FEDERAL COURT OF AUSTRALIA Australian Competition & Consumer Commission v Gary Peer & Associates Pty Ltd [2005] FCA 404 Trade Practices Act 1974 (Cth) ss 51A, 52, 53 and 53A Estate Agents Act 1980 (Vict) Part IV, s 47C Estate Agents and Sale of Land Acts (Amendment) Act 2003 (Vict) TRADE PRACTICES (CTH) – Estate agents – Auction advertisements – "Price Guide $600,000 Buyers Should Inspect" – Whether representation that vendor would sell for $600,000 or not substantially more – Whether representation that agent believed property would sell for that price or not substantially more – Whether representation as to supply or possible supply of services – Whether representation concerning price payable for land – Whether representations false – Relief – Declarations – Injunctions – Compliance program – Discretionary remedies Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd (1982) 149 CLR 191 cited Cassidy v Medical Benefits Fund of Australia (No 2) [2002] FCA 1097 cited Medical Benefits Fund of Australia Ltd v Cassidy (2003) 135 FCR 1 cited Australian Competition and Consumer Commission v Henry Kaye and National Investment Institute Pty Ltd [2004] FCA 1363 cited Ting v Blanche (1993) 118 ALR 543 applied Henderson v Pioneer Homes Pty Ltd (1980) ATPR 40‑159 cited Given v C V Holland (Holdings) Pty Ltd (1977) 29 FLR 212 cited Trade Practices Commission v Penfolds Wines Pty Ltd (1992) ATPR 41‑163 cited Australian Competition and Consumer Commission v Nationwide News Pty Ltd (1996) ATPR 41‑519 cited Pappas v Soulac Pty Ltd (1983) 50 ALR 231 distinguished Eighth SRJ Pty Ltd v Merity (1997) NSW Conv R 55‑813 distinguished O'Brien v Smolonogov (1983) 53 ALR 107 cited Argy v Blunts & Lane Cove Real Estate Pty Ltd (1990) 26 FCR 112 cited Franich v Swannell (1993) 10 WAR 459 cited Australian Competition and Consumer Commission v Oceana Commercial Pty Ltd [2004] FCAFC 174 cited Australian Competition and Consumer Commission v Dermalogica Pty Ltd [2005] FCA 152 cited BMW Australia Ltd v Australian Competition and Consumer Commission (2004) 207 ALR 452 cited AUSTRALIAN COMPETITION AND CONSUMER COMMISSION v GARY PEER & ASSOCIATES PTY LTD V1081 OF 2003 SUNDBERG J 13 APRIL 2005 MELBOURNE IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY V1081 OF 2003 BETWEEN: AUSTRALIAN COMPETITION AND CONSUMER COMMISSION APPLICANT AND: GARY PEER & ASSOCIATES PTY LTD (ACN 006 688 295) RESPONDENT JUDGE: SUNDBERG J DATE OF ORDER: 13 APRIL 2005 WHERE MADE: MELBOURNE THE COURT DECLARES THAT: 1. The respondent, in trade or commerce, has engaged in conduct which was misleading or deceptive or likely to mislead or deceive in contravention of s 52 of the Trade Practices Act 1974 (Cth) ("the Act") by causing printed advertisements to be published in Melbourne in August 2003 and September 2003 in relation to the property situated at 341 Glen Eira Road, Caulfield, Victoria, ("the Property"), which advertisements contained one or other of the following statements: (i) 'PRICE GUIDE $600,000 Plus Buyers Should Inspect'; and (ii) 'PRICE GUIDE $650,000 Plus Buyers Should Inspect' thereby representing that: (a) the vendors would sell the Property for a price that was approximately, or was not substantially more than, $600,000 or $650,000, as the case may be; (b) the vendors were prepared to sell the Property for a price that was approximately, or was not substantially more than, $600,000 or $650,000, as the case may be; (c) the vendors had instructed the respondent to sell the Property for a price that was approximately, or was not substantially more than, $600,000 or $650,000, as the case may be; (d) the respondent believed and held the opinion that the Property would be sold at a price that was approximately, or was not substantially more than, $600,000 or $650,000, as the case may be; and (e) the respondent had reasonable grounds for believing and holding the opinion that the Property would be sold at a price that was approximately, or was not substantially more than, $600,000 or $650,000, as the case may be; each of which representations was false or misleading because: (f) on 6 August 2003 the vendors instructed the respondent that they would not sell for less than $780,000 and wanted more than that for the Property; (g) on 27 August 2003 the vendors informed the respondent that they were not prepared to sell the Property for less than $800,000; (h) from 6 August 2003 or thereabouts until 27 August 2003 the respondent believed and held the opinion that the Property was likely to be sold for at least $700,000; (i) from 27 August 2003 the respondent believed and held the opinion that the Property was likely to be sold for at least $750,000; (j) and further, in respect of the representation referred to in sub‑pars 1(a) and (e) above, the respondent did not have reasonable grounds for making the representation. 2. The respondent, in trade or commerce, in connexion with the sale, possible sale or promotion of the sale of the Property, has made false or misleading representations concerning the price payable for the Property in contravention of s 53A of the Act, by causing printed advertisements to be published in Melbourne in August 2003 and September 2003 in relation to the Property which advertisements contained one or other of the following statements: (i) 'PRICE GUIDE $600,000 Plus Buyers Should Inspect'; and (ii) 'PRICE GUIDE $650,000 Plus Buyers Should Inspect' thereby representing that: (a) the vendors would sell the Property for a price that was approximately, or was not substantially more than, $600,000 or $650,000, as the case may be; (b) the vendors were prepared to sell the Property for a price that was approximately, or was not substantially more than, $600,000 or $650,000, as the case may be; (c) the vendors had instructed the respondent to sell the Property for a price that was approximately, or was not substantially more than, $600,000 or $650,000, as the case may be; (d) the respondent believed and held the opinion that the Property would be sold at a price that was approximately, or was not substantially more than, $600,000 or $650,000, as the case may be; and (e) the respondent had reasonable grounds for believing and holding the opinion that the Property would be sold at a price that was approximately, or was not substantially more than, $600,000 or $650,000, as the case may be; each of which representations was false or misleading because: (f) on 6 August 2003 the vendors instructed the respondent that they would not sell for less than $780,000 and wanted more than that for the Property; (g) on 27 August 2003 the vendors informed the respondent that they were not prepared to sell the Property for less than $800,000; (h) from 6 August 2003 or thereabouts until 27 August 2003 the respondent believed and held the opinion that the Property was likely to be sold for at least $700,000; (i) from 27 August 2003 the respondent believed and held the opinion that the Property was likely to be sold for at least $750,000; (j) and further, in respect of the representation referred to in sub‑pars 2(a) and (e) above, the respondent did not have reasonable grounds for making the representation. AND THE COURT ORDERS THAT the respondent pay the applicant's costs of the application. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY V1081 OF 2003 BETWEEN: AUSTRALIAN COMPETITION AND CONSUMER COMMISSION APPLICANT AND: GARY PEER & ASSOCIATES PTY LTD (ACN 006 688 295) RESPONDENT JUDGE: SUNDBERG J DATE: 13 APRIL 2005 PLACE: MELBOURNE REASONS FOR JUDGMENT BACKGROUND 1 In August 2003 the owners of premises at 341 Glen Eira Road, Caulfield ("the Property"), pursuant to an exclusive auction authority, retained the respondent to auction the Property on 14 September 2003. Pursuant to the authority, in August and September 2003 the respondent lodged advertisements for publication as shown in the table. Date of Lodgement Date of Publication Name of Publication 19 August 2003 22 August 2003 The Property Review Weekly (being an insert in the Australian Jewish News) 21 August 2003 23 August 2003 The Age newspaper 26 August 2003 29 August 2003 The Property Review Weekly (being an insert in the Australian Jewish News) 28 August 2003 30 August 2003 The Age newspaper 2 September 2003 5 September 2003 The Property Review Weekly (being an insert in the Australian Jewish News) 4 September 2003 6 September 2003 The Age newspaper 2 The August advertisements included the statement "PRICE GUIDE $600,000 Plus Buyers Should Inspect." The September advertisements included the statement "PRICE GUIDE $650,000 Plus Buyers Should Inspect." THE PROCEEDING 3 The applicant contends that having regard to the make‑up and overall content of the August advertisements, the price guide statement contained implied representations by the respondent that, as at the time of publication: (a) the vendors would sell the Property for a price that was approximately, or was not substantially more than, $600,000; (b) the vendors were prepared to sell the Property for a price that was approximately, or was not substantially more than, $600,000; (c) the vendors had instructed the respondent to sell the Property for a price that was approximately, or was not substantially more than, $600,000; (d) the respondent in fact believed and held the opinion that the Property would be sold at a price that was approximately, or was not substantially more than, $600,000; (e) the respondent had reasonable grounds for believing and holding the opinion that the Property would be sold at a price that was approximately, or was not substantially more than, $600,000; and (f) the market value of the Property was approximately, or not substantially more than, $600,000. 4 The applicant makes the same contentions about the September advertisements, though by reference to $650,000. 5 The applicant claims that the first representation alleged in relation to the August and September advertisements was made with respect to a future matter within the meaning of s 51A of the Trade Practices Act 1974 (Cth) ("the Act"), that the respondent did not have reasonable grounds for making the representation, and that accordingly the representation was misleading by reason of the operation of s 51A. 6 The applicant then contends that each of the August and September representations was false, misleading and/or likely to mislead in that: (a) in August and September 2003 the vendors were not prepared to sell for less than $800,000, which is substantially more than $600,000 and $650,000; (b) in or about August the vendors instructed the respondent that they were seeking a price of $780,000 to $800,000, a price range which is substantially more than $600,000 and $650,000; (c) from on or about 4 August the respondent in fact believed and held the opinion that the Property was likely to be sold for at least $700,000, which is substantially more than $600,000; (d) from on or about 27 August the respondent in fact believed and held the opinion that the Property was likely to be sold for at least $750,000, which is substantially more than $600,000 and $650,000; (e) the market value of the Property in August was approximately $750,000, which is substantially more than $600,000 and $650,000; (f) the market value of the Property in September was approximately $805,000, which is substantially more than $650,000; 7 The applicant claims that in making the representations the respondent · contravened s 52 of the Act in that it engaged in conduct that was misleading or deceptive, or likely to mislead or deceive · contravened s 53(e) of the Act in that it engaged in conduct that constituted false or misleading representations with respect to the price of services, namely rights and interests in the Property, and · contravened s 53A of the Act in that it engaged in conduct that constituted false or misleading representations concerning the price payable for the Property. 8 The applicant seeks declarations that the respondent has contravened ss 52, 53(e) and 53A of the Act, and · an injunction restraining it for a period of four years from publishing advertisements for any real property which refer to a price which is less than 90 per cent of the lower of (a) the price at which the vendors, prior to any such advertisements, have instructed it that they are prepared to sell the property, or (b) the price at which the respondent, at the time of publication of any such advertisements, expects that the property will be sold, and · an order pursuant to s 86C of the Act requiring the respondent to implement and maintain for three years an appropriate compliance program to the extent necessary to ensure compliance by the respondent with ss 52, 53 and 53A of the Act. THE LEGISLATION 9 Section 51A of the Act provides: "(1) For the purposes of this Division, where a corporation makes a representation with respect to any future matter (including the doing of, or the refusing to do, any act) and the corporation does not have reasonable grounds for making the representation, the representation shall be taken to be misleading. (2) For the purposes of the application of subsection (1) in relation to a proceeding concerning a representation made by a corporation with respect to any future matter, the corporation shall, unless it adduces evidence to the contrary, be deemed not to have had reasonable grounds for making the representation. (3) Subsection (1) shall be deemed not to limit by implication the meaning of a reference in this Division to a misleading representation, a representation that is misleading in a material particular or conduct that is misleading or is likely or liable to mislead." 10 Section 52 provides: "(1) A corporation shall not, in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead or deceive. (2) Nothing in the succeeding provisions of this Division shall be taken as limiting by implication the generality of subsection (1)." 11 Section 53 provides, in part, that "A corporation shall not, in trade or commerce, in connexion with the supply or possible supply of goods or services or in connexion with the promotion by any means of the supply or use of goods or services: … (e) make a false or misleading representation with respect to the price of goods or services …." 12 Section 53A provides, in part, that "(1) A corporation shall not, in trade or commerce, in connexion with the sale or grant, or possible sale or grant, of an interest in land or in connexion with the promotion by any means of the sale or grant of an interest in land: … (b) make a false or misleading representation concerning the nature of the interest in the land … [or] the price payable for the land …." THE APPLICANT'S EVIDENCE Ms Wong 13 The applicant relied on two affidavits. The first was that of Jenny Wong, the vendors' daughter. Her account of the events that happened is summarised in this paragraph and [14]‑[17]. She and her parents had lived at the Property for approximately nineteen years. In about August 2003 the parents decided to sell because they had plans to live in Hong Kong. Ms Wong was present at all discussions and negotiations with real estate agents and others on her parents' behalf, because they do not speak good English. She is fluent in English and Cantonese, which is the parents' first language. 14 Ms Wong spoke to Adam Joske of the respondent who agreed to appraise the Property. Mr Joske inspected it, and told her and her parents that the respondent had acted as agents on the sale of the next door property, 343 Glen Eira Road ("343"), in May 2003, for $741,000. Mr Joske said the Property could expect a very similar price because it was in the same area, and the land was the same size as 343. Ms Wong told Mr Joske her parents wanted to get a higher price than $741,000 because their house was much newer and in much better condition than the house at 343. She told him they were not prepared to sell for less than $780,000, and that they "expected and wanted" to obtain more than that price. On the day of the meeting the parents signed an exclusive auction authority with the respondent. At the meeting the parties discussed the advertising of the Property. Mr Joske provided cuttings of newspaper advertisements used in relation to the sale of 343. They stated a price guide of "$600,000 Plus". He said that because the Property was in the same area and of the same size as 343, the same kind of advertising should be used. The parents agreed. The advertisements first appeared around 22 and 23 August in The Age, the Australian Jewish News and The Property Review Weekly Magazine. Each contained the words "PRICE GUIDE $600,000 Plus Buyers Should Inspect". 15 Early in the advertising campaign the parties had another meeting. Ms Wong asked Mr Joske whether the price guide amount should be increased, because she and her parents were concerned that the advertisement price was too low, and might not attract buyers who were prepared to spend the amount the parents were prepared to accept. Mr Joske said the amount should not be changed. However, about a week later he telephoned Ms Wong to say he thought the price guide amount should be increased to "$650,000 Plus". She accepted his suggestion, and subsequent advertisements included the increased amount. 16 In about the second week of the campaign Ms Wong's father and Mr Joske both received an offer of $750,000. Ms Wong told Mr Joske her parents wished to reject the offer. Later she told him they had decided to increase to $800,000 the price for which they would be prepared to sell. On the morning of the auction a reserve of $800,000 was set by the vendors. 17 The auction took place. During a break in proceedings Mr Joske and Gary Peer (also of the respondent) came into the house. Ms Wong's father said he would only sell if he could get $850,000. Mr Peer said that would not be achievable, and asked the father to set a lower price. Messrs Peer and Joske then left the owners to consider the matter. When Mr Peer returned, the father said he would accept $830,000. Mr Peer said that would be difficult to achieve, but he would try for the best possible price. At the conclusion of bidding the highest bid was $782,000. The bidder later increased the amount to $805,000, which the parents rejected. Ms Wong said the Property had not subsequently been sold. 18 In the course of cross‑examination Ms Wong said she understood that when she told Mr Joske of her parents' reserve price, he would not be at liberty to disclose it, because the vendor at an auction does not want potential bidders to become aware of the reserve. If a reserve were to become known, no‑one would bid above it. The auction would be ruined. If the reserve had been mentioned directly or indirectly in an advertisement, that would have been disadvantageous to achieving a higher price at the auction. Ms Wong confirmed that before the advertisements were lodged they were shown to her and her parents, and were approved by them. 19 Ms Wong was taken to the auction authority. She recalled the discussion on 6 August, when Mr Joske was filling in the blanks in the document, about the words under "Price" – a "figure to be advised by the vendor". This, she agreed, was inserted because "no price – no selling price, no reserve" – had been identified at that time. Any reserve was to be advised to the agent later on. She was then taken to the bonus commission provision. She agreed that this was to be payable if the agent secured "a really good, a really exceptional result". The bonus for an exceptional result would be paid on any price over $780,000. The valuer 20 The applicant also relied on the affidavit of a property valuer, Louis Megas. His firm, Charter Keck Cramer, had been requested by the applicant to determine the market value of the Property as at August and September 2003. The assessment was based on an external inspection. His report referred to four sales in the area between March and October 2003, one of which was of 343, with a sale price of $785,000. This was a sale in October 2003. The earlier sale of 343 for $741,000 was in May 2003. The report contained this passage: "Valuation Methodology Based on the evidence to which we have referred and after appropriate adjustments for size, quality and location, we have by analysis assessed value in the sum of $785,000, apportioned as follows: Land 877sq m @ $800 psm say $700,000 Improvements Main Residence 162 sq m @ $475 psm $ 75,000 Secondary Improvements $ 10,000 Assessed Value $785,000" The assessed value represents an overall value rate of approximately $900 psm (actual $895 psm) and is well supported by the sales referred to herein, with particular reference to the recent sale of the adjoining property situated at 343 Glen Eira Road, Caulfield North, relating to an identical sized allotment which was sold for $785,000 during October 2003, representing $895 psm. Additional sales of relevance include 289 Orrong Road, Caulfield North, which sold for $630,000 during July 2003, representing $1,131 psm and 375 Alma Road, Caulfield North, which sold for $766,000 during May 2003, representing $943 psm." Mr Megas was not cross‑examined. Section 155 response 21 The applicant sought to tender parts of the respondent's response to a notice served on it pursuant to s 155 of the Act which it was said contained admissions on which the applicant wished to rely. So far as material for present purposes, the notice required the following information to be furnished: "3. Provide details of all communications held between company staff and the vendors in relation to the price of the property, on or after the date on which the company was approached by the vendors to sell the property including: (i) any estimates as to the price at which the property might reasonably be expected to sell provided to the vendors by company staff, and the dates on which those estimates were provided; (ii) any indications by the vendors as to the price they were prepared to sell the property for, and the dates upon which those indications were communicated to the company or its staff; (iii) any indications by the vendors as to a price below which they would not be prepared to sell the property, and the dates on which those indications were communicated to the company or its staff …. 4. What estimates, if any, did company staff make in relation to the price at which the property might reasonably be expected to sell? … 11. What was the reserve price for the property? When was the reserve price set by the vendors and/or communicated to the company representatives? …." 22 The response to par 3(i) was in part as follows: "Joske indicated to the Vendors on both 4 and 6 August 2003 that he believed the Property was unusual, unique and difficult to accurately appraise. Joske felt, based on the sale of 343 Glen Eira Road, Caulfield North … that the Property could be appraised at approximately $700,000, depending on the interest shown throughout the auction campaign." 23 The response to par 3(ii) and (iii) included: "Upon receiving a written offer (not signed contract) of $750,000 on 27 August 2003, Joske passed onto the Vendors that day, via their daughter Jenny, details of the formal offer. At that time, the Vendors stated they were prepared to sell the Property for $800,000 …. … On 11 September 2003, the Vendors again advised Joske during a meeting held at their Sales Office with Joske alone, that their reserve price was still $800,000." 24 The response to par 4 included: "As Gary Peer & Associates were not given a reserve price, its company staff would not give estimates of the Vendors' selling price, except to a potential buyer who offered $750,000, which on the Vendors' instructions at that time, was to counter offer at $800,000." 25 The response to par 11 included: "The reserve price was first set on 27 August 2003 at $800,000 by the Vendors …." 26 What is relied on as an admission in the par 3(i) response is that Mr Joske indicated on both 4 and 6 August that the Property could be appraised at approximately $700,000. Contrary to the respondent's contention, the dates in the first sentence do in my view attach to the content of the second sentence. The statement of claim alleges (par 11(c)) that from on or about 4 August the respondent believed and had the opinion that the Property was likely to be sold for at least $700,000. In its defence the respondent denies the allegations in par 11, but admits that "on or about 4 and 6 August" it informed the vendors that the Property could be appraised at approximately $700,000, but the price achieved at the auction would depend on the level of interest shown during the auction campaign. There is accordingly no issue between the parties that on 4 and 6 August the respondent told the vendors that the Property could be appraised at approximately $700,000. The par 3(i) response is not an admission against the respondent's interest. 27 The first two sentences of the par 3(ii) response accords with what is admitted in pars 11(b) and (c) of the defence and with Ms Wong's and Mr Joske's evidence. It is common ground that Mr Joske passed on the $750,000 offer to the vendors, that they rejected it, and that they told Mr Joske they were prepared to sell for $800,000. Mr Joske says he passed this on to the offeror, Gad Kolsky. In those circumstances the response is not an admission against the respondent's interest. 28 The last sentence of the par 3(ii) response, which is also a response to par 3(iii), accords substantially with what is admitted in par 11(f) of the defence, save that the response implicitly treats the 27 August information as the fixing of a reserve. The applicant is entitled to rely on it as an admission. 29 The par 4 response is not an admission against the respondent's interest. In its defence the respondent admits that on 27 August it received an offer of $750,000, that the vendors rejected it, but said they were prepared to sell for $800,000. Further, it is the respondent's evidence that there was a pre‑auction offer of $750,000, that the vendors' instruction was to make a counter offer of $800,000, this was done, and the counter offer was not accepted. 30 The par 11 response is covered by what I have said in [28]. The respondent's evidence 31 The respondent relied on the affidavit of Mr Joske. His account of events is summarised in this paragraph and [32]‑[45]. He placed the first meeting with Ms Wong and the owners at 4 August. He did not recall discussing at this meeting either the value of the Property or the price at which 343 had sold, though he may have mentioned that price. Mr Joske denied that at this meeting Ms Wong told him her parents were not prepared to sell for less than $780,000 and that they expected and wanted to obtain more than that. The parties agreed to meet again on 6 August. 32 In the meantime Mr Joske considered what appraisal price he would give the vendors on 6 August. He had been the agent responsible for the sale of 343 for $741,000 in May 2003. The sale price was considerably higher than the price he or the vendors of 343 had expected. Although the Property was of the same land size as 343, Mr Joske did not believe it would bring as much as 343. This was because · unlike 343, the Property was not an early 1900s "period home", which was a popular style due to its character and renovation potential · the house on the Property was built in the 1970s, its style was dated and it was not as attractive as 343 · unlike 343, the house was not solid brick, but brick veneer, and · the house had low ceilings which would not appeal to many buyers. Because of these negative features, Mr Joske thought it quite likely that the Property would be purchased by a buyer interested in the land alone, and that the house would be demolished. 33 Mr Joske also took into account the fact that the market was not as strong as it had been when 343 was sold. There was increasing talk in the industry and the media about the market "coming off the boil". In addition, it was his general rule not to provide unrealistic appraisals because of the difficulties such appraisals can cause both vendors and agents. He settled upon a price of around $700,000, and thought that if the owners were lucky they might get "up around the price" obtained for 343, though he did not think this was likely. 34 The parties met again on 6 August. Mr Joske told the owners, as sensitively as he could, what he saw to be the differences between the Property and 343. He said they would be doing very well if they obtained a price similar to 343's, and that his personal view was that the Property would be likely to sell for approximately $700,000. He denied that he said the owners could expect a very similar price to that of 343, as Ms Wong had claimed. For the reasons he had given, that was not his view. He regarded 343 as superior in many respects. 35 At this meeting the owners signed an exclusive auction authority. Under the heading "Agent's Fees" in the authority there appeared "The amount calculated as follows: 2.2% < $780,000 plus 10% (GST incl) of every dollar over $780,000 including GST." In his affidavit Mr Joske rendered this as "if the property sold for $780,000 or less, a commission of 2.2% (including GST) of the selling price; and if the property sold for greater than $780,000, the sum of $17,160 (being 2.2% of $780,000) plus a 'bonus' commission of 10% of every dollar of the sale price over $780,000." Under the heading "Price" was inserted "A figure to be advised by the vendor". 36 As to the "bonus commission" Mr Joske said: "In my experience, a vendor will only agree to pay a bonus commission if the sale price achieved is well in excess of the best price they hope to achieve for their property. Indeed, my general approach when including a bonus structure in any commission is to encourage vendors to set a high figure; a price which I describe as a 'premium price'. I do this because it builds trust with the seller and means a seller is more likely to come to us again or recommend us to others in the future. I discussed the option to include a bonus commission in the Authority with the Vendors. I explained that the idea of a bonus commission was to give the agent a reward for working hard to achieve an exceptional result and that if the Vendors wanted to include a bonus payment they should select a price above which they would be extremely happy and willing without hesitation to pay more commission. The Vendors agreed to pay me a very generous bonus if we sold the Property for more than $780,000. For the reasons discussed above, my personal view at the time of this meeting was that it was highly unlikely the Property would sell for anywhere near this amount. I therefore believed that it was very unlikely that I would earn the bonus commission on the Property. However, I did not think it was completely impossible that we might achieve a particularly exceptional result for the Property which would result in some amount of bonus commission being paid, since the property market is unpredictable and there had been surprisingly high results during my time with Gary Peer & Associates." 37 Mr Joske denied that at this meeting Ms Wong said the owners would not be prepared to sell for less than $780,000 and wanted more than that. He had earlier denied that she had said this at the first meeting. See [31]. He did not recall her saying that the owners wanted a higher price than 343 because the Property was newer and in much better condition than 343. 38 Mr Joske formed the view at this meeting that the owners were likely to sell on auction day to the highest bidder if the price reached $700,000. He came to this view because they seemed comfortable with his appraisal and had allocated him a generous advertising budget ($7,665.50). 39 In reference to Ms Wong's affidavit, Mr Joske said he did not recall discussing advertising at the 6 August meeting "in any detail, if at all". He thought this topic was discussed at a meeting on 12 August. 40 A further meeting was held on 12 August to finalise the advertising. Mr Joske showed the owners various draft advertisements. Some of those approved by the owners contained the words "PRICE GUIDE $600,000 Plus Buyers Should Inspect". In 2003 Mr Joske often included a price guide in advertisements, because such a guide helps capture the attention of buyers who have the ability to purchase a property for the stated amount or more, and encourages them to inspect the property. On the other hand, it deters buyers who do not have that ability, and avoids a waste of their time in inspecting. Mr Joske said the respondent's usual practice was to set the minimum amount in buyer inspection price guides at approximately 10 to 15 per cent less than the amount for which the respondent expected the property to sell. This was a common practice in the industry. During the 12 August meeting Mr Joske explained to the vendors that in price guides the vast majority of agents quote a dollar amount that is approximately 10 to 15 per cent less than the expected sale price. He believed the Property would sell for approximately $700,000, and accordingly suggested that it be advertised with the statement "PRICE GUIDE $600,000 Plus Buyers Should Inspect". The owners agreed. 41 Mr Joske was surprised at the "relatively strong interest" shown in the Property. On 25 August Mr Kolsky orally offered $750,000, which he confirmed by letter on 27 August. In the letter Mr Kolsky said his offer was made on Mr Joske's "strong suggestion, as he said that the (comparable) property next door had just recently sold for $741,000 and that that was the best indicator for this property". Mr Joske passed the offer on to Ms Wong who, after consulting her parents, informed him that they would not accept less than $800,000. This surprised Mr Joske, who thought $750,000 an exceptionally good offer, as he told Ms Wong. However the owners confirmed that they wanted $800,000. 42 After the vendors' rejection of the Kolsky offer, Mr Joske recommended that the price guide be increased to "$650,000 Plus Buyers Should Inspect". He did this because he was optimistic that the Property would achieve in excess of $700,000 at the auction. There had been significant interest in the Property, and positive buyer feedback. Mr Joske did not interpret the vendors' rejection of the Kolsky offer as the setting of a reserve price of $800,000. Rather he viewed it as a counter‑offer to test how much Mr Kolsky was prepared to pay. He still believed the vendors would accept the price set by the market at the auction, and that the price would be well below $800,000, and closer to his appraisal. Mr Joske rejected Ms Wong's statement that she ever asked him whether the price guide amount should be increased. 43 Either on 11 September or on the day of the auction (14 September) the vendors set the reserve at $800,000. Mr Joske did not tell them he considered this unlikely to be achieved, as he still thought they would meet the market on auction day even below the reserve. 44 The highest bid at the auction was $781,000. Mr Joske agreed with Ms Wong that during the auction the owners increased their reserve to $850,000 and then reduced it to $830,000. The Property was passed in. The highest bidder subsequently offered $805,000, but the owners would not sell below $830,000, took the Property off the market "and were not prepared to sell it for any price". 45 On 15 September Ms Wong confirmed that the vendors had not changed their mind "and were still unwilling to sell the Property at any price". She requested that the auction board be removed immediately. Mr Joske said he thought this most unusual, because after most failed auctions vendors are quite happy for the board to remain to see if it "drums up" any further offers in the following weeks. Ms Wong also said she would be attending the respondent's office the next day to pay for the advertising costs. This she did. Mr Joske thought it "highly unusual" for a vendor whose property fails to sell at auction voluntarily to pay such a large sum so quickly. 46 Mr Joske was cross‑examined. His recollection of some matters connected with the transaction was poor. On many occasions he responded to questions by saying "I don't remember" or "I don't recall". When pressed, he often grudgingly agreed that although he didn't remember saying something or that something had been said to him, he didn't deny having said it or that it had been said to him. Nevertheless I had regard to the fact that the events took place nearly eighteen months before he gave evidence, that this transaction was but one of many with which he had dealt in the interim, and that the details are much more likely to have made a greater impression on a person in the position of Ms Wong, for whom this was a very important and singular event. 47 Mr Joske was taken to the letter in which Mr Kolsky offered $750,000 for the Property. He did not remember, but did not deny, telling Mr Kolsky that $741,000 (the price for 343) was the best price indicator for 341. He agreed that 343 was "probably the best indicator" of the value of 341. Mr Joske did not remember, though he did not deny, mentioning at the first meeting on 4 August the price at which 343 had sold. He thought it more likely that he mentioned it at the second meeting. 48 He was taken to the auction authority and asked about the following words under the heading "Agent's Fees": "NB. If commission is calculated as a percentage of the price, the dollar amount of the commission which would be payable upon a sale at that price must also be inserted $16,500 including GST of $1,500 on a selling price of $750,000 excluding GST." The underlined figures were inserted by Mr Joske in blank spaces on the printed form. Counsel put to Mr Joske that he inserted the $750,000 because the vendors said they expected the Property to bring more than that obtained for 343 ($741,000). He denied this was the case, and said he had just plucked the figure out of the air. 49 Mr Joske was asked what was meant by "PRICE GUIDE" in an advertisement. He agreed it was meant to be a guide to prospective purchasers, but initially said it was not a guide to the price of the Property. Later he didn't dispute that the $600,000 in one of the advertisements was meant to be a guide as to price. 50 Mr Joske was asked about the respective values of 343 and the Property. He agreed that when he had earlier said he believed 343 was worth considerably more than the Property, he was referring to the difference between the sale price of 343 ($741,000) and his appraisal of the Property. 51 When asked whether his receipt of the Kolsky offer of $750,000 changed his view of the value of the Property, he said "not overly" – it was just one buyer's opinion that had been rejected by the vendors. He also said that the vendors' rejection of the $750,000 offer and subsequent instruction that they wouldn't sell for less than $800,000, didn't change his opinion of the value of the Property. He agreed that in hindsight his appraisal was wrong. By "hindsight" he meant after the bids at and following the auction ($781,000 and $805,000). 52 He denied that it was the receipt of the Kolsky offer that caused him to suggest increasing the price guide amount. He recommended the change because he felt there were a number of parties showing keener interest than he had expected. He said the increased amount was for the information of people who had not yet inspected. It was "to give them a guide as to the price". He agreed that the difference between $600,000 and $650,000 was a "considerable difference", and that he suggested the increase "to pitch the property at a higher level". THE APPLICANT'S CASE Section 52 53 The applicant contends that the representations set out in [3] and [4] are implied by the statements "PRICE GUIDE $600,000 Plus Buyers Should Inspect" and "PRICE GUIDE $650,000 Plus Buyers Should Inspect", having regard to the make‑up and overall content of the advertisements. 54 There was no dispute about the applicable law. In determining whether the advertisements imply the representations alleged, the meaning of the words used must be assessed in their context and setting. Context is also relevant in determining whether a representation is false or misleading. In Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd (1982) 149 CLR 191 at 199 Gibbs CJ said: "The conduct of a defendant must be viewed as a whole. It would be wrong to select some words or act, which, alone, would be likely to mislead if those words or acts, when viewed in their context, were not capable of misleading. It is obvious that where the conduct complained of consists of words it would not be right to select some words only and to ignore others which provided the context which gave meaning to the particular words." It is essential to consider the entire context in which a representation is made. The conduct of the representor in making the representation must be viewed as a whole: Cassidy v Medical Benefits Fund of Australia (No 2) [2002] FCA 1097 at [46]. Whether there is a contravention of s 52 is to be determined by reference to whether an ordinary or reasonable member of the class to which the advertisements were directed was or was likely to be misled or deceived by them. See Medical Benefits Fund of Australia Ltd v Cassidy (2003) 135 FCR 1 at [31] and Australian Competition and Consumer Commission v Henry Kaye and National Investment Institute Pty Ltd [2004] FCA 1363 at [107]. Neither the intent nor the effect of the conduct is determinative of whether it is in breach of s 52: Medical Benefits Fund of Australia Ltd v Cassidy at [43]. 55 In relation to representations with respect to future matters, the effect of s 51A is to cast the burden of proof upon the representor to show that it had reasonable grounds for making the representation. The section does not itself create a cause of action or define a norm of conduct. The cause of action is found in s 82(1) by reference to the norm of conduct in s 52. Section 51A is designed to facilitate proof. A representation as to an event or conduct in the future may be a representation as to a future matter notwithstanding that it implies a representation as to present state of mind. See generally Ting v Blanche (1993) 118 ALR 543 at 552‑553; Henry Kaye at [125]‑[126]. Section 53(e) 56 The applicant relied on that part of s 53(e) concerned with representations made in connexion with the "promotion" of services or the "possible supply" of services. By reference to the definition of "services" in s 4(1) it submitted that "rights in relation to, and interests in, real or personal property" include the sale of houses: Henderson v Pioneer Homes Pty Ltd (1980) ATPR 40‑159 at 42,242. Accordingly, it was said, the relevant "service" here is the rights to or interests in the Property. 57 A representation may be false within the meaning of s 53(e) if it is contrary to fact, irrespective of the knowledge of the representor: Given v C V Holland (Holdings) Pty Ltd (1977) 29 FLR 212 at 217. 58 A "price" of goods or services in s 53(e) does not have to be a precise figure. There can be a "price" even though it is stated to be within a range of a particular figure or that otherwise an element of approximation is involved: Trade Practices Commission v Penfolds Wines Pty Ltd (1992) ATPR 41‑163 at 40,222. It was submitted that the relevant issue is whether the advertisements falsely or misleadingly represented the price, namely the monetary consideration for the sale of the Property: Australian Competition and Consumer Commission v Nationwide News Pty Ltd (1996) ATPR 41‑519 at 42,493‑4. 59 It was contended that the advertised sale price of the Property was approximately $600,000 in August and approximately $650,000 in September. In view of Mr Joske's appraisal of $700,000, the vendors' instructions and the market value at the time, that was false or misleading. The price for the Property was at least $700,000, but by 27 August it was at least $750,000, and by September it was at least $800,000. Section 53A 60 So far as material for present purposes, s 53A prohibits representations made in connexion with either the "promotion" of the sale of an interest in land or the "possible sale" of an interest in land that are false or misleading in relation to the "price payable" for the land. It was submitted that the representations in the advertisements were made in connexion with either the promotion of the sale or the possible sale of an interest in land, given that they advertised the Property for auction on 14 September, even though it was not actually sold on that date. What had been submitted in connexion with s 53(e) was said to be applicable to s 53A, so that the issue was whether the advertisements falsely or misleadingly represented the price payable. It was submitted that the word "payable" in "price payable for the land" does not add any meaningful qualification to "price". Accordingly, the submission concluded, the advertised price payable of $600,000 and then $650,000 was false or misleading because the "price payable" for the Property was at least $700,000, by 27 August it was at least $750,000 and by September it was at least $800,000. FINDINGS OF FACT 61 I make the following findings of fact. (a) At a meeting on 6 August 2003 Mr Joske informed the vendors that he appraised the Property at around $700,000. He told them they might get as much as $741,000, the price obtained for 343 in May 2003, though he did not think this was likely, because the house on the Property was less attractive than that on 343, and the market was not as strong as it had been in May. (b) At that meeting the vendors told Mr Joske they were not prepared to sell for less than $780,000 and wanted more than that. (c) At that meeting the vendors signed an exclusive auction authority by which they agreed that if the Property sold for $780,000 or less, a commission of 2.2% would be payable, and if it sold for more than $780,000 the respondent would receive a bonus of 10 per cent of every dollar over $780,000. (d) In completing the exclusive auction authority at that meeting Mr Joske inserted "A figure to be advised by the vendor" under the heading "Price". (e) At either the 6 August meeting or one held on 12 August the vendors approved auction advertisements containing the words "PRICE GUIDE $600,000 Plus Buyers Should Inspect". (f) The respondent's usual practice in 2003 was to set the minimum amount in buyer inspection price guides at approximately 10 to 15 per cent less than the amount for which it expected the property to sell. This was a common practice in the real estate industry in Melbourne. At the meeting on 12 August Mr Joske explained this to the vendors. (g) Advertisements containing the words "PRICE GUIDE $600,000 Plus Buyers Should Inspect" were inserted in the publications and on the August 2003 dates set out in the table at [1]. (h) On 27 August Mr Kolsky's written offer of $750,000 was received, which the vendors rejected. They informed Mr Joske they would not accept less than $800,000. (i) At a meeting probably after 12 and before 27 August Ms Wong told Mr Joske that she and her parents were concerned that the advertised price was too low, and might not attract the right buyers who were prepared to spend the amount the vendors required. For this reason she asked whether the price stated in the advertisements should be increased. Mr Joske said it should remain as it was for the time being. (j) Soon after 27 August Mr Joske recommended that the price guide be increased to "$650,000 Plus Buyers". He did this because of the strong interest that had been shown in the Property, as a result of which he was optimistic that it would bring more than $700,000 at the auction. The vendors accepted this recommendation. (k) Advertisements containing the words "PRICE GUIDE $650,000 Plus Buyers Should Inspect" were inserted in the publications and on the September 2003 dates set out in the table at [1]. (l) Either on 11 September or on the day of the auction (14 September) the vendors set a reserve of $800,000. (m) During the auction the vendors increased the reserve to $850,000 and then reduced it to $830,000. (n) The highest bid at the auction was $781,000, and the Property was passed in. (o) A later offer of $805,000 was made by the highest bidder, but was not accepted. (p) The market value of the Property in August and September 2003 was $785,000. 62 The findings in [61](c), (d), (g), (h), (k) and (m) to (p) are not controversial and require neither comment nor explanation. The first sentence in (a) is also not controversial. Ms Wong and Mr Joske differed as to the subject matter of the second sentence. I accept Mr Joske's account. He gave his reasons for assigning to the Property a lower value than the amount obtained for 343, and was not challenged on that part of his evidence. Accordingly I think it unlikely that he would be as positive as Ms Wong claimed he was as to the applicability of 343's price to the Property. 63 As to (b), I accept Ms Wong's evidence in preference to Mr Joske's. A mention of $780,000 explains, or is at least consistent with, the amount in the auction authority in excess of which the bonus commission was payable. It is also consistent with the vendors' later statements that they would not sell for less than $800,000. As to (e), nothing turns on whether the advertisements were approved at the 6 or 12 August meeting. Mr Joske was not challenged on the material in par (f). Ms Wong did not mention it. 64 As to (i), I accept Ms Wong's evidence in preference to Ms Joske's. As I have said at [46], their various communications are more likely to have made a memorable impression on her than on him. As to (j), Ms Wong and Mr Joske were agreed as to the substance of this paragraph. They differed only as to the date and whether the conversation was preceded by the enquiry in (i). Ms Wong was unable to assign dates to various meetings and events, and her evidence was thus uncertain as to the sequence of events. I think Mr Joske's date is more likely to be correct, and that his recommendation was prompted by the $750,000 offer. As to (l), nothing turns on the date on which the reserve was established. WERE THE REPRESENTATIONS MADE? Respondent's submissions 65 The respondent points out that all the representations pleaded are directed to the selling price of the Property: the price at which the vendors would sell, the price at which they were prepared to sell, the price at which they had instructed the respondent to sell, the opinion of the respondent as to the price at which the Property would be sold, the grounds the respondent had for its opinion as to the price at which the Property would be sold, and its market value. The first three representations relate to the vendors' position as to the selling price, and the next two to the respondent's opinion as to that price. 66 The respondent contends that the advertisements, read as a whole, are not directed to the selling price of the Property, the vendors' position on that price, the respondent's opinion as to that price or the market value of the Property. Rather, they are directed to the class of persons who are invited to inspect the Property, namely those who have more than $600,000, or more than $650,000, to spend on a dwelling. The respondent submits that the words "PRICE GUIDE $600,000 Plus Buyers Should Inspect" are to be contrasted with the device employed in another of the respondent's advertisements. This one contains a bar chart divided into parts showing a price range from 290 through 310 and 330 to 350 with the 310 to 330 range coloured black so as, presumably, to indicate the most likely selling range. That, it is said, is plainly an indication of the vendor's/agent's opinion as to the total range of selling prices ($290,000 to $350,000) and the most likely range ($310,000 to $330,000). 67 Another contrast is said to be provided by a private sale advertisement for five apartments in a single complex. The price guide is "From $725,000", indicating the vendor's asking price for the lowest priced apartment. 68 The first of these contrasting advertisements is directed to the price, albeit within a range, at which the vendor and the agent expect the property to be sold. The second, in so far as it relates to the lowest priced apartment, is directed to the price at which the vendor would sell, was prepared to sell, or had instructed the agent to sell the apartment. 69 The orientation of the advertisements of the Property is said to be different. They are directed not to the vendors' selling price or to the respondent's belief as to that price, but to the class of potential purchasers who should inspect. Apart from that express and distinct message, it was said that the only other thing one could derive from the language is that the minimum for which the Property could be expected to be sold was $600,000 or $650,000. 70 Thus far the respondent's submissions focus on the language of the particular part of the advertisement. But the respondent contends that the context in which that part appears, namely in connection with a proposed auction, is vital to its characterisation. As indicated at [54], in determining whether words convey a particular representation, attention must be directed not only to the words themselves, but to the words in their whole context. The nature of an auction, as opposed to a private sale, is said to be important. In a private sale, the vendor discloses the price that is sought for a property. Someone interested in purchasing it may simply agree to pay the asking price. Or the interested party may offer a lower amount, and the parties may negotiate until they reach agreement. But the interested party knows that it is unnecessary to offer more than the asking price, because the vendor has announced that that is the maximum asked. 71 On the other hand, an owner who chooses the auction mode of sale will rely on the market to set the price. The selling price is determined by the bidders, not by the vendor. Disclosure of the vendor's likely selling price is said to be alien to the auction process. The vendor remains mute throughout the bidding. When all but the final bidder are exhausted, the fate of the auction depends on the vendor. If the vendor has fixed a reserve, which the last bid exceeds, there will be a sale. If there is no reserve, there will be a sale only if the vendor is satisfied with the last bid. There may be a reserve below which the auctioneer will not be at liberty to sell. But that will be a matter between the owner and the auctioneer. It would, it is said, frustrate the selected mode of sale for the reserve to be disclosed. It was submitted that this difference between a private sale and an auction is well understood by those interested in purchasing residential property. If evidence to this effect were necessary, it was given by Ms Wong. See [18]. She was the means her parents used to communicate with the respondent. Acting for her parents, she was plainly a member of the class of persons to whom the advertisements were directed. The importance of the context provided by the fact that the advertisements relate to an auction of the Property is that it would be unnatural to read into them the statement of a likely selling price. Further, the disclosure of such a price would be a departure from the obligations of the agent to the vendors to let the bidders establish the selling price and not to disclose the likely selling price (or even the reserve). 72 The respondent also submits that the invitation to potential purchasers possessing the attribute or quality of having more than $600,000 or $650,000 to spend, is in the nature of an introductory feature or preliminary information referred to in some of the cases as inappropriate to be elevated to the status of a representation. Reliance was placed on the observation of Fisher J in Pappas v Soulac Pty Ltd (1983) 50 ALR 231 at 234, in relation to statements made by a real estate agent about the commercial viability of a shopping centre. His Honour said: "Many of the statements … were also essentially the types of introductory comments, in the nature of puffery, made at the start of negotiations, for the purpose of attracting the interest of a possible purchaser. … To the extent that they are essentially puffery, it is proper to be reluctant to elevate them to the status of potentially misleading conduct." 73 Reference was also made to what was said by Young J in Eighth SRJ Pty Ltd v Merity (1997) NSW Conv R 55‑813, at 56,392, speaking of a newspaper advertisement: "It seems to me very difficult to allege that a newspaper advertisement which is designed primarily to tell people that a house is open for inspection should be construed as giving information other than preliminary information upon which a person should rely in order to enter into a contract. If one expects puffery anywhere, it would be in such a newspaper advertisement. … I think ordinarily an advertisement which merely directs someone to enquire about the product is not expected in trade and or commerce to be relied upon as a quasi representation." 74 The respondent did not in reliance on these passages make a puffery submission, but used them to support the view that introductory comments which seek to attract interest are not of their nature representations going to the ultimate subject matter of a negotiation. Here, it was said, the subject matter of the information in the advertisement (namely an inspection) is remote from the subject matter of the ultimate transaction (namely the price at which it was sold). Conclusion 75 I do not find persuasive the distinction drawn by the respondent between the "direction" of the alleged representations and that of the advertisements. The words "Buyers Should Inspect" do not, to my mind, preclude the direction of the relevant part of the advertisement being the selling price of the Property. First, the visually dominant part of the composite phrase is "PRICE GUIDE". The natural meaning of these words is a guide as to the price at which the Property is likely to be sold. Mr Joske himself eventually accepted that that was what the words meant. Second, the emphasis on the later words "Buyers Should Inspect" does not, it seems to me, deflect attention from an indication of the likely selling price to an invitation to inspect. It is true that they identify a group of potential purchasers, namely those who have more than $600,000 or more than $650,000 to spend on a dwelling. But the cardinal characteristic of the group is its spending potential, which is related to the likely selling price of the Property. Why, it may be asked, are members of this group being invited to inspect? Because they are likely to be able to pay more than $600,000 or more than $650,000 for the Property. The advertisements as a whole would implicitly carry with them an invitation to inspect even without the addition of the words "Buyers Should Inspect". The price guide merely narrows the focus of that invitation upon a particular class of potential purchasers. 76 The essence of the respondent's auction/private sale distinction is that it would be unnatural to read into an auction advertisement a statement of the likely selling price. But the evidence, and general experience, shows that that is routinely done in connection with auctions. The bar chart case referred to in [66] is an auction advertisement, yet it plainly discloses a selling price range. The invitation to inspect directed to the relevant class in the present case, though it does not contain a cap or maximum expected price, is directed to a range, namely a minimum of $600,000 or $650,000 and upwards. The submission that the disclosure of a likely selling price would be a departure from the obligations of an agent to let the bidders establish the selling price and not to disclose the likely selling price, is answered by the fact that the vendors approved the advertisements. Ms Wong was certainly aware that the price guide was directed at a likely selling price and that interested purchasers would so understand it. See [61](i). Further, I doubt whether the distinction between the methods of sale by auction and sale by private treaty is as clear as the respondent asserts. The period before an auction can, and often does, give rise to negotiations with a view to a sale by private treaty – as in this case. During those negotiations, the vendor is not mute and may effectively disclose a price at which he is prepared to sell. 77 The cases relied on by the respondent (see [72] and [73]) do not assist. I do not understand Fisher J in Pappas to be positing the distinction between puffery and merely introductory statements (as opposed to "introductory comments, in the nature of puffery") that the respondent apparently contends for. In any case, Pappas is distinguishable. There, the main question was whether the alleged statements were misleading. Fisher J's reliance on the observations in Parkdale (see [54]) make this clear. Eighth SRJ is also distinguishable. The representations relied on there included the words "Max living style with min maintenance" and "Just move in and enjoy" in an advertisement of the property in question. Young J was of the view that such statements "do not get into the area of statement which were intended to be more than introductory puffery". On their own, such statements amount to very little that is of substance. Unlike the instant case, it is extremely doubtful whether such inherently uncertain statements in an advertisement could ever be converted into meaningful representations. 78 In my view, the advertisements carry the representations alleged in pars 7(a), (b) and (c) and 8(a), (b) and (c) of the statement of claim. I note in passing that there seems to be no difference between those in (a) and (b) – the price at which the vendors would sell and that at which they were prepared to sell. In my view the advertisements also carry the representations in pars 7(d) and (e) and 8(d) and (e). It was suggested by counsel for the respondent that the one advertisement is incapable of carrying the two classes of representation alleged: first as to the price at which the vendors were prepared to sell, and second what their agent believed was the likely sale price. I see no reason why, where a vendor acting on the advice of an agent settles upon a price range or a minimum price and instructs an agent to cause advertisements to be published accordingly, the advertisement cannot convey representations both as to the vendors' selling price and the agent's belief as to the selling price. 79 I do not consider that the advertisements carry any representation as to the market value of the Property (pars 7(f) and 8(f)). WERE THE REPRESENTATIONS FALSE? Section 52 80 The representations in pars 7(a) and 8(a) of the statement of claim are representations as to future matters. Accordingly the respondent has the onus of showing it had reasonable grounds for making them. In default they are taken to be misleading. The first three "$600,000 Plus" advertisements were lodged before the Kolsky offer was made. By the time the first advertisement was lodged on 19 August the vendors had told Mr Joske they were not prepared to sell for less than $780,000 and wanted more than that. It was not in dispute that $780,000 is substantially more than $600,000. In addition to this, on 6 August Mr Joske informed the vendors of his $700,000 appraisal, and that they might get as much as $741,000, though he thought that was not likely. Even his appraisal of $700,000 showed that he did not think the vendors would sell for approximately $600,000 or a price that was not substantially more than that. Again it was not in dispute that $700,000 is substantially more than $600,000. The respondent has not shown that it had reasonable grounds for making the representations in par 7(a) conveyed by the first three advertisements. 81 The advertisements lodged on 28 August, 2 September and 4 September were made at a time when Mr Joske and the vendors were aware that the Property could have been sold for $750,000 before auction. The letter from Mr Kolsky of 27 August, an exhibit to Mr Joske's affidavit, asserts that the offer was made on Mr Joske's "strong suggestion, as he said that the (comparable) property next door had just recently sold for $741,000 and that that was the best price indicator for this property". Mr Joske accepted that the sale price of 343 was probably the best indicator of the price or value of the Property. And then along came an offer of $750,000, only a little more than the price obtained for 343. Mr Kolsky's letter shows that he (acting for his wife Michal Schneider‑Kolsky) was an anxious purchaser. He could not understand why his offer had not been passed on to the vendors, and was angry about this. His letter concluded: "Michal herewith offers to purchase this property for $750,000 on a 90 day settlement. You can collect from me here, or from Michal who is at home today, a cheque of $75,000 immediately if you wish. … I must now insist that Michal's offer above be immediately put to the vendor, and that you inform me of his/her response forthwith. I should be pleased if you now did so without further delay. It behoves me to point out that it is your legal responsibility, as selling agents, to inform the vendor immediately of the offer and to let us know his/her response. We trust this matter can be dealt with in a professional manner." There is no doubt that the offer was a genuine one and that its quantum was influenced by the price obtained for 343. 82 The vendors rejected the Kolsky offer on 27 August. Mr Joske was aware of this. It follows that the respondent did not have reasonable grounds for representing that the vendors would sell for a price that was approximately, or was not substantially more than, $600,000 or later $650,000. It was not in dispute that $750,000 is substantially more than both $600,000 and $650,000. Accordingly the representations in pars 7(a) and 8(a) were misleading in relation to the last three advertisements as well. 83 Although not pleaded as such, in argument the applicant contended, in my view correctly, that the representations in pars 7(e) and 8(e) of the statement of claim relate to future matters. As indicated in the discussion of pars 7(a) and 8(a), the respondent did not have reasonable grounds for believing and holding the opinion that the Property would be sold at a price that was approximately, or was not substantially more than, $600,000 and later $650,000. The representation is thus deemed by s 51A to be misleading. For the reasons appearing in [80]‑[82] the respondent has not shown that it had reasonable grounds for making the representations in pars 7(e) and 8(e) conveyed by the advertisements. 84 The representations in pars 7(b) and (c) and 8(b) and (c) do not relate to future matters. However, what I have said at [80] shows that the first three advertisements were misleading because at the time they were lodged Mr Joske knew that the vendors were not prepared to sell for less than $780,000. Even his own appraisal of $700,000 showed that he did not think the vendors were prepared to sell for approximately $600,000 or a price that was not substantially more than that. A fortiori he could not have believed that the vendors had instructed him to sell for $600,000 or for a sum that was not substantially more than that. 85 The representations in the last three advertisements were also misleading. The vendors had rejected the Kolsky offer. Mr Joske was aware of this. He thus knew, when the last three advertisements were lodged, that the vendors were not prepared to sell for approximately $600,000 or later $650,000 or a price that was not substantially more than $600,000 or later $650,000. He also knew that the vendors had not instructed him to sell for a price that was approximately, or was not substantially more than, $600,000 or not substantially more than $650,000. As I have said, it was not in dispute that $750,000 is substantially more than both $600,000 and $650,000. Accordingly representations 7(b) and (c) and 8(b) and (c) have been shown to be false. 86 Representation 7(d) has also been shown to be false. On the dates when the first three advertisements were lodged, Mr Joske knew that the vendors were not prepared to sell for less than $780,000. He could not have believed or have held the opinion that the Property would be sold at a price that was approximately, or was not substantially more than, $600,000. His own valuation of $700,000 also showed that he could not have had that belief or held that opinion. 87 The last three advertisements were lodged after the Kolsky offer had been rejected. It was put to Mr Joske that the Kolsky offer was an indication of the value of the Property. His response was unconvincing: "When you received the offer of $750,000 did your view of value change?--- Not overly. Did it change at all?--- Not really because its only one buyer's opinion. … Didn't you eventually put the offer of $750,000 to the Wongs and they said no?--- That's right. Didn't they say they wouldn't sell for less than $800,000?--- That's right. None of that changed your opinion that the property was worth around $700,000?--- That didn't change my opinion of the value. So your opinion of value is unaffected by what actually happens in the market …?--- Certainly that didn't affect what I felt the result might be since the offer was withdrawn. … What about when the $750,000 was offered? Did you think maybe your $700,000 appraisal was light on?--- Possibly. Did you think it or not?--- I didn't know. You didn't even consider it?--- I considered that it may be." 88 It must have been clear to Mr Joske from the Kolsky letter that here was a genuine, indeed anxious, purchaser prepared on 27 August to pay $750,000. I do not accept his evidence that the $750,000 did not affect his opinion of the value of the Property. Certainly the reasons he gave for this are not at all persuasive. The first was that $750,000 was only one buyer's opinion. This was a buyer who was prepared to pay that amount, and was anxious to pay a deposit there and then. That must have indicated to Mr Joske that, subject to instructions, the Property could have been sold for $750,000 before auction. The second reason was that the offer was withdrawn. In fact it was rejected by the vendors, and Mr Kolsky did not accept the vendors' counter offer of $800,000. None of this alters the fact that on 27 August a genuine buyer was prepared to pay $750,000 for the land. 89 It follows that representations 7(d) and 8(d) conveyed by the last three advertisements have been shown to be false. From 27 August or thereabouts Mr Joske believed and held the opinion that the Property was likely to be sold for at least $750,000. Section 53(e) 90 The respondent contends that even if it engaged in the conduct alleged by the applicant, it cannot be held to have contravened s 53(e) of the Act, because the services the applicant alleges it was supplying, "namely, rights and interests in the Property", are not "services" as defined by s 4(1) of the Act. That definition: "includes any rights (including rights in relation to, and interests in, real or personal property), benefits, privileges or facilities that are, or are to be, provided, granted or conferred in trade or commerce …." The respondent submits that the authorities in this and other courts (albeit in relation to alleged contraventions of ss 52 and 53A of the Act) make clear that the vendors' sale of the Property is not a transaction "in trade or commerce" and, therefore, is not a supply of "services" for the purposes of the Act. 91 In support of this submission, the respondent relies on the decision of the Full Court of this Court in O'Brien v Smolonogov (1983) 53 ALR 107. That case involved an alleged contravention of s 53A(1)(b) of the Act. The impugned conduct took place during telephone conversations that occurred as a result of a newspaper advertisement placed by the appellants wherein they solicited inquiries from potential purchasers of parcels of rural land owned by them. The Full Court said (at 113‑114): "… it cannot be suggested that the lands acquired by the appellants became trading stock (see FC of T v St Hubert's Island Pty Ltd (in liq) (1978) 19 ALR 1; 138 CLR 211). Nor is it a case where the taxpayer's activities amounted to more than the mere realization of a capital asset and constituted the carrying on of land development (see FC of T v Whitfords Beach Pty Ltd (1982) 39 ALR 521). The land itself was not used for any business activity: it was not used for farming or grazing. It follows, in our opinion, that the only possible feature of the case which could conceivably be relied upon to suggest that the impugned conduct occurred in trade or commerce was the resort by the appellants to a newspaper as a medium of public advertisement of the land and the use made by the parties of the telephone for the purpose of conducting negotiations. It is true, as the learned judge observed, that the use of such facilities is common practice in the conduct of trade or commerce. … But, in our view, the mere use, by a person not acting in the course of carrying out a business, of facilities commonly employed in commercial transactions, cannot transform a dealing which lacks any business character into something done in trade or commerce." (The emphasis is added.) The respondent essentially submits that much the same circumstances obtain here: that the vendors were not attempting to sell the Property as part of any business but merely because they no longer wished to reside there. The vendors' engagement of the respondent to facilitate the sale of the Property at the highest possible price does not convert their purpose into one that can be described as one "in trade or commerce". 92 The respondent also relies on decisions since O'Brien in support of this submission: Argy v Blunts & Lane Cove Real Estate Pty Ltd (1990) 26 FCR 112, Franich v Swannell (1993) 10 WAR 459 and Eighth SRJ. 93 In Argy, Hill J said (at 129) that: "It could scarcely be said that a person who sells his home, whether by private treaty or by auction and whether he conducts the negotiations personally or through a real estate agent, is undertaking what he does in the course of a trade or business or in a business context. … The present is purely a case of a person selling his house, and accepting that O'Brien v Smolonogov is correct, it necessarily follows that whether or not an estate agent is used, and whether or not that agent advertises the property by preparing brochures or other advertisements and whether or not the agent sells by auction or merely negotiates a private treaty, the sale still remains a sale by the vendor of his house and not an act done in a business context." (The emphasis is added.) In Franich, Seaman and Ipp JJ (at 479 and 481 respectively) agreed with the above passage. See also Eighth SRJ at 56,390‑1. Each of these cases involved the sale of urban residential property by vendors who had engaged an estate agent to facilitate its sale. 94 None of the decisions noted above involved an alleged contravention of s 53 of the Act. However, this does not mean that they are of no assistance in the instant case. All deal with the question whether the sale of residential property can be described as "in trade or commerce" for the purposes of the Act. In my opinion, they make clear that that the attempted sale of the Property cannot be so described. There is simply nothing in the evidence to suggest that the vendors were doing anything more than attempting to sell their family home because, at the time, they no longer wished to reside in it. 95 The respondent does not dispute that it was acting "in trade or commerce" when it advertised the Property. However, the further question that is posed by s 53(e) is whether the respondent was doing so "in connexion with the supply or possible supply of … services" as defined by the Act. The service identified by the applicant is "rights and interests in the Property". Only the vendors of the Property can provide this service. For the reasons I have given, I am of the opinion that the vendors were not seeking to provide this service "in trade or commerce" – which they must do if that service is to come within s 53(e). Therefore, the respondent cannot be held liable for a contravention of s 53(e). 96 The inclusive nature of the Act's definition of "services" is not fatal to the respondent's contention. The work done by the word "includes" in the definition of "services" is to enlarge the ordinary meaning of "services" to include "rights (including rights in relation to, and interests in, real or personal property), benefits, privileges or facilities that are, or are to be, provided, granted or conferred in trade or commerce". The enlargement of the meaning of the word "services" to include certain things that might not ordinarily be thought of as services (such as interests in real property) is circumscribed by the words "in trade or commerce". 97 The applicant did not join issue with the respondent's services/trade or commerce contention. It understood the contention to be that an estate agent who, in the course of business, causes an advertisement to be published does not do so in trade or commerce because the subject matter of the advertisement is residential property. That was never the respondent's submission, which is directed not to the words "in trade or commerce" in s 53 itself, but to those words in the definition of "services" in s 4(1). Thus the respondent's real contention went unanswered. Section 53A 98 The respondent contends that the alleged representations are not representations concerning the "price payable" for the Property. It was submitted that the concept of "price payable" in s 53A(1)(b) "is concerned with the nature of the burden that arises under a contract that has been or is to be entered into [and] not … with the process of arriving at or quantifying the price". It was said that the most natural operation for the relevant part of par (b) is a standard form contract containing provisions about payment obligations, where there is a misrepresentation as to what those obligations are, for example as to the instalments payable, the amount of the deposit or the payment of interest. On the other hand, the applicant contends (by its written submissions) that "the addition of the word 'payable' [to 'price'] does not add any meaningful qualification relevant to this proceeding". 99 The Oxford English Dictionary defines "payable" as "Of a sum of money, a bill etc: That is to be paid; due; owing; falling due". The concepts "due", "owing" and "falling due" do reflect the respondent's contention that a contract (or, to put it a little lower, an obligation) of some sort is necessary before a price can be said to be payable. However, the phrase "a sum of money … [t]hat is to be paid" is a broader concept that does not necessarily connote the presence of any sort of obligation to pay. 100 The extrinsic material in relation to s 53A(1)(b) sheds no light on what the legislature intended the word "payable" to mean. The respondent submitted that I should construe "price payable" in accordance with the ordinary meaning of those words. As appears from [99], that approach provides little assistance. 101 The context in which the words "price payable" appear in s 53A(1)(b) leads me to the view that those words do not import a requirement that the impugned conduct be in relation to money that a person is obliged, or will or may become obliged, to pay. The opening lines of s 53A(1) throw some light on the phrase in par (b) – "the price payable for the land". A corporation is precluded from making a false or misleading representation about the matters listed in par (b) "in connexion with the sale or grant, or the possible sale or grant, of an interest in land". The prohibition thus clearly includes pre‑sale activities. This is made even more clear by the ensuing words "or in connexion with the promotion by any means of the sale or grant". The promotion of a sale will unquestionably include the advertising of land for sale. It is difficult in these circumstances to attribute to the legislature an intention to restrict the ambit of the provision (so far it deals with price) to binding contracts under which the price agreed to be paid for the land is either currently payable or due at some time in the future, or to what the respondent called "future contracts" or contracts that are "to be entered into". The precise point at which an inchoate understanding that a property will be purchased becomes an anticipated contractual obligation is unclear. 102 A further indication that the respondent's construction of "price payable" is not the preferable one is seen in s 53A(1)(b). Apart from the "price payable", par (b) includes other instances of false or misleading representations in relation to land, none of which suggests that an obligation to purchase need be in existence or anticipated at the time of the impugned conduct. Indeed, impugned conduct involving the nature of the interest in the land, its location, characteristics, the use to which it may be put, or the existence or availability of facilities associated with the land, may cause loss to a person who does not evince an intention to purchase the land in question precisely because of that conduct. Such loss may consist of the waste of resources on inspection and/or investigation of the land in question that was induced by the impugned conduct. It is difficult to see why the legislature would have intended there to be any relevant difference between the circumstances in which the Act regulates, on the one hand, conduct in relation to misrepresentations as to the "price payable" for land and, on the other hand, conduct in relation to the other instances of misrepresentation appearing in s 53A(1)(b). 103 I did not understand the respondent to contend that the necessarily approximate nature of the "price guide" in the advertisements meant that those amounts could not be a "price" for the purposes of s 53A(1)(b). In Penfolds Wines at 40,222 the Full Court approved "the proposition that the fact that a price is stated to be within a range of a particular figure or that otherwise an element of approximation is introduced, does not detract from the true character of the price as a specified price". If that is the case in relation to a "specified price" appearing in the provisions of the Act dealing with resale price maintenance (the provisions that were at issue in Penfolds Wines), it must also be the case in relation to the concept of a "price" in s 53A(1)(b). 104 Accordingly, the representations I have found to be misleading for the purposes of s 52 also contravene s 53A in that they constituted false or misleading representations concerning the price payable for the Property. RELIEF Declarations 105 The applicant seeks declarations that the respondent has engaged in contravening conduct by making the various representations pleaded (see [3]), and setting out the respects in which they are false or misleading (see [6]). The respondent submitted that such declarations should not be made on two grounds: first, that the Court's findings of fact alone would suffice and no useful purpose would be served by declarations, and second, that the declarations sought are poorly framed and inappropriate. 106 A declaration is a discretionary remedy. I think it is appropriate in a case such as the present, where contraventions have occurred yet no pecuniary penalties are sought, to mark the Court's disapproval of the respondent's conduct by making appropriate declarations. The subject matter of the case is of considerable public interest, involving as it does advertisements for the sale of real property that affect many members of the public. The applicant, as a public body charged with responsibility for enforcing the Act, has a genuine interest in seeking declarations. The case involved a real, and not a merely hypothetical, question for determination. Finally, such declarations act as a deterrent, and are of educative value to both corporations and consumers. In the declarations I have granted, I have sought to avoid the criticisms directed by the respondent to the form of the declarations sought, to the extent that I think the criticisms well‑founded. Injunctions 107 The injunctions sought are described at [8]. The applicant has not pleaded that the respondent intends or threatens further to engage in contravening conduct. Nor is there any evidence that it has such an intention or makes such a threat. Such evidence as there is points in the opposite direction. The tenor of Mr Joske's evidence is that the respondent no longer uses price guides of the type it employed in 2003. It is true that the Court may grant an injunction whether or not it appears that a person intends to engage again, or to continue to engage in, contravening conduct: s 80(4)(a). But whether a person has such an intention is relevant to the exercise of the discretion whether to grant injunctive relief. See Australian Competition and Consumer Commission v Oceana Commercial Pty Ltd [2004] FCAFC 174 at [187] and Australian Competition and Consumer Commission v Dermalogica Pty Ltd [2005] FCA 152 at [109]‑[110]. 108 In BMW Australia Ltd v Australian Competition and Consumer Commission (2004) 207 ALR 452 at [39] the Full Court said: "A relevant factor to consider in determining whether to grant an injunction pursuant to s 80 of the Trade Practices Act is whether the existing sanctions for the conduct to be the subject of the injunction, found in the Trade Practices Act itself, require to be supplemented by the availability of the range of sanctions applicable to contempt of court. The purpose of granting an injunction to restrain conduct already prohibited by legislation can only be to add to whatever consequences the legislation attaches to that conduct the additional consequences of a possible finding of contempt of court by failure to comply with an injunction. In each case, it is a question whether the conduct concerned warrants the application of those more stringent consequences." 109 The conduct in question here does not, in my view, warrant those more stringent consequences. I have referred to the absence of any allegation or any evidence of intended or threatened repetition. There is nothing to suggest that in 2003 the respondent was aware that its advertisements were contravening the Act. There is no evidence that the applicant or anyone else warned the respondent, or asserted, that it was contravening, and that it went ahead regardless. There is no evidence that anyone was induced to act in reliance on the misrepresentations or suffered loss as a result. No one at the auction complained about the advertisements. The vendors expressed no dissatisfaction about them. They appeared to be quite happy with the respondent's conduct of the auction and the preparations for it. The day after the auction they paid the respondent in full for the advertising costs. The auction was an isolated transaction. It is true that there were other advertisements in which the respondent had used the price guide. But there was no evidence that these advertisements had a misleading quality. In all those circumstances, in the exercise of my discretion, I do not propose to grant the injunctive relief sought. 110 The respondent also contended that no such relief should be granted on the ground that the conduct that is the subject of this proceeding is now prohibited by provisions inserted into Part IV of the Estate Agents Act 1980 (Vict) by the Estate Agents and Sale of Land Acts (Amendment) Act 2003 (Vict). Those provisions came into effect after the occurrence of the conduct that is the subject of this proceeding. In Oceana at [185], referring to Queensland legislation introduced in order to deal with fact situations such as that before the Court, the Full Court said the existence of the legislation was a relevant consideration for the primary judge to take into account in determining whether to grant injunctive relief. There is, I think, a serious question as to whether s 47C of the Estate Agents Act as amended would prohibit the conduct in question in this case. However I need not pursue the matter because I am satisfied, for the reasons I have given, that I should exercise my discretion against granting injunctive relief. Compliance program 111 The applicant also seeks an order pursuant to s 86C of the Act requiring the respondent to implement and maintain for three years an appropriate compliance program "to the extent necessary to ensure compliance" by the respondent with ss 52, 53 and 53A of the Act. For essentially the reasons appearing in connection with the refusal of injunctive relief, I decline in the exercise of my discretion to make such an order. The institution of the proceeding, its conduct, its outcome, including the findings of contravention, the making of the declarations and the costs order, will in my view sufficiently concentrate the minds of the respondent and its officers on the need in the future to avoid contravening conduct to make it unnecessary for a compliance program to be imposed on them. I certify that the preceding one hundred and eleven (111) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Sundberg. Associate: Dated: 13 April 2005 Counsel for the Applicant: C Scerri QC and K Anderson Solicitors for the Applicant: Slater & Gordon Counsel for the Respondent: AC Archibald QC and M O'Bryan Solicitors for the Respondent: Allens Arthur Robinson Date of Hearing: 9, 10 March 2005 Date of Judgment: 13 April 2005