FEDERAL COURT OF AUSTRALIA Australian Executor Trustees Limited v Propell National Valuers (WA) Pty Ltd [2011] FCA 522 Citation: Australian Executor Trustees Limited v Propell National Valuers (WA) Pty Ltd [2011] FCA 522 Parties: AUSTRALIAN EXECUTOR TRUSTEES LIMITED (ACN 007 869 794) and SEIZA MORTGAGE COMPANY PTY LTD (ACN 114 436 412) v PROPELL NATIONAL VALUERS (WA) PTY LTD (ACN 009 455 056) and TRAVIS COLEMAN File number: NSD 974 of 2010 Judge: BARKER J Date of judgment: 18 May 2011 Catchwords: TRADE PRACTICES – whether representations contained within a valuation of property provided by the respondents for the purpose of ascertaining whether property represented acceptable security for mortgage purposes were misleading or deceptive or were likely to mislead or deceive contrary to s 52 of the Trade Practices Act 1974 (Cth) –– whether valuation fell within accepted range of values that a competent valuer might ascribe to the value of the subject property valued – whether appropriate for expert witnesses to take into account sales subsequent to the date of valuation for the purposes of the proceedings – whether second respondent involved in the contravention within the meaning of s 75B of the Trade Practices Act 1974 (Cth) TRADE PRACTICES – whether applicants relied upon the representations in the valuation – where evidence of reliance of the applicants upon the valuation limited - reliance on valuation by applicants made out on the balance of probabilities and by proper inference drawn from the evidence NEGLIGENCE - whether second respondent owed a duty of care for the purposes of the law of negligence to the applicants – where second respondent is a licensed valuer employed by first respondent, and who prepared and signed the valuation - whether second respondent assumed personal responsibility towards the applicants – where second respondent knew the valuation would be relied upon by applicants for mortgage security purposes Legislation: Federal Court of Australia Act 1976 (Cth) s 51A Trade Practices Act 1974 (Cth) s 52, s 53A, s 75B, 82, s 87 Cases cited: Campbell v Backoffice Investments Pty Ltd [2008] NSWCA 95Daandine Pastoral Company Pty Ltd v Commissioner of Land Tax of the Commonwealth of Australia (High Court of Australia, Williams J, 26th August 1943, unreported)Esanda Finance Corporation Ltd v Peat Marwick Hungerfords [1997] HCA 8; (1997) 188 CLR 241Fitzgerald Enterprises (WA) Pty Ltd v Bob Slight's Boat School Pty Ltd [2009] WADC 50Frewin v Emmdale Sports Club Inc [2003] NSWSC 108Genworth Financial Mortgage Insurance Pty Ltd v Hodder Rook & Associates Pty Ltd [2010] NSWSC 1043Great Wall Resources Pty Ltd v O'Sullivan [2009] NSWCA 119 Hedley Byrne & Co Ltd v Heller & Partners Ltd [1964] AC 465Hill v Van Erp (1997) 188 CLR 159HTW Valuers (Central Qld) Pty Ltd v Astonland Pty Ltd [2004] HCA 54Interchase Corporation Ltd v ACN 010 087 573 Pty Ltd [2003] 1 Qd R 26 Kestrel Holdings Pty Ltd (ACN 009 590 265) v APF Properties Pty Ltd (ACN 095 297 019) [2009] FCAFC 144; (2009) 260 ALR 418L Shaddock & Associates Pty Ltd v Parramatta City Council (No 1) [1981] HCA 59; (1981) 150 CLR 225La Trobe Capital & Mortgage Corporation Limited v Hay Property Consultants Pty Limited [2011] FCAFC 4Mutual Life & Citizens Assurance Co Ltd v Evatt (1968) 122 CLR 556Mutual Life & Citizens Assurance Co Ltd v Evatt (1970) 122 CLR 628Perre v Apand Pty Ltd [1999] HCA 36; (1999) 198 CLR 180Russell v Federal Commissioner of Taxation 50 CLR 182San Sebastian Pty Ltd v The Minister Administering Environmental Planning Act [1986] HCA 68; (1986) 162 CLR 340Spencer v The Commonwealth (1907) 5 CLR 418Standard Chartered Bank v Pakistan National Shipping Corporation (No 2) [2003] 1 AC 959Tepko Pty Ltd v Water Board [2001] HCA 19; (2001) 206 CLR 1Western Australian Planning Commission v Arcus Shopfitters Pty Ltd [2003] WASCA 295Williams v Natural Life Health Foods Ltd [1998] 1 WLR 830Yorke v Lucas (1983) 158 68 FLR 268Yorke v Lucas (1985) 158 CLR 661 Date of hearing: 8, 9 and 10 March 2011 Date of last submissions: 14 March 2011 Place: Perth Division: GENERAL DIVISION Category: Catchwords Number of paragraphs: 248 Counsel for the Applicants: Mr PCS Van Hattem SC Solicitor for the Applicants: Gadens Lawyers Counsel for the Respondents: Mr PG McGowan Solicitor for the Respondents: DLA Phillips Fox IN THE FEDERAL COURT OF AUSTRALIA WESTERN AUSTRALIA DISTRICT REGISTRY GENERAL DIVISION NSD 974 of 2010 BETWEEN: AUSTRALIAN EXECUTOR TRUSTEES LIMITED (ACN 007 869 794) First Applicant SEIZA MORTGAGE COMPANY PTY LTD (ACN 114 436 412) Second Applicant AND: PROPELL NATIONAL VALUERS (WA) PTY LTD (ACN 009 455 056) First Respondent TRAVIS COLEMAN Second Respondent JUDGE: BARKER J DATE: 18 MAY 2011 PLACE: PERTH REASONS FOR JUDGMENT fast track application 1 This proceeding was conducted under the Court's Fast Track practice note (CM 8). While damages under s 82 of the Trade Practices Act 1974 (Cth) (TP Act), compensation under s 87 of the TP Act and damages for breach of duty of care at common law were claimed by both the first applicant, Australian Executors Trustees Ltd (AET) and the second applicant, Seiza Mortgage Company Pty Ltd (Seiza Mortgage Co) in the Fast Track application, at trial senior counsel for the applicants opened the case on the basis that only the first applicant, AET, sought relief and that relief was only for damages under s 82 of the TP Act and damages at common law. facts 2 At all material times, the first respondent, Propell National Valuers (WA) Pty Limited (Propell) carried on business as a valuer, and the second respondent, Travis Coleman (Mr Coleman) was employed by Propell as a licensed valuer within the State of Western Australia. 3 As explained in more detail below, on or about 20 April 2007, Seiza Mortgage Co received a loan application from a Mr Michael Paul Pell, the stated purpose of which was, in part, to refinance an existing mortgage with another entity, Mortgage Ezy Pty Ltd, over property located at 95 Curtin Avenue, Cottesloe, Western Australia (the subject property), in the sum of $1,200,000. 4 Mr Pell's loan application included a copy of a valuation for the subject property dated 3 April 2007, addressed to Mortgage Ezy Pty Ltd, which had been issued by Propell and signed by Mr Coleman. 5 An officer of Seiza Mortgage Co, who appears to have been a Mr Dean Italia, recommended approval of a four year "Lo-Doc Cash Flow" loan with a loan-to-value ratio (LVR) of 75%, subject to receipt of a valuation report. Seiza Mortgage Co seems to have operated to that point on the basis that the valuation attached to the loan application was indicative of the true value of the subject property. 6 By a "pre-approval" letter dated 26 April 2007, AET (on the face of it by its agent, "Mortgage Ezy Pty Ltd – Qld") notified Mr Pell that, among other things, a valuation report was required. 7 Propell were then reinstructed by Mr Pell or his agent (which also appear to have been Mortgage Ezy Pty Ltd – Qld or its principal, a Mr McLeod) to prepare a new valuation. Mr Coleman completed the task after visiting the subject property and satisfying himself that it appeared to be in same condition as it was when he completed the 3 April valuation for Mortgage Ezy. He then signed a new valuation which was provided to Seiza Mortgage Co on 7 May 2007. 8 The valuation issued by Propell and signed by Mr Coleman and given to Seiza Mortgage Co on 7 May stated that the report could be relied on by, amongst others, AET and Seiza Mortgage Co. 9 Mr Coleman accepted, in the course of evidence, that the valuation so issued was issued with the intention or expectation that the appellants could rely on it for the purposes of assessing and approving the subject property as security for a loan. 10 The valuation issued by Propell and given to Seiza Mortgage Co contained a representation that the market value of the subject property as at 3 April 2007 was $1,600,000. 11 On or about 7 May 2007, AET made a written offer to Mr Pell for a principal loan advance of $1,200,000 to refinance his existing loan over the subject property, as well as $20,650 for fees payable by Mr Pell on settlement of the loan. 12 Under the terms of the offer made by AET, the loan was to be a "Residential Lo Doc 4 Year Cash Flow Manager Loan", secured by way of first registered mortgage over the subject property. Among other things, this had the consequence that Mr Pell's repayment obligations did not require repayment of principal, and required payment of less interest than would actually accrue, during the first four years of the loan. 13 Mr Pell signed and thereby accepted the loan offer on 23 May 2007. 14 On 25 May 2007, AET advanced the sum of $1,220,650 to Mr Pell. 15 Mr Pell subsequently defaulted on the loan. His last payment which was honoured and credited to his account was on 8 September 2008. Subsequent payments by him until 5 June 2009 were dishonoured, after which he made no further payments. Mr Pell was subsequently declared bankrupt. 16 AET commenced proceedings for possession of the subject property, obtained judgment and entered into possession in October 2009. As mortgagee in possession, AET sold the subject property by public auction in February 2010 for a sale price of $980,000. That sale settled on or about 4 June 2010. 17 The proceeds of sale were insufficient to extinguish the loan obligation. AET calculate its loss as at 4 June 2010 in the sum of $407,739.15 and now claim, as trustee for the loans and mortgage written under Seiza Mortgage Co's lending program, that amount as damages together with interest thereon and costs. issues 18 The applicants claim that: the valuation issued by Propell to Seiza Mortgage Co contained representations that the subject property represented acceptable security for the first applicant's and the second applicant's mortgage purposes, which were false or incorrect in that the market value of the subject property as at 3 April 2007 was only $1,030,500, not $1,600,000; the representations were not based on a reasonable degree of professional skill and care, in that the valuation was deficient in a number of respects and that the methodology adopted by Mr Coleman fell below the degree of skill and care expected of him; Propell is primarily liable for its contravention of the TP Act as well as vicariously liable for the negligence of its employed valuer, Mr Coleman; and Mr Coleman was relevantly involved in Propell's contravention of s 52 and s 53A(1)(b) of the TP Act by Propell so that he is liable also for that contravention pursuant to s 75B of the TP Act, but that he also is liable in negligence directly to AET for his negligence. 19 The respondents dispute that: (1) the respondents' valuation contained representations which were false and misleading; (2) those representations were made negligently; (3) Mr Coleman was a party to the making of those representations; (4) the applicants relied upon those representations and, in doing so, suffered loss; and (5) the applicants adequately mitigated any such loss. whether representations were false or misleading and valuation negligently prepared 20 The test in a valuation case: On or about 7 May 2007 the respondents provided the applicants with the valuation prepared by Mr Coleman. While he signed a new valuation as of this date, the valuation provided was in effect confirmation of that which Mr Coleman had made on 3 April 2007 for Mortgage Ezy. 21 In these circumstances, the applicants contend that the valuation provided by the respondents to them contained representations that the subject property represented acceptable security for their mortgage purposes, which were false or incorrect, and constituted a gross overvaluation, in that the market value of the subject property as at 3 April 2007 was not the $1,600,000 stated in the valuation, but only about $1,030,500. 22 The parties generally accept that a gross overvaluation may, depending on the circumstances, constitute a contravention of s 52 of the TP Act and negligence at common law. 23 In relation to representations concerning the valuation of subject property it is often accepted, having regard to the facts of the case, that a valuation given by one party to another will not be considered misleading or deceptive and not prepared without due care and skill merely because another, perhaps more experienced, valuer arrived at a different valuation figure. Accordingly, it is generally accepted, as it is here by the expert valuers, that a valuation will not be considered misleading or deceptive or negligently prepared, if it falls within a range of values that a competent valuer might ascribe at the material time to the value of the subject property valued: see generally Genworth Financial Mortgage Insurance Pty Ltd v Hodder Rook & Associates Pty Ltd [2010] NSWSC 1043 (Genworth) at [21][23] and [56][57], per Einstein J and authorities there referred to; Kestrel Holdings Pty Ltd (ACN 009 590 265) v APF Properties Pty Ltd (ACN 095 297 019) [2009] FCAFC 144; (2009) 260 ALR 418 at [148]. 24 The valuers here suggest that a tolerance of about 10% of market value might be considered an acceptable tolerance in a property valuation of the type here under consideration. Senior counsel for the applicants in closing submissions, perhaps more generously, considered that the central question of fact is whether the market valuation of $1,600,000 was more than 10% or perhaps, at most, more than 15% above the market value. Accordingly, counsel submitted that if the market value was $1,400,000, allowing a 15% margin at the outer limit, a valuation of just over $1,600,000 would not be unfair in this case, or to put that in stricter terms, not incorrect from a competency point of view and not misleading or deceptive for the purposes of the s 52 TP Act cause of action, or in breach of the duty of care owed by the valuer to the client. I proceed on the basis expressed on behalf of the applicants, which was not quibbled with on behalf of the respondents. 25 Mr Coleman's 3 April 2007 valuation: In his valuation authorised 3 April 2007 and provided to Mortgage Ezy, which was confirmed on 7 May 2007 in the valuation provided to the applicants, Mr Coleman valued the subject property at $1,600,000, made up of a land value of $1,520,000 and improvements of $80,000. As can be seen, most of the value was in the land. 26 In the Property Summary in the valuation, Mr Coleman correctly noted the address of the subject property at 95 Curtin Avenue, Cottesloe, the relevant title details and zoning and that the Site Area of the subject property was 458m2. 27 However, in a number of other respects, Mr Coleman seems to have been a little slovenly in the information he provided. For example, he recorded the Site Dimensions as "Corner lot", when it was not and specified that the car accommodation was a "Garage" when it seems plainly to have been a carport. 28 Also, Mr Coleman did not note the prior sale of the subject property itself less than two years earlier, in June 2005, for $750,000. Under Recent Sales of the Subject Property and Earlier Sale of the Subject Property Mr Coleman recorded "n/a", meaning "not applicable". 29 However, for both the purposes of assessing whether the valuation was misleading and deceptive, or incorrect, or prepared negligently, those details effectively may be put to one side, because it is plain that the value in the subject property was mainly in the land value and it is also plain, on Mr Coleman's evidence, which I accept in this regard, that he had prior familiarity with the subject property and was not confused about which property he was actually valuing in April 2007. 30 In relation to the value of the subject property, Mr Coleman's valuation relied upon seven sales, which he evaluated in his statement of Sales Evidence & the Market and which I abbreviate for present purposes as follows: 7 Eileen Street, Cottesloe, 19/9/2006, 170m2, $1,450,000, three bedroom constructed in 1995, "inferior overall" by comparison. 21 Rosser Street, Cottesloe, 1/1/2007, 445m2, $1,500,000, four bedroom fully renovated, "inferior overall". 20 Brighton Street, Cottesloe, 12/9/2006, 668m2, $1,630,000, two bedroom built in 1951, predominantly land value, "superior overall". 51 Brighton Street, Cottesloe, 20/10/2006, 647m2, $1,780,000, two bedroom, 1953 construction, "superior overall". 33 Napier Street, Cottesloe, 2/9/2006, 668m2, $1,825,000, three bedroom, constructed in 1935, "superior overall". 32 Boreham Street, Cottesloe, 5/10/2006, 663m2, $2,270,000, modern located on the corner of Gordon Street, "superior overall". 2 Lyons Street, Cottesloe, 5/10/2006, 361m2, $2,300,000, three bedroom brick and iron, good presentation, "superior overall". 31 Mr Coleman indicated in the section dealing with Sales Evidence and the Market that the level of market activity was "Good" and that the recent market direction was "Steady". In answer to the question whether there was a two or multitier market, he stated "No". 32 In the valuation Mr Coleman added Additional Comments in the following terms: As at the date of valuation, the subject property is considered to have a current fair market value of $1,600,000, which is supported by the analysis of comparable sales evidence. The sales evidence analysed varied in age, size, condition, location and the overall level of improvements provided, however the sales evidence listed represents a fair level of comparison. The market value has been assessed exclusive of GST. The subject property does represent good security for mortgage purposes. Sales evidence are considered dated, however, recent sales of a similar nature and within close proximity to the subject property are limited, accordingly the value at the date of sale has been adjusted to take into account any trends since that time. 33 Mr Coleman gave evidence at the trial of this proceeding. He commenced with Propell, when it was known as Ray White Valuers (WA) in May 2000 as a student/assistant valuer, having graduated from Curtin University of Technology in 2000 with an undergraduate Bachelor of Commerce majoring in property. He became a licensed valuer in October 2002. From October 2002 until 2004 he prepared valuations for properties throughout the Perth metropolitan area, but since 2004 has predominantly valued prestige residential properties focussing on Perth's western suburbs and other high valued areas. At the time of trial he was employed as the valuations manager of Propell in Perth and had held that position since 2007. 34 Mr Coleman considered that in the period 2004 to 2007 he had prepared the following numbers of valuations in the western suburbs area: 86 in Cottesloe. 18 in Swanbourne. 119 in Mosman Park. 26 in Peppermint Grove. 78 in Claremont. 52 in Dalkeith. 44 in Nedlands. 35 Mr Coleman explained that to prepare these valuations he typically: Spoke on an approximately fortnightly basis to real estate agents active in the areas regarding valuation requests and the strength of buyer interest in the market. Regularly monitored Cottesloe property sales using RP Data, which provides details of property sales, listing price and sales price and does this almost on a daily basis. Attended Propell office meetings every two months, where licensed valuers discussed trends in the Perth real estate market and at which he spoke on trends specific to the Cottesloe property market. Attended numerous auctions in the area to gain a direct impression of the level of demand and activity in the market. In this regard he attended approximately 5 to 10 auctions in Cottesloe in 2006 to 2007. Regularly reviewed subject property statistics compiled by RP Data and the Real Estate Institute of Western Australia (REIWA). 36 Mr Coleman's view at the time he prepared the valuation based upon this experience was that from the start of 2006 to early 2007 the Cottesloe market experienced very strong growth before steadying in early to mid-2007. 37 He remarked that in the period from 2006 to early 2007 properties advertised for sale in Cottesloe were often advertised as "from" a set amount and more often selling for more than that, which was opposite to the ordinary practice wherein a subject property was advertised at an "aspirational" price. 38 So far as the valuation he prepared for Mortgage Ezy dated 3 April 2007 was concerned, Mr Coleman explained that having received instructions to prepare the valuation he contacted the owner for permission to inspect the subject property, which permission was given. On 3 April he conducted a search of the Home Open database for records of property sales in Cottesloe in the Department of Land Administration's (DOLA's) electronic records for residential sales for Cottesloe for the previous six months and on a copy of the print out of the data made handwritten annotations for the purpose of choosing properties to use to compare to the subject property when making the valuation and in this respect chose seven properties for comparison. Those seven were the seven ultimately listed in the valuation as set out above. 39 Mr Coleman says that he recognised that these sales were somewhat dated and were not individually of a similar size, location and quality to the subject property. Mr Coleman said he understood that Mortgage Ezy required a minimum of three sales within three to six months of the valuation date and within 10% of the assessed value of the subject property. If that could not be done, as it could not be in this case, additional sales had to be included and comments added explaining why this could not be done. 40 Mr Coleman stated that, as he did not have sales evidence available to him which accorded with these requirements and which was in close proximity to the subject property, he had to broaden his search parameters to cover the entire suburb of Cottesloe and adjust each sale to take into account the overall level of improvements, locational factors, aspect/views afforded and land areas. In that regard, Mr Coleman considered the seven properties listed together provided a reasonable range of sales which could be used to determine the value of the subject property. 41 In preparing the valuation Mr Coleman confirmed that on 3 April 2007 he inspected the subject property and completed a checklist as well as a sketch of the subject property. He also drove to each of the seven other properties in order to see whether each was inferior or superior to the subject property. His inspections of those properties, however, was only external, although he had previously inspected two of them, 7 Eileen Street and 51 Brighton Street in about September and October 2006. 42 Mr Coleman said that before he completed the valuation, he spoke to a real estate agent known to him to ascertain her general market perception of property demand and supply, and her view was that there was a minimal supply and a lot of demand, but it was difficult to gauge land values because of the unprecedented demand, views he then shared. 43 Valuation of Mr Ross Hughes: The applicants called Ross Allen Hughes to give expert evidence. Mr Hughes is a licensee partner of Ross Hughes Property and a licensed valuer in Western Australia. He has more than 40 years experience in business, especially the property industry. Between 2007 and 2010 he was President and Vice President of the Australian Property Institute and between 1997 and 2002, was variously a board member and chairman of LandCorp, a State government property agency. 44 Mr Hughes was briefed by the applicants to prepare three reports. First, he was briefed to provide a valuation in respect of the subject property as of 3 April 2007. Once that was to hand, he was further briefed by the applicants to review the respondents' report dated 3 April 2007. Then he was later briefed to review the valuation of the subject property prepared by Mr Steve Kish of Burgess Rawson, which had been filed on behalf of the respondents in this proceeding. 45 In his valuation report dated 30 March 2010 (Exhibit 7), Mr Hughes valued the subject property at $1,030,500 as at 3 April 2007. He completed that report without any awareness of and without regard to the respondents' valuation, a desirable approach in the proceeding such as this as it helps to avoid any conscious or unconscious contamination of the independent valuer's mind. 46 In his valuation Mr Hughes had regard to the classical definition of market value provided by Griffiths CJ in Spencer v The Commonwealth (1907) 5 CLR 418 at 441. 47 Mr Hughes noted formal matters such as title particulars, that there were no limitations or encumbrances and then described the location and site and services of the subject property. 48 In particular, he made the following observations concerning location: The subject property is an old residential cottage on the southern fringe of Cottesloe, adjacent to the neighbourhood of Mosman Park. Cottesloe is a well serviced beachside residential suburb, is well served with government and private schools and is 1km west of the Swan River. Mosman Park railway station is situated some 200m to the south of the subject property as is the commercial precinct of Mosman Park. 49 Mr Hughes then noted improvements on the site, providing photographs of the improvements and noting also that the subject site had a rear frontage to George Street. 50 Mr Hughes then provided what he termed an "Economic Overview" based upon information from the Chamber of Commerce and Industry of WA. As of the December quarter 2006, he observed the following as key points: Business confidence in the outlook for the WA economy fell to a three and a half year low in the December quarter. However, business sentiment about the current economic environment remains high, with 93% of respondents describing current economic conditions as positive. Businesses reported slightly weaker operating conditions, but activity remains positive overall. Price pressures appear to have eased slightly this quarter, but wages under input costs remain at a high level. 51 Mr Hughes further commented that: The property market peaked in the June quarter of 2006 then reflected signs of moderating in 2007. Since the second half of 2006 there have been discernable downward pressures and shifts in the property market. It is extremely unlikely the boom market conditions of 2006 will be repeated. Progressively slowing market conditions during the second half of 2006 were largely symptomatic of an interest rate induced slump and an inevitable price correction following several years of unprecedented growth rates, which created affordability issues. 52 As to the basis of the valuation he conducted, Mr Hughes noted that the main valuation methods are market comparison, cost approach, income capitalisation and hypothetical development approaches, although he also noted that, on close examination, all of these methods are really different forms of a market comparison method of valuation. He rejected the appropriateness of the methods of cost approach, income capitalisation or hypothetical development in this instance and considered the primary methodology in arriving at value of the subject property should involve weighted application of sales evidence. 53 Mr Hughes accepted that the highest and best use of the subject property was as a single residential redevelopment site. 54 In adopting the approach he recommended, Mr Hughes stated that sales of similar use properties in Cottesloe were more suitable for comparison with the subject property as they largely comply with the following requirements within reasonable limits: Land use and potential utility. General location. Dates of transactions. Physical characteristics. Amenities and services. Transaction circumstances. 55 Mr Hughes then identified a range of "historical sales evidence" in his section dealing with Sales Evidence in respect of improved properties, which he evaluated and reduced to a value per square metre, and which I abbreviate as follows: 43 Curtin Avenue, Cottesloe, February 2006, 382m2, $1,065,000, or $2,788m2, dated sale of three bedroom 40 year old dwelling, which fronts a service road separated from Curtin Avenue with views of the Indian Ocean, "significantly superior" to subject property; 79 Curtin Avenue, Cottesloe, February 2006, 491m2, $799,000, or $1,627m2, dated sale of a three bedroom 80 year old brick and tile dwelling which fronts Curtin Avenue, "inferior"; 131 Curtin Avenue, Cottesloe, February 2006, 491m2, $790,000, or $1,609m2, dated sale of a three bedroom 75 year old brick and iron dwelling which fronts Curtin Avenue, "inferior"; 65 Curtin Avenue, Cottesloe, June 2006, 466m2, $1,275,000 or $2,736m2, three bedroom, 70 year old brick and tile which fronts a cul de sac service road, site elevated, "superior"; 21 Rosser Street, Cottesloe, December 2006, 445m2, $1,500,000, or $3,371m2, current sale of four bedroom, two bathroom 85 year old weatherboard and iron dwelling in popular street, 70 metres from Curtin Avenue, "significantly superior"; 86A Grant Street, Cottesloe, January 2007, 474m2, $1,300,000, or $2,743m2, current sale of four bedroom, two bathroom 20 year old brick and tile dwelling in popular dual carriageway street, "significantly superior"; 119 Curtin Avenue, Cottesloe, February 2007, 491m2, $1,690,000, or $3,442m2, current sale of five bedroom, two bathroom 80 year old brick and tile dwelling which fronts road separated from Curtin Avenue, "significantly superior". 56 Mr Hughes also noted sales of vacant land, which he also evaluated, and in respect of which he also provided a per square metre analysis, as follows: 2A Nailsworth Street, Cottesloe, January 2006, 440m2, $1,200,000, $2,727m2, "significantly superior"; 11B Barsden Street, Cottesloe, April 2006, 428m2, $1,165,000, $2,722m2, "significantly superior"; and 5 Albion Street, Cottesloe, September 2006, 292m2, $600,000, $2,055m2, "marginally inferior". 57 Mr Hughes further noted that the subject property itself had sold in June 2005 after being advertised for sale for about 44 days, for $750,000. He noted that the price reflected a sale rate of $1,638m2. 58 He considered that the sales evidence noted as well as the June 2005 sale of the subject property needed to be considered and weighted. 59 In completing what he termed a "Competitive Market Analysis", Mr Hughes noted what he considered were three comparable but unsold properties on the market that indicated current market dynamics: 92 Railway Street, which had been on the market for 150 days with a current asking price of $1,149,000 or $1,971 per square metre improved. 167 Curtin Avenue, which had been on the market for about 52 days at an asking price of $1,050,000 or $2,488m2 improved. 217 Curtin Avenue, which had been on the market for about 75 days at an asking price of $1,050,000 or $1,899m2 improved. Mr Hughes expressed the view that the asking price range of between $1,900 to $2,490m2 improved for those unsold properties was an indicator of value for the subject property and of slowing market conditions. 60 Again utilising a per square metre rate, Mr Hughes commented on the sales evidence by saying that sales of "superior" improved properties indicated a value range of between $2,700 to $3,400m2. 61 He also noted that sales of vacant land indicated a value range of $2,000 to $2,700m2 and a value towards the lower end of that range for the subject property. 62 Mr Hughes then expressed the view that sales of "more comparable improved properties" indicated a value range of $1,600 to $2,000m2. That is to say, having regard to the sales evidence he had provided, that Mr Hughes considered the "more comparable improved properties" to be: 79 Curtin Avenue, sold in February 2006; 131 Curtin Avenue, sold in February 2006; and Vacant land at 5 Albion Street, sold in September 2006. 63 Mr Hughes then concluded: Whilst the median price of established house sales in the western suburbs of Perth reflected significant increases since the June quarter of 2005, it is unlikely that 95 Curtin would have appreciated by more than say 40% since that date. A notional value of $1,050,000 indicates a rate of $2,293 per square metre for 95 Curtin as at April 2007. In my opinion the value of 95 Curtin Avenue as at 3 April 2007 is $1,030,500 or $2,250 per square metre. 64 It is apparent that Mr Hughes in providing this valuation considered that the value of the subject land would not have appreciated by more than 40% since its June 2005 sale at $750,000, and that a per square metre rate inflated by a 40% increase over that time, whilst higher than the rate indicated for his list of more comparable properties ($1,600 to $2,000m2) and within the indicated range for vacant land ($2,000 to $2,700m2), lent support to his valuation, and that anything greater than that would be too high a value. 65 In his second report dated 1 July 2010 (Exhibit 8), Mr Hughes reviewed the 3 April 2007 valuation of the respondents. In analysing the seven sales that Mr Coleman used for the purposes of his valuation, Mr Hughes expressed the view that this involved reliance on "underlying rates of sale" ranging from $2,444 to $8,529m2 and the adoption of a value rate of $3,493m2 for the subject land. While Mr Coleman plainly did not use a rate per square metre for his valuation purposes, it is clear that Mr Hughes found it useful to "convert" Mr Coleman's sales evidence to such a rate so that he could assimilate it into his own assessment. 66 Mr Hughes expressed the view that a competent valuer would not use, for the purposes of valuation, six of the seven sales because they differed in offering significantly better amenities and/or being significantly better located. 67 Mr Hughes indicated that of the seven, he would only have relied upon the sale of 20 Brighton Street, Cottesloe for $1,630,000 in September 2006, it being a subject property of 667m2, analysed by him at $2,444m2 improved. On the basis that the valuer was required initially to identify those recent sales to support a valuation he could have included 20 Brighton Street. He later explained, during crossexamination, that he had not included it in his initial historical sales evidence because he had not then been aware of it. Mr Hughes considered 20 Brighton Street to be "generally superior". 68 Mr Hughes considered each of the other six properties and stated why in his opinion each should be considered "significantly superior" or "superior" and "not comparable" to the subject property. 69 Mr Hughes in this second report confirmed his view that the market value of the subject property after taking account of sales evidence was about $1,000,000. He stated that the approximate market value could be deduced by applying a value of $2,183m2 to the 458m2 area of the subject property. He accepted that a range of plus or minus 10% should apply, thus indicating a market value range of between $900,000 to $1,100,000. 70 As a result he considered the market value ascribed in Mr Coleman's valuation of $1,600,000 for the subject property as at 3 April 2007 "to be excessive". He considered a market value of $1,000,000 to be more realistic as of that date. He did not consider Mr Coleman's valuation to be within parameters sometimes allowed for differences of opinion in valuations of this sort, namely within 10% of the valuation found. It follows that if Mr Hughes had considered a tolerance of 15% above $1,000,000 as appropriate, namely $1,150,000, he would also have considered this to be excessive. 71 Valuation of Mr Steve Kish: Steve Kish, a director of Burgess Rawson and a certified practising valuer in Western Australia was briefed by the respondents to provide an expert report on his opinion as to the market value of the subject property as of 3 April 2007, and also as of 13 February 2010. 72 Mr Kish in his valuation report (Exhibit 13) noted many of the same formal matters concerning the subject property as had been mentioned in the reports of Mr Hughes and also in the respondents' valuation. 73 The principal difference between the valuation of Mr Kish and the other reports referred to, so far as the formal parts are concerned, is that he chose to describe the subject property as "2A George Street" rather than 95 Curtin Avenue, Cottesloe, on the basis that the redevelopment of the property as a single residential site would most likely take advantage of the George Street, rather than the Curtin Avenue, frontage, something that Mr Hughes did not later seriously quibble with. 74 In relation to market and sales activity for the purposes of the 3 April 2007 valuation, Mr Kish noted the following sales evidence as relevant, which he evaluated, and may be abbreviated as follows: 2 Athelston, Corner Haining Road, Cottesloe, April 2007, 814m2, $1,800,000, older style home built in 1950's, "better than the subject"; 119 Curtin Avenue, Cottesloe, February 2007, 491m2, $1,690,000, quality character home with more recent extensions, "better"; 167 Curtin Avenue, Cottesloe, June 2007, 420m2, $1,050,000, fibro/iron house, 1900's, "not as good"; S/L1, 197 Curtin Avenue/Finey Street, Cottesloe, February 2007, 642m2, $1,070,000, brick and tile house, 1930's, "not as good"; 217 Curtin Avenue, Cottesloe, May 2007, 554m2, $995,000, brick and iron cottage with more recent additions, "not as good"; 19 Elizabeth Street, Cottesloe, July 2007, 569m2, $1,450,000, brick and tile cottage, apparently upgraded since sale, "overall slightly inferior"; 72 Grant Street, Cottesloe, May 2007, 481m2, $1,550,000, brick and tile cottage built 1945 with recent upgrades, "overall only slightly marginally better"; 50 Griver Street (corner North Street), Cottesloe, June 2007, 547m2, $1,297,000, older style brick and tile home, apparently upgraded since sale, "overall inferior and not as good"; 71 Hawkstone Street, Cottesloe, May 2007, 493m2, $1,530,000, brick and tile home 1970's, "marginally better"; 27 Jarrad Street, Cottesloe, May 2007, 445m2, $1,275,000, would appear to be upgraded home since sale, "not as good due to substantially inferior location"; 7 Kathleen Street, Cottesloe, May 2007, 463m2, $1,380,000, weatherboard/iron 1920's, upgraded since sale, "not quite as good"; 24 Lillian Street, Cottesloe, June 2007, 402m2, $1,510,000, vacant land sale and developed since sale, "marginally better"; and 32 Salvado Street, Cottesloe, July 2007, 390m2, $1,340,000, character brick and tile home, "not as good". Of these 13 sales, 11 were subsequent to Mr Coleman's valuation date of 3 April 2007. Neither of the two earlier sales – 119 Curtin Avenue and S/L 1, 197 Curtin Avenue – were mentioned by Mr Coleman. 75 As noted above, in assessing the value as at 3 April 2007, Mr Kish took into account the frontage to George Street upon new construction. In doing so, he considered that the current improvements added limited value. He also considered the site to be elevated. 76 Mr Kish noted REIWA Statistics during the two closest quarters to the subject valuation date and noted that growth was substantial – 4.5% (June 2007) and 8.3% (March 2007) and over the twelve month period a "quite phenomenal" 40.4% (June 2007) and 42.7% (March 2007). 77 As to the annual change of 40.4%, Mr Kish considered this a guide to movement in the market although his valuation was provided on the sales evidence referred to. His view was that this was a "substantial buoyant period". 78 Mr Kish then expressed the view that the sales evidence provided a fairly broad range from $995,000 up to $1,800,000 but that he considered the majority of the evidence to be within the range of $1,340,000 up to $1,550,000. He said this suggested a value in the order of $1,450,000 to $1,500,000. 79 In particular, Mr Kish considered 24 Lillian Street to be similarly affected by Curtin Avenue and the nearby railway, on a similar awkward shaped site, which had been sold as a redevelopment site for $1,510,000 (in June 2007) and which he considered "slightly better". 80 Mr Kish then said that having regard to the very buoyant market as at the date of valuation, the market value would be within this range. Therefore he had adopted a midrange value of $1,475,000. 81 As far as the buoyant market was concerned, Mr Kish noted, as a further "check" to support his assessment, that the subject property was purchased in June 2005 for $750,000 when the median price in Cottesloe was $1,000,000. By comparing this to the June quarter 2007 median price which reflected $1,790,000, this showed a 79% increase over the period. Applying that rationale to the purchase price in June 2005 of $750,000, he considered 79% increase would reflect a value in the order of $1,342,500 as at June quarter 2007, and that this was within 10% of the value he had adopted and so within an acceptable range. Mr Kish later agreed with Mr Hughes this constitutes an invalid valuation methodology. 82 Mr Hughes' responsive report: In a third report dated 28 January 2011 (Exhibit 9), Mr Hughes condensed Mr Kish's report and responded by evaluating the sales evidence relied on by Mr Kish as follows: "Significantly superior and not comparable" 2 Athelstan Road 217 Curtin Avenue "Superior" 119 Curtin Avenue 19 Elizabeth Street 72 Grant Street 50 Griver Street 71 Hawkstone Street 27 Jarrad Street 24 Lillian Street 32 Salvado Street "Does not constitute an open market transaction" 167 Curtin Avenue 83 As to the six sales of the 13 that fell within the range $1,340,000 up to $1,550,000, Mr Hughes suggested they were not comparable and had been applied on the basis of gross price that had not been adequately analysed and weighted. He considered all six to be in superior locations, not exposed to the detrimental impacts of Curtin Avenue, being in close proximity to the railway and a busy road. Mr Hughes also considered that the six were not comparable as the sales occurred subsequent to 3 April 2007. 84 In Mr Hughes' view, the "most comparable" of the current sales selected by Mr Kish was S/L 1, 197 Curtin Avenue in February 2007 at $1,070,000, which had been totally discarded by Mr Kish. 85 Similarly, he considered that three of the sales listed which reflected the lower price range of $995,000 to $1,070,000, all being properties exposed to the impacts emanating from Curtin Avenue, were relevant and should not have been discarded by Mr Kish. In essence, Mr Hughes was critical of the methodology employed by Mr Kish in listing 13 sales, including subsequent sales, discarding some of the highest sales and some of the lowest, and then working from the range then created. 86 He also considered that a current sale of 119 Curtin Avenue in February 2007 appeared to have been discarded by Mr Kish without adequate weighting analysis as to why it was "better". 87 Joint statement of valuers: Pursuant to pre-trial orders of the Court, Messrs Hughes and Kish conferred concerning their expert reports on the valuation of the subject property as at 3 April 2007 and produced a joint statement dated 25 February 2011 (Exhibit 10). 88 The valuers reached agreement on the formal matters and further noted that Curtin Avenue has over 20,000 average weekday traffic movements and that impacts on the subject property by exposure to Curtin Avenue are exacerbated by rail traffic and disturbance emanating from level crossings. 89 The valuers agreed that the prime valuation methodology should be based on the evidence provided by sales of comparable properties. They also agreed that a higher level of comparability should be drawn between the subject property and properties fronting Curtin Avenue which are on a slip road, especially those properties which have two street frontages. 90 They also agreed that check methodology applied in the report and valuation by Mr Kish based on median price statistics was not appropriate. 91 Matters in respect of which the valuers continued to disagree following their conferral were as follows: retrospectivity and subsequent sales evidence; dual road frontage; selection of sales evidence; and sales evidence analysis methodology. 92 As to retrospectivity and subsequent sales evidence, Mr Kish expressed the view that dicta of Williams J in Daandine Pastoral Company Pty Ltd v Commissioner of Land Tax of the Commonwealth of Australia (unreported decision of the High Court of Australia, Queensland Registry in Appeal No 2 of 1942) (Daandine) supported the view that in conducting valuations in circumstances of proceedings such as these it was permissible to have regard to sales of comparable properties that occurred after the valuation date, subject to there being no supervening events which altered the conditions previously existing. Mr Hughes, however, considered it was not appropriate to use evidence of sales completed after 3 April 2007 at all, and considered that the Daandine approach was not relevant to the circumstances of a valuation of the subject property for present purposes. 93 As to the dual road frontage, Mr Kish considered that for all practical purposes the frontage of the subject property is to George Street and any redevelopment would result in Curtin Avenue becoming a secondary frontage. Mr Hughes expressed the opinion that the frontage to George Street is advantageous however the majority of sales referenced possess either rear access, side access or dual street frontage, which is already factored into the valuation of the property. Further, Mr Hughes considered that the advantages in frontage to George Street did not extinguish the negative impacts amounting from exposure to Curtin Avenue. 94 Concerning the selection of sales evidence used by Mr Hughes, Mr Kish expressed the following disagreement: He disagreed with the use of 43 Curtin Avenue on the basis it was dated and views may be impacted by rooftops to the West. He disagreed with the use of 79 Curtin Avenue because it was a dated transaction. He disagreed with the use of 131 Curtin Avenue because it was a dated transaction. He disagreed with the use of 65 Curtin Avenue because it was dated and, whilst acknowledged to be a fairly good comparison, was not superior to the subject property. He also disagreed with the comment that the peak of recent market trends occurred in June 2006, when, in his opinion, this market status occurred in the March quarter of 2007. He disagreed with the use of 86A Grant Street because it fronts a busy thoroughfare and the aesthetics and style of improvements should be discounted for a neighbourhood in Cottesloe. He disagreed with the use of the vacant land sale at 2A Nailsworth Street because the sale is dated and the property is impacted by the Cottesloe Council Depot; although Mr Kish acknowledged that the location is superior to the subject property. He disagreed with the use of 11B Barsden Street because it was a dated sale; although he acknowledged that the location is significantly superior to the subject property. He disagreed with the use of the vacant land sale at 5 Albion Street because the property is small and in an inferior location. He agreed that the sale of 119 Curtin Avenue was relevant. He declined to comment in relation to the sale of 21 Rosser Street. 95 Mr Hughes generally maintained the views he had previously expressed in commenting on Mr Kish's report as to why the following sales were not comparable: 2 Athelston Road; 167 Curtin Avenue; 217 Curtin Avenue; 19 Elizabeth Street; 72 Grant Street; 50 Griver Street; 71 Hawkstone Street; 27 Jarrad Street; 7 Kathleen Street; 24 Lillian Street; and 32 Salvado Street. 96 Mr Hughes agreed that the sale of 119 Curtin Avenue was relevant. 97 Mr Hughes expressed the opinion that the sale of S/L 1, 197 Curtin Avenue was very comparable and a relevant indicator to the value of the subject property. and disagreed with the opinion of Mr Kish that the property was "Not as good" as the subject property. 98 As to sales evidence analysis methodology, Mr Kish considered sales evidence on the basis of gross price and weighted same by overall comparison to the subject property. Mr Hughes, by contrast, stated that he considered the sales evidence in accordance with the systematic procedure set out in the International Valuation Guidance Note 1 (ANZ VGN1) entitled "Real Property Valuation" and analyses based on relevant units of comparison or price per square metre. The valuers disagreed on the approach to analysis of sales evidence. In the opinion of Mr Hughes, sales evidence used by Mr Kish was not reported and adequately analysed in accordance with the requirements of the Australian Property Institute guidelines. Mr Kish disagreed. consideration 99 Subsequent sales: Mr Kish's valuation depends on a number of sales that occurred after the date upon which Mr Coleman valued the subject property on 3 April 2007. They have been identified above. The primary question, which the two valuers, Mr Hughes and Mr Kish dispute is whether it is permissible, for present purposes, for a valuer to have regard to such subsequent sales in expressing an opinion as to what the value of the subject property was as at 3 April 2007. 100 As a matter of broad principle, one would have thought that to take account of subsequent sales in present circumstances is to ascribe a value with the benefit of hindsight, something obviously not available to a competent valuer at the relevant valuation date. That suggests, unless the exercise in a particular case is to state what, with the benefit of hindsight, the value was at an earlier date, that such an approach is impermissible. Another way of expressing that, perhaps, is to ask whether the object of the valuation exercise is to be able to say whether a price paid at some earlier point seems to have been a fair price. 101 In my view, as a matter of principle, Mr Hughes is correct when he asserts that in providing for the purposes of these proceedings a valuation of the subject property as at 3 April 2007, it is inappropriate to take account of subsequent sales. This is because the task before the Court is to assess whether, upon the sales evidence available as of 3 April 2007, a competent valuer could have, using the comparable sales methodology, ascribed a value of $1,600,000, or thereabouts to the subject property. 102 The respondents challenge this in principle approach by reference to what Williams J said in Daandine. Daandine came before Williams J in the High Court of Australia, Queensland Registry, as Appeal Number 2 of 1942, pursuant to The Lands Tax Assessment Act 19101940 (Cth) (LTA Act) against the assessment of the Deputy Commissioner of Taxes for the financial year 19391940. 103 Daandine Station was purchased by the appellant in 1926. For the financial years ending 30 June 1939, 1940 and 1941, in respect of 36,737 acres of freehold land used for grazing and fattening cattle, the Commissioner assessed the appellant upon an unimproved value of £38,574 or in round figures, 21 shillings per acre. The appellant contended that the value was excessive and that the true unimproved value was in round figures, 15 shillings per acre. 104 Evidence had been led concerning the use of the land, the prior assessed use improved values and the value of three of the principal primary products during relevant years; wool, beef and wheat. Evidence was also given concerning infestation from prickly pear and the fact that in recent years the District of Dalby, in which the Daandine Station was situated, had become one of the greatest wheat growing centres in Queensland, resulting in a considerable influx of population and subdivision of several stations in the vicinity into small areas of 1,000 to 2,000 acres, suitable for mixed farming. 105 The Commissioner took the view that as at 30 June 1939, the best use to which the station could have been put would have been to subdivide it and sell it for mixed used farms of 1,000 to 2,000 acres and that the land should be valued on that basis. The appellant contested that view and the likelihood that subdivision would be permitted. 106 Williams J noted the evidence, amongst others, of Mr Allan, an experienced pastoral inspector and valuer, called on behalf of the appellant, who said that the unimproved value of Daandine as grazing land was at most 15 shillings per acre. His Honour then noted (at page 5 of the unreported decision): If I was satisfied that this was the best use to which Daandine could have been put in June 1939, I would be prepared to accept this estimate subject to some adjustment of the values which Mr Allen placed on timber improvements. But for reasons which will herein after appear, and particularly in the light of the evidence of sales of other land in the vicinity, I am not satisfied that this is the best use to which the property could have been put. 107 Williams J went on to note that s 3 of the LTA Act provided a definition of "unimproved value" that defined it as "the capital sum which the fee simple of the land might be expected to realise if offered for sale on such reasonable terms and conditions as a bona fide seller would require, assuming that, at the date as at which the value is required to be ascertained for the purposes of the Act, the improvements did not exist…". His Honour noted that in Russell v Federal Commissioner of Taxation 50 CLR 182 at 185, Starke J pointed out that the Court must determine: (1) what the land the subject of the assessment would have fetched in the market on the material date, leaving out of view any improvements thereon or appertaining thereto, whether visible or invisible – they are to be treated not only as nonexistent, but as if they had never existed; and (2) the improved value of the land on the material date, less the added value which the improvements thereon or appertaining thereto, whether visible or invisible, gave to the land on that day, but so that the added value shall not exceed the amount reasonably involved in effecting improvements of a nature and efficiency equivalent to the existing improvements. The Act provides that the higher of the two unimproved values determined in this way is the unimproved value for the purposes of the Act. 108 In the end, Williams J was satisfied that the assessment should be made on an unimproved value that reflected the price the land would have fetched in the market on the material date. His Honour (at page 9) noted that sales showed that land in the district was selling readily in subdivision in small blocks, suitable for mixed farming at enhanced prices in spite of a downward trend in the price of wheat and wool. 109 A number of sales were discussed by Williams J as affording some assistance in arriving at the value of Daandine on 30 June 1939. These included Loudon, which was sold on 4 August 1938, Logie which was sold in December 1939 and Kennington which was sold in 1937, although some other portions were sold in 1940. Williams J also referred to some other properties that were sold, although he said they did not afford him much assistance. 110 The appellant's valuer, Mr Allen, apparently took the view that he should not take into account sales made after 30 June 1939. Williams J (at page 13) considered this "unfortunate". His Honour observed: Values must be calculated in the light of circumstances which existed on the material date, in this case 30th June 1939, but subsequent events can be taken into account in order to determine the proper weight to attach to such circumstances. Subsequent sales are just as admissible in evidence as prior sales provided that in all the circumstances they are comparable. If between the material date and the date of the subsequent sale, supervening events occur which alter the conditions previously existing, the subsequent sales would not be comparable and would be useless. But if on the material date there was a tendency in the district to closer settlement and for prices to rise, subsequent sales of property in subdivision at rising prices would be evidence in support of the view that it was correct value land in the district suitable for subdivision which was being applied for some other purpose in the light of this potential value. The whole tendency of the Courts is to admit evidence of any event prior to the date of trial which will throw any real light on the issues. See the authorities referred to in the judgment of my brother Rich in Tonking v Australian Apple & Pear Marketing Board 66 CLR at p 108; see also In re Bradberry 167 L.T. 396 at p 400. In Federal Commissioner of Land Tax v Duncan 19 CLR 551 the whole contention of the Commissioner was that sales of the subject land subsequent in date to that upon which it had been valued showed that the original valuation was too low and ought to be increased. 111 In my view, when understood in the context of a land assessment appeal in respect of the unimproved value of land as defined, the finding of Williams J that historic sales and trends could and should be taken into account in assessing the unimproved value at a particular point in time, is, with respect, unexceptional. That, however, is not the context in which the valuation principle arises in this case. The question here is, as I have noted, whether as at 3 April 2007 – the valuation date – a competent valuer could have produced a valuation in the region of $1,600,000 in respect of the subject property. 112 The respondents however press a contention that the observations of Williams J in Daandine have a wider, more general application and say that they have been referred to and applied more recently, for example in Great Wall Resources Pty Ltd v O'Sullivan [2009] NSWCA 119 (Great Wall). In that decision of the New South Wales Court of Appeal, Giles JA and Ipp JA agreed with the reasons of Macfarlan JA. The appeal concerned the sale of land that was part of a larger parcel of land being subdivided by the appellant. By the contract the appellant warranted that a right of way affecting the land would be extinguished. In proceedings between the appellant and the owners of the land entitled to the benefit of the right of way, certain orders were made. Ultimately, the contract of sale was not completed and the respondents commenced proceedings against the appellants in respect of their failure to complete. The trial judge made an order that the contract be specifically performed and made a declaration that in failing to extinguish the right of way, the appellant had breached the contract and was liable to pay damages in respect of that breach to the respondents. He ordered that an inquiry be held as to the amount of damages which the plaintiffs had sustained by reason of the defendant's refusal to perform the contract. 113 A further hearing was then held before another judicial officer, for the purpose of assessing damages, and the appeal that went before the Court of Appeal was brought against that judgment. One of the issues was whether certain evidence of a land valuer was relevant. Macfarlan JA, at [21], observed that if the primary judge had taken the view that the evidence was not relevant because his task was to assess damages as at the date upon which completion should have occurred and that subsequent events were not material to that assessment, then he disagreed. His Honour relied upon what Williams J had said in Daandine to this effect, noting that the dicta of Williams J had been quoted in A Hyam, The Law affecting Valuation of Land in Australia, 3rd Ed (2004) Federation Press at 87, and referred to with approval in Campbell v Backoffice Investments Pty Ltd [2008] NSWCA 95. Macfarlan JA, at [22], added that, in any event, the assessment did not necessarily have to occur as at the date of breach. 114 In my view, the decision in Great Wall concerns the question of determining what damage had been suffered by reference to a lost interest in land. Accordingly, the Court might reasonably have regard to events subsequent to the material date that throw real light on the question of value at the time of breach of contract. But that, as I have stated above, is not what is in issue in this case. This is not a case of assessing damage or loss at a point in time, but in determining whether or not a competent valuer, on the available sales evidence at a particular point in time, could have produced a particular valuation. 115 As the High Court in HTW Valuers (Central Qld) Pty Ltd v Astonland Pty Ltd [2004] HCA 54 (HTW Valuers) have confirmed, there are a number of areas of the law where the benefit of hindsight can be important in ascertaining whether a person received value for property when assessing damages or compensation. The Court (Gleeson CJ, McHugh, Gummow, Kirby and Heydon JJ) dealt with the question of damage or loss assessment in a case where the primary judge had found breach of contract, negligence and contravention of s 52 of the TP Act in relation to misleading and deceptive conduct. A question arose as to the value of property for the purpose of measuring loss in circumstances where a "predictive opinion" had been given as to the value of the property the subject of the impugned dealing. The Court, at [39], pointed out that, in many fields of law, assessments of compensation or value at one date are commonly made taking account of all matters known by the later date when the Court's assessment is being carried out. This has been so in relation to remarriage of widows, the termination of a dependency by early death after the date from which damages were to be assessed, the death of a person having a claim for personal injuries which was unexpectedly early and unrelated to those injuries, rises in wages rates, assessing the value of reversionary life interests which never came into possession, valuing annuities, and assessing compensation for the acquisition or destruction of property rights. 116 At [40], the Court stated that although the court is entitled to take into account events after the date of acquisition in such cases, it must be careful to distinguish among possible causes of the decline in value of what has been bought. If the cause is inherent in the thing itself, then its existence should be taken into account in arriving at the real value of the property at the time of the purchase. If the cause be independent, extrinsic, supervening or accidental, then the additional loss is not the consequence of the inducement. 117 The Court explained, at [41], in relation to the facts of the case before it, that the market value of the property acquired, according to the evidence of the valuer, had fallen over a three year period after the acquisition. The Court considered that the evidence demonstrated that the cause of the decline in market value was not independent, extrinsic, supervening or accidental. Rather, it lay in circumstances crucial to the value of the property at the time when the plaintiff acquired it. The cause of the decline was what the defendant was found liable for not having warned about. Those causes were not truly "supervening" events. 118 However, relevantly, at [44], the Court said in respect of the valuations made that the valuer had to take account of the risks so far as the market perceived them to be present realities as at the date at which the value was to be fixed. That task was to be conducted "without hindsight" – that is, without knowledge of events which have not happened by the date at which the value is to be ascribed, though they may have happened by the date at which the valuation takes place. The Court there said that this task is different from the task of assessing loss, because the latter task is to be conducted with hindsight. 119 The decision of the High Court in HTW Valuers demonstrates why, in some circumstances, hindsight can be and, indeed, must be regarded in determining questions of damage or loss where the question of lost value arises and, it might be added, in the particular statutory circumstances in Daandine, unimproved value of land. But hindsight has no place in an action concerning the competency of a valuation of land at a certain point in time for the purposes of the law of negligence or for the purposes of an action founded on breach of s 52 of the TP Act. 120 The point can finally be demonstrated in a rather simple way. In order to determine whether Mr Coleman negligently prepared his valuation as of 3 April 2007, or by his valuation misled or deceived the applicants as to the true value of the property at the time they relied on it for mortgage security purposes, it is of no relevance to say that, with the benefit of hindsight, it turns out that the applicants got good value. To say that is to say nothing about whether, at the material time, the valuation provided was prepared in accordance with due skill or misrepresented the position as to the value of the subject property to a person, such as the applicants in this case, who relied on that report for mortgage security purposes, at the time assuming it was based on sound valuation principles. The judgment that needs to be made by the Court in this regard can only be relevantly assisted by a valuation made after the event that itself takes into account the relevant sales evidence that was available to a competent valuer as at the material date of valuation. 121 In these circumstances, in my view, it is impermissible, in conducting a valuation for the purposes of the s 52 proceeding and the negligence proceedings in the proceedings now before the Court, for the Court to take into account sales subsequent to 3 April 2007 for the purpose of deciding these competence and representational issues. Similarly, it is not open to the expert witnesses to have regard to such subsequent sales and, to the extent that Mr Kish has done so, his expert opinion must be disregarded or discounted. 122 Valuation methodology: As noted above, each of the valuers, Mr Hughes and Mr Kish, agree that the prime valuation methodology should be based on the evidence provided by sales of comparable properties. 123 Mr Kish considered sales evidence on the basis of gross price and weighted the gross price for each property that he considered comparable by overall comparison to the subject property. Mr Hughes, however, endeavoured to reduce the sales evidence to a rate per square metre. The result was that the valuers could not agree on the precise approach to analysis of the sales evidence. Mr Hughes held the view that the sales evidence used by Mr Kish was not reported and adequately analysed in accordance with the requirements of the Australian Property Institute guidelines. Mr Kish, on the other hand, considered that a price per square metre analysis is not required and not appropriate in the valuation of a residential property such as the subject property. 124 Estimating the value of any item of property is not a precise art, but nor is it a matter of speculation. When it comes to the sale of real property even in an isolated, greenfields market there is a market context in which a unit of property is made available for sale. Where greenfields have been subdivided for residential development in a remote location, for example, there is a broader regional or statewide or national market against which a proposed sale price can be measured. Additionally, a sale price will inevitably reflect the cost of producing the unit of property from a developer's point of view. In the property valuation setting produced in this proceedings, by contrast, the subject property is residential property located within a well established locality in the metropolitan region of Perth. The valuers agree generally on the formal matters and also the land use context governing zoning and town planning, site description, environmental heritage and native title matters and, generally speaking, improvements. The valuers also agree that Curtin Avenue, which the subject property fronts, has over 20,000 average weekday traffic movements. In other words they agree that the property fronts a busy road. They also agree that the property is impacted by exposure to Curtin Avenue which is exacerbated by rail traffic and disturbance emanating from a nearby level crossing. 125 The secret to valuation in such a circumstance, from the trained valuer's point of view, is to find other properties that reflect as far as possible, the characteristics or attributes or general setting of the subject property. It will be helpful, but often unusual to find two properties that are so alike that the established value of one, exhibited by a recent sale, will help to determine the value of the other. But, sometimes a degree of similarity can be so great that the sales evidence of another property can largely dictate the value of the subject property. Here the valuers agree the focus should be on finding sales of properties in a like position on Curtin Avenue. 126 Where, however, very comparable sales evidence is not available, as the valuers agree is the case here, it is necessary to look further afield for sales evidence and describe the different attributes those different broadly but relevant properties have in order to measure the value of the subject property against those sales. There can be a preliminary debate about what properties are broadly comparable for this purpose. Some other properties may, in the particular land and property context, be in such different locations, or be so much larger in size or have been so improved, or have such other attributes or detriments, that a recent sale of those other properties may provide no reasonable guidance to the value of the subject property and a "weighting" of their value by comparison to the subject property may be difficult in the extreme. The sales evidence may also be sufficiently old in a volatile market as not to be reliable and so should not be used to this end. 127 What is required of a valuer adopting this "weighted" comparative approach is that as far as possible the weighting be accounted for and explained in the valuation: see Western Australian Planning Commission v Arcus Shopfitters Pty Ltd (Arcus) [2003] WASCA 295, McLure J at [70]. What a court does not expect a valuer to do is simply to list a number of property sales said to be broadly comparable to the subject property and then simply nominate the value that the subject property is said to carry. To do this has an air about it of speculation, something which good valuation practice is designed to avoid. As far as possible the detail of the reasoning behind the valuation ascribed to a subject property by way of comparison to broadly comparable properties which have been sold needs to be laid out in the valuation. 128 However, this, in my view, does not necessarily mean that a valuer must remove all subjectivity associated with such a weighting exercise. It may be accepted that a degree of judgment is part of the art of the valuer. In this proceeding, in order to minimise the risk of speculation, Mr Hughes in his valuation, has adopted a unit of valuation by reference to a value of residential properties per square metre. Plainly he considers this is an approach that helps to inform the mind of the valuer in a more precise way than an overall comparison to the competing attributes of different properties. There are no doubt a number of settings, as the Australian Property Institute guidelines indicate, where it may be expected that the unit of value approach, such as a rate per square metre, might be extremely instructive for a valuer. For example, where commercial property is ordinarily leased out to commercial tenants on a rate per square metre of lettable space, then it stands to reason that the overall value of a subject property ought to be measured by primary reference to a value per square metre of the lettable space in an improved site, or by reference the space that might be rented under planning controls if a vacant commercial site were to be developed to the fullest extent possible. 129 While, in my view, the Australian Property Institute guidelines do not mandate the use of a value per square metre in the course of valuing a residential property, there is, nonetheless, a case to be made that in some residential property contexts, perhaps in a buoyant or fast moving residential property market, or in respect of an unusual property in a sought after area where little reliable guidance can be obtained from very comparable recent sales, that a rate per square metre might provide a good guide to the true value of the subject property at a given point in time. However, all of these considerations are for the trained and experienced valuer to consider in the circumstances of each case. There can be no hard and fast rule. 130 In the circumstances of the present valuation, Mr Hughes found it useful to adopt a price per square metre. To do that he first however had to assemble the list of possibly relevant sales in the same way that Mr Kish did. However, unlike Mr Kish, Mr Hughes went the extra step of reducing the transactions he considered comparable to a rate per square metre, although a rate as at the date of the sale. He drew from a range of values he considered most appropriate a value he considered relevant to the subject property, but in doing so he essentially used the same weighting exercise that Mr Kish had undertaken in order to indentify the range. Indeed there would be no other way of doing it. Accordingly, the process Mr Hughes adopted did not in fact remove all that much subjectivity from the process and the weighting exercise was still required. 131 In other respects, as I have indicated, each of Mr Hughes and Mr Kish first engaged in the exercise of deciding what residential sales of both improved and unimproved land might be considered broadly comparable in circumstances where there was a paucity of sales of very comparable properties in Curtin Avenue. That task needs to be undertaken. 132 I have already indicated, however, in the preceding section of these reasons that in identifying comparable sales it is inappropriate to have regard to such sales that are subsequent to the relevant date of the valuation. 133 Both Mr Hughes and Mr Kish provided similar sorts of reasons or analyses for including or excluding particular sales from their final list of comparable sales by reference to whether a particular property should be considered relevantly superior to or inferior to or similar to, the subject property. 134 The result of this discussion of the appropriate methodology is that I accept, as the two expert valuers do, that the prime valuation methodology here should be based on the evidence provided by sales of comparable properties. 135 However, I do not accept Mr Kish's approach that comparable properties in this setting can include subsequent sales. 136 I am, however, disinclined, in all of the circumstances of this case to adopt as a mandatory valuation methodology or analysis a unit of comparison based on rate per square metre, as Mr Hughes did. Broadly speaking, subject to articulation of the "weighting" process undertaken, the process adopted by Mr Kish of weighting comparable properties by overall comparison with the subject property is appropriate, although a check on outcomes by reference to the rate per metre, as utilised by Mr Hughes, may prove to be of assistance. 137 I should also note that in light of my finding concerning the inappropriate use made by Mr Kish, for the purposes of this proceeding, of subsequent sales evidence, it is unnecessary for me to consider the applicants' additional submissions that the Court should not be persuaded by Mr Kish's opinion more generally having regard to the particular methodology he employed in disregarding sales evidence and the particular context in which he was engaged to provide his opinion and in which he made his assessment of value. 138 Peak of market trends: Mr Hughes took the view that the peak of recent market trends occurred in June 2006. Mr Kish considered that this market status was achieved in the March quarter of 2007. The evidence of Mr Coleman also bore this question. He too considered when he prepared his valuation that from the start of 2006 to early 2007 the Cottesloe property market experienced very strong growth, before steadying in early to mid 2007. This opinion does not however fall into the category of expert opinion. 139 Mr Hughes was pressed in crossexamination about his view as to when the Cottesloe market peaked. He accepted that he had limited exposure to the Cottesloe market. He confirmed that it was his view (at transcript p 40) that the market was at its strongest in the middle of 2006, but that he produced no statistical or other basis to support this view. Mr Hughes had regard however, to data relating to the Perth metropolitan area to suggest that at February 2006 the residential property market was generally rising and that this was a very large boom, with the rise being rapid and unlikely to occur again. He confirmed (at transcript p 41) that he had not experienced such a rising market before. From REIWA statistics, Mr Hughes expressed the opinion that the sales volume in the month ending 30 June 2006 was equivalent to what it was later in the year 2006, although he did not reference those statistics in his report and did not produce them. 140 By contrast and as noted earlier Mr Kish in his valuation report (Exhibit 13) provided a "snapshot" of the market showing REIWA Cottesloe growth for the quarters September 2006, December 2006, March 2007 and June 2007, which reflected market movement for Cottesloe over the period from September 2006 to June 2007 and showed an annual change of 40.4%. Mr Kish acknowledged, however, that the guide to the movement of the market was merely a guide and a valuation must be based on sales evidence. Nonetheless, he considered the data referred to reflected a "substantial buoyant period". 141 Having regard to the evidence of the valuers, I am inclined to accept that the market did not peak quite in the manner that Mr Hughes contended for, as at the end of June 2006 – at least in the Cottesloe property market – and that the more reliable estimate is that contended for by Mr Kish, to the effect that it experienced strong growth or at least did not shrink through to early 2007 and then steadied. 142 In finding this, the consequence is that one should not too quickly form the view that those sales that occurred prior in the period from the end of June 2006 through to the end of December 2006/early 2007 were in a plateauing or steady market, but rather were more sales in a still buoyant market. Plainly there was some steadying or weakening of the market in the latter part of 2006 and into early 2007 and continuing as at the valuation date. This must be taken into account and adjusted for appropriately. However, it means one should not readily consider that values in April 2007 had fallen dramatically from those evidenced in mid 2006 or in the later part of 2006/early 2007. 143 Comparable sales: Mr Kish identified 13 sales that might be considered comparable and used in the weighted overall assessment process. Once one excludes from those the transactions that are sales subsequent to the valuation date of 3 April 2007, then only the following remain on Mr Kish's list: 119 Curtin Avenue, Cottesloe (February 2007); S/L 1, 197 Curtin Avenue, Cottesloe (February 2007). 144 Both Mr Kish and Mr Hughes agree 119 Curtin Avenue is relevant, which I accept. 145 As to strata lot 1, 197 Curtin Avenue, while Mr Hughes is of the opinion that this sale is very comparable and is a relevant indicator as to the value of the subject property, Mr Kish does not consider this sale property to be "as good as" the subject property, a view with which Mr Hughes disagrees. Both agree however it is relevant, which I also accept. 146 As to the 10 sales relied upon by Mr Hughes for the purpose of his valuation, obviously none of these are subsequent sales. However, a number occurred sometime before the relevant valuation date and Mr Kish has expressed the view that these should be excluded from comparison for this and other reasons. I will deal with each in turn. 147 Mr Hughes relied upon the sale of 43 Curtin Avenue, Cottesloe. This was a sale of a 382m2 block in February 2006 for $1,065,000. In other words the sale was about 14 months prior to the valuation date of 3 April 2007. Mr Kish considered that to be a dated sale that should not be used. When pressed in crossexamination about the relevance of such a sale, Mr Hughes accepted (at transcript p 39) that he had experienced difficulty (as had Mr Coleman and Mr Kish) in finding comparable sales that met all the criteria that he looked for in a comparable property. As a result he looked further afield. He also accepted (at transcript p 37) that where sales quoted are older than six months, or three months in a rapidly changing market, this should be noted in the additional comments in the valuation, and that where older sales are included in such circumstances the sale price must be adjusted. When pressed in crossexamination as to what adjustment he had made in respect of this and other older sales that he relied upon in his first valuation report (Exhibit 7), Mr Hughes indicated (at transcript p 38) that the adjustment is in weighting the evidence in arriving at the value. He accepted that this exercise was not laid out in his report, although he did refer in his report to a slowing market with the peak of the market being in the middle of 2006. Mr Hughes (at transcript p 39) conceded that, other than weighting, nowhere in his report where he used the per square metre rate, did he lay out how he had made any adjustment for changes in the market between January 2006 and April 2007 in relation to a number of dated sales. Nonetheless, he relied, he explained, on these older sales because of the difficulty he had in finding sufficient comparable sales. 148 In my view, in regard to the evidence of Mr Kish as to the number of comparable sales at or prior to the valuation date of 3 April 2007, and the confirmatory evidence of Mr Hughes in relation to the paucity of such evidence, it is reasonable, in accordance with standard valuation practice, and with the Mortgage Ezy requirements by which Mr Coleman was constrained at material times, to note relevant older sales. However, in circumstances where Mr Hughes contends the market peaked at June 2006, and Mr Kish says it peaked later in the year/early 2007, which latter evidence I consider more accurately to reflect the true market position, it seems to me that sales from as early as January/February 2006, even up to April 2006, are not susceptible to reliable adjustments in such a buoyant market and should not be used for comparative purposes. 149 In these circumstances, the 43 Curtin Avenue sale should be disregarded. For the same reasons I would disregard the use of the sale of 79 Curtin Avenue (February 2006), 131 Curtin Avenue (February 2006) and the vacant land sales at 2A Nailsworth Street (January 2006) and 11B Barsden Street (April 2006). 150 However, the sales evidence in respect of 65 Curtin Avenue (June 2006), to which Mr Kish also objected, I would include on the basis that it is sufficiently recent to provide some guidance on a valuation setting where there is otherwise a marked paucity of sales evidence. 151 Mr Hughes also indicated in crossexamination that at the time he prepared his valuation (Exhibit 7) he was not aware of the sale of 20 Brighton Street, Cottesloe, a 668m2 property, in September 2006 for the price of $1,630,000. He accepted that this should be mentioned although it was generally superior, being well located close to North Cottesloe beach, with a modest brick and tile dwelling on it, and in his opinion did not constitute a comparable property. He considered the sale reflected an improved rate of $2,444m2, which fell outside the upper range of improved sales that could be considered comparable, that is, between $1,600 to $2,000m2. Mr Kish did not rely on this sale either. In my view, 20 Brighton Street should not be used for comparative purposes largely for the reasons given by Mr Hughes. The sale is in respect of a superior property which does not provide a reliable guide to the value of the subject property. 152 As to the use of the sale of vacant land at 5 Albion Street, Cottesloe, in September 2006, Mr Kish considered this should be disregarded as the property was a very small site (292m2) in an inferior location. In crossexamination, it became clear that Albion Street was across the railway line from Curtin Avenue, closer to the Stirling Highway, but despite this Mr Hughes considered it was of assistance. In my view, this sale, despite being relatively recent, should not used. Its inferior characteristics of location and size make it too unreliable a sale to be helpful. 153 As to the sale of 86A Grant Street, Cottesloe, in January 2007, Mr Kish also considered it should be disregarded as the property fronts a busy thoroughfare in Grant Street and the aesthetics and style of the improvements should be discounted for a neighbourhood such as Cottesloe. In my view, while the factors identified by Mr Kish should be taken into account and adjustments made in respect of it, 86A Grant Street provides a useful comparison, subject to adjustments in these circumstances. Both Grant Street and Curtin Avenue are busy. Given the dearth of other recent comparable sales, this sale provides some guidance to value the subject property, particularly as it is quite recent. 154 Both Mr Hughes and Mr Kish list 119 Curtin Avenue, Cottesloe for consideration, but both agree that it is better than the subject property. 119 Curtin Avenue involved the sale of a 491m2 improved property (5 bedrooms, 2 bathrooms, 80 year old brick and tile dwelling) in February 2007, just before the valuation of the subject property, for $1,690,000. Mr Hughes described the property as "significantly superior" to the subject property, by reason not only of the improvements on it, but because the property fronted a cul de sac service road separated from Curtin Avenue by a vegetation strip and also because it possessed a rear right of way access. From Mr Hughes point of view the value represented by the sale was $3,442m2 improved, far in excess of the range he suggested reasonable. In his valuation Mr Kish ultimately discounted 119 Curtin Avenue by reason of his assessment that it was better than the subject property and towards the top of the range of sales. 155 I accept the judgment of each of the valuers that 119 Curtin Avenue, Cottesloe should be disregarded from the assessment of value of the subject property because, in the final analysis, it is sufficiently superior not to justify its use for comparative purposes. 156 Mr Hughes also referred to the sale of 21 Rosser Street, Cottesloe, a sale of 445m2 lot in December 2006 for $1,500,000 (a sale also noted by Mr Coleman) although he considered the property significantly superior to the subject property and so not liable to use for comparative purposes. By contrast, Mr Coleman noted the property was "significantly inferior". In Mr Hughes' estimation this value equated to $3,371m2 and he discounted the sale as a comparable sale. Mr Kish did not comment on the sale when the valuers conferred. I find that it is not a comparable sale largely for the reasons advanced by Mr Hughes. 157 In those circumstances I find the following sales should be made use of as broadly comparable sales, in the circumstance of a valuation as at 3 April 2007, subject to appropriate adjustments being made: 65 Curtin Avenue for $1,275,000 in June 2006; 86A Grant Street for $1,300,000 in January 2007; S/L 1, 197 Curtin Avenue for $1,070,000 in February 2007. 158 Value suggested by the evidence: In all of these circumstances I find that, subject to appropriate adjustments being made, by reason both of the age of a sale, the steadying of the market as of late 2006/early 2007, as well as other adjustments to be made on account of size and other attributes of the property or other detriments, only the following sales should be regarded in assessing value: 65 Curtin Avenue, Cottesloe, the sale of an improved 466m2 property in June 2006 for $1,275,000; 86A Grant Street, Cottesloe, the sale of an improved 474m2 property in January 2007 for $1,300,000; and S/L 1, 197 Curtin Avenue, Cottesloe, the sale of an improved 642m2 property in February 2007 for $1,070,000. 159 The property at 65 Curtin Avenue should be considered superior to the subject property for the reasons supplied by Mr Hughes. It sold for $1,275,000 in June 2006, a period when the market was quite buoyant and, in my view, not then past its peak. The fact that this property is plainly superior, as I accept it is, needs to be taken into account when considering this broadly comparable sale. I would consider that the subject property would not exceed the value of 65 Curtin Avenue as at 3 April 2007, all those things considered. 160 The property at 86A Grant Street, Cottesloe may also be considered broadly comparable, but the value of the improvements (20 year old brick and tile dwelling), which are relatively substantial, suggest the subject property is of lesser value, although Mr Kish's point, that the improvement are not very Cottesloe, may be acknowledged. The effluxion of time between the sale in January 2007 and the date of valuation is short, but in the then steadying market not entirely insignificant. The difference between the different locations is perhaps marginal. All these things taken into account the subject property should be considered to have a slightly lower value than the $1,300,000 for which 86A Grant Street sold in January 2007. 161 The property at S/L 1, 197 Curtin Avenue, Cottesloe, albeit that it is of a strata lot, must be considered very comparable. While Mr Kish has commented on its inferior location and its superior improvements and considers it "not as good" as the subject property, it is in my view an important comparable sale. It is in Curtin Avenue. However, it does not have rear access, but it is a corner location. It is larger in area – 642m2 compared with 458m2. Mr Kish considered this property "Not as good". All things taken into account, it should be considered around the same value as the subject property, perhaps a lower value. Its sale for $1,070,000 in January 2007, three months before the valuation date, when the market was settling, suggests the subject property has a value a little higher than this sale. 162 These sales then, for the reasons given, indicate a value of the subject property in the range of about $1,100,000 to $1,300,000. The midrange of $1,200,000 is reasonable and consistent with the approach taken by both valuers to settling on a value where a range is indicated. 163 Findings: In my view a competent valuer would have valued the subject property as of 3 April 2007 in the sum of $1,200,000. Allowing a generous 15% tolerance above this sum, a valuation of up to $1,350,000 might be acceptable in the sense that one would not consider such a representation as to value misleading or deceptive or the valuation negligently prepared. 164 However, I consider a valuation of the subject property of $1,600,000 a gross overvaluation. I therefore find such a representation of value in the respondents' valuation of 3 April 2007 to be both misleading and deceptive and in breach of the respondents' duty of care and skill owed to the applicants. Whether mr coleman WAS A PARTY TO THE MAKING OF THE REPRESENTATIONS 165 The respondents raise the issue, however, whether the second respondent, Mr Coleman, was a party to the making of the representations and, in that sense, (1) owed a duty of care to the applicants in respect of them and (2) was an accessory to any contravention of the TP Act by Propell under s 75B of the TP Act. 166 As to the contention that Mr Coleman did not owe a duty of care to the applicants in undertaking the valuation issued by Propell, counsel, on behalf of Mr Coleman, submits that it is not pleaded that Mr Coleman engaged in any conduct which conveyed to the applicants that he had assumed personal responsibility towards them and there is no evidence produced to establish this. 167 To the contrary, counsel submits, it is clear from the evidence that the valuation Mr Coleman made was commissioned from Propell directly and not from Mr Coleman, that it was published by Propell and not by Mr Coleman and that Propell extended liability to the applicants. 168 It is submitted that in these circumstances any duty of care is confined to Propell and there is no basis for imposing a duty of care of Mr Coleman. 169 The submission made on behalf of Mr Coleman relies on the statements of principle and finding of Lord Steyn in his speech in Williams v Natural Life Health Foods Ltd [1998] 1 WLR 830 (Williams), a case raising the question of the personal liability of a director for the actions of his company. On behalf of Mr Coleman it is submitted that the relevant principle was applied in Frewin v Emmdale Sports Club Inc [2003] NSWSC 108 and Fitzgerald Enterprises (WA) Pty Ltd v Bob Slight's Boat School Pty Ltd [2009] WADC 50 (Fitzgerald Enterprises), and should be applied in this case to relieve Mr Coleman of any common law duty of care. 170 The speech of Lord Steyn in Williams has excited much judicial and academic debate over the years. Some of this is usefully essayed by her Honour Judge Schoombee in Fitzgerald Enterprises. Her Honour came to the view that the principle stated by Lord Steyn was good law in Australia and applied it in the circumstances of that case. 171 Before I deal with the principle for which Williams apparently stands, it is appropriate that I attempt, relatively briefly, to state the principles that ordinarily govern the law of negligent misstatement in Australia, pursuant to which a duty of care at common law may be considered to arise, including in relation to a case like the present where a licensed valuer employed by a company that conducts the business of land valuation prepares and signs a valuation that both the employed valuer and his employer understand is to be provided to particular client. 172 For the purposes of Australian law, the existence of liability for negligent misstatements was first recognised by the House of Lords in Hedley Byrne & Co Ltd v Heller & Partners Ltd [1964] AC 465 (Hedley Byrne). The Privy Council had more to say concerning the nature of the "special relationship" that might produce such liability in Mutual Life & Citizens Assurance Co Ltd v Evatt (1980) 122 CLR 628, an appeal from Australia. It then seemed that liability could only follow from misstatement if the respondent had, or claimed to have, skill and competence in the subject matter of misstatement. However this limitation was later rejected in Australia by the High Court in L Shaddock & Associates Pty Ltd v Parramatta City Council (No 1) [1981] HCA 59; (1981) 150 CLR 225 (Shaddock). 173 As Gleeson CJ, Gummow and Hayne JJ later explained in their joint judgment in Tepko Pty Ltd v Water Board [2001] HCA 19; (2001) 206 CLR 1 (Tepko) at [47], the reasoning of Barwick CJ in the High Court in Mutual Life & Citizens Assurance Co Ltd v Evatt (1968) 122 CLR 556 (MLC v Evatt) at 569 – 572, was in effect reclaimed and restated by Brennan J in San Sebastian Pty Ltd v The Minister Administering Environment Act [1986] HCA 68; (1986) 162 CLR 340 and this was eventually given new life in Shaddock. Barwick CJ made two points in MLC v Evatt at 122 CLR 556 at 571: (1) the speaker must realize or the circumstances be such that he ought to have realized that the recipient intends to act upon the information or advice in respect of his subject property or of himself in connexion with some matter of business or serious consequence; and (2) the circumstances must be such that it is reasonable in all the circumstance for the recipient to seek, or to accept, and to rely upon the utterance of the speaker. The nature of the subject matter, the occasion of the interchange, and the identity and relative position of the parties as regards knowledge actual or potential and relevant capacity to form or exercise judgment will all be included in the factors which will determine the reasonableness of the acceptance of, and the reliance by the recipient upon, the words of the speaker. 174 In Tepko, at [48], Gleeson CJ, Gummow and Hayne JJ said that the first point emphasises the need for caution lest a duty of care be imposed upon a party who has no appreciation of and could not be expected to appreciate the implications of making an error. 175 Their Honours, at [50], also made reference to Perre v Apand Pty Ltd [1999] HCA 36; (1999) 198 CLR 180 (Perre) and stated that significant matters for the existence of the duty of care to the appellants in that case (with respect to the supply of infected seed) included foresight of the likelihood of harm and knowledge or means of knowledge of an ascertainable class of vulnerable persons unable to protect themselves against that harm. 176 In the case now before the Court, in terms of the first point made by Barwick CJ, Mr Coleman, as the licensed valuer employed by Propell, who prepared and signed the valuation, fully realised that the applicants, who were named as the intended recipients of the valuation, would rely upon the valuation for the purposes of considering the loan application of Mr Pell, that is to say, a matter of business consequence. 177 In terms of the second point made by Barwick CJ, there is also no doubt, on the facts stated above, that it was reasonable for the applicants to rely upon the statements made in the valuation. They expressly required the advice of a licensed valuer to assist them to exercise judgment in an area where they lacked that expertise. That too was well understood by Mr Coleman. 178 Unless there is some other, narrowing principle that excludes a person such as an employed licensed valuer in a case like this from owing such a duty, then there is no reason to conclude otherwise than that Mr Coleman owed a duty of care at common law to the applicants. 179 It is in this context that the respondents turn to Williams. That case, on the face of it, grappled with the time honoured difficulty of attributing to a director of a company the acts or conduct of the company itself, in order to avoid the established principle that a company, even a one person company, is a separate legal entity not to be equated for legal purposes with the directors or director who may constitute its guiding mind. In Williams, Lord Steyn, at 582, said that: In such a case where the personal liability of the director is in question, the internal arrangements between a director and his company cannot be the foundation of a director's personal liability in tort. The inquiry must be whether the director, or anybody on his behalf, conveyed directly or indirectly to the prospective franchisees that the director assumed personal responsibility towards the prospective franchisees. Lord Steyn considered that unless it could be established on the facts that the director in that case had "assumed personal responsibility" towards the persons dealing with the company, which it could not be, then the director would have no liability for the company's conduct. 180 The common law has grappled with the issue of the liability of a director for his or her company's conduct at different times on various bases. One basis has been that the director is a joint tortfeasor. Sometimes it has been suggested that the test of liability is whether the director "directed or procured" the tortious act done by the company. Another test suggested has been whether or not the degree and kind of personal involvement of the director has in effect made the tortious act of the company "his or her own". The decision in Williams and the principle enunciated by Lord Steyn confirms the category of "assumption of responsibility". See generally the discussion of Neil Foster "Personal Civil Liability of Company Officers for Company Workplace Torts" (2008) 16 Torts Law Journal 20. 181 Foster, citing other academic opinion and Lord Hoffman in Standard Chartered Bank v Pakistan National Shipping Corporation (No 2) [2003] 1 AC 959 at [23], suggests that the decision in Williams has nothing to do with company law and is really concerned with the specific question of whether an agent may create liability for a principal in the tort of negligent misrepresentation. Foster also notes some critical judicial reception of Williams in Australia: see for example Interchase Corporation Ltd v ACN 010 087 573 Pty Ltd [2003] 1 Qd R 26 at [9], McMurdo P and [77], McPherson JA. Her Honour Judge Schoombee, in Fitzgerald Enterprises, makes reference to and discusses some of these diverging views. 182 What is clear, however, is that in Australia there is no special category of liability known as "assumption of liability". That particular expression seems to owe itself most directly to the speech of Lord Devlin in Hedley Byrne at 528-529, where his Lordship said that there could be a duty to take care in word as well as deed in the case of a relationship which was "equivalent to contract", that is, "where there is an assumption of responsibility in circumstances in which, but for the absence of consideration, there would be a contract". 183 In Esanda Finance Corporation Ltd v Peat Marwick Hungerfords [1997] HCA 8; (1997) 188 CLR 241 at 299, Gummow J emphasised that in the area of negligent misstatement much attention has been given to such considerations as "antecedent request, assumption of responsibility, reliance, and intention to induce activity". His Honour noted the imprecision of such terms. In Hill v Van Erp (1997) 188 CLR 159, 230, Gummow J also suggested that the law of negligence "would benefit greatly were the courts to set aside these conceptual veils and confront this complex picture". 184 In a similar vein, in Perre at [125], McHugh J suggested that "reliance" and "assumption of responsibility" are merely indicators of a plaintiff's "vulnerability to harm" from a defendant's conduct, and it is the concept of vulnerability rather than these evidentiary indicators which is the relevant criterion for determining whether a duty of care exists. 185 In the end, in my view, so far as the law of Australia is concerned, it may be said that the finding in Williams is explicable by the facts as found, that neither the director nor anybody on his behalf conveyed directly or indirectly to the prospective franchisees that the director assumed personal liability towards them or otherwise did anything else upon which a duty of care could be established. While the language of "assumption of liability" has a long lineage, at least all the way back to Hedley Byrne, it must be seen as another way of saying that, in the particular circumstances of a negligent misstatement case, the respondent owed a duty of care to an applicant. Perhaps it can be put no more neatly than the learned authors of Balkin and Davis, Law of Torts, 4th Edition (2009) put it at [13.22] of their discussion of negligent misstatements, that "since the issue of whether the defendant has assumed responsibility is to be determined objectively [and here the authors cite Williams] all aspects of the dealings between the parties are relevant". 186 In my view, having regard to all relevant aspects of the dealings between the parties – the dealings involving the respondent Mr Coleman, as a licensed valuer, and the applicants, in the sense that Mr Coleman knew who he was actually preparing the valuation for and that Mr Coleman knew the report he agreed would be relied upon by them for mortgage security purposes – Mr Coleman should be taken as owing a duty of care to the applicants in respect of the valuation he produced and knew his employer, Propell, would be providing to them. 187 Accordingly, I reject the submission made on behalf of Mr Coleman that he did not owe the applicants any relevant duty. 188 To the extent that, in Williams, the English House of Lords considered that a defendant director owed no duty of care to the plaintiff in respect of the conduct of the company of which he was a director in Williams, that decision plainly turns on its own facts. 189 I find, therefore, that at material times Mr Coleman owed a duty of care for the purposes of the law of negligence to the applicants. 190 The second aspect of the disputed issue as to whether Mr Coleman was a party to the representations is whether he was involved in the contravention within the meaning of s 75B of the TP Act. Section 75B provides for what is often called accessorial liability in respect of contravention of the Act, in the following terms: (1) A reference in this Part to a person involved in a contravention of a provision of Part IV, IVA, IVB, V or VC, or of section 95AZN, shall be read as a reference to a person who: (a) has aided, abetted, counselled or procured the contravention; (b) has induced, whether by threats or promises or otherwise, the contravention; (c) has been in any way, directly or indirectly, knowingly concerned in, or party to, the contravention; or (d) has conspired with others to effect the contravention. (2) In this Part, unless the contrary intention appears: (a) a reference to the Court in relation to a matter is a reference to any court having jurisdiction in the matter; (b) a reference to the Federal Court is a reference to the Federal Court of Australia; and (c) a reference to a judgment is a reference to a judgment, decree or order, whether final or interlocutory. 191 The applicants say it is sufficient that Mr Coleman intentionally participated in the act or omission constituting a contravention, if it is established, in order to attract his liability as an accessory under this provision. In this the applicants rely upon what was said by Fisher J in Yorke v Lucas (1983) 68 FLR 268. 192 Counsel for Mr Coleman submits that the applicants' submission misconstrues the ratio of what Fisher J stated (which was approved on appeal to the High Court in Yorke v Lucas (1985) 158 CLR 661) and ignores the fact that his Honour held that Mr Lucas was not a party to the contravention of s 52 of the TP Act, because: He did not know and knowledge should not be imputed to him of all the facts which gave rise to the contraventions. 193 In the High Court in Yorke v Lucas (1985), in the joint judgment of the majority (Mason ACJ, Wilson, Deane and Dawson JJ) at 670, their Honours held that for a natural person to be a party to a contravention of the TP Act, pursuant to s 75B(a) or (c), it is necessary for the individual to have knowledge of the essential elements of the contravention. 194 Brennan J, at 677, explained a similar point in these terms: knowledge of the acts constituting the contravention and of the circumstances which give those acts the character which s 52 defines, namely, 'misleading or deceptive or ... likely to mislead or deceive'. 195 Counsel for Mr Coleman submits that the applicants do not contend that Mr Coleman had any such knowledge and there is no evidence or basis for such a finding. 196 The applicants submit that the evidence shows that Mr Coleman admits he prepared the valuation and with the intention that Seiza Mortgage Co and AET could rely on it. Therefore, by preparing the valuation he was directly and knowingly concerned in the making of the representation to the applicants that the market value of the subject property at 3 April 2007 was $1,600,000. 197 In my view, the applicants' submissions should be accepted. I have found above that the valuation of 3 April 2007 was misleading and deceptive in representing the subject property carried a value of $1,600,000 for mortgage security purposes. Mr Coleman was instrumental in the making of the representations at every step. He prepared the valuation, knew its purpose and caused it to be given to the applicants. He was aware of all the facts that gave rise to the contravention, and it was his conduct that led to the contravention. RELIANCE 198 The applicants' case is that Seiza Mortgage Co relied upon the representations in the valuation in assessing and approving the loan and that Seiza Mortgage Co assessed and approved the loan on behalf of, and as agent for, AET. 199 The respondents challenge the reliance claimed by the applicants and submit there is no evidence led at all from AET to this effect and no documents that it generated other than the mortgage agreement which the respondents contend merely founds the contractual basis of its arrangements with Mr Pell. Fundamentally, the respondents contend there is no evidence as to whether AET ever acted upon Mr Coleman's valuation of 3 April 2007. 200 As to the witnesses who were called in relation to documentary matters, the respondents observed that they were not themselves involved with the transaction at material times. Put shortly, the respondents say that without evidence from AET itself, an officer of AET, a director, or someone who says that they acted on behalf of AET, there is no evidence of AET or its agent having relied on the valuation. 201 While it is true to observe that the process by which the applicants sought to prove the making of the transaction and, in particular, the reliance of AET upon the valuation supplied by the respondents was limited and may have been supported by additional evidence, I am satisfied that by proper inference drawn from the evidence admitted, reliance on the valuation by the applicants is made out on the balance of probabilities. 202 First, there is clear evidence of a business arrangement at material times between Pepper Australia Pty Ltd, AET, Seiza Management Pty Ltd, Seiza Mortgage Co, and AMAL – Australia Mortgage Administrator Ltd. 203 A loan application dated 20 April 2007 was received from Mr Pell in order to refinance an existing mortgage and purchase investment subject property. Two separate facilities were sought. It is only the first which was relevant to this proceeding. The security offered for the financing was 95 Curtin Avenue – the subject property. The credit approval request makes reference to Ray White Valuers and a market value of $1,600,000. In the same document, after a reference to Mortgage Ezy Pty Ltd in Cottesloe, reference is made to the re-financing of the Mortgage Ezy $1,200,000 loan. It is clear enough that the loan application was directed to AET or Seiza Mortgage Co. 204 The loan application was accompanied by the first valuation prepared for Mortgage Ezy by the respondent, showing a value of $1,600,000. 205 The evidence includes a worksheet of Seiza Mortgage Co that identifies the borrower Mr Pell in respect of a four-year "cash flow lo doc" loan. The same worksheet shows information concerning a loantovalue ratio (or LVR) of 76% on a loan amount of $2,500,000. That sum reflected the total of two separate facilities that were being considered at that stage. The worksheet shows an interest rate of 8.7% for an interest only term of up to five years. 206 The documentary material shows that at this point the repayment obligations did not include any repayment of capital. Reduced payments of interest would have the consequence that at the end of the repayment period the total amount owing would exceed the amount advanced. 207 Other documents show that enquiries were undertaken and searches were carried out. A Seiza Mortgage Co document clearly identifies Mr Pell as the borrower and that a "Lo Doc Cash Flow; Subject property Type Residential" loan was proposed, with an LVR before capitalisation of 75%. It may be noted that a loan of $1,200,000 equates to 75% of a security valuation of $1,600,000. 208 The Seiza Mortgage Co documentation also indicates that the mortgage originator was one Mr Lloyd McLean. He was associated with Mortgage Ezy and the application given to the applicants on behalf of Mr Pell. A number of other documents indicate that the Seiza credit officer was Dean Italia. 209 Under the sub-heading of "Purpose", the Seiza Mortgage Co documentation identifies the loan purpose as, "To refinance a loan through mortgage ezy (i.e. Adelaide Bank)", and then goes on to state: Seiza will be refinancing one of the securities which is part of this loan - a property at Cottesloe. The other loan is to assist with the purchase of a property in Cottesloe. 210 Further in the documentation it is noted that the LVR is also considered an acceptable risk, being 75% on two houses. 211 The Seiza Mortgage Co credit policy was also produced in evidence. It identifies three types of loans offered: full doc, light doc and low doc, as well as no doc. The maximum LVR on residential properties, that are light doc or low doc, is 90%. 212 The credit policy notes that all real property securities are to be valued in accordance with the policy by an independent valuer approved by Seiza and/or instructions from Seiza. The credit policy explicitly notes that the following point must be addressed in the valuation: The purpose of the valuation, with Seiza noted as being able to rely on the valuation for mortgagee purposes. 213 The credit policy also requires the age, method of construction, quality, functionality and improvements located on the subject property to be taken into account. Further, once the valuation is received it must be reviewed to confirm that the amount is consistent with expectations and that there are no adverse aspects noted which could have a significant impact on the use of the subject property as security for the loan. 214 The credit policy makes it plain that where the loan is less than $1,250,000 – as in this case – the light to low doc LVR is 85%. Footnote 2 to this requirement, however, indicates that for cash flow type loans, the maximum end LVR can be 5% higher, that is to say, up to 90%. 215 The credit policy indicates that while credit authority resides with the board of Seiza Mortgage Co, the authority has been delegated to individual credit officers, the head of credit and the credit committee. Credit officers are able to approve loans less than or equal to $1,250,000. 216 The credit policy also refers to the mortgage servicing function that involves all aspect of loan administration, which is outsourced to AMAL – Australian Mortgage Administration Ltd – the entity referred to above. 217 By the credit policy, once a credit officer is satisfied that a loan proposal meets Seiza's credit guidelines, in particular guidelines on LVR and other matters, the loan may be approved by the credit officer. 218 The evidence here shows that a pre-approval letter went to Mr Pell from Mortgage Ezy. He was advised that: Mortgage Ezy Pty Ltd are pleased to advise that you are eligible for a residential low doc cash flow loan. 219 The LVR was stated at 75% of the valuation. The security property was identified in the letter. General conditions were stated, the fourth of which provided: A valuation report is to be prepared by a valuer approved by the Lender. The loan application will not proceed unless the valuation report is found to be satisfactory to the Lender in all respects. 220 The preapproval letter was signed "for and on behalf of Australian Executor Trustees Ltd". 221 While it might be thought a little unusual that the mortgage originator, Mortgage Ezy Pty Ltd – Qld, or Mr McLean (or an entity called Guardian) sent the letter to Mr Pell for and on behalf of AET, the fact is that is what happened and that letter was then acted upon for or on behalf of Mr Pell. The respondents then provided the further valuation to the applicants, as instructed, in the manner described above. 222 The documentary evidence discloses that following a further inquiry made by "Dean" – clearly a reference to Mr Dean Italia – Seiza Mortgage Co or Mr McLean (of Mortgage EzyQld or Guardian), the loan application was approved. 223 I accept on all the evidence that Mr Italia was the relevant credit officer of Seiza Mortgage Co who held delegated authority to deal with Mr Pell's loan application, that he dealt with it, that he caused the preapproval letter to go to Mr Pell and that he ultimately approved the loan application of Mr Pell having considered the valuation supplied to the applicants by the respondents. In this the documentary evidence is all one way, and I make those findings by strong inference drawn from all the evidence, and particularly that to which I have referred. 224 Ultimately, the loan agreement was signed by Mr Pell. It contained the manager's certification on the letterhead of Seiza Mortgage Co, dated 23 May 2007, and was made out to AET. 225 The loan agreement specifies, amongst other conditions precedent which have been satisfied or confirmed, the following: Valuation Reports have been obtained in regard to the relevant security. The report(s) have been reviewed by SEIZA MORTGAGE CO and found to be satisfactory in all respects. Complied 07/05/07. 226 Confirmation of settlement then followed. 227 In all of these circumstances, I infer on the balance of probabilities that the applicants relied on the valuation provided to them by the respondents. the question of loss 228 In their Fast Track statement, the applicants calculated their loss in the sum of $669,215.07, in the following way. The applicants noted that Mr Pell had defaulted under the loan, that they entered into possession as mortgagee and then sold the subject property at auction for the sum of $980,000. The implication was that, before the auction proceeds were applied in reduction of the amount outstanding under the loan, that the amount outstanding was $980,000 plus $669,215.07, being a total of $1,649,215.07. 229 However, in opening the applicants' case, as noted above, senior counsel for the applicants stated that the claim, taking into account the proceeds of the auction, as at 3 June 2010, was only $407,739.15. In the applicants' outline of submissions, dated 3 March 2011, the amended quantum was particularised in the following way: (1) the capital loss suffered by AET, represented by the loan principal of the loan to Mr Pell of $1,200,000, minus the net proceeds recovered on 3 June 2010 of $936,681.02, is $263,318.98; (2) AET's costs of funding the Pell loan in the period from 25 May 2007 to 3 June 2010, being an amount of $135,457.52. In calculating AET's cost of funds, the applicants say they have taken into account the payments made by Mr Pell under the loan. They contend this is consistent with the approach adopted by the Full Court in La Trobe Capital & Mortgage Corporation Limited v Hay Property Consultants Pty Limited [2011] FCAFC 4; (3) the total legal and recovery expenses paid by AET in seeking to recover the Pell loan, being an amount of $6,905.65; and (4) the total fees paid to AMAL for servicing the loan, being an amount of $2,057.00. 230 The applicants also claim interest on the sum of $407,739.15 at Court rates from 4 June 2010 to 10 March 2011, being the commencement date of the trial at that point, in the sum of $26,552.64. 231 The respondents do not challenge the entitlement of the applicants to be awarded damages on a "no transaction" basis but seek to characterise the loss calculations as constituting recovery of capital loss, plus a loss which might best be described as a loss of opportunity claim. Further, counsel for the respondents in closing submissions submitted that the claimed loss is relevant in any event on the evidence of Mr Zhang, concerning the cost of funds to AET. The respondents say evidence is required from AET to make this out. Mr Zhang does not represent AET, and as a result there is no evidence from AET as to what its business is, how it operates its business, on what basis it operates its business and there is no evidentiary basis to come to the conclusion that the loss of opportunity claim has been made out. 232 Senior counsel for AET says that the respondents incorrectly described the two components of the damages claimed. As to description of the first component being a capital loss as to the money owed under the mortgage, less the money received on the sale, in fact the capital loss claimed is the loan principal amount of $1,200,000, less the net proceeds of sale, as is apparent from [60(a)] of Mr Zhang's first affidavit. Senior counsel emphasises that the manner of calculation is therefore different from "the money owed under the mortgage", which is not just the principal amount advanced but the interest payable under the mortgage as well. AET has not claimed on that basis, as the basis of the claim is a "no transaction claim". 233 As to the characterisation of the second component of the claim as a "loss of opportunity", senior counsel for AET emphasises that the applicants do not claim damages for the lost opportunity to redeploy the money that was advanced to Mr Pell. Rather they claim the cost of borrowing that money which was used to fund the loan. Senior counsel submits that this measure of damages actually produces a lower amount that those described by counsel for the respondents. 234 In circumstances where I have found that both the first respondent, Propell, and the second respondent, Mr Coleman, have contravened s 52 of the TP Act, and are liable to AET for damages in negligence, it is open to the Court to award damages on a so called "no transaction" basis. In other words, AET, which is the only applicant to seek damages on the case put by the applicants, is entitled to be restored to the position it would have been in had it not entered into the loan transaction. I accept that AET has so constructed its claim for damages, that the claim should not be construed as one for monies due under the loan agreement. Rather, as I have outlined above, the claim particularised in (1) above is for capital loss suffered in relation to the capital sum of $1,200,000 loaned to Mr Pell, less the cost of the proceeds of sale on auction, being a sum of $263,318.98. 235 The claims in (2) and (3) are reasonably characterised as costs incurred by AET in funding the loan. I accept that the evidence contained in the affidavit of Mr Zhang, filed 3 March 2011, annexed and marked "Table 2" (Exhibit 4), proves the loss claimed in (2) above, in the sum of $135,457.52. 236 I also accept that in awarding damages on a "no transaction" basis, the legal and recovery expenses incurred by AET in seeking to recover the Pell loan in the sum $6,915.65 (which are proved by the documents included in Mr Zhang's affidavit, filed 3 March 2011, annexures "O" to "O" (Exhibit 4), adequately prove these expenses. 237 The final head of loss claimed on a "no transaction" basis is that in (4) above, namely fees paid to AMAL for servicing the loan in the amount of $2,057 (which are referred to in the affidavit of Mr Zhang, dated 11 February 2011 at [47(d)]. I accept that Mr Zhang has proved the payment of the fees to AMAL. Senior counsel for AET in effect, by noting the comparatively small amount of the loan servicing fees, submits that this sum should be allowed as part of the expenses necessarily incurred by AET which should now be recoverable on a "no transaction" basis. However, in my view the servicing fees paid to AMAL are not shown to have been necessarily incurred by AET. AET chose to structure its lending, servicing and recovery processes in the particular way that it did. In my view it is not sufficiently clear that AET was bound to incur such servicing fees when it made the loan. In effect I consider that AET has incurred the loan servicing fee by reason of its own commercial decisionmaking and it is not an expense that the respondents should now reasonably be obliged to meet. 238 Having regard to my findings above concerning the evidence of reliance, I am equally satisfied that the evidence of loss adduced by the applicants, including that of Mr Zhang, is adequate proof that AET suffered the loss as claimed. 239 In these circumstances, I would allow damages in the sum of $407,739.15 as claimed, less the amount claimed in (4) above in the sum of $2057, making total damages in the sum of $405,682.15. 240 These damages should include prejudgment interest on the damages sum I have assessed, pursuant to s 51A of the Federal Court of Australia Act 1976 (Cth), from the date of receipt of the proceeds of sale following auction on 4 June 2010 to judgment. MITIGATION OF LOSS 241 The respondents also put in issue whether the applicants adequately mitigated any loss they suffered. In my view, while there were some delays in the realisation and sale of the secured asset, the applicants acted in a timely fashion and cannot reasonably be accused of failing adequately to mitigate the loss. This view is supported by the by direct evidence of Mr Walden of Pepper Australia (Pepper) and a large volume of documentary evidence. I need do no more here than summarise the evidence to this end in the manner in which it was summarised in the applicants' submissions. 242 Attempts to obtain payment from Mr Pell, including by follow up calls and default notices, were not successful and instructions to commence proceedings for possession of the subject property were given to AET's solicitors on or about 8 December 2008. This was two months after Mr Pell ceased to make payments. Proceedings were then duly commenced and Mr Pell was served with the possession proceedings on 2 February 2009. Judgment was obtained on 20 October 2009 and AET took possession of the subject property at that point. The subject property was extensively marketed for sale. The marketing campaign was arranged and supervised by Pepper and notice provided to the applicants, as noted above. 243 Prior to the sale of the subject property, Pepper obtained appraisals and valuations in the range of $780,000 to $975,000. Propell itself provided a valuation to Pepper in November 2009 which stated that the market value of the subject property as at 3 November 2009 was $850,000. On 13 February 2010, AET sold the subject property as mortgagee exercising power of sale of public auction. The sale price was $980,000. 244 The sale of the subject property was settled on 4 June 2010. AET received net proceeds from the sale of the subject property of $936,681.02. 245 While the recovery process may be said to have been drawn out, I find that the applicants took reasonable steps to mitigate their loss in all the circumstances. conclusion and orders 246 For the reasons given above, I consider the representations as to value of the subject property contained in the valuation of the respondents dated 7 May 2007, were misleading and deceptive in contravention of s 52 of the TP Act, and also in breach of the duty of care the respondents owed to the applicants to prepare the valuation with due care and skill. I find the applicants relied on those representations and that AET has suffered loss. 247 I will invite counsel to bring forward a minute reflecting the findings and damages I have assessed in the sum of $405,682.15 plus prejudgment interest. 248 The applicants will also be entitled to their costs of the proceedings. I certify that the preceding two hundred and forty-eight (248) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Barker. Associate: Dated: 18 May 2011