Supreme Court New South Wales Medium Neutral Citation: Lonergan v JQZ Eleven Pty Ltd [2022] NSWSC 1461 Hearing dates: 30 May – 2 June, 8 June 2022 Decision date: 27 October 2022 Jurisdiction: Equity Before: Robb J Decision: See below at [314]-[315]. Catchwords: CONSUMER LAW — misleading or deceptive conduct — husband and wife plaintiffs seek to purchase property 'off the plan' in residential tower development — design concept of tower involves installation of black privacy screens on balconies of every third floor — defendant developer omits numbering levels 4 and 14 — whether defendant's agent represented to plaintiffs by reference to display model that unit sought to be purchased would be on numbered level with black privacy screens where representation failed to account for omission of lower level numbers — silence or non-disclosure — whether defendant's agent failed to warn of siting of intrusive structural columns and air-conditioning unit in property as finally built — representations as to future matters — whether representations, if made, were representations as to future matters or as to present facts — limitation of liability — disclaimer — whether bevy of disclaimers in contractual provisions and promotional material capable of and successful in dispelling misleading or deceptive quality of representations — preliminary character of 'off the plan' development renders plaintiffs dependent on representations of defendant's agent — causation or reliance — black privacy screens of special importance to second plaintiff suffering from skin condition — remedies — defendant liable to repay deposit plus interest — defendant precluded from prosecuting claim against plaintiffs for breach of contract or claim enforcing contractual provision in respect of purchaser's default Legislation Cited: Australian Consumer Law, ss 4, 18, 232, 236, 237, 243 Competition and Consumer Act 2010 (Cth), ss 84, 137B, Sch 2 Conveyancing Act 1919 (NSW), s 55 Trade Practices Act 1974 (Cth) Cases Cited: Argy v Blunts (1990) 26 FCR 112 Armstrong Strategic Management and Marketing Pty Ltd v Expense Reduction Analysts Group Pty Ltd (No 9) [2016] NSWSC 1005 Awad v Twin Creeks Properties Pty Limited [2012] NSWCA 200 Boensch v Pascoe (2019) 268 CLR 593; [2019] HCA 49 Butcher v Lachlan Elder Realty Pty Ltd (2004) 218 CLR 592; [2004] HCA 60 Campbell v Backoffice Investments Pty Ltd (2009) 238 CLR 304; [2009] HCA 25 Campomar Sociedad Limitada v Nike International Ltd (2000) 202 CLR 45; [2000] HCA 12 Dylan Mann & Co Pty Ltd as trustee for the Mann Family Trust v Tiejag Pty Limited as trustee for the Skeihy Khoury Family Trust [2018] NSWSC 1334 Flight v Booth (1834) 1 Bing (NC) 370; 131 ER 1160 Google Inc v ACCC (2013) 249 CLR 435; [2013] HCA 1 Henjo Investments Pty Ltd v Collins Marrickville Pty Ltd (No 1) (1988) 39 FCR 546 HG & R Securities Pty Ltd v Sayer [2009] NSWSC 427; (2009) 14 BPR 27,045 IOOF Australia Trustees (NSW) Ltd v Tantipech (1998) 156 ALR 470 Ireland v WG Riverview Pty Ltd (2019) 101 NSWLR 658; [2019] NSWCA 307 Massoud v Nationwide News Pty Ltd; Massoud v Fox Sports Australia Pty Ltd [2022] NSWCA 150 Ng v Chong [2005] NSWSC 270; (2005) 12 BPR 22,903 Taco Co of Australia Inc v Taco Bell Pty Ltd (1982) 42 ALR 177 Trilogy Funds Management Ltd v Sullivan (No 2) [2015] FCA 1452; (2015) 331 ALR 185 Victorsen v Easy Living Holdings Pty Ltd [2019] NSWSC 1721; (2019) 19 BPR 39,893 Xu v Lindsay Bennelong Developments Pty Limited [2020] NSWSC 1692 Category: Principal judgment Parties: David Kenneth Lonergan (First Plaintiff) Victoria Ingrid Lonergan (Second Plaintiff) JQZ Eleven Pty Ltd (ACN 168 380 265) as trustee for the JQZ Eleven Unit Trust (ABN 97 142 041 731) (Defendant) Representation: Counsel: P Lane (Plaintiffs) S Docker (Defendant) Solicitors: Pikes & Verekers Lawyers (Plaintiffs) Thomson Geer (Defendant) File Number(s): 2021/00103409 Judgment 1. On 11 November 2016, David Kenneth Lonergan and Victoria Ingrid Lonergan entered into a standard form contract with JQZ Eleven Pty Ltd (JQZ) by which Mr and Ms Lonergan agreed to purchase from JQZ a property 'off the plan' for $1,518,000. 2. The parties agree that, at the date of exchange of contracts, JQZ was the registered proprietor of the land with folio identifier 4/1046092 located at 101 Waterloo Road, Macquarie Park. JQZ is a special purpose vehicle that was incorporated by its holding company for the purpose of carrying out a substantial home unit development on the land that involved the construction of four towers with 680 home units and 1,674.8 m² of retail space. As JQZ's name would suggest, the development was the eleventh development undertaken by the group of companies of which JQZ is part. 3. JQZ was in fact the proprietor of the land and carried out the development through a development management agreement dated 21 December 2017 with Waterloo Road Development Pty Ltd, which was a member of the same group of companies as JQZ. Nothing turns on this agreement, and it will be appropriate to treat JQZ as the developer. 4. The contract between the Lonergans and JQZ was for the purchase of a unit, being a lot in an unregistered plan of subdivision of the land designated as Lot 133. The unit was initially known as unit 11803 and is now known as unit 1803A/101 in Tower A (the Unit) in what is known as "Prime" (the Prime Development). 5. In accordance with the contract, albeit by instalments, the Lonergans paid the deposit of $151,800, which JQZ accepted. The parties agree that the contract was not completed on the completion date of 6 December 2019 and has never been completed. The parties each acted to terminate the contract in January 2020, and it is agreed that the contract is at an end, although there is a dispute as to which termination was effective. Relief sought 1. By their statement of claim filed on 14 April 2021, the Lonergans sought a declaration that they validly terminated their contract with JQZ, an order that JQZ return to them their deposit of $151,800 with interest, and an award of damages for breach of contract by JQZ. 2. On the second day of the hearing, I granted leave to the Lonergans to file in court their amended statement of claim, which was the same as their original statement of claim save for the introduction of two new prayers for relief. The Lonergans sought an order that JQZ refund the deposit pursuant to s 232 of the Competition and Consumer Act 2010 (Cth), Sch 2 (Australian Consumer Law), and an order restraining JQZ from enforcing cl 9 of the contract pursuant to s 243 of that Law. Clause 9 provided JQZ with alternative means for recovering its loss upon non-completion of the contract by the Lonergans. As will be seen below, the Lonergans appear to have relied upon additional alternative sections of the Australian Consumer Law in their final submissions. 3. The Lonergans' amended claim based upon the Australian Consumer Law was pleaded in par 37A of their amended statement of claim by reference to pars 40A and 41 of their defence to JQZ's amended cross claim. By that defence, the Lonergans alleged that the Unit, as completed, differed from the Unit, as marketed, in a number of ways that they called "the discrepancies". The discrepancies that were relevant at the end of the hearing were that the Unit had two structural columns installed on the balcony and one column in the living area. The Unit also had an air-conditioning unit on the floor of the balcony, the operation of which would blow hot air into the middle of the balcony. None of these features was present in the display suite that they inspected or depicted on the floor plan that was given to the Lonergans before they entered into the contract. The final alleged discrepancy was that the Unit did not have black privacy screens installed on its balcony, contrary to an assurance allegedly made to the Lonergans by JQZ's estate agent. 4. The Lonergans alleged that the failure by JQZ to disclose that the columns would be constructed in the completed Unit and the air-conditioning unit would be installed on the balcony (which the parties called the "columns representation") involved failures to disclose that the Lonergans called "representations by silence". However, the particulars given by the Lonergans of the representations included the physical displays of the proposed units and the floor plan given to them by the agent. The parties called the representation concerning the installation of the privacy screens the "privacy screen representation". The Lonergans alleged that all the representations were made with respect to future matters within the meaning of s 4 of the Australian Consumer Law. I think it will be preferable to separate the columns representation into separate representations concerning the installation of the structural columns and the positioning of the air-conditioning unit. In the latter case I will refer to the "air-conditioning representation". 5. By its amended statement of cross claim filed on 30 June 2021, JQZ sought a declaration that it had validly terminated its contract with the Lonergans, a declaration that the deposit and interest on the deposit have been forfeited to JQZ and that JQZ is entitled to retain those monies, and either judgment in respect of the amount payable under clause 9.3.1 of the contract for deficiency on resale, or an award of damages for breach of contract by the Lonergans. Misleading or deceptive conduct claim issues 1. The parties supplemented the pleadings concerning the Lonergans' misleading or deceptive conduct claim by agreeing on the issues that arose in respect of that claim, which I will paraphrase as follows: 1. Did JQZ, by its agent, make the privacy screen representation? 2. Did JQZ, by its agent, make the columns representation? 3. Did JQZ engage in misleading or deceptive conduct? 4. Did the Lonergans rely on the alleged misleading or deceptive conduct in making their decision to enter into the contract? 5. Did the Lonergans suffer loss and damage? 6. What was the loss and damage suffered by the Lonergans? 7. Are the Lonergans entitled to a remedy under the Australian Consumer Law? 1. JQZ ultimately accepted that the conduct of the agent, Mr Li (Roger) Zhu of CBRE, was deemed, pursuant to s 84(2) of the Competition and Consumer Act, to be the conduct of JQZ, and that that and JQZ's own alleged conduct had been engaged in in trade and commerce. 2. The parties contested additional issues concerning the effectiveness of the notice to complete upon which JQZ relied to make time of the essence of the contract, as well as other related issues, which I will explain below after the issues relevant to the Lonergans' misleading or deceptive conduct claim have been determined. Summary of misleading or deceptive conduct claim 1. It will be convenient to begin by making the following brief observations concerning the essence of the Lonergans' misleading or deceptive conduct claim as finally prosecuted. 2. The privacy screen representation claim arose out of the fact that, as a design feature, the three-bedroom units on every third floor of Tower A in the Prime Development in which the Unit was to be located would have black privacy screens installed on their balconies. The Lonergans claim that this was a particularly attractive feature to them because Ms Lonergan suffers from a skin condition called rosacea that causes her to develop hives on the parts of her skin that are subjected to direct sunlight, which can leave her isolated and unsightly for periods in the order of seven days. Accordingly, the installation of black privacy screens on the balcony would substantially increase the utility of the balcony to the Lonergans. Unbeknownst to the Lonergans, as JQZ is controlled by Chinese persons and as the Prime Development was to be marketed to Chinese purchasers, the development was planned on the basis that no level would have the numeral 4 in its level number, because 4 is a number that is considered unlucky in Chinese custom. That meant that the Prime Development, when constructed, would not have a Level 14. According to the Lonergans, when the agent, Mr Zhu, advised them that the Unit, being unit 11803 on Level 18, would be constructed with black privacy screens installed, his determination that the screens would be installed on Level 18 miscarried because he did not allow for the fact that there would be no Level 14. Accordingly, his advice to the Lonergans that black privacy screens would be installed on Levels 6, 9, 12, 15 and 18 was incorrect. Relevantly to the Unit, when Tower A of the Prime Development was constructed, the black privacy screens were installed on the equivalent unit on Level 19 and not on the Unit. 3. Before they entered into the contract, the Lonergans were shown by Mr Zhu a completed display suite, including a fully built sample living room. The Lonergans claim that there was no structural pillar in the display living room, nor was any column depicted in the floor plan that Mr Zhu gave them. Further, the floor plan did not depict any columns on the balcony. The floor plan also did not depict the air-conditioning unit for the Unit as being located on the floor of the balcony, in such a way that the exhaust air from the unit would blow directly across the balcony. The Lonergans say that, as constructed, there was a 500 mm x 500 mm column in the living room that encroached into the area in a manner that reduced its size and amenity, and that the two columns installed on the balcony protruded 800 mm into the balcony from its corners, also reducing its size and amenity. 4. The contract involved the Lonergans buying the Unit 'off the plan'. The significance of that expression may differ according to the precision and finality of the relevant plan at the time the contract is entered into. Where the plan of the building has been completed, the plan may be sufficient to inform the purchaser of the description of the property with a high level of specificity. The purchaser only need expect the vendor to cause the property to be constructed in accordance with the plan. Where, however, as in the present case, the plan against which the contract is made is rudimentary and incomplete, the purchaser faces a substantially increased risk that the plan will not be an adequate description of the property to be purchased, or that the plan may be changed in a way that disappoints the purchaser's expectations. 5. As will be seen, immediately after they inspected the Unit following its completion, the Lonergans raised their complaints with JQZ. Initially, the Lonergans asked JQZ to delay the completion process under the contract to negotiate a reduction in the price. JQZ responded that Mr Zhu did not have authority to make representations on its behalf and it relied upon terms of the contract that permitted JQZ to change the plan, and other terms that disclaimed any liability to the Lonergans. Relatively shortly after the due completion date, JQZ served a notice to complete and purported to terminate the contract upon non-completion by the Lonergans. The Lonergans in turn treated the purported termination by JQZ as a repudiation of the contract, which they themselves purported to terminate. 6. Although the Lonergans claim that, in their particular circumstances, the absence of the black privacy screens being installed on the Unit significantly diminished its amenity for them, as did the unexpected installation of the structural columns in the living room and on the balcony of the Unit, together with the siting of the air-conditioning unit, it may be that the magnitude of that loss of amenity was not substantial relative to the price of the Unit. The issue is how the relevant provisions of the Australian Consumer Law should operate in this context, where JQZ simply denied the legitimacy of the Lonergans' claims and terminated the contract. In practical terms, in the circumstances of this case, did the Australian Consumer Law have the effect that JQZ ought not to have terminated the contract without first addressing the Lonergans' claims? 7. For the reasons that follow, I have found that the Lonergans have established their claim that JQZ engaged in misleading or deceptive conduct in respect of the privacy screen representation and the columns representation. I am not satisfied that the Lonergans have proved their claim in relation to the siting of the air-conditioning unit. The Lonergans are entitled to appropriate relief against the consequences of the misleading or deceptive conduct, which I will consider below. 8. It will be convenient to start by analysing the terms of the contract and making a number of preliminary observations concerning the relationship of those terms to the misleading or deceptive conduct claim now made by the Lonergans. I will then consider the evidence and set out the facts that I consider are material to this claim. I will then consider the relevant principles of law, and finally, I will explain the outcome of the misleading or deceptive conduct claim by reference to the submissions made by the parties. The contract 1. As noted, on 11 November 2016 the Lonergans as purchasers and JQZ as vendor entered into a contract for the sale and purchase of the Unit, described as "Lot 133, 101 Waterloo Road, Macquarie Park, in an unregistered plan, being a plan of subdivision of Lot 4 in DP 1046092". The Contract took the form of the 2016 edition of the contract terms published by The Law Society of New South Wales and The Real Estate Institute of New South Wales. 2. The price payable was $1,518,000, with a deposit of $151,800, and the balance payable of $1,366,200. 3. The date for completion, as stated on the front page of the contract, was specified by reference to additional condition 32.1, which defined "Completion Date". Relevantly, "Completion Date" was defined in additional clause 32.1 as being: "14 days after the day on which the Vendor's Notification is served". By the same additional clause, "Vendor's Notification" was defined as meaning: "the notice in writing provided to the purchaser or the purchaser's solicitor advising of Registration and the issue of an Occupation Certificate". 4. Beside the reference to "purchaser" were three boxes beside each of which were stated the words "JOINT TENANTS", "tenants in common", and "in unequal shares" respectively. None of the boxes was ticked. Clause 20.15 had the effect that, where the contract provided for choices, "a choice in BLOCK CAPITALS applies unless a different choice is marked." Consequently, the Lonergans contracted to purchase the Unit as joint tenants. 5. As clause 20.4 provided that: "If a party consists of 2 or more persons, this contract benefits and binds them separately and together", the liability of the Lonergans under the contract was joint and several. 6. Clause 9 provided for the consequences of "Purchaser's default" materially as follows: 9 Purchaser's default If the purchaser does not comply with this contract (or a notice under or relating to it) in an essential respect, the vendor can terminate by serving a notice. After the termination the vendors can – 9.1 keep or recover the deposit (to a maximum of 10% of the price); … 9.3. sue the purchaser either – 9.3.1 where the vendor has resold the property under a contract made within 12 months after the termination, to recover – the deficiency on resale (with credit for any of the deposit kept or recovered and after allowance for any capital gains tax or goods and services tax payable on anything recovered under this clause); and the reasonable costs and expenses arising out of the purchaser's non-compliance with this contract or the notice and of resale and any attempted resale; or 9.3.2 to recover damages for breach of contract. 1. Clause 15 required the parties to complete by the date for completion and, if they did not, a party was authorised to serve a notice to complete if that party was otherwise entitled to do so. 2. Additional clause 34 dealt with the Prime Development and contained terms requiring JQZ to use reasonable endeavours to cause the building to be constructed. Although additional clause 34.1 required JQZ, subject to the terms of the contract, to "use reasonable endeavours to cause the Building (in so far as it contains the Property) to be constructed … generally in accordance with the Development Consent", the Development Consent (which had not been issued at the time) was defined in additional clause 32.1 in a way that permitted JQZ to make any modification or variation that JQZ "in its absolute discretion, believes it will require to permit it to carry out the Development or the Development Works". Additional clause 34.3 relevantly provided: (a) The vendor discloses and the purchaser acknowledges that: … (iii) the Draft Documents and concept drawing and plans in connection with the Development Site … are not final, are for marketing and illustrative purposes only, are subject to Authority approval and/or agreement with third parties and may change at any time… … (c) Despite, and in addition to, additional clause 34.1, the vendor may at any time seek an amendment to the Development Consent, or seek any Additional Approval, which it considers necessary or desirable, provided that such applications/consents are not inconsistent with the vendor's obligations and the rights of the purchase under this contract. 1. "Draft Documents" was a term defined in additional clause 32.1 as including the Schedule of Finishes and the Draft Strata Plan and any other document attached to the contract. 2. Additional clause 35.1 provided for an allowance in favour of JQZ that required the Property to be finished "substantially as specified in the Schedule of Finishes" and reserved the right to JQZ to change any finish to a finish of at least equal quality to the finish specified in the Schedule of Finishes. 3. In particular, additional clause 35.1(d) provided: (d) The purchaser acknowledges that the display suite or samples displayed (if any) are not an exact replica of the Property but rather is indicative of the general style, quality and finish of properties within the Development. The chattels, fixtures and fittings used in the display suite (or any samples displayed) are not inclusions and will not be provided by the vendors in the Property. 1. As will be seen, JQZ relied upon this term in support of its argument that the Lonergans understood that the Unit, as constructed, might not have black privacy screens, and that structural columns might be placed in the Unit inconsistently with the display suite. 2. In the context of discussing relevant terms of the contract, it will be convenient to make some observations about the significance of those terms to the argument ultimately made by JQZ that they had the effect that JQZ's conduct was not misleading or deceptive, or that the Court should find that the Lonergans did not rely upon that conduct in entering into the contract. Some of the observations will concern the possible meaning of the relevant terms, even though the Court is not required to construe the contract for the purpose of these proceedings. The reason I will do so is that the contract itself, when viewed as a whole, is complex and may have been sufficiently unclear that it was confusing to laypeople such as the Lonergans. That is so, even though the Lonergans had the assistance of a conveyancing solicitor, as there were practical limitations on the extent to which the solicitor could explain the possible effect of all the terms of the contract. 3. The definition of "Development Consent" in additional clause 32.1, to which I have referred above, arguably permitted JQZ to make any modification or variation that it would require to permit it to carry out the Development. Such a discretion may well be held to be absolute, but alternatively it might be confined by its context to modifications or variations necessary to allow the Development to be completed. 4. Turning to additional clause 35.1(d), there is scope for argument and uncertainty about the degree of variation from the display suite that was permitted. The meaning of the word "indicative" is not clear and matters such as the absence of black privacy screens and the installation of structural columns in places that are unexpected by the purchaser probably fall outside "general style, quality and finish". 5. Additional clause 37 was entitled "Plan", and contained provisions that responded to the fact that, at the date of the contract, not only was the plan of subdivision not registered, but development approval had not been given by the relevant Council, construction drawings had not been completed, and JQZ had not obtained the necessary advice of structural engineers. Relevantly, the additional clause provided: 37. Plan 37.1 Registration of Plan Subject to clause 34.3 and 37.3 the vendor undertakes to use all reasonable endeavours and do all such things and execute all such documents reasonably required to obtain the registration of the Strata Plan generally as shown in the Draft Strata Plan by the Sunset Date. 37.2 Disclosure The vendor discloses that: (a) as at the date of this contract, the boundaries of the Property may not have been accurately defined or determined and the Draft Strata Plan is subject to final survey; (b) the number or configuration of lots in the Plan may vary from the number or configuration shown in the Draft Plan; (c) the boundaries of the Lots in the Strata Plan may vary from the boundary shown in the Draft Plan; (d) the vendor may carry out boundary adjustments between Lots in the Draft Plan before and after completion; and (e) The vendor may be required to make amendments to the Draft Plan to comply with conditions of consent imposed in the Development Consent and requirements of any Consent Authority. 37.3 Variation to the Draft Documents The vendor reserves the right to make any such alterations and amendments to the Draft Documents which it deems necessary or desirable or as may be required by the Consent Authority or the LPI or any other public authority to effect Registration. … 37.5 Acceptance of Variations The purchaser agrees to accept (including under additional clauses 37.3 and 38.3) the Property as altered or amended and will not be entitled to make any requisition/or claim (or attempt to do so) unless: (a) such alterations, amendments, variations or discrepancies substantially, detrimentally and permanently affect the Property in a way which is other than minor; (b) the area of the Property shown on the Strata Plan is reduced by more than 5% of the area of the Property as shown in the Draft Strata Plan; (c) the location of the Property is not in substantially the same position as it appears on the Draft Strata Plan; in which case the purchaser will have a right to rescind this contract in the manner specified in additional clause 40. … 1. These provisions are intended to provide JQZ some latitude in relation to changes that may be made to the Draft Strata Plan and the other Draft Documents. Again, however, there is scope for contention as to whether the entitlement of JQZ to make changes would be unrestrained, or whether it would be limited to the making of changes in response to the requirements of any Consent Authority or the LPI or any other public authority that might in some reasonable way be required to achieve the development consent or registration of the strata plan. The use of an expression such as "which it deems necessary or desirable" may be found, as a matter of construction, to be limited by the context. 2. The apparent effect of additional clause 37.5 is to prevent the Lonergans from making any claim in relation to any alteration that has a minor effect on the Unit, or in circumstances where the area of the Unit is reduced by more than 5% of the area as shown in the draft strata plan. The wording of additional clause 37.5(a), insofar as it suggests that alterations must be substantial, detrimental and permanent before a claim may be made, but then says that the effect of the alteration must be other than minor, is problematic for lack of clarity. The contractual remedy, where the Lonergans are entitled to make a claim, is to rescind the contract. It should be noted, however, that, as reinforced by JQZ in a disclaimer in the floor plan given to the Lonergans that I will consider below, the floor plan was prepared at an unspecified scale. As will also be noted when the draft strata plan is considered, the only dimension specified is an area of the Unit in square metres. 3. The effect of additional clause 40 was that the right to rescission granted by clause 37 could only be exercised within seven days of JQZ giving the Lonergans notice of the relevant amendment or variation. Time was made of the essence of the right to rescind. 4. Additional clause 42 was called "Disclosure Material" and provided: 42.1 Disclosure The purchaser acknowledges that the vendor has made available to the purchaser and the purchaser has inspected (or not inspected by its own election) the Disclosure Material. 42.2 Purchaser Warranties The purchaser warrants that it has conducted all further investigations, inspections and enquiries of its own as it has been necessary or appropriate to verify or satisfy itself as to anything contained in the Disclosure Material. 42.3 Acknowledgements The purchaser acknowledges that the vendor has not made and does not make any representation, warranty or statement: (a) as to the completeness or accuracy of the Disclosure Material; (b) that the Disclosure Material comprises all documents or information in the possession or control of the vendors in relation to, or which may affect the Property or any adjoining or nearby properties. … 1. "Disclosure Material" was defined in additional clause 32.1 as meaning: "the information, documents and other forms (sic) disclosures made in this contract including those documents and disclosures made or attached in Annexure "E" (if any)." 2. Annexure E to the copy of the contract that is in evidence does not list any documents. As the definition of "Disclosure Material" is inclusive, additional clause 42 may operate in relation to other documents and disclosures made in the contract, which would at least include the Draft Strata Plan in Annexure B, and the Schedule of Finishes in Annexure C. 3. Additional clause 43, under the heading "Purchaser's Acknowledgment", contained terms which had the effect of disclaiming liability on JQZ's part, relevantly, as follows: 43 Purchaser's Acknowledgement 43.1 Property Status The purchaser acknowledges that: (a) the purchaser has inspected the Property; (b) the purchaser enters into this contract as a result of the purchaser's own enquiries and inspections; (c) the purchaser has not been induced to enter into the contract by, and has not relied on any marketing material, statement, representation or warranty by or on behalf of the vendors or any agent or employee of the vendor other than those as set out in this contract, including any statements or representations as to potential or projected yield, return, use (present or potential) or development potential; and (d) the Property is sold and is to be accepted by the purchaser in its present state of repair and condition and subject to legal and physical defects (if any) and any Contamination. 43.2 Purchaser's Own Enquiries The purchaser relies entirely upon its own enquiries and investigations in relation to the following: (a) the quality and state of repair of the Property and of any services; … (d) the fitness of the Property for the purchaser's purposes; … and has satisfied itself on all such matters prior to entering into this contract. 1. It will be convenient, having set out the relevant parts of additional clause 43, to make the following observations concerning its operation in the present context. As the construction of Tower A had not commenced at the time the parties entered into the contract, and as its design had not yet been completed, it was plainly impossible for a purchaser to have inspected the Property. Not only was additional clause 43.1(a) meaningless, but it was likely in its context to confuse any layperson who tried to understand the effect of the provision. As to additional clause 43.1(b), it was all well and good for JQZ to have imposed an acknowledgement on the Lonergans that they had entered into the contract as a result of their own enquiries and inspections, but that provision begs the question of what enquiries and inspections a purchaser could undertake. Given the status of the Prime Development as being only the subject of a relatively rudimentary plan at the time the parties entered into the contract, no inspections were possible, and a lay potential purchaser might think, in the circumstances, that enquiries should be made of JQZ's agent. Additional clause 43.1(d) was plainly meaningless at best, as the Property did not have a present state of repair and condition. 2. Additional clause 43.1(c) is in a different position because, as a statement of the negative, it was capable of application, notwithstanding that it was impossible for a potential purchaser to satisfy the purchaser's requirements in the property by means of any enquiry or inspection. The practical effect of additional clause 43.1(c) (and 65.2, which is set out below) was to require a purchaser to identify every feature of what the purchaser was informed by the display suite, any available plans, and all representations made by JQZ's agent that was important to the purchaser, and then seek to protect the vendor by having the requirement that the feature be inserted in the contract. 3. Additional clauses 43.2(a) and (d) are also obviously impossible to apply given that the Property did not exist at the date of the contract. 4. I will come to the significance of the Lonergans having the advice of a conveyancing solicitor below. The issue will be whether the Lonergans' knowledge of any of the above terms of the contract has had the effect of preventing JQZ's conduct being misleading or deceptive, or the Lonergans entering into the contract other than in reliance on that conduct. Any advice that the solicitor gave the Lonergans may be relevant to those issues. However, in the context of the analysis of the terms of the contract, it should be noted that, as I have explained, the meaning of some of the terms, insofar as they gave JQZ latitude to make changes, is not entirely clear. Some of the terms plainly could not apply to the purchase of the Unit because they assumed that the Unit existed and could be inspected. JQZ has sought to 'cherry pick' the terms that could apply practically to an 'off the plan' unit whose design was preliminary and incomplete. However, the reaction of a potential purchaser to the terms of the contract should be approached in a holistic way, if the issue is whether those terms had the effect that JQZ's conduct was not misleading or deceptive, or to support a conclusion that the Lonergans knew that they could not rely on any representation by JQZ or its agent, or upon any other information provided to them by JQZ. 5. In addition to clause 15, additional clause 49 required the parties to complete the contract by the Completion Date, and clause 49.2 provided: 49.2 Notice (a) In the event that completion does not take place by the Completion Date, then the party who is ready, willing and able to complete and is not in default may serve the other party with a notice (Notice to Complete) in writing requiring completion to take place not less than ten (10) Business Days from (and including) the date of service of the Notice to Complete, then for the purposes of this contract time will become and be deemed to be of the essence for the purposes of completion. (b) Following service of the Notice to Complete, time is deemed to be of the essence for the purposes of completion. (c) For all purposes at law and in equity, the parties acknowledge that 14 days is reasonable and sufficient notice within which to require completion. 1. Additional clause 49.3 entitled the parties to withdraw any Notice to Complete issued by them or to extend the period of notice, or to issue subsequent Notices to Complete. 2. Additional clause 64 provided for a method for the service of notices in the following terms: 64.2 Service Method Any notice may be served by delivery in person or by post or transmission by facsimile (if the facsimile number is specified in this contract) to the address or number of the recipient specified in this contract or most recently notified by the recipient to the sender. 1. Additional clause 65.2 provided: 65.2 Entire contract This contract contains the entire understanding between the parties concerning the subject matter of the contract and supersedes all prior communications between the parties. 1. The preliminary strata plan in Annexure B to the Contract simply depicts the Unit by the outline of its boundaries and the symbols "PT133 121sq.m.". This depiction appears on the page representing "Level 16". Background facts 1. I will begin my consideration of the evidence by stating my conclusions concerning the creditworthiness of the evidence given by the witnesses. Findings on credit of witnesses Mr Lonergan 1. It was evident from the evidence given by Mr Lonergan that he gave the greater attention to the events that led to the Lonergans entering into the contract than did Ms Lonergan. They both participated in those events and discussed and agreed the course that they would take, but Mr Lonergan appears to have focused more on the detail of the transaction than did his wife. 2. I found Mr Lonergan to be an entirely satisfactory witness, whose evidence on the material issues I have been able to accept with confidence. I will explain below why I reject the submission made by JQZ that Mr Lonergan was an unsatisfactory witness. Mr Lonergan gave direct and immediate answers to all the questions that were asked of him in cross-examination. Wherever he could answer a question in the simple affirmative he did so. Mr Lonergan appeared to me to answer questions without regard to the consequences to his case. In particular, as will be seen, he readily admitted that he had read terms in the draft contract upon which JQZ seeks to rely in its defence. Furthermore, it was my impression that Mr Lonergan's answers were generally appropriate to the questions. I accept Mr Lonergan as a witness of truth. The transaction was a very important one for the Lonergans, and I accept that Mr Lonergan paid attention to detail, at least to the extent that was possible given the relatively incomplete nature of the plans for the Prime Development. I have not hesitated to accept Mr Lonergan's evidence on points of detail, because the subject matter was generally important to the Lonergans and was of a nature likely to be retained in memory. 3. JQZ's first submission as to why Mr Lonergan was not a satisfactory witness rested on his evidence that, in an application for finance for the purchase of the Unit that he made on 30 October 2019, he did not disclose as a liability a debt of $140,000 that he owed to Bendigo and Adelaide Bank. JQZ submitted that Mr Lonergan initially denied the non-disclosure and then attempted to explain that it was disclosed by the repayments being part of the monthly groceries expense, which JQZ said was an incredible explanation. The circumstances in which the $140,000 debt arose were not explored in any detail in the evidence. Mr Lonergan appeared to be surprised by the questions directed at the existence of the debt and did not appear to have time to have fully recalled those circumstances. Mr Lonergan said that the debt arose as a result of a judgment in some unidentified class action suit (T 114.3). He said that an order had been made that the debt be paid by instalments of $1,570 per month (T 113.30). He said that he would not intentionally have misled the lender to whom the credit application was made (T 114.31), and that he believed the monthly repayment of the judgment debt was disclosed in the monthly expenses of $5,735 (T 113.34). There is some force in JQZ's submission that Mr Lonergan's evidence appeared to be questionable on this issue but, given the absence of detail, I am not prepared to accept that this incident demonstrates that Mr Lonergan is a generally untruthful person. If in some way the judgment debt arose out of a class action, it may have concerned some investment made by Mr Lonergan with other persons in the same class. I am not prepared to disbelieve Mr Lonergan's explanation, which I take to be that he treated the liability as a monthly expense. 4. Next, JQZ submitted that Mr Lonergan had falsely stated that he had a loan approval from Pepper Finance to cover the liability to Bendigo and Adelaide Bank as well as to finance the completion of the contract. JQZ made this submission by reference to Exhibit D1, which was a Final Approval dated 2 August 2017 by Pepper Group Ltd trading as Pepper Money for a loan of $363,069.13 secured on a property at Ermington owned by Mr Lonergan. On Mr Lonergan's evidence, that borrowing was made to pay out an earlier mortgage and to obtain funds to pay the balance of the deposit under the contract. Mr Lonergan's evidence was (T 111.26): "… So, when you take out a bank loan, they don't only just give you the deposit, they look after the whole scenario at the end of settlement. So, we had approval from Pepper Money and this was a – this was to try and get a lower value rate – interest rate" (referring to applications for finance that the Lonergans had made to alternative lenders). JQZ also relied upon the following part of the cross-examination of Mr Lonergan (T 116.14-22): Q. By the time of the inspection of 7 November, Mr Lonergan, you had no finance approved, did you? A. We had the original Pepper loan approval, which was based on the whole scenario, so Shore Financial had started discussions with banks to get a lower interest rate. Q. Did the Pepper loan approval cover the repayment of the Bendigo and Adelaide Bank loan? A. Yes. 1. JQZ's submission was technically correct insofar as the Lonergans appeared not to have had a final binding loan approval for the amount necessary to complete the contract. The only loan approval that was in evidence covered the balance of the deposit. However, it appears from Mr Lonergan's evidence that it was his position that he had discussed the matter with Pepper Money and that he had been given to understand that, having made an advance that included funds necessary to pay the deposit under the contract, it had already considered the Lonergans' financial position and it had indicated in some way a preparedness to provide the balance of the finance. Mr Lonergan's position was that all the evidence that was tendered concerned unsuccessful applications for finance that had been made through a mortgage broker to lenders who were likely to require a lower interest rate than would Pepper Money. I am not satisfied that JQZ has adequately demonstrated that Mr Lonergan knowingly gave false evidence to the Court. The evidence did not establish what the true arrangement was between the Lonergans and Pepper Money. There is some plausibility in Mr Lonergan's assertion that Pepper Money would not have advanced the deposit money without satisfying itself that the Lonergans were a good credit risk for a loan for the balance of the price. I reject JQZ's attempt to persuade the Court that an apparently honest witness has given dishonest evidence based upon imprecise inferences asserted by JQZ about the Lonergans' relationship with Pepper Money. 2. Thirdly, JQZ submitted that the Court should find Mr Lonergan was an unsatisfactory witness because (a) he said that he would not have contributed to the purchase if Ms Lonergan had gone through with the contract to purchase the two-bedroom unit (which I will explain below) alone, which JQZ submitted was obviously necessary, and (b) Ms Lonergan gave contrary evidence. Mr Lonergan did say that he was not "going to contribute to the purchase" (T 31.29). Ms Lonergan accepted that Mr Lonergan was going to contribute to the purchase price, although she said that she was not sure that the two-bedroom unit would be an investment for both the Lonergans, even though it was going to be in her name (T 157.11-157.17). So far as the cross-examination of the Lonergans was concerned, the issue was left there. The difficulty the Court has in accepting JQZ's submission is that the issue was not explored in sufficient detail to justify a finding that Mr Lonergan's evidence was untruthful. Ms Lonergan in fact signed the first contract for the purchase of a two-bedroom unit in her own name for a price of $1,190,000, which required the payment of a deposit of $119,000. The two-bedroom unit, if purchased, would have been an investment property, and there is no evidence as to whether the rent from the leasing of the property would have covered the holding costs of the mortgage. Ms Lonergan apparently had some funds to apply towards payment of the deposit, but when the Lonergans decided to buy the Unit, which required payment of a deposit of $158,000, they had to make other arrangements, including obtaining the agreement of JQZ to defer the payment of part of the deposit, and it became necessary for Mr Lonergan to join Ms Lonergan as a purchaser. The evidence is insufficient to enable the Court to determine what the real position was, and whether Mr Lonergan could not honestly say that he understood that he would not be contributing to the price of the two-bedroom unit. 3. JQZ's fourth submission was that Mr Lonergan persisted in giving instructions to Hunt & Hunt to send letters stating that Mr Zhu had said that the Lonergans could have a bath in the Unit, when JQZ had in fact rejected a formal application that a term to that effect be inserted in the contract. It is true that the Lonergans asserted, after the date of their inspection of the completed Unit, that they had been told by Mr Zhu that they could have a bath in the main bathroom. Mr Lonergan explained the error by saying that, when the claim was made on their behalf, they had not revisited the correspondence between the solicitors before the date of the contract. Mr Miller, their solicitor, who wrote the later letters making the complaint, had obviously also forgotten that he had made a request that the inclusion of a bath be inserted in the contract but that the request had been rejected by JQZ. This represents a trivial error in recollection by both Mr Lonergan and Mr Miller and does not bespeak dishonesty on Mr Lonergan's part. 4. JQZ's final submission as to why the Court should find that Mr Lonergan was an unsatisfactory witness was based upon the fact that Mr Lonergan denied in cross-examination that he had decided not to complete the contract by 7 January 2020, when he had in fact written to his mortgage broker to that effect on 3 January 2020. I do not accept that this relatively trivial error in recollection as to dates justifies a finding that Mr Lonergan was not an honest witness. Ms Lonergan 1. I also found Ms Lonergan to be a creditworthy witness. I am satisfied that Ms Lonergan answered questions put to her in cross-examination truthfully and to the best of her ability. Ms Lonergan did not have quite the same grasp of the detail of events as did her husband, but I am satisfied that was because she left it to Mr Lonergan to attend for both of them to some of the details of the transaction, so that, for example, she did not read the contract, the floor plans provided to her by Mr Zhu, or the draft strata plan annexed to the contract. I have no hesitation in accepting the evidence given by Ms Lonergan. Mr Zhu 1. I accept that the evidence given by JQZ's agent, Mr Li Zhu, was given conscientiously and to the best of his ability. I accept Mr Zhu as an honest witness. However, the credibility of the evidence given by Mr Zhu must be assessed having regard to the fact that his role was to procure purchasers for the units in the two stages of the Prime Development that were the subject of the retainer of CBRE, his employer. It was Mr Zhu's role to converse with a substantial number of potential purchasers who attended the display suite during the marketing program. This was not a case where the agent dealt with a relatively small number of potential purchasers in respect of a single property over a significant marketing period. There were two open days, and there was evidence that on each day a substantial number of potential purchasers attended, so that queues formed, and potential purchasers had to wait for some time until a representative of CBRE became available to speak to them. Consequently, Mr Zhu must have spoken with a significant number of potential purchasers on each occasion. He would have been required to cover substantially the same subject matter with a significant number of interested parties. There is no reason to think that anything discussed with the Lonergans would have stood out in Mr Zhu's memory. The evidence does not disclose when Mr Zhu was first required to recall his interactions with the Lonergans. However, his affidavit was made on 19 October 2021, about five years after the relevant events occurred. Mr Zhu could not be expected to have actually recalled his interaction with the Lonergans in reliable detail. 2. I am satisfied that, where Mr Zhu has given evidence of the detail of his interactions with the Lonergans, he has been required to reconstruct that recollection, and his evidence has been influenced by his attempt to recall what he would have done in the circumstances based upon his general recollection of his ordinary practices. That does not reflect dishonesty on Mr Zhu's part, but is a reflection of the process he was required to engage in to respond to the evidence given by the Lonergans. 3. Where the evidence of the Lonergans departs from the evidence given by Mr Zhu on the central issues of fact, I have preferred the evidence given by the Lonergans. The remaining witnesses 1. The remaining witnesses for JQZ, Ms Yi Zhou, who was its development executive, Mr Justin Wu, who was its program manager, and Mr Roger Mattar, its solicitor, gave relatively uncontroversial background evidence. The Lonergans' circumstances 1. Mr and Ms Lonergan were about 46 and 41 years of age respectively at the date of the contract. They had three children who were then about 15, 11 and 3 years of age. 2. Mr Lonergan completed his Higher School Certificate in 1988. He obtained a Trade Certificate in Fire Systems from NSW TAFE in 1992, a Certificate IV in Fire Technology from the Sydney Institute in 2002, and a Graduate Certificate in Fire Safety Engineering from the University of Western Sydney in 2012. At the time of the contract, Mr Lonergan was employed as a Services Infrastructure Manager by Sydney Airports Corporation. He was made redundant on 30 September 2020 and was self-employed at the time of the hearing. 3. Ms Lonergan completed her Higher School Certificate in Perth in 1992. She obtained a Diploma in Hotel Management from a Community College in Arizona, USA, in 1995. 4. At the time the contract was entered into, the Lonergans were living in a rental apartment in Chatswood with their three children. 5. Mr Lonergan was the owner of a house at Ermington, which he had acquired from his mother for a price of $200,000, which he had borrowed by a mortgage secured on the property. Mr Lonergan's aged mother lived at the Ermington property. Both the Lonergans sometimes stayed at the property to look after Mr Lonergan's mother. 6. The Lonergans had not previously bought a property 'off the plan'. The Lonergans initially planned to acquire an investment unit. By searching on the Internet, the Lonergans discovered the proposal by JQZ to construct the Prime Development. This was an attractive proposition to the Lonergans because it adjoined the Macquarie Centre, which was a large shopping mall with a lot of shops, restaurants and other amenities including a cinema complex. It also had a railway station on the Epping-Chatswood railway line. 7. The Lonergans decided that they would look at the Prime display centre. Ms Lonergan registered their interest in the Prime Development and received an invitation by email for a "VIP" event from CBRE on 4 October 2016. The invitation to the launch of the display centre included a requirement that a "$5,000 Expression of Interest (EOI) amount" be paid to secure an appointment at the launch, which was to be refundable if a decision was made not to make a purchase. 8. As will be seen, the Lonergans' perspective in responding to JQZ's conduct is important to the determination of whether that conduct was misleading or deceptive. I find in this respect that the Lonergans were inexperienced in the purchase of residential property on the open market and that they had no experience in purchasing units 'off the plan'. They were renters and had to mind their money carefully. They were prudent and careful people and attended as best they could to the detail required in entering the contract. Mr Lonergan's professional experience lay in managing services infrastructure. He did not have significant experience in what was required for the design and construction of substantial home unit developments. Ms Lonergan had no relevant experience in these matters. Both were substantially dependent on the information provided to them by JQZ and its agent in deciding whether they should enter the contract. First visit to the display suite 1. The opening of the display centre was held on 23 October 2016, which was a Sunday. When the Lonergans arrived, there was a long queue outside. After some delay they were introduced to Mr Zhu, a CBRE sales consultant, who used the first name Roger. 2. The display suite for the Prime Development included: * floor plans for each of the floors in the then proposed Stage 1 of the Prime Development, which was to be two buildings, and included Tower A in which the Unit was eventually built; * a fully built sample bedroom; * a fully built sample kitchen and dining area; * a fully built sample bathroom; * a fully built sample living room; and * a scale model of the Prime Development, together covering an area about as big as a dining table and about 50 cm high. 1. The Lonergans did not specifically say so in their evidence, but it is an obvious inference from their evidence and the lack of contradiction in the evidence given by JQZ that the fully built sample living room did not have a large structural column in it. 2. Towards the end of the tour of the display suite, the Lonergans discussed the purchase of unit 11505, which had two bedrooms plus a study. They then had a conversation with Mr Zhu, in which he explained that they would have to put down a $5,000 'expression of interest' deposit that day. The Lonergans agreed and Ms Lonergan paid the $5,000 using her credit card. 3. After 23 October 2016, the Lonergans discussed the possibility that the two-bedroom plus study unit might be too small for their purposes. They discussed whether it would be preferable for them to buy a three-bedroom unit. Mr Lonergan's Ermington property required rebuilding and the construction of a granny flat. The Lonergans and their children would be able to live in a three-bedroom unit as their home while the Ermington property was reconstructed. In the longer term, a three-bedroom unit in the Prime Development might be an alternative and preferable home for the Lonergans, particularly after their children left home. Second visit to the display suite 1. The second meeting with Mr Zhu happened on 30 October 2016, when the Lonergans went back to the display centre at about 10:00 or 11:00 AM to have a look at the floor plan of apartment 11505. They looked through the Stage 1 lot plans on the wall and the unit model again and had a discussion with Mr Zhu about unit sizes. In his first affidavit, Mr Lonergan said in par 18 that Mr Zhu said: "The 3 bedrooms are a fair bit larger than the 2 bedrooms with study. And some of them have the black privacy screens on the balcony at no extra cost." 2. Ms Lonergan said in par 15 of her first affidavit that a conversation to the following effect occurred: David: We are discussing with each other if a 2 bedroom plus study will be big enough. Mr Zhu: Why don't you go for a 3 bedroom? There are still some available. Some of them have the black privacy screens on the balconies. Me: Is there a cost for the black privacy screens? Mr Zhu: No, there is no cost for the black screens. 1. Although some potential purchasers might have been indifferent as to whether the unit that they selected had black privacy screens, it was a feature of particular interest to the Lonergans. 2. In the following and later paragraphs I will set out extracts from the evidence given by witnesses in cross-examination. For the sake of brevity and clarity I will sometimes abbreviate the evidence as set out in the transcript. 3. Ms Lonergan's evidence on the subject in cross-examination was (T 152.21-153.16): Q. In there you say that you suffer from rosacea and need to stay out of the sun as much as possible. Do you see that? A. Correct. Q. When you say you need to stay out of the sun, does that mean the sun in the middle of the day? A. Well, any of the sun in any time. Q. But it's true, isn't it, that the sun during the middle of the day is much stronger. Is that more of a problem than in the afternoon or the morning? A. Not always. Q. Is the problem that's caused by the sun is that it creates a rash? Is that right? A. Hives. Rash and hives as well because I have rosacea and urticaria, which is all hives everywhere and all over my body. Q. It's the place on your body that feels the sun that that there's the problem. Is that right? A. I don't understand. Q. If you get sunlight on your face, that's where the skin problem is. Is that right? A. Which ever part of my body exposed to the sun it will affect. Say for example, if I'm on summer I'm going to the beach with the kids, I come back with all hives everywhere. Q. But wherever the sun hits. Is that right? A. Yes, that's right. Q. So you do go to the beach with the kids, do you. A. Not that often. I would love to, but yeah not that often. Q. Is it right that it's the sun in the middle of the day that's more of a problem than in the evening or the morning? A. Sometimes in the evening can be really sunny as well and depends on the way that - at the moment Sydney where you can't predict. Q. Do you have creams that you can put on your face do you if-- A. Yes. If I come back, for example, if I come back with the rashes all over the body and stuff like that so I straightaway took the medication and then after I put some ointment as well, which is called Rozex for the rosacea and some cream that's prescribed by the doctor and then maybe about seven days it will reduce. And then normally I isolate myself because this look really, really not pretty. Even my little ones say, "You just look ugly Mum." You know, so, like rest everywhere. So, hives. 1. It was suggested to Ms Lonergan in cross-examination that her suffering from rosacea was not in fact a reason for the Lonergans to choose a unit with black privacy screens, but Ms Lonergan insisted that it was, and I accept her evidence. 2. Ms Lonergan's evidence was, in the following terms, that she would not have purchased the Unit if she did not think that it had black privacy screens (T 160.48-160.50): Q. You still would have signed that contract even if you did not think that it had black privacy screens. Do you agree or disagree with that? A. No, I wouldn't buy it if that's no black screen. 1. On the same subject, the cross-examination of Mr Lonergan was as follows (T 106.29-106.46): Q. Mr Lonergan, you knew, as of 18 November 2016, that subject to obtaining the relevant approvals from the council and from the strata corporation, that if there were no black screens built on the outside of unit 11803, you could have installed yourself? A. No. Q. Do you say that because you didn't give it any thought at the time? A. No. It would depend on the screens and whether it had any screens. Q. Mr Lonergan, I suggest to you that you and your wife would have entered into this contract to purchase 11803 whether or not you had understood that it was going to have black privacy screens? A. I can only speculate. I would say no. Q. And I suggest to you that you didn't raise the question of black privacy screens through your solicitor with the vendor solicitor before 18 November because it was not an important consideration in you purchasing the property. A. I disagree. 1. Mr Lonergan gave the following further evidence in his first affidavit of the conversation with Mr Zhu after Mr Zhu had suggested that the Lonergans might prefer to buy a three-bedroom apartment: 19. Victoria and I showed Mr Zhu our preferred apartment numbers as: 10903, 11803, 10803, 12103, which had significance as birthdays of family members. We then walked to the model where Mr Zhu counted the levels and there was a conversation in words to the following effect: Mr Zhu: Only levels 6, 9, 12, 15, 18 have the black screen design feature. Me: We are very interested in the black screens feature on the apartment because of Victoria's skin condition with UV rays and it will allow us to enclose in the future for more privacy and space. 10903 looks too close to the retail shops downstairs and we don't want to get that noise so we will choose our second preference number in our list, 11803. 20. Mr Zhu then gave us with (sic) a large floor plan of the 3 bedroom apartment layout (the three-bedroom plan) … 21. Mr Zhu wrote the following entry in black on the three-bedroom plan: * 11803: $1.518 – 1.548M … … Mr Zhu also wrote 6/9/12/15/18 on the right side of the 3 bedroom plan to indicate the floors that would have the black privacy screens and there was a conversation in words to the following effect: Victoria: Can you confirm the black screen with no extra cost? Mr Zhu: Yes it's all included. The black screen features automatically come from the building. Victoria: Can we also add the bath in the ensuite? Mr Zhu: Of course, can be done. Me: If we go ahead with the 3 bed the purchaser will be under both names. Mr Zhu: No problem and noted. 1. Ms Lonergan's evidence of the relevant parts of the conversation with Mr Zhu was consistent with the evidence of Mr Lonergan, although not in identical terms. The Floor Plan 1. The floor plan of the three-bedroom units that Mr Zhu gave to the Lonergans (the Floor Plan) became Exhibit P1. The evidence was that some of the writing on the Floor Plan was made by Mr Zhu on 30 October 2016, and other writing was placed on the document at a later meeting with Mr Zhu on 6 November 2016, that I will come to shortly. The relevant features of the Floor Plan were, in relation to its state as of 30 October 2016: * There was no structural column depicted in the living room. * No structural columns were depicted on the balcony. * Some of the external and internal walls of the unit were depicted by thick black lines suggesting solidity and other walls were depicted by means of lines on a white background. * The site of the proposed air-conditioning unit was not depicted. * The writing made by Mr Zhu "*11803: $1.518-1.548M" was shown, as well as other writing that the Lonergans said was made on the Floor Plan by Mr Zhu that does not require a detailed description. * On the right-hand side of the Floor Plan was a panel that stated: "LEVEL 5 - 21" underneath a small drawing in outline of the four proposed towers, that was apparently intended to show that the Floor Plan had relevance to all of the three-bedroom units that would have the same layout on all of those levels. * The panel also contained a statement that the internal area would be 97 m², the external area 23 m², and the total area 120 m². * At the top of the panel under the word "APARTMENT" was a list of 16 unit numbers, which were evidently the numbers of the units on the various floors that would have a three-bedroom apartment with the layout depicted in the Floor Plan. The units identified included the Unit, being 11803. * Under the list of three-bedroom units were the numbers: "6/9/12/15/18" in Mr Zhu's handwriting. 1. At this stage of the development project, each of the proposed units was identified by a five-digit number, in which the second and third digits identified the proposed level on which the unit would be situated. Accordingly, unit 10603 would be on the sixth level and unit 11803, the Unit, would be on the 18th level. 2. If a reader of the Floor Plan were looking for the information, a close reading of the list of three-bedroom units with the same layout as depicted in the Floor Plan would show that there was apparently no unit with that layout on Level 14. I will return to the significance of this fact below. 3. The Floor Plan, according to my measurement, was about 42 cm wide by 30 cm tall. 4. The Floor Plan had three lines of writing at the bottom. According to my measurement, ordinary letters in those three lines appear to be marginally less than 1 mm in size. 5. The writing (the Floor Plan Disclaimer) stated: The floor plan contained herein has been compiled for your convenience and for marketing purposes only. The vendor of the property, its related bodies corporate, assignees, agents and contractors (together the 'vendor') may make changes to the size and layout without notice to you. All areas are indicative only and the plan is prepared at an unspecified scale. The floor plan does not include bulkheads for services. The vendor make no (and expressly disclaim all) representations or warranties of any kind, express or implied, in respect of or in any way connected to the floor plan. The vendor exclude, to the extent permitted by law, all liability for loss or damage arising from any reliance placed on the floor plan from time to time. 1. It is apparent that, by this means, JQZ engaged in a marketing program by which it proposed to sell three-bedroom units to members of the public for prices in the order of $1.5 million on terms that potential purchasers were not entitled to rely upon the depiction of the unit in the Floor Plan for any purpose. 2. One aspect of the Floor Plan Disclaimer that warrants comment at this stage is the sentence: "The floor plan does not include bulkheads for services." The author of the Floor Plan must have been aware that, in the final design and construction process, it might be necessary to include bulkheads for services that were not depicted on the Floor Plan. However, as noted, there are no structural columns depicted anywhere on the Floor Plan. It is reasonable to infer that any technically competent person responsible for preparing the Floor Plan, and being aware that bulkheads for services could not at that time be depicted, would also be aware that, when the structural engineer that had not yet been retained by JQZ completed and certified the structural drawings, structural columns might be required to be situated at appropriate places in the units. Why would the Floor Plan contain a relatively minute warning that it did not include bulkheads for services, without also warning potential purchasers of the much more serious possibility that substantial structural columns would be constructed in the living areas of the units? I will return to this question below. 3. Both Mr Lonergan (T 46.9 and 47.2) and Ms Lonergan (T 147.5) said in cross-examination that they did not see or read the Floor Plan Disclaimer. The Purchaser Checklist 1. After the meeting on 30 October 2016, Mr Zhu sent a document called "Purchaser Checklist" to Ms Lonergan on 31 October 2016. The Lonergans completed the checklist and emailed it back to Mr Zhu on 1 November 2016. The Purchaser Checklist showed both the Lonergans as the proposed purchasers and ticked the three-bedroom option. The Lonergans indicated six three-bedroom units in order of preference as follows: 10903, 11803, 11203, 11503, 10803 and 11003. The first four of those preferences were on levels that had been stated by Mr Zhu, according to the Lonergans' evidence, as being levels where the three-bedroom unit would have the black privacy screens. The Unit was given as the second reference, although, as explained by the Lonergans in their evidence, they ultimately decided that the unit on Level 9 would be too close to the shopping levels. The Schedule of Finishes 1. Mr Zhu also gave the Lonergans a document called "Schedule of Finishes". Under the headings "ITEM" and "DESCRIPTION", in respect of the units generally and identified parts of the units, the document specified finishes; for example, for the "Floor covering" in the "Kitchen" it specified "Tiles". JQZ raised in cross-examination with Mr Lonergan the fact that the Schedule of Finishes did not specify black privacy screens on the balcony of the Unit. However, it appears that the document was a generic schedule for all the units, not just those on every third level. 2. One of the items was "Air conditioning system" and the description was "Ducted system air conditioning". I will return to this aspect of the Schedule of Finishes when I consider below whether the Lonergans have established that they were misled or deceived in relation to the location of the air-conditioning unit. 3. The Schedule of Finishes contained four lines of writing at the bottom of the first page in font that was about 1 mm high for lower case letters. The writing was (Schedule of Finishes Disclaimer): The inclusions and finishes above are indicative, subject to final design, provided for marketing purposes only. The vendor may change or remove finishes or inclusions at its discretion. The vendor makes no representation or warranties as to the accuracy, currency or completeness of the inclusions and finishes listed and prospective purchasers must satisfy themselves as to the accuracy, reliability, currency or completeness of the information provided herein and where necessary seek independent advice. 1. It may be unexceptionable for JQZ to have disclaimed the accuracy, currency, or completeness of the information in the Schedule of Finishes, but this begs the question: what was the potential purchaser to make of the requirement that they satisfy themselves and, where necessary, seek independent advice, given that the state of the design of the Prime Development at that time made that exercise impossible? The sample contract 1. On 2 November 2016, Mr Zhu emailed to Ms Lonergan a sample contract for sale. Ms Lonergan said that she did not read the contract (T 145.38). Mr Lonergan accepted that he read some parts of the sample contract "as a normal person", by which he meant not as "a lawyer" (T 50.21). Mr Lonergan was taken to a number of terms of the contract which he had read in draft. Mr Lonergan said that he did not read every page of the sample contract, but only "the main parts of the contract" (T 52.2). 2. Mr Lonergan accepted (T 53.17) that he read the schedule of finishes as annexed to the sample contract. He satisfied himself that the schedule was the same as the Schedule of Finishes that he had been given by Mr Zhu. Mr Lonergan responded to the suggestion that the schedule of finishes did not say anything about the installation of black privacy screens on the balcony by agreeing (T 53.31) but saying that he could not remember noticing that there was no reference to the black privacy screens. He explained (T 53.37): "… Because it wasn't applicable to every apartment, so why would it be in a schedule of finishes?" 3. Mr Lonergan agreed (T 56.23) that he recalled that there was a clause saying that the vendor would use reasonable endeavours to obtain the development consent. Mr Lonergan said (T 56.42) that he could not remember reading clause 34.3(a)(iii) to the effect that the drawings and plans were not final and were for marketing and illustrative purposes, but said, "it is in my knowledge that that does – sometimes that does occur." Mr Lonergan also accepted (T 57.7) that he understood that there was a clause in the contract that said "that draft documents and concept and drawing plans in connection with the development site are not final and are for marketing and illustrative purposes only." 4. Mr Lonergan accepted (T 57.9-33) that he read clause 35, and in particular 35.1(b) and 35.1(d). He also read additional clause 37.5 (T 57.36). Mr Lonergan said that he did not understand the recission clause in additional clause 40 (T 58.21). 5. Mr Lonergan gave the following evidence of his understanding of the effect of additional clause 43 in the sample contract (T 58.26-59.5 and T 60.15-61.20): Q. Do you recall reading clause 43.1? A. 43.1? Q. Yes. A. Yes. Q. Did you read 43.1(c), when you got this contract around, the draft contract, around 2 November 2016? A. Yes. Q. You understood didn't you, from reading that, that if you signed the contract, you were agreeing that you had not been induced to enter into the contract or relied on anything that Mr [Zhu] had said to you? You understood that, didn't you? A. No, I didn't understand that at the time. Q. Let's be clear about the time. At the time that you read this yourself around 2 November. Is that what you're saying? A. Well, I was told and promised these things by the sales agent, which was part of the reason for my signing this contract. Q. Mr Lonergan, but what I'm suggesting to you that when you read this clause 43.1(c) in the draft contract around 2 November you understood that if you signed the contract, you would be acknowledging that you didn't rely on anything that he said. That's right, isn't it? A. That would be correct. Q. And you understood that at the time you read this on 2 November. Is that right? A. No, I didn't understand that at that time, being a normal person. … Q. I'm sorry, Mr Lonergan, let me just come back to this clause. I was asking you about clause 43.1(c). A. Yes. Q. I just want to ask you first about 43.1(b). Do you recall reading that clause? A. Yes. Q. You understood by reading it, didn't you, is that if you signed the contract you would be acknowledging that you were entering into the contract as a result of your own enquiries. That's right. A. Yes. When I read it, I didn't think it was applicable because it's a standard contract because how - how can you go make your own enquiries with an off the plan and inspections. Q. There are some things that you can make enquiries on off the plan, aren't there. You can find out if there's a development consent. A. Maybe. Q. You can ask for all the floor plans of the building, can't you. A. But that's actually talking about own - own inspections. Inspections of what? Q. I'm not talking about inspections. My question was directed at enquiries. A. Yeah, okay. Q. You could make enquiries for a copy of all of the floor plans of the proposed building, couldn't you. A. Yes, you could. Q. That's something you in fact did. A. Yes. Q. You did understand, didn't you, that it was possible to make enquiries for an off the plan purchase. A. It'd have to be through the sales agent, I would imagine. Q. Mr Lonergan, I just asked you a question about 43.1(c) and you said you didn't understand it to mean that you couldn't rely on what Mr Zhou had told you. Is that your evidence? A. Yes. Well, why - why would you buy a car then if you were having to go to a - a salesperson. So, it's exactly the same. Q. Mr Lonergan, you understood, didn't you, that this contract was to contain the whole of the agreement between the parties if it was signed. A. This was our first off the plan - plan purchase, so we were unsure on how it went. Q. What did you think clause 43.1(c) was referring to? A. Well, that was up to my lawyer to go through and advise me, so like I said, we're just normal person going through - trying to go through a - a large contract. Q. That was something that you would expect your lawyer to advise you about. A. Yes. The floor plans for each level 1. On 3 November 2016, Mr Zhu sent an email to Ms Lonergan attaching floor plans for every level in Tower A. Mr Lonergan was cross-examined about the significance he attributed to the floor plans. Asked whether he looked through all the floor plans, Mr Lonergan replied (T 62.31): "We just narrowed it down to ones that we were interested in, being two plus study and three bedroom." Mr Lonergan was cross-examined on the subject that none of the floor plans apparently depicted structural columns in the following terms (T 62.34-41, 64.24-25, 64.32-33, and 64.43-47): Q. Do you recall noticing that there were no columns depicted on any of the floorplans? A. They were very open plan. Yes. Q. Are you agree with my suggestion to you that of the floorplans you saw, none of them showed any columns? A. No. They didn't show any columns but some did show services, risers for services. … Q. Mr Lonergan, you knew, didn't you, that these units were going to be in a building that was more than 20 storeys high, didn't you? … A. Well, mine was on level 18, so, yes, you would assume that's going to be more than 20. … Q. You expected, didn't you, in order to build a building that high, that it would be necessary to provide - sorry, to construct structural columns that went through every floor of the building? That's right; isn't it? A. Like I just said to you, I said, you don't actually need structural columns. You can use the walls as the structural support. So that is incorrect. 1. Mr Lonergan was also cross-examined on the issue of whether he learned from an examination of the floor plans that there was apparently no Level 14. Ms Lonergan gave evidence (T 147.33) that she was not aware of the Chinese custom that levels in buildings containing the number 4 were unlucky. Mr Lonergan's evidence on the same subject in cross-examination was (T 71.3-71.44). Q. In your role as a building services engineer, by 2016 had you worked with any Chinese developers? A. Throughout my career I have, yes. Q. You knew, didn't you, that the people behind the developer for the project at Macquarie Park were Chinese people. A. Yes. Q. And the units were being marketed to Chinese people. A. Yes. Q. Were you familiar with the number four being an unlucky number for Chinese people? A. Yes. Q. And you were familiar with that in 2016. A. Yes. Q. Were you also familiar with the practice of Chinese developers of having level numbers which had a four in them? A. Not always. Q. Well you say "not always", but you were familiar, weren't you, with the practice of it? A. I wasn't that au fait with it, no. Q. You'd heard of it, yes? A. I had heard of it. Q. And you understood, didn't you, that when that practice was being implemented it meant that there was no level 4 in the building? A. I would assume so, yes. Q. And no level 14? A. I would assume, yes. Q. And no level 24? A. That I'd be unclear about. I'm not - not sure about that. Q. And had you had any personal experience with this happening in the developments you'd worked on by 2016? A. No. 1. Mr Lonergan said (T 73.8) that he did not pay much attention to the floor plan unit numbers and (T 72.31 and 73.26) that he did not notice that there was no Level 14. 2. This is a convenient place to make the following observations concerning the suggestion to Mr Lonergan in cross-examination that he could have discovered, by examining the floor plans for all of the levels in Tower A, that there was no Level 14, which presumably was the foundation of an argument that when Mr Zhu concluded from an examination of the model of Tower A that the three-bedroom unit on Level 18 would have black privacy screens, he had made an error because he had not allowed for the absence of a Level 14. There were 30 separate floor plans, some of which depicted a unit layout that would only be found on one or two levels. Ten of the floor plans depicted particular unit layouts that would be copied on all or most of Levels 1 to 21. I will set out one of these 10 examples (Supplementary Court Book p 133), which depicted a one bed and study unit for apartments listed in the panel as follows: 10501, 10513, 10601, 10610, 10701, 10710, 10801, 10810, 10901, 10910, 11001, 11010, 11101, 11110, 11201, 11210, 11301, 11310, 11501, 11510, 11601, 11610, 11701, 11710, 11801, 11810, 11901, 11910, 12001, 12010, 12101, 12110 1. As the second and third digits for the unit numbers identified the level on which the unit would be constructed, a careful consideration of this list would reveal that there was no unit whose second and third digits were 1 and 4. If a person in possession of all of the floor plans had the inclination to do so, they could read through all of the floor plans and see that there was no unit with 1 and 4 as their second and third digits. Of course, the example that I have set out above was a one bed plus study unit in which the Lonergans had no interest. Not only did the Lonergans not carry out the exercise that I have just described, but there is no reason why they would rationally have done so. If a person in possession of all the floor plans did not study every one of them, they could not exclude the possibility that Level 14 existed containing proposed units with layouts that they had not considered. All of this assumes that a person casually reading the list of unit numbers that I have set out above would notice that there was no unit number with 1 and 4 as the second and third digits. The preliminary strata plan 1. Mr Lonergan was also cross-examined about the content of the preliminary strata plan that was annexed to the sample contract. The plan for the Unit disclosed that the Unit was on "LEVEL 16". That is, apparently, because it was required that for the strata plan to be registered it would need to have levels that were consecutively numbered without omissions. As JQZ had elected not to give any level the numbers 4 or 14, the numbers of the levels in the strata plan would not match the levels as they would be called in Tower A. 2. Mr Lonergan said (T 73.44) that he was "unsure as to what apartment was going to be on what level". He added (T 74.48) that he "relied on what the agent told [him] to clarify that matter". The cross-examination of Mr Lonergan proceeded as follows (T 72.23-73.2): Q. Now, Mr Lonergan, looking at the floorplan for two bed plus study on page 161 of the Court book, you can see, can't you, that there are unit numbers there for every level between levels 5 and level 21, except level 14; that's right, isn't it? A. Yes, I can see that here. Yes. Q. Did you notice that at the time that you looked at this floorplan back in November 2016? A. I didn't notice; I didn't pay that much attention to those numbers then because the strata plan had the - those levels in it. Had all the levels. Q. I'm sorry, I don't quite understand your response about the strata plan. What did the strata plan have that caused you not to notice the numbers here? A. Well the strata plan was listed one through - so it was listed from basement all the way through to all the levels. Q. So did you understand that because the strata plan had consecutive numbers including four and 14 that you expected there would be levels 4 and 14 in the building. Is that what you're saying? A. We just got confused by the whole numbering of the building. Q. Right. But-- A. And that's-- Q. --you just gave an answer a minute ago about the strata plan and the numbers here. I'm just trying to ask you to explain what you meant by the levels on the strata plan affecting how you read these numbers. A. Well the numbering system didn't line up, so floorplans didn't line up with the strata plan, so we were unsure on how that relationship worked. So we were reliant on the sales agent. 1. The cross-examination concluded (T 73.21-73.48): Q. Now, you can see there that it has an apartment, or it lists an apartment there for every level between levels 5 and 21 except 14. Do you see that? A. Yes, I see that. Q. Did you notice that at the time? A. No, not particularly. Like I said before, we were interested in our numbers that were relevant to us. Q. Did you expect that there would be no level 4 or 14 in this building? A. Again, we were unsure on how that relationship was going to work. Q. So would it be correct then to say that even though the unit that you ended up signing a contract for, 11803, was to your understanding to be on level 18, you were unsure whether it was going to be on level 18. Is that what you're saying? A. No, I'm saying it - it's on level 18, the sales agent marked level 18 had the black screens, so - and he pointed out where it was going to be. So it - we were reliant on that because we were unsure how the relationship of the floors and the layouts worked. Q. So if I can just clarify this, what you say is that the documents that you were provided made you unsure as to what apartment was going to be on what level. Is that right? A. Yes. Q. And so you say that you relied on what the agent told you to clarify that matter, is that what you're saying? A. Yes. Execution of first contract by Ms Lonergan 1. The Lonergans' evidence was that their initial intention was that Ms Lonergan alone would purchase a two-bedroom and one study unit as an investment. CBRE arranged what was called the "VIP Launch Day" to take place on 5 November 2016, on which parties who had paid the $5,000 deposit and who wished to buy a unit would attend to sign a contract for the purchase of the unit. Ms Lonergan's evidence was that she met with a CBRE representative, Mr Clayton Ross, at the display suite. She had a conversation with him in which she said that the Lonergans were unsure about signing the contract for unit 11505, as they might consider a three-bedroom unit. She said that Mr Ross advised them that, if she signed the contract for unit 11505, she could cancel it in the five-day cooling off period, so the Lonergans could swap to the three-bedroom unit and transfer the $5,000 holding deposit to the new contract. Mr Ross also advised the Lonergans, after saying that he had discussed the issue with the vendor, that if Ms Lonergan signed the contract for unit 11505 that day, CBRE was authorised to give her a 10-week extension for payment of the full deposit. 2. On 5 November 2016, Ms Lonergan alone signed a contract for the purchase of what was described as Lot 107 in an unregistered strata plan at 101 Waterloo Road, Macquarie Park. Third visit to the display suite 1. On the afternoon of 5 November 2016, Ms Lonergan was advised by Mr Zhu, by telephone, that the Unit was available, and Ms Lonergan organised a time to meet Mr Zhu on 6 November 2016. On the morning of that day, the Lonergans met with Mr Zhu at the display suite at about 10:00 AM. Mr Lonergan gave the following evidence in his first affidavit: 33. All three of us walked through the display suite. Then we stood closer to the model and we put the 3 bedroom plan that Mr Zhu had written on the corner of the model. I pointed to the black screens on the model with Mr Zhu and he counted up the floors again to make sure the level for the apartment had a black screen and the conversation continued: Mr Zhu: 6, 9, 12, 15, 18 -this is the one. You definitely get the black screens on level 18. Victoria: Can you write that in the contract? Mr Zhu: There is no need, that's what you will get. 34. Victoria then wrote the following entry in black under the 11803 pricing range on the three-bedroom plan: Black Screen and said: Just in case so this floorplan will be kept as our proof. 35. Victoria and I then agreed with each other to buy apartment 11803 on level 18 of the Building, with both of us to be purchasers. 1. The Lonergans both signed the contract at about 10:45 AM, according to Mr Lonergan. 2. On 11 November 2016, Ms Lonergan, by her solicitor, Hunt & Hunt, rescinded the first contract by way of a notice to JQZ by its then solicitor, Kemp Strang. 3. Ms Lonergan gave equivalent evidence concerning the Lonergans' discussion with Mr Zhu on 6 November 2016 in pars 31 to 34 of her first affidavit. She said in par 31: "… We then had a conversation in front of the model display, making sure that apartment number 11803 had a black screen by counting the levels with Mr Zhu's laser pointer". She said that Mr Zhu advised the Lonergans that there was no need to include the requirement for black screens in the contract as: "… The black screens are automatically included for apartment 11803, level 18." 4. Ms Lonergan confirmed that she wrote "Black Screen" on the Floor Plan and said that she would keep the Floor Plan "for proof, just in case, since you did not put it in the contract." 5. The words "Black Screen" as apparently written by Ms Lonergan appear on the Floor Plan in black under the price range for the Unit that Mr Zhu wrote on the Floor Plan on 30 October 2016. Significance of JQZ's marketing campaign 1. The marketing campaign that JQZ adopted through its agent, CBRE, was to advertise widely to encourage potential purchasers to pay a deposit of $5,000 for the opportunity to attend the display suite on a couple of open days to decide whether they wanted to contract to buy a unit. Not only had Tower A not been built, but its design had only reached a relatively preliminary stage. Development consent had not been obtained and the structural design of the building had not started. Many features of the building had not been addressed, and JQZ was not able to give precise information to potential purchasers of the design characteristics of the units. In these circumstances, potential purchasers were particularly dependent on the information provided by JQZ for the purpose of making sound decisions to purchase units, as they were entirely unable to satisfy themselves of the matters that concerned them by making their own inspections and enquiries. In particular, potential purchasers were highly dependent on the information they were given by JQZ's agent. Mr Zhu's evidence 1. Mr Zhu gave evidence of his recollection of his dealings with the Lonergans in his affidavit made on 19 October 2021. Much of his evidence was consistent with the evidence given by the Lonergans. I will focus on those aspects of Mr Zhu's evidence that are relevant to the issue of whether the privacy screen representation was made. 2. Mr Zhu's evidence was: 25 As we stood at the scale model, Mr Lonergan enquired about the black privacy screens which were on the scale model of Tower A and we had a conversation in words to the following effect: Mr Lonergan: "Is there an extra cost for the black screens on the balcony?" Me: "That is part of the architectural design." Mr Lonergan: "Which floors have the black screens?" 26 I counted up the levels of the scale model and it appeared that the black screen was a feature on levels 6, 9, 12, 15 and 18 of the building model and I said words to the following effect: Me: "They are on every third floor of the building. It looks like they are on floors 6, 9, 12, 15 and 18." 27 As I spoke, I wrote in red ink "6/9/12/15/18" on the copy of the 3 bedroom apartment floorplan. 28 It was very rare for clients to ask about the black privacy screens and I never usually discussed the topic of the black privacy screens unless the client raised it first. This is because some clients are attracted to that feature while other clients dislike the feature. 29 Mr and Mrs Lonergan did not mention the reason why they were attracted to the black privacy screens. They did not mention that Mrs Lonergan suffered from any skin condition and I did not observe any obvious redness on her skin or face. They also did not mention that they wanted to use the black privacy screen to create an additional room on the balcony. 1. Mr Zhu said that he had a very brief meeting with the Lonergans at the display suite on 6 November 2016. Mr Zhu said: 43 During this short meeting, we did not discuss apartment 11803 in detail and I did not do another presentation or another tour of the display suite because, in my mind, they did not need any convincing to purchase the 3 bedroom apartment and they did not ask for another tour. 1. Mr Zhu also said that he did not recall the Lonergans bringing with them the Floor Plan or the Lonergans asking whether they could include the black privacy screens in the terms of the contract. He also did not recall either of the Lonergans writing "Black Screen" on the Floor Plan, or stating that it would be proof that he had guaranteed they would get a black privacy screen. Mr Zhu said in par 45: "… No purchaser or potential purchaser ever said something like this to me." Mr Zhu claimed in par 46 that if a purchaser had said something like that to him, he would have responded that they should confirm it through their solicitor and obtain the developer's approval and request a variation of the contract, as that is the normal practice. 2. JQZ accepted in final oral submissions (T 289.21) that Mr Zhu conceded in cross-examination that he had in fact discussed the installation of a black privacy screen on the three-bedroom unit that the Lonergans proposed to purchase at the third meeting on 6 November 2016. 3. Both Mr Lonergan (T 39.34) and Ms Lonergan (T 143.34 and 143.48) specifically denied that Mr Zhu only said that it "looks like" the Unit would have black privacy screens. Mr Lonergan's evidence in cross examination was (T 39.23-39.40): Q. You asked him, didn't you, which floors the black screens were on. A. Yes. Q. He answered your question, didn't he, by reference to the model. A. He - before we went to the model, he actually wrote down the levels that have the black screens. Q. Mr Lonergan, I suggest to you that what he did is he counted the levels on the model in front of you and then said, "They are on every third floor of the building. It looks like they are on floors 6, 9, 12, 15 and 18." That's what he said, wasn't it. A. He did not say that. Q. He did tell you though, didn't he, that, "It looks they are on floors 6, 9, 12, 15 and 18." A. He did not hesitate. He did not say it does not look like he said they are on, which represents that they will be on those levels that he had drawn - he'd hand marked on the plan. 1. Mr Lonergan confirmed (T 40.10) that Mr Zhu used the model to show what level had the black privacy screens and (T 40.41) that Mr Zhu identified the level numbers with the screens by counting up from the bottom. 2. Mr Lonergan's evidence in cross-examination concerning the discussion with Mr Zhu on 6 November 2016 was (T 75.11-75.38): Q. If you can come back to page 71, you say at paragraph 33 that there was a conversation with Mr [Zhu] where he showed you the model again and counted off the levels. A. Correct. Q. I suggest to you that that didn't happen, that that only happened on 30 October. A. Incorrect. Q. I also suggest to you, Mr Lonergan, that Mr [Zhu] did not say you definitely can't [typographical error for "can"] the black screens on level 18. A. Incorrect. Q. I suggest to you that this meeting with Mr Zhou was very brief, that it was over in a matter of something like ten or 15 minutes, and it was just a matter of you signing the contract. A. It was confirmation, discussion with Mr [Zhu] to ensure that we were getting what we were told. Q. What do you say about the proposition that the meeting was as brief as ten or 15 minutes? A. Yes. It wasn't a very long meeting at all. Q. You say that your wife said to him, "Can you write that in the contract?" A. Yes. Q. I suggest to you that she didn't say that. A. Incorrect. 1. My assessment of Mr Zhu in his cross-examination was that he did not have a clear, actual recall of what happened at each of his meetings with the Lonergans. He said that he interviewed 15 to 20 groups on each of the open day weekends (T 246.33). He reasonably acknowledged in response to a number of questions that he could not remember what had happened (T 254.45, 259.25 and 260.37). 2. Mr Zhu was apparently aware that it was common for developers who wanted to market home units to Chinese people to avoid labelling the levels in the proposed building with numbers that included the numeral 4 (T 250.8). Mr Zhu also understood that for marketing purposes there was no Level 14 in Tower A (T 250.22). Mr Zhu agreed (T 250.46) that in fact there would be privacy screens installed in the three-bedroom units on Levels 6, 9, 12, 16 and 19, but also agreed (T 255.31) that he wrote "6, 9, 12, 15 and 18" on the Floor Plan. He did this, even though he accepted (T 257.8) that he knew in fact that unit 11903, rather than 11803, would have the black privacy screens. 3. Mr Zhu's explanation for this conduct (given at T 255.1-257.11) was hard to follow. The better view of Mr Zhu's evidence is that he understood that he was simply calculating the levels in fact on the physical model of Tower A that would have the black privacy screens, and he was not talking about the levels that were designated by JQZ. He only meant to advise the Lonergans that the relevant three-bedroom unit that would have the black privacy screens was on the 18th level of the physical model. This explanation left out of account that the Unit was on Level 16 in the draft strata plan and the unit that did have the black privacy screens was ultimately constructed on the 17th actual level in accordance with the draft strata plan (or the 19th level in accordance with JQZ's scheme for giving levels numbers). I do not accept that Mr Zhu's attempted explanation for his conduct makes sense. It is much more likely that he simply forgot that there would be no Level 14 in the completed Tower A. Hunt & Hunt advice 1. On 17 November 2016, Hunt & Hunt wrote a letter of advice to the Lonergans in relation to the contract. The letter included the following statement: 3. The living area for the unit is located on Level 16 and has an area of 121 square metres. This includes the balcony area. 1. Hunt & Hunt had apparently derived this information from the preliminary strata plan that was attached to the contract. Mr Lonergan was cross-examined on the issue (T 92.7-100.17). In essence, Mr Lonergan's position was (T 92.22-92.36): Q. That was inconsistent with your understanding, wasn't it? A. Like I said, confusion was with - there was two plans. Floor plans, strata plan, different levels, different numbers. So, it depends on what plan you use. Q. That wasn't my question, Mr Lonergan. My question was that the suggestion that the unit was going to be on level 16 was inconsistent with your understanding, wasn't it. A. It was inconsistent with the - the floor plan. Q. I'm asking you about your understanding, not the floor plan. A. I was confused, so-- Q. So, you didn't know which unit-- A. --you wouldn't have picked it up. You could - he could have meant either way. 1. And at (T 93.23-93.40): Q. Just to answer my question, it was important to you to know which level the unit was going to be on in the building. Is that right? A. Yes. Q. You say do you that as a result of getting this letter that you were confused about what level of the building the unit was going to be on. A. I wasn't confused. He was technically right as well. I could say level 18. He says level 16. He technically could be right because he's referring to strata plan. I'm referring to a floor plan. Q. Mr Lonergan, come back to this later at paragraph 3. Paragraph 3 doesn't say anything about the strata plan, does it. A. It doesn't say anything about the floor plan either. Q. That's right. I suggest to you that you did not assume that he was talking about the strata plan when he was referring to level 16. Is that right? A. Like I said, he's technically correct as well. You can be level 16 and you can be level 18 depending on what referenced material you use. 1. Mr Lonergan accepted (T 79.27) that he knew that the contract did not mention the black privacy screens and (T 85.9) that he did not tell the Lonergans' solicitor about their expectation that the Unit would have black privacy screens. Mr Lonergan said (T 89.36-89.41): Q. You didn't instruct him to send in a floorplan with black screens, did you? A. No. Q. You didn't instruct him to ask that the contract required that the unit be constructed with black screens, did you? A. No. That was based on a conversation with Mr [Zhu] and the exhibit P1. 1. Hunt & Hunt's 17 November 2016 letter also contained the following advice: 9. Special condition 39 confirms that where draft documents are attached to the contract then these may be replaced by the vendor from time to time. This is normal for an off the plan purchase. 10. We draw your attention to special condition 42 and note that you must rely upon your own enquiries in relation to the purchase of the property. This also applies to the status of the property as set out in special condition 43. 1. Mr Lonergan's evidence in cross-examination on his understanding of the meaning of these paragraphs was (T 100.19-102.4): Q. If I could just ask you to go to paragraph 10 of this letter, which is on page 191, you see there that Mr Miller is referring to special conditions 42 and 43 of the contract. … Q. There was another clause about not relying on any representations. A. Yes. Q. You said in relation to the second one that you relied on your solicitor to advise you. A. Yes. Q. This is the advice that the solicitor is giving you about clause 43, isn't it? A. Yes. Q. You understood from reading this that you wouldn't be able to rely on anything that Mr [Zhu] had told you about the property, didn't you? A. That wasn't my understanding of that clause. Like I said, I'm just a normal person trying to understand the contract. Q. I'm not asking you about the clause. I'm asking you about what Mr Miller's telling you. What he's telling you, isn't it, that you have to rely on your own inquiries in relation to the purchase of the property? A. Typically, the clause refers to an existing building, not a new building per se. … Q. Like paragraph 10, Mr Miller was telling you, wasn't he, that special condition 42, he drew your attention to special condition 42 and he notes that you must rely on your own inquiries in relation to the purchase of the property. A. Yes. Q. Did you understand by that that he was saying that you couldn't rely on what the agent had told you in relation to the property. A. No. Q. He says that, "This also applies to the status of the property as set out in special condition 43." Did you see that? … A. Yeah. Q. Did you understand when he said, "This also applies," he was referring to relying on your own enquiries? A. Yes. Q. Did you understand that what he was saying to you in paragraph 10 of this letter in the second sentence, was that you had to rely on your own enquiries in relation to the unit? A. Again, this is a knockdown building. So, it's a brand new off the plan building. Q. Yes, but what I'm suggesting to you is that you understood by this letter that what Mr Miller was telling you was that you couldn't rely on anything the vendor had told you about the unit. A. I saw it as standard contract condition. Q. Are you disagreeing with that proposition that you understand that was the effect of what Mr Miller was telling you? A. I didn't fully understand it. I just - I read through it and tried to work out - work out what clauses mean what in - in relation to that letter. Q. If you were unclear about what he meant by clause 10 of the letter, you would have written to him and asked him, wouldn't you? A. Well, if I queried everything in a contract, you wouldn't purchase a contract - you wouldn't purchase the property. Q. Are you saying that you were happy for clauses 42 and 43 to mean what they meant whether you understood them or not? Is that what you're saying? A. That's what I engaged the solicitor for. Q. Is the answer to my question yes? A. Yes. 1. On 17 November 2016, Hunt & Hunt wrote a letter to Kemp Strang to request that certain amendments be made to the draft contract. Kemp Strang replied by an email the date of which is not in evidence. In relation to the matters that remain relevant, Hunt & Hunt enclosed a copy of the Floor Plan and requested: "that this plan be attached to the contract to confirm that the vendor will construct the apartment in accordance with the attached plan." Kemp Strang responded by simply saying: "The Vendor does not agree to annex the floor plan to the contract." 2. It is intriguing that, in paragraphs 11 and 12 of their letter, Hunt & Hunt requested the deletion of additional clauses 43.1 and 43.2 "as the property is not constructed". Kemp Strang did not give a reason for rejecting those requests. 3. JQZ relied in its submissions on the fact that there were negotiations between the parties' solicitors concerning the terms of the contract as a factor that dispelled its conduct having a misleading or deceptive effect. However, this particular exchange between the solicitors did not mean that the Lonergans understood that they had accepted that JQZ was entitled to make any changes to the Unit from what was depicted in the Floor Plan that JQZ wished to make. 4. The real effect of JQZ's bald rejection of the request to annex the Floor Plan was that the Lonergans were not disabused of their understanding that there would be no structural columns in the living room or on the balcony of the Unit. The result would have been completely different if Kemp Strang had informed Hunt & Hunt that JQZ rejected the request to annex the Floor Plan to the contract because it had not yet retained structural engineers, and there was a real possibility that it would be necessary to construct structural columns within the Unit. Design and siting of structural columns 1. The City of Ryde Council issued a Deferred Commencement Development Consent for the construction of the Prime Development on 7 August 2017. A term of the development consent required structural certification of the proposed Prime Development by a qualified practising structural engineer. Mr Wu, JQZ's project manager, who was appointed as such in August 2017, gave evidence that the structural engineer was engaged on 1 August 2017. The first revision of the structural engineering drawing for Levels 17 and 18 in Tower A was issued on 3 October 2017, and the final design certificate was issued on 20 March 2018. The structural engineering drawing and the design certificate required six structural columns to be installed as part of the construction of the Unit, three of which were the columns the subject of the column representation alleged by the Lonergans. The other three columns were apparently sited at places in the Unit that were less obviously intrusive. 2. There was no evidence on the issue of how obvious it would have been to the relevant employees of JQZ that the structural engineer, who was subsequently retained after the units in Tower A were sold 'off the plan', would require that some structural columns be constructed in the units that were not apparent from the display suite or the floor plans that were given to prospective purchasers. However, from an inspection of the structural engineering drawings and the design certificate, it is probable that the relevant technical employees of JQZ would have expected that JQZ would be required to cause structural columns to be constructed at locations in the units that would diminish their amenity to purchasers. Events following the completion of the Unit 1. The Lonergans inspected the Unit on 7 November 2019 at the invitation of JQZ and in anticipation of the registration of the Strata Plan and the completion of the contract. 2. The Strata Plan was registered on 11 November 2019. 3. Also on 11 November 2019, Hunt & Hunt sent an email to Thomson Geer, the new solicitors for JQZ, attaching a letter dated 8 November 2019 that referred to the inspection of the Unit that had been carried out by the Lonergans and said that they were "shocked to find that the representations made by your client's agent that black shutters that would be built on the balcony for the property has not been carried out". The letter included: 2. … It was a clear representation of our client that black shutters would be featured for this apartment on Level 18. It was for this reason that our clients actually changed the level in which they purchased the apartment from a lower level as they considered that the black shutters were a feature which they sought to have included in their property. 3. We are instructed that our clients had understood that a bath would be installed in the main bathroom with shower over the bath, rather than as presently constructed with just a shower. As you will note from the plan of the property, the shower space in the main bathroom has been built to enable a bath to be installed. We request your immediate advice in relation to the above matters. 1. One of the enclosures with the letter was the Floor Plan. 2. Thomson Geer advised Hunt & Hunt on 21 November 2019 of the Vendor's Notification in accordance with additional clause 36.2 of the contract that an occupation certificate had been issued for the Unit. The email advised that the Completion Date had been fixed and was to take place in accordance with additional clause 36.1 of the contract. 3. Hunt & Hunt advised Mr Lonergan of the issue of the occupation certificate on 21 November 2019 and stated: "so we are on countdown to completion". 4. Thomson Geer replied to Hunt & Hunt's letter on 3 December 2019, saying: We refer to your letter to us dated 8 November 2019 in relation to the above. We are instructed that our client denies that it promised black shutters on any particular level and if the agent made such representations, they were not authorised by the vendor to make such representations. … The contract clearly provides that marketing material and any representations outside the contract (including those that may be made by agents) are excluded from the contract and the purchaser agreed it has not relied on such matters. Our client maintains that it has completed the building and the subject property as contemplated in the contract. If your client has relied on claims by the agent, we suggest your client take that up with the agent. 1. On 6 December 2019, Hunt & Hunt wrote to Thomson Geer to "now formally request an extension of time in relation to the completion of this matter…" The letter said that the Lonergans had been waiting for a response to Hunt & Hunt's letter dated 8 November 2019 and had held off completing the arrangements with their lender until the response was received. Hunt & Hunt requested that the completion date be extended to 20 December 2019. The letter included the following: Our clients have also now reviewed your response with respect to the schedule of finishes. The information contained in our previous letter was not "marketing material" but rather made by specific representation by the vendor's agent for which the vendor is responsible. Without the black screen, our clients have suffered a substantial detriment as this area could have been separated from the remainder of the balcony and used as a further room subject to council approval. Our clients have previously obtained council approval for similar arrangements without any difficulty. As a consequence, the failure to correctly complete this area has meant that our clients have suffered a substantial loss by the unit not being located on a black shutter floor. It is completely unacceptable that the vendor should walk away from liability for the vendor's own agent in making these assertions as set out in our previous correspondence. We formally request that your clients reconsider their response. Without prejudice our clients have requested that the purchase price be reduced by 2% of the purchase price which would be an amount of $30,360.00 by way of compensation for this loss. If this matter cannot be resolved on an amicable basis then our clients must reserve their rights to take appropriate action. With respect to the request for extension of time, we formally request for a waiver of interest from the due date for completion up to and including 20 December 2019. 1. On 15 December 2019, Thomson Geer responded that JQZ disputed the claim and said that the "contract clearly set out the basis of the purchase and clearly excluded the purchaser's right to make any claims based on marketing materials or agent representations." The letter required completion without delay. 2. Thomson Geer, on behalf of JQZ, served the first Notice to Complete on 16 December 2019. The Notice to Complete was addressed: "To Victoria Ingrid Lonergan AND their solicitor Hunt & Hunt DX 23503 EASTWOOD". The Notice to Complete noted that completion of the contract was due on 13 December 2019, and required completion on or before 5:00 PM on 30 December 2019 and stated: "in this respect time is of the essence." Apart from the fact that the Notice to Complete was addressed only to Ms Lonergan and Hunt & Hunt, it has not been suggested that the Notice to Complete was defective. 3. Hunt & Hunt sent a detailed response to Thomson Geer's earlier correspondence on 16 December 2019. The letter was not in terms a response to the first Notice to Complete. Materially, the letter said: … In summary, the main issues from our clients' point of view is that CBRE is the Vendor's sales agent and that the purchase of Unit 11803 was based on a verbal/written confirmation provided by the Vendor's CBRE Sales Consultant Roger Zhu, upon which our clients relied upon in accepting to agree to purchase the property. This representation was that their Unit 11883 included black privacy screens on the balcony. The CBRE sales agent, Roger Zhu, informed our clients that the Floor Numbers 6, 9, 12, 15 and 18 all had black shutter privacy screens and that Roger showed to our clients that unit number 11803 had black shutters, on the Sales office model, as well as on the sales brochures. Mr Zhu even wrote all the information on the brochure and provided the price on the negotiated floor plan (attached) along with stating "black screens". Our clients agreed to purchase this apartment 11803 based on the information provided by the Sales Agent Roger Zhu, as our clients could, in future, enclose the balcony to form another room. In addition, the screens will also block some of the UV rays to protect Mrs Lonergan's rosacea skin condition. Roger Zhu also advised that our clients can add a bath to the ensuite. … The delay in receiving a response from both your firm and the Vendor's Sales Agent CBRE has caused our client's extreme stress for over a month and the misrepresentation as to black shutters has not been the fault of our clients. … 1. The letter also contained a number of other complaints on behalf of the Lonergans, but the only ones that remain relevant are as in the following extract from the letter: 1. A 500mm × 500mm column is fully exposed in the corner of the Living area, which limits the furniture in the corner. This column is not shown on the floor plan. 2. The balcony has four (4) columns installed on the balcony and also a A/C unit sitting on the floor of the balcony. This A/C unit blows air into the middle of (sic) balcony therefore, the balcony is unusable space. … Please be advised that our clients have instructed this firm to now seek rescission of the contract based on the above misrepresentations and formally request the return of their deposit. 1. On 17 December 2019, Hunt & Hunt responded to the receipt of the first Notice to Complete by letter as follows: We refer to your email dated 16 December 2019 and are instructed to reject the notice to complete as being invalid for the following reasons: 1. The vendor is not ready, will (sic) and able to transfer the property as contracted to be provided to the purchaser in accordance with the terms of the contract. 2. The matters set out in correspondence with the lawyers acting for the vendor have not been properly dealt with and the vendor has failed to build the property in accordance with the terms of the contract and as agreed with the vendor through the vendor's agent. 3. In the event the vendor seeks to take any action to recover the deposit, then the purchaser will contest the matter vigorously. 4. The purchaser reserves her rights generally to contest the validity of the notice to complete contained in your email dated 16 December 2019, including the fact that the period specified therein, having regard to the holiday period, is not adequate. 1. This letter referred to "purchaser" in the singular and to the client as "her". 2. On 20 December 2019, Hunt & Hunt sent a further letter to Thomson Geer to advise that "our client" had been in contact with the Department of Fair Trading "to seek to resolve the outstanding dispute in relation to this matter." They made a formal request that no action be taken with respect to the Notice to Complete until the matters had been resolved. 3. By further letter to Thomson Geer dated 23 December 2019, Hunt & Hunt noted that they had not received a response to their earlier correspondence and said (omitting the parts of the letter that made complaints that are no longer pursued by the Lonergans): We confirm our instructions to you that our client is now rescinding the contract and requires the immediate return of the deposit, together with all interest earned thereon accruing since 2016 based on the misleading and deceptive conduct by the vendor and its agent CBRE due to the following issues: … 3. Misleading and deceptive conduct in breach of the Australian Consumer Law in that there was verbal/written confirmation provided by the CBRE sales consultant Mr Roger Zhu when, at the time of confirming the purchase of the property, black privacy screens would be provided for the unit. This was shown by Mr Zhu to our client on the display model and a written confirmation note "black screen" was included on the price brochure/floor map during the sales transaction. Our client specifically chose this unit (11803) because of the representation that a black privacy screen would be installed with the outcome that our client would be able to enclose the balcony to form another room in the future and also this would provide various health benefits to our client as previously advised. … 6. Misleading and deceptive conduct in breach of the Australian Consumer Law in that the architect designed space/interiors have a 500 mm × 500 mm column, which is fully exposed in the corner of the living room and this column is not shown on the floor plan. This substantially reduces the area of the unit and consequently reduces the size of the unit. 7. Misleading and deceptive conduct which is in breach of the Australian Consumer Law in that the architect designed space/interior being the balcony has two columns installed on the balcony that protrude 800 mm in from each corner, the air conditioning unit sitting on the floor of the balcony and the operation of this air conditioning unit blowing hot air into the middle of the balcony, rendering the balcony size of 23 square metres as unusable space. These columns are not shown on the floor plan, nor the location of the air conditioning unit. By reducing the size of the unit by this amount, the vendor has reduced the area below the tolerance allowed for in the contract (5%) and thus gives rise to a right to rescind the contract in itself. … Based on the above conduct, the correspondence from JQZ dated 16 December 2019 is not applicable and therefore our client is entitled to rescind the contract in this purchase. Our client formally requests that no action be taken by the vendor other than the rescission of the contract and the immediate return of the full deposit plus the interest accumulated from their deposit in 2016. If the vendor disputes this request then there be a stay of costs until this matter has been resolved in a suitable manner with our client not having to bear costs associated with the misleading and deceptive conduct undertaken by the vendor and its agent. We await your reply within the next seven (7) days. 1. Again, Hunt & Hunt referred to their client in the singular, which I infer was because the first Notice to Complete had only been addressed to Ms Lonergan. 2. JQZ's response to this letter was to cause Thomson Geer to send a second Notice to Complete to Ms Lonergan. The Notice to Complete was addressed in the same manner as the first one and was in the same terms save that it required completion of the contract on or before 5:00 PM on 21 January 2020. 3. The reply of Hunt & Hunt dated 13 January 2020, was that "our client" disputed the validity of the Notice to Complete noting: "that the property has not been constructed in accordance with the agreed terms of contract." The letter enclosed copies of Hunt & Hunt's earlier correspondence and asserted that a 14-day notice to complete was too short. The letter included: 5. Our client formally requests the return of the deposit, together with all interest accrued thereon, as set out in previous correspondence. 1. Thomson Geer on behalf of JQZ served a Notice of Termination dated 22 January 2020. The Notice of Termination was addressed to Ms Lonergan alone as well as Hunt & Hunt. 2. The Lonergans then retained new solicitors, being Pikes & Verekers. On 30 January 2020, Pikes & Verekers on behalf of the Lonergans served a Notice of Termination on JQZ. The Notice of Termination asserted that JQZ's two Notices to Complete were invalid and that the effect of JQZ's Notice of Termination was that JQZ: "unequivocally represented that it would not complete the Contract and thus repudiated its obligations under the Contract." The Lonergans accepted that repudiation and terminated the contract. The Lonergans' Notice of Termination required that the deposit of $151,800 be refunded. 3. On 18 May 2020, JQZ appointed a new real estate firm called Oz International Investment Pty Ltd to market the remaining units in the Prime Development, including the Unit. Through that agency, JQZ entered into a new contract for the sale of the Unit on 1 December 2020 for a price of $1,450,000. On the same date, JQZ entered into a rebate deed with the new purchaser that provided that if the contract was completed, JQZ would reimburse the purchaser $130,000. The contract was completed on 21 December 2020 and the reimbursement was made by JQZ. JQZ paid commission of $72,600 to Oz International Investment and legal fees of $871.55. 4. The total loss suffered by JQZ, compared to the position that it would have been in had the Lonergans completed their contract, was therefore $271,471.55. Legal principles 1. The focus of the Lonergans' claim is now their allegation that JQZ contravened s 18 of the Australian Consumer Law, subsection (1) of which provides: "A person must not, in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead or deceive." 2. The Lonergans eschewed any reliance on the principle in Flight v Booth (1834) 1 Bing (NC) 370; 131 ER 1160 "to the effect that a purchaser can rescind a contract for the sale of land where there is a material and substantial discrepancy between the subject matter of the sale and that which the vendor can convey" as explained by Darke J in Victorsen v Easy Living Holdings Pty Ltd [2019] NSWSC 1721 at [3]; (2019) 19 BPR 39,893 at 39,897. 3. If the Lonergans establish a contravention of s 18, they put their entitlement to relief on a number of bases. One is that they suffered "loss or damage because of the conduct of "JQZ in contravention of s 18, so that they are entitled under s 236 of the Australian Consumer Law to "recover the amount of the loss or damage by action against" JQZ. They say that the amount of the loss or damage they have suffered is the deposit held by JQZ plus the interest that has accumulated from the investment of the deposit under the contract. They say in addition that, if at general law they are found to be liable to JQZ for breach of the contract, the damage recoverable under s 236 would include the total of the damages they would otherwise be liable to pay to JQZ. Secondly, they rely upon s 237 for an order that JQZ compensate them in order to prevent or reduce the loss or damage that they will suffer. The quantum of this claim is the same as under s 236. Thirdly, the Lonergans seek an order under s 232 that JQZ be restrained from enforcing clause 9.3 of the contract. Finally, they seek an order under s 243 declaring clause 9.3 of the contract void. In substance, the effect of the orders sought would be that JQZ would compensate the Lonergans for the amount of the deposit paid plus interest, and JQZ would be prevented from recovering damages, or any other payment, from the Lonergans for breach of the contract. 4. The proper approach to the interpretation of s 18 of the Australian Consumer Law is as stated by McHugh J in Butcher v Lachlan Elder Realty Pty Ltd (2004) 218 CLR 592 at 621-2; [2004] HCA 60 at [97]-[98] (Butcher). Although his Honour dissented in the result, as Gummow, Hayne, Heydon and Kiefel JJ said in Campbell v Backoffice Investments Pty Ltd (2009) 238 CLR 304 at 341; [2009] HCA 25 at footnote 149 (Backoffice): "McHugh J dissented in the result of the particular case but not as to these questions of principle." Omitting footnotes, McHugh J said of the equivalent provision to s 18 that was found in the Trade Practices Act 1974 (Cth): [97] Section 52 — which is in Pt V of the Act — is capable of flexible application and should be construed accordingly. Such an approach gives effect to the consumer protection objectives that underpin Pt V of the Act generally and s 52 in particular. As Lockhart and Gummow JJ pointed out in Accounting Systems 2000 (Developments) Pty Ltd v CCH Australia Ltd: "[T]he evident purpose and policy underlying Pt V, which includes s 52, recommends a broad construction of its constituent provisions, the legislation being of a remedial character so that it should be construed so as to give the fullest relief which the fair meaning of its language will allow." [98] Section 52 must be construed against the background of the general law, for its intended scope cannot be fully perceived without an understanding of that background. But common law principles of liability do not govern the operation of the section. While those principles may often be relevant in determining whether a contravention of s 52 has occurred, they are not determinative and do not always provide a safe guide to the operation of s 52. In Brown v Jam Factory Pty Ltd, Fox J said that the words of the section "should not be qualified or ... expanded, by reference to established common law principles of liability". Courts must give effect to the natural and ordinary meaning of the section, even if to do so "may result in the imposition of liabilities and the administration of remedies which differ from those supplied by the general law". This is because the relevant conduct (including any representation) "falls to be judged under s 52 not, as at common law, by the state of mind or intention of the maker of the statement, but according to its effect or likely effect or impact on the person to whom it is directed". 1. These are, with respect, important observations because they show that s 18 is more than a statutory augmentation of the general law. It does not fill a gap in the general law, such that it is appropriate to apply general law principles on par with the operation of s 18. In particular, the remedial character of the provision in relation to the protection of consumers must be respected and applied. 2. In Backoffice at 341-2 [102], the plurality explained that a statutory precursor to s 18 of the Australian Consumer Law, and thus s 18 itself, was directed at conduct, and that conduct could not always be distilled into the making of representations. In this context, representations may be thought of as explicit propositions, whether of existing fact or law or statements of opinion or predictions conveyed either expressly or by implication by the maker. It is necessary for the Court to have regard to the whole of the relevant conduct. Their Honours said (footnotes omitted): [102] Using tools of analysis drawn from the common law of deceit (misrepresentation and reliance) within the statutory framework provided by ss 42 and 68 of the Fair Trading Act may sometimes be helpful in identifying contravening conduct and deciding whether loss or damage was suffered by the contravention. But as McHugh J correctly pointed out in Butcher v Lachlan Elder Realty Pty Ltd, the "conduct" with which s 52 of the Trade Practices Act 1974 (Cth) deals is not confined to "'representations', whether they be representations as to matters of present or future fact or law". This proposition applies with equal force to s 42 of the Fair Trading Act. References to misrepresentation or reliance must not be permitted to obscure the need to identify contravening conduct (here, misleading or deceptive conduct) and a causal connection (denoted by the word "by") between that conduct and the loss and damage allegedly suffered. … 1. Their Honours then approved the following statement of principle by McHugh J in Butcher as to the need for the Court to examine the effect of the impugned conduct as a whole in its full context: [102] … As McHugh J also pointed out in Butcher, with particular reference to s 52 of the Trade Practices Act, but with equal application to s 42 of the Fair Trading Act: "The question whether conduct is misleading or deceptive or is likely to mislead or deceive is a question of fact. In determining whether a contravention of s 52 has occurred, the task of the court is to examine the relevant course of conduct as a whole. It is determined by reference to the alleged conduct in the light of the relevant surrounding facts and circumstances. It is an objective question that the court must determine for itself. It invites error to look at isolated parts of the corporation's conduct. The effect of any relevant statements or actions or any silence or inaction occurring in the context of a single course of conduct must be deduced from the whole course of conduct. Thus, where the alleged contravention of s 52 relates primarily to a document, the effect of the document must be examined in the context of the evidence as a whole. The court is not confined to examining the document in isolation. It must have regard to all the conduct of the corporation in relation to the document including the preparation and distribution of the document and any statement, action, silence or inaction in connection with the document." (Emphasis added.) 1. In Ireland v WG Riverview Pty Ltd (2019) 101 NSWLR 658 at 673; [2019] NSWCA 307 at [65] (Ireland), Macfarlan JA (with whom Bell ACJ (as his Honour then was) and Barrett AJA agreed at 660 [1] and 678 [91] respectively) observed, based upon Butcher and Backoffice, that the impugned conduct must be examined from the perspective of the party claiming to have been misled or deceived: [65] … [W]hen determining whether conduct was misleading or deceptive, it is necessary to consider that conduct from the perspective of a reasonable person in the position of the person complaining of it. In Butcher, the purchasers of an expensive residential property complained that a sales brochure provided to them by a suburban real estate agent was misleading and deceptive because it reproduced an inaccurate survey diagram prepared by a surveyor. The majority in that case considered that the conduct of the real estate agent was to be assessed "in relation to the particular purchasers, bearing in mind what matters of fact each knew about the other as a result of the nature of their dealings and the conversations between them, or which each may be taken to have known": at [37]. The majority accordingly took into account the character and circumstances of the purchasers, including that they were "intelligent, shrewd and self-reliant": at [41] cf at [188] (Kirby J). 1. The claimant must, in a case such as the present where the Lonergans claim relief to compensate them for specific loss and damage they claim to have suffered, establish that the misleading or deceptive conduct of another person has caused the loss or damage: Australian Consumer Law, ss 236(1)(a), 237(1)(a). In Butcher, the plurality said at 604-5 [37]: [37] … The plaintiff must establish a causal link between the impugned conduct and the loss that is claimed. That depends on analysing the conduct of the defendant in relation to that plaintiff alone. So here, it is necessary to consider the character of the particular conduct of the particular agent in relation to the particular purchasers, bearing in mind what matters of fact each knew about the other as a result of the nature of their dealings and the conversations between them, or which each may be taken to have known. Indeed, counsel for the purchasers conceded that the mere fact that a person had engaged in the conduct of supplying a document containing misleading information did not mean that that person had engaged in misleading conduct: it was crucial to examine the role of the person in question. 1. If conduct is misleading or deceptive it does not generally cease to have that character because a person who has been subject to it "could have discovered the misleading or deceptive conduct by proper enquiries. Conduct that objectively leads one into error is misleading": Butcher at 625-6 [111] (McHugh J, footnote omitted). 2. Conduct that causes confusion may not necessarily have the quality of being misleading or deceptive. In Taco Co of Australia Inc v Taco Bell Pty Ltd (1982) 42 ALR 177 at 201, Deane and Fitzgerald JJ said: In McWilliam's v McDonald's ((1980) 33 ALR 394), the Full Court held that, although the conduct of McWilliam's was likely to have caused confusion or wonderment, it did not appear that in the particular circumstances of that case the conduct was misleading or deceptive or likely to mislead or deceive. As we read their Honours' judgments, that was a factual conclusion. Their Honours were not suggesting that there is, for the purposes of s 52 of the Act, a necessary dichotomy between "confusion" on the one hand and "misleading or deception" on the other. Conduct which produces or contributes to confusion or uncertainty may or may not be misleading or deceptive for the purposes of s 52. In some circumstances, conduct could conceivably be properly categorized as misleading or deceptive for the very reason that it represents that confusion or uncertainty exists where, in truth, there is no proper room for either. Ordinarily, however, a tendency to cause confusion or uncertainty will not suffice to establish that conduct is of the type described in s 52. The question whether particular conduct causes confusion or wonderment cannot be substituted for the question whether the conduct answers the statutory description contained in s 52. 1. That statement was approved by the High Court in Campomar Sociedad Limitada v Nike International Ltd (2000) 202 CLR 45 at 87; [2000] HCA 12 at [106]; see also Google Inc v ACCC (2013) 249 CLR 435 at 443; [2013] HCA 1 at [8] (French CJ, Crennan and Kiefel JJ). 2. It may be necessary to characterise the impugned conduct in relation to whether it involves a statement of existing fact or some prediction about the future. This is an issue of some importance in the present case because, as I have explained above, the Lonergans appear in their pleadings to have characterised the representations of which they complain as going to future matters. To some degree, JQZ has seized upon that approach by the Lonergans to argue that the issue of whether its conduct was misleading or deceptive should be determined on the basis that the representations only related to future states of affairs. There are many authorities that have considered the question of the proper analysis of representations of present fact or law, as opposed to statements of belief or predictions, in relation to whether those representations constitute misleading or deceptive conduct. JQZ, in par 19 of its final written submissions, appears to submit that a "dichotomy" exists between statements of present fact and representations as to a future matter. In Backoffice at 321 [32]-[33], French CJ said (footnotes omitted): [32] It is important in considering whether conduct is misleading or deceptive to identify clearly the conduct to be characterised. If the conduct is said to consist of a statement made orally or in writing, the first question to be asked is what kind of statement was made. Was it a statement of historic or present fact made on the basis that its truth was known to its maker? Was it a statement of opinion? That is to say was it a statement of "judgment or belief of something as probable, though not certain or established"? The term "estimate" itself, used as a verb, means the "act of valuing or appraising" or an "approximate judgement of the number, quantity, position, etc, of something". [33] A statement of opinion may be a statement with respect to a future matter. It may take the form of a prediction. A forward estimate relating to the financial results of a business is a class of prediction. In strict logic there may be some category overlap between opinions and statements of fact. Opinions may carry with them one or more implied representations according to the circumstances of the case. There will ordinarily be an implied representation that the person offering the opinion actually holds it. Other implied representations may be that the opinion is based upon reasonable grounds, which may include the representation that it was formed on the basis of reasonable enquiries. In the case of a person professing expertise or particular skill or experience the opinion may carry the implied representation that it is based upon his or her expertise, skill or experience. 1. In Ireland at 664-7 [21]-[35], Bell ACJ provided a comprehensive explanation of the approach that the Court should adopt in determining whether representations should be characterised as going to the facts or the maker's belief, and when statements of belief or judgement should be found to be misleading or deceptive. His Honour's explanation included: [22] So it is with many statements made in everyday life and commerce, that is to say, matters will often be expressed as objectively the case whereas, in reality, they will (and can only) be statements as to a belief or a judgment. In the context of the jurisprudence relating to the statutory prohibition on misleading or deceptive conduct, the distinction drawn between objective truth and a person's reasonable belief in or judgment as to the truth of a particular matter or state of affairs has always assumed importance, although the distinction has traditionally been drawn between an expression of opinion, on the one hand, and a statement of fact, on the other hand: see, for example, the cases referred to and the discussion in JD Heydon, Thomson Reuters, Competition and Consumer Law (at Service 216) at par 160.330; C Lockhart, The Law of Misleading or Deceptive Conduct (5th ed, 2019, LexisNexis Butterworths) at par 4.39ff; RV Miller, Miller's Australian Competition and Consumer Law Annotated (41st ed, 2019) at par ACL 18.400; cf Forrest v Australian Securities and Investments Commission (2012) 247 CLR 486; [2012] HCA 39 at [33] and [38]. … [25] There are, of course, many cases which have applied the distinction between a statement of fact and an expression of opinion in the context of claims of misleading or deceptive conduct. [26] Consistent with the extra-judicial observations of Gageler J to which I have adverted above at [19]–[20], a person's expression of something as a fact will frequently be an expression of their belief as to the existence of a fact or "conclusion involving matters of judgment" (cf Thompson v Ice Creameries of Australia Pty Ltd [1998] FCA 54 (Lehane J)) in circumstances where they are unable to verify the truth of that fact or conclusion. In the context of the matter in issue in Forrest, Heydon J observed (at [94]) that "[t]he binding quality of an alleged contract is an inherently controversial matter of professional judgment". … [29] In the context of the case law on misleading or deceptive conduct, there is no relevant difference in principle, in my view, between the expression of an opinion and a statement of belief, although the more explicitly the opinion or statement in question is expressed to be only one of opinion or belief, the more likely it is to be held to have that character. Absent such explicit identification, the distinction between a statement as to belief and one as to fact may be subtle and masked by the language in which it is uttered (although sometimes it will be express: see, for example, Sanofi-Aventis Australia Pty Ltd v Apotex Pty Ltd (No 3) (2011) 196 FCR 1; [2011] FCA 846 at [280]) and there will frequently be debate as to the proper characterisation of the statement in question: see, for example, Council of the City of Sydney v Goldspar Pty Ltd (2004) 62 IPR 274; [2004] FCA 568 at [145]. The decision of the High Court in Forrest in relation to an ASX release announcing entry into a "binding contract" is a case in point, all members of the High Court differing radically on this question of characterisation from the Full Court of the Federal Court of Australia. [30] The case law requires that the characterisation of a statement as to one of belief or opinion, on the one hand, or as to a matter of fact, on the other hand, is to be viewed from the perspective of the person or "ordinary" or "reasonable" audience to whom the statement or representation is directed (as opposed to from the perspective of the maker of the statement) … … [33] It follows from the above discussion of principle that there will be cases where a statement made by a person honestly believing it to be true will give rise to liability, notwithstanding that person's honest belief in its truth because, to the target audience, that statement has presented as one of fact, and not of opinion or belief: Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd (1982) 149 CLR 191 at 197; [1982] HCA 44. In this sense, liability for misleading or deceptive conduct is sometimes described as strict (in that it does not require any fault or intent on the part of the representor to be established: see, for example, Heydon at par 160.250). [34] Where, however, it is established that a statement or representation is or must have been understood by its target audience as one of opinion or belief, even though presenting at one level as one of fact, liability will not be strict; rather, it will generally depend upon an assessment as to whether or not the belief or the opinion was honestly held and "perhaps" (see [24] above) whether or not the maker had a reasonable basis for the belief or opinion. Other than in cases of statements as to future matters (where the statutory presumption is engaged: see, for example, Competition and Consumer Act 2010 (Cth), Sch 2 — Australian Consumer Law, s 4), it will be for a plaintiff to establish the lack of reasonable basis for belief if misleading or deceptive conduct is to be established. … 1. It is important that care be taken to avoid the possibility that an inappropriate focus on the circumstances when representations should be treated as matters of present fact or law, or as statements of belief or predictions or opinions, and when those representations should be found to be misleading or deceptive, will cause sight to be lost of the fundamental principle that s 18 of the Australian Consumer Law is concerned with the whole of the conduct said to be misleading or deceptive. Conduct may not be restricted to conveying information about either a present or a future situation. Conduct may be composite and at the one time convey information about present and future matters, express and implied, with statements of fact, opinion, and prediction. The question is whether, from the perspective of the party to whom the conduct is directed, it is misleading or deceptive. Cases may require that issue to be determined in a holistic way because the warp and weft of the conduct is not sensitive to minute analysis in terms of the common methodology for classifying conduct in this context. 2. As will be seen, many of the submissions made by JQZ in its defence depend upon terms in the contract that were evidently intended to give JQZ substantial latitude in relation to the characteristics of the Unit that it was required to deliver on completion, as well as contractual disclaimers and disclaimers inserted in other documents that were given to the Lonergans. JQZ constructed a substantial contractual bastion designed to protect itself from claims by purchasers of units. It might not be going too far to suggest that JQZ has attempted to construct from the terms of its contract and the disclaimers an aegis of Zeus, which was sometimes portrayed in ancient mythology as an impregnable shield. However, it is well-established that the presence of exclusion clauses and disclaimers may be an integral part of the impugned conduct and may be instrumental in a finding that conduct was not misleading or deceptive, or, even if it was, that the loss or damage complained of was not caused by the conduct. In the latter case, that may be because presence of the exclusions and disclaimers had the effect that the complainant did not act in reliance on the conduct. Exclusions and disclaimers may therefore have the effect of qualifying the character of the impugned conduct. As noted, that effect may operate at the point of deciding whether the conduct was misleading or deceptive. The presence of exclusions or disclaimers may in a particular case cause the complainant with the particular characteristics of that complainant to understand that conduct that is capable of leading the complainant into error is not in fact proffered on the basis that it is true or reliable. Alternatively, the exclusions or disclaimers may in fact cause the complainant to understand that the conduct cannot be relied upon, so that in fact it is not relied upon. 3. The Court must determine the quality of the impugned conduct in the light of all of the circumstances that may qualify its character. In Butcher at 605 [39], Gleeson CJ, Hayne and Heydon JJ said, in a case in which a real estate agent was alleged to have engaged in misleading or deceptive conduct as a result of giving information to potential purchasers that was provided by the vendors: [39] In applying those principles, it is important that the agent's conduct be viewed as a whole. It is not right to characterise the problem as one of analysing the effect of its "conduct" divorced from "disclaimers" about that "conduct" and divorced from other circumstances which might qualify its character. Everything relevant the agent did up to the time when the purchasers contracted to buy the Rednal land must be taken into account. It is also important to remember that the relevant question must not be reduced to a crude inquiry: "Did the agent realise the purchasers were relying on the diagram?" To do that would be impermissibly to dilute the strict liability which s 52 imposes. 1. That statement of principle was followed by French CJ in Backoffice at 320 [30]. 2. In Ireland, Macfarlan JA, following Butcher, said: [67] Thirdly, the majority in Butcher emphasised that the provision of a disclaimer by a defendant is part of the conduct that is required to be considered. Their Honours referred to the Court of Appeal having declined in that case to accord disclaimers "decisive significance" but their Honours said that "they do have some significance": at [50]. Their Honours continued: "[50] … If the 'conduct' of the agent is what a reasonable person in the position of the purchasers, taking into account what they knew, would make of the agent's behaviour, reasonable purchasers would have read the whole document, given its importance, its brevity, and their use of it as the source of instructions to professional advisers." 1. However, for exclusions and disclaimers to have the effect of preventing conduct being misleading or deceptive or negating a finding that loss or damage has been caused by the conduct, careful scrutiny of the circumstances by the Court is required to ensure that the exclusions and disclaimers have in fact been effective. 2. In Butcher at 640-1 [158]-[159], McHugh J said of the effectiveness of disclaimers (footnotes omitted): [158] The case law suggests that disclaimers that appear in small print at the foot of marketing brochures are rarely effective to prevent conduct from being found to be misleading or deceptive or likely to mislead or deceive. If misleading conduct has induced a contract, that fact cannot be negated by the mere circumstance that there is a statement to the contrary. In Benlist, for example, the disclaimer appeared in a footnote on the back cover of a brochure prepared in connection with the sale of a city building, and in another section of the brochure. The disclaimer stated that all descriptions, dimensions and other details "are given in good faith and are believed to be correct, but any intending purchasers should not rely on them as statements or representations of fact and must satisfy themselves by inspection or otherwise as to the correctness of each of them". A disclaimer in similar terms appeared at the foot of the proposed lease Schedule for the commercial premises in Lezam Pty Ltd v Seabridge Australia Pty Ltd , namely that all descriptions, dimensions and other details "are given in good faith and are believed to be correct but any intending tenant/purchaser should not rely on them as statements or representations of fact but must satisfy themselves by inspection or otherwise as to the correctness of each of them". The disclaimer in the marketing dossier prepared by the real estate agents in John G Glass Real Estate stated: "The information contained herein has been prepared with care by our Company or it has been supplied to us by apparently reliable sources. In either case we have no reason to doubt its completeness or accuracy. However, neither John G Glass Real Estate Pty Limited, its employees or its clients guarantee the information nor does it, or is it intended, to form part of any contract. Accordingly, all interested parties should make their own enquiries to verify the information as well as any additional or supporting information supplied and it is the responsibility of interested parties to satisfy themselves in all respects." [159] In all three cases, the Federal Court found that the disclaimer did not operate to enable the conduct of the corporation to be seen as conduct that was not misleading or deceptive or likely to mislead or deceive. 1. As Lockhart J said in Henjo Investments Pty Ltd v Collins Marrickville Pty Ltd (No 1) (1988) 39 FCR 546 at 561 (with the agreement of Burchett J and Foster J, the latter limited to issues of principle, at 568) (Henjo): … Section 52 is a section in the consumer protection provisions of an Act concerned to protect the public from misleading or deceptive conduct and unfair trade practices which may result in contravention of the Act. It has been held that exclusion clauses, of which special conditions 6 and 7 are examples, cannot operate to defeat claims under s 52. It may be, as the judgment of Sweeney J in P J Berry Estates Pty Ltd v Mangalore Homestead Pty Ltd (1984) 6 ATPR 45,626 at 45,638 suggests, that such exclusion clauses will generally be ineffective because they cannot break the nexus between the conduct in contravention of s 52 and the making of the agreement in issue. … There are wider objections to allowing effect to such clauses. Otherwise the operation of the Act, a public policy statute, could be ousted by private agreement. Parliament passed the Act to stamp out unfair or improper conduct in trade or in commerce; it would be contrary to public policy for special conditions such as those with which this contract was concerned to deny or prohibit a statutory remedy for offending conduct under the Act. There are various judgments of judges of this Court where this approach has been adopted and they are collected in the judgment of the trial judge, so I need not repeat them. 1. The Full Court of the Federal Court of Australia in IOOF Australia Trustees (NSW) Ltd v Tantipech [1998] FCA 924; (1998) 156 ALR 470 at 478-80 (Tantipech) approved the statement by Lockhart J in Henjo. The Court added, at 479: Although the clause in question in Henjo was part of the contract the applicant had been induced to enter into by representations in contravention of s 52, the public policy basis for the denial of its effectiveness is applicable to a case such as the present where the exculpatory clause is found in another document. 1. The limits of this approach to the significance of disclaimers have been considered by Ball J in a number of cases. In Armstrong Strategic Management and Marketing Pty Ltd v Expense Reduction Analysts Group Pty Ltd (No 9) [2016] NSWSC 1005, his Honour said at [88]: [88] A disclaimer or exclusion clause in a contract cannot be relied upon to exclude liability for misleading or deceptive conduct. However, the clause is part of the surrounding circumstances which must be considered in order to determine the question whether or not conduct is misleading or deceptive: Butcher v Lachlan Elder Realty Pty Ltd [2004] HCA 60; (2004) 218 CLR 592 at [39] per Gleeson CJ, Hayne and Heydon JJ; Campbell v Backoffice Investments at [29] per French CJ. In addition, an exclusion clause may be relevant to the question of causation. As the Full Federal Court explained in IOOF Australia Trustees (NSW) Ltd v Tantipech [1998] FCA 924; (1998) 156 ALR 470 at 480: Although an exculpatory clause cannot be relied on to answer a claim based on s 52, the fact that an applicant states that he was not induced to enter into an agreement in reliance on representations may bear upon the question whether he should be believed when he asserts that the representations were an inducement. … See also Campbell v Backoffice Investments at [31] per French CJ. 1. Further, in Dylan Mann & Co Pty Ltd as trustee for the Mann Family Trust v Tiejag Pty Limited as trustee for the Skeihy Khoury Family Trust [2018] NSWSC 1334, Ball J said at [74]-[78]: [74] A further difficulty with this aspect of Tiejag's case is reliance. The SSA contains a comprehensive entire agreement clause (cl 18.2), which states that the SSA supplants any previous written or oral representation. It is well established that clauses such as cl 18.2 cannot oust the operation of s 18 of the ACL or its predecessor, s 52 of the Trade Practices Act 1974 (Cth). As Gummow, Hayne, Heydon and Kiefel JJ stated in Campbell v Backoffice Investments Pty Ltd (2009) 238 CLR 304; [2009] HCA 25 at [130]: It is as well to add, however, that, of itself, neither the inclusion of an entire agreement clause in an agreement nor the inclusion of a provision expressly denying reliance upon pre-contractual representations will necessarily prevent the provision of misleading information before a contract was made constituting a contravention of the prohibition against misleading or deceptive conduct by which loss or damage was sustained. [75] As Lockhart J said in Henjo Investments Pty Ltd v Collins Marrickville Pty Ltd (No 1) (1988) 39 FCR 546, to treat such a disclaimer as effective would be to oust "a public policy statute … by private agreement" and prevent it from stamping out unfair or improper conduct in trade or commerce by denying a remedy to those in need of one: at 561 (Burchett and Foster JJ agreeing). [76] However, an entire agreement clause may be relevant to the question of causation in misleading and deceptive conduct cases. In IOOF Australia Trustees (NSW) Ltd v Tantipech (1998) 156 ALR 470, Lee, Nicholson and Sundberg JJ said (at 480, citing Keen Mar Corp Pty Ltd v Labrador Park Shopping Centre Pty Ltd (1989) ATPR 46-048 at 53-146 and 53-161): Although an exculpatory clause cannot be relied on to answer a claim based on s 52, the fact that an applicant states that he was not induced to enter into an agreement in reliance on representations may bear upon the question whether he should be believed when he asserts that the representations were an inducement. [77] Similarly, in Campbell v Backoffice Investments, French CJ stated that "[a] subsequent declaration of non-reliance by a person said to have been affected by the conduct is more likely to be relevant to the question of causation": at [29], footnotes omitted. His Honour continued (at [31]): Where the impugned conduct comprises allegedly misleading pre-contractual representations, a contractual disclaimer of reliance will ordinarily be considered in relation to the question of causation. For if a person expressly declares in a contractual document that he or she did not rely upon pre-contractual representations, that declaration may, according to the circumstances, be evidence of non-reliance and of the want of a causal link between the impugned conduct and the loss or damage flowing from entry into the contract. In many cases, such a provision will not be taken to evidence a break in the causal link between misleading or deceptive conduct and loss. The person making the declaration may nevertheless be found to have been actuated by the misrepresentations into entering the contract. The question is not one of law, but of fact. (Footnotes omitted). [78] In the present case, the entire agreement clause is contained in an agreement that was the subject of careful negotiation between parties of equal bargaining power. The agreement itself contains a detailed list of warranties and sets out the consequences if any of those warranties were false. It is unlikely in those circumstances that Tiejag relied on any of the pre-contractual negotiations in entering into the SSA. Significance of the contract being for an 'off the plan' purchase 1. JQZ relied upon the observation of Ward CJ in Eq (as her Honour then was) in Xu v Lindsay Bennelong Developments Pty Limited [2020] NSWSC 1692 at [254] (Xu), where her Honour said in relation to parties entering into 'off the plan' contracts for properties yet to be developed: "[b]oth parties thus shoulder some risk in entering into contracts of this kind prior to the completion of the development." 2. It should be acknowledged that the facts in Xu had something in common with the present, at least to the extent that the subject matter of the contract was a lot in an unregistered plan as indicated on a draft strata plan that was attached to the contract. However, that case differed substantially from the present, as the defendant against whom a misleading or deceptive conduct case was prosecuted by the plaintiff, and who may have engaged in misleading or deceptive conduct comparable to that alleged by the Lonergans in this case, determined not to proceed with the development because it was considered to be unviable, and the plaintiff entered into a deed of novation whereby she agreed to purchase the property from an assignee of the first defendant, who was prepared to complete the development. Her Honour found at [53] that the plaintiff could not in those circumstances have relied upon representations made by the first defendant. Materially, the case against the second defendant was in contract, and her Honour's discussion of the significance of the contract being 'off the plan' and the effect of the contractual terms and disclaimers intended to give the second defendant latitude in what was satisfactory performance took place in that context. Her Honour's comment concerning the risks involved in 'off the plan' contracts was made in the context of considering the effect at general law of those terms and disclaimers. 3. As I have already noted, is not necessary in this case to express any view about the meaning or effectiveness of the contractual terms and disclaimers relied upon by JQZ under the law of contract or equitable principles. The issue here is whether the knowledge of the Lonergans of the existence of the terms and the disclaimers had the effect that JQZ's conduct was not misleading or deceptive or, if it was, that it did not cause the Lonergans to enter into the contract, because the Lonergans understood that they could not rely upon it. 4. Many of the terms of the contract appear to have been borrowed from precedents that were not applicable to the sale of units in the Prime Development at the stage the development had reached at the time of the contract: see additional clauses 42.2, 43.1 (a), (b) and (d), and additional clause 43.2 considered above at [41]-[48]. These terms required the Lonergans to satisfy themselves by inspections and enquiries of property that did not exist and had only been designed to a preliminary level. The same was true of the second half of the Schedule of Finishes Disclaimer: see [103]-[104]. 5. The only right under the contract that appears to have been quantified was the right in additional clause 37.5(b) to make a claim if the area of the Unit was less by 5% than the area as shown on the draft strata plan: see [37]-[39]. In relation to the requirement that the Lonergans accept other variations, additional clause 37.5(a) required that the variation to be substantial, detrimental and permanent and, at the same time, to be more than minor: see [37]-[39]. But additional clause 35.1(d) provided that the display suite was not an exact replica but rather indicative of the final product: see [31]-[33]. The Floor Plan Disclaimer permitted JQZ to make changes to the size or layout of the Unit without notice and stated: "All areas are indicative only and the plan is prepared at an unspecified scale": see [95]-[98]. It is problematic how the relative effect of variations could be determined if the design and specification of the Unit provided by JQZ to the Lonergans was only indicative, and not to scale. 6. Although JQZ disclosed to the Lonergans that it had not received a development consent, it did not disclose that the structural design of Tower A had not occurred. The Lonergans had no reason when they reviewed the Floor Plan to know that it had been prepared at a time when JQZ did not know where structural columns would have to be constructed. Although it was the Lonergans' evidence that they did not read the Floor Plan Disclaimer, it is significant that JQZ disclosed that the Floor Plan did not include bulkheads for services, without anything being said about the possible location of more intrusive structural columns. 7. For the purpose of considering whether the terms of the contract and disclaimers had the effect of preventing JQZ's conduct from being misleading or deceptive, or establishing that the Lonergans did not rely upon conduct that was misleading or deceptive, the terms and disclaimers should be considered as a whole. Importantly, to the extent that the whole was confusing because many parts could have no application in the circumstances, and other parts required the Lonergans to rely upon their own investigations that were impossible to carry out, the terms and disclaimers are unlikely to provide a defence to JQZ. Furthermore, requirements imposed by JQZ that the Lonergans were not entitled to rely upon representations by agents or representations by JQZ that were not incorporated into the contract, in the circumstances that the Lonergans were, in reality, required to rely upon such representations in order to have a reasonable level of understanding of the property that they contracted to purchase, are also unlikely to be effective to protect JQZ from liability for its misleading or deceptive conduct. 8. The fact that the contract involved a purchase 'off the plan' is also relevant to the attempt by JQZ to rely upon the fact that the parties were represented by solicitors to defeat the Lonergans' claim that they entered into the contract in reliance upon misleading or deceptive conduct engaged in by JQZ. The fact that the claimant was represented by a solicitor is not, of course, a panacea to loss being suffered by misleading or deceptive conduct. The capacity of a solicitor to intercept, as it were, the effect of misleading or deceptive conduct depends upon the circumstances of the case. 9. One of those circumstances will be the degree of certainty or finality in the relevant plan. Where the plan has reached the stage of the construction certificate having been issued, the scope for further variation may be relatively limited, and the risk imposed on the purchaser by the usual suite of provisions and disclaimers intended to protect the vendor may be relatively small. Where, however, the plan has not progressed further than the preparation of a draft strata plan and individual floor plans that are devoid of structural detail or scaled measurements, the scope for unexpected variation may be large. In this case, in the context of an ordinary conveyancing transaction, the scope for a solicitor to protect the purchaser may be limited. 10. Furthermore, the scope for a solicitor to intercept the effect of misleading or deceptive conduct may be significant where the contract is actually negotiated between the parties' solicitors. That may happen in the case of contracts for the purchase of major properties. In the case of ordinary residential properties, however, the protection that a solicitor is able to afford a purchaser will be limited by the fee that the solicitor can reasonably charge. In this class of case, the solicitor may not be able to do more than make limited suggestions concerning amendments to the contract and may have to act absent knowledge that the purchaser is proceeding upon some false understanding caused by the misleading or deceptive conduct of the vendor. 11. While it is a truism, it is the case that a purchaser who is misled or deceived will not know that is the case unless and until the purchaser learns the truth. Consequently, the purchaser's solicitor will be unlikely to receive instructions to confirm the purchaser's expectation, although that may happen in a particular case. I have given an example of this above, where JQZ's rejection of the Lonergans' request to attach the Floor Plan to the contract without giving an explanation had the consequence that Hunt & Hunt proceeded in ignorance of the Lonergans' expectation that no structural columns would be constructed inside the living areas in the Unit. Did JQZ engage in misleading or deceptive conduct? The privacy screens representation 1. The Lonergans' case in relation to what they called the privacy screens representation was that, by his statements to them and the notations that he made on the Floor Plan, Mr Zhu told them by reference to JQZ's model of Tower A in the display suite that the three-bedroom unit that at that time was numbered 11803 was on what would be known as Level 18, and would be constructed with black privacy screens on the balcony. In one sense, that is necessarily a prediction about the state of the Unit after it had been constructed. But it would be unrealistic to characterise the representation as being exclusively a prediction in relation to a future matter. Conduct that conveys information may be composite and involve components that are better analysed in terms of being in part statements as to present facts and in part predictions as to future events. Proper characterisation of the representation 1. In my view, in the present case, the most realistic way to consider the relevant conduct is to start with a representation by Mr Zhu to the Lonergans, when they were all looking at the model of Tower A, that the three-bedroom unit that the Lonergans were contemplating purchasing, and which they were looking at in model form, was the unit which, in the completed Tower A, would be unit 11803, and would be on the level of the model that represented Level 18 (i.e., the level with unit numbers 118XX). There was also necessarily a separate representation by implication that JQZ would cause Tower A to be constructed in a manner that would match the model. I put aside for the moment the possibility that other conduct of JQZ informed the Lonergans that the completed Tower A might have differences from the model. 2. The point of these observations is that Mr Zhu did not simply predict that JQZ would cause Tower A to be constructed, and that when that occurred it would be found that there was a unit 11803 that had black privacy screens installed on the balcony. That is important because Mr Zhu's error lay in miscounting the levels, and that was an immediate error and did not result from some prediction made by Mr Zhu not coming to pass. In this case, the fact that the Unit was not constructed with black privacy screens installed on the balcony had nothing to do with the future process of constructing Tower A after the date of the contract. The error was one of present fact, in that the unit in the model that Mr Zhu and the Lonergans were looking at that depicted black privacy screens on its balcony was not part of Level 18 of the model, but was part of Level 19. 3. I have found that the Lonergans were careful but relatively unsophisticated potential purchasers of a home unit 'off the plan', and the stage that the design of Tower A had reached meant that the Lonergans were substantially dependent upon Mr Zhu to learn the characteristics of the unit that would become the subject of the contract that they might enter with JQZ. That was the very role for which JQZ, through CBRE, made Mr Zhu its agent. It was a natural result of the marketing plan that JQZ adopted that potential purchasers would be required to make their decisions on the basis of what they were told by the agent, the inquiries that they made of the agent, and what they perceived in the display suite and the documents given to them by JQZ. 4. As I foreshadowed earlier in these reasons, I have found that the Lonergans have proved their case that JQZ made the privacy screens representation and that, in the context of all its conduct relevant to that representation, its conduct was misleading or deceptive and that the Lonergans were in fact misled or deceived. In order to justify that finding, it will be necessary for me to respond to the contrary submissions made by JQZ. JQZ made detailed submissions over some 16 pages, and I will outline my understanding of those submissions and deal with them, albeit to some extent in a different order than as appears in the written submissions. 5. JQZ submitted that the Court should not find it engaged in misleading and deceptive conduct by reason of this representation having been made on its behalf, because the Court should find that all Mr Zhu said was that "it looks like" unit 11803 would have black privacy screens. If the Court made that finding, it would support a conclusion that Mr Zhu did not make any representation of fact or any implied prediction, but only expressed a personal and tentative opinion based upon a cursory examination of the model of Tower A. 6. However, I do not accept this part of Mr Zhu's evidence. It is improbable that Mr Zhu had an actual and precise recollection of what he said to the Lonergans at the time he prepared his affidavit. As I have said above, I prefer the evidence given by the Lonergans. It was an issue of importance to the Lonergans, given Ms Lonergan's medical condition. The fact that Mr Zhu recorded his advice as to which levels were designed to have black privacy screens on the Floor Plan shows that Mr Zhu's advice was more definite than he portrayed it in his affidavit. That conclusion is reinforced by the fact that Ms Lonergan wrote "Privacy Screens" on the Floor Plan. 7. JQZ focused on the submission that the privacy screens representation was as to a future matter, as Tower A had not been built. I have explained above why I consider that the representation was a composite one and why the falsity of the representation did not flow from its predictive component but from what was in substance a representation of fact concerning which levels of the model had black privacy screens. Mr Zhu's error appears to have been caused by his having lost sight of the fact that there would be no Level 14, such that the relevant component of the representation was not prevented from being a representation of fact by reason that it was made in part as a result of Mr Zhu counting the levels on the model. 8. JQZ sought to draw from the submission that the privacy screens representation was as to a future matter that it was nothing more than a statement of opinion or prediction of Mr Zhu. I do not accept that in any real way the statements made by Mr Zhu relevantly involved an opinion or prediction. It may be debatable whether the result of a counting exercise is a statement of fact or opinion, but there was no error in Mr Zhu's statement that the black privacy screens were to be installed on every third floor or that, starting from 6, increments of 3 would give the result 9, 12, 15 and 18. The error flowed from the existing fact that there was no intention to include a Level 14. Impact of promotional material and disclaimers 1. JQZ correctly submitted that the issue of whether its conduct was misleading or deceptive required an examination of the whole of its conduct insofar as that impinged upon the understanding of the Lonergans, and that the issue should not be limited to the conduct of Mr Zhu engaged in as JQZ's agent. JQZ relied upon the fact that the Floor Plan had no units on Level 14 and included the disclaimer that is extracted at [96] above. 2. I have already explained, in relation to the draft strata plan that was annexed to the contract, that I do not accept that the absence of reference to one or more units on Level 14 on any floor plan was information that would naturally cause persons in the position of the Lonergans to understand that the counting process adopted by Mr Zhu in relation to the model of Table A was erroneous, and hence that JQZ did not intend to install black privacy screens on the balcony to the Unit. In any event, the misleading effect of the advice given by Mr Zhu was not in fact cured by the Lonergans learning the truth as a result of the absence of any units on Level 14 in the Floor Plan. 3. So far as the Floor Plan Disclaimer is concerned, I accept the evidence given by the Lonergans that they did not notice its existence or read it. The existence of the Floor Plan Disclaimer did not in fact dispel the effect of the representations made by Mr Zhu. 4. The Floor Plan was a generic plan for all the apartments listed in the document, so it would not be expected that the black privacy screens would be depicted in the Floor Plan. That is apparently why Mr Zhu wrote "6/9/12/15/18" on the panel in the Floor Plan. 5. Accordingly, even if the issue of whether the privacy screens representation involved misleading or deceptive conduct on JQZ's part should be judged on the basis that the Lonergans ought to have read and understood the Floor Plan Disclaimer, the statement to the effect that JQZ "may make changes to the size and layout without notice to you" would not dispel any misleading understanding had by the Lonergans in respect of a structural feature of the Unit that was not depicted on the Floor Plan in the first place. 6. In any event, as the Lonergans were in fact misled by the privacy screen representation, I would not find that the Floor Plan Disclaimer protected JQZ from the consequences of its misleading or deceptive conduct. I understand that in its submissions JQZ accepted that reasoning (T 286.9), and only relied upon the Floor Plan Disclaimer as part of the information that it generally provided to the Lonergans relevant to the issue of whether they were entitled to believe that any representation made to them concerning the configuration of the Unit before they entered the contract would necessarily be included in the Unit when finally constructed. 7. Next, JQZ submitted that the model of Tower A included a disclaimer. Although a photograph of the full model was in evidence, JQZ's submissions did not identify the evidence of the text of the disclaimer. As I understand it, the best evidence given of the alleged disclaimer on the model of Tower A was given by Ms Zhou in re-examination (T 221.43) in the following terms: "… But it's generally a disclaimer prepared by our lawyer. And then, we pretty much try to put it everywhere to make sure all the purchasers are aware of that. But it's generally with a – something indicative, or, you know, for your information owning, something like that. […] We reserve the right to changes, or something like that." JQZ's submissions do not explain how any disclaimer associated with the model could have the effect of dispelling the positive privacy screens representation made on its behalf by Mr Zhu. 8. JQZ then relied upon the fact that there was no unit on Level 14 in any of the floor plans for Tower A that were sent to Ms Lonergan on 3 November 2016. I have already explained above why I accept that the Lonergans did not learn from a review of all the floorplans that there would be no Level 14 in Tower A, which might have otherwise dispelled the privacy screens representation made by Mr Zhu as incorrect. 9. Finally, in this aspect of its submissions, JQZ relied upon the fact that the draft strata plan annexed to the contract stated that the Unit was on Level 16. I accept the evidence given by Mr Lonergan that he noticed that fact, and was confused about the differences in the numbering of the levels in the draft strata plan, when compared to what he understood, from the statements made by Mr Zhu, was the intention of JQZ concerning the actual names of the levels in Tower A. 10. These submissions led JQZ to make the further submission that the information that JQZ provided was objectively confusing and, taken together, and in context, did not represent that the Unit would have black privacy screens. JQZ submitted that it is not enough, in a claim of misleading or deceptive conduct, to establish that conduct was merely confusing. 11. I do not accept this submission because, in my view, it would be incorrect to find that the conduct of JQZ, considered as a whole, was merely confusing. The privacy screens representation made by Mr Zhu was more than confusing. It was misleading or deceptive, and it was only the other information that was provided by JQZ that was confusing, with the result that the positive representation was not dispelled by the other information that was made available. Impact of contractual provisions 1. JQZ correctly submitted that the provisions contained in the draft contract were part of its conduct relevant to the question of whether it had engaged in misleading and deceptive conduct. I will deal with JQZ's submissions concerning the significance of the terms of the contract in turn. 2. First, JQZ relied upon the fact that the draft contract disclosed in additional clause 34.3 that it required development consent and in additional clause 34.1 that JQZ was required to use reasonable endeavours to cause the building containing the Unit to be constructed in a proper and workmanlike manner and generally in accordance with the development consent. Additional clause 34.3(c) informed the Lonergans that JQZ would seek to amend the development consent in any way "which it considers necessary or desirable". 3. JQZ in fact obtained a development consent and did not apply to amend the development consent in any way that is material to the effect of the privacy screens representation. Relevantly, the development consent authorised JQZ to build Tower A in a way that was consistent with the Unit being constructed with black privacy screens on its balcony. The positive privacy screens representation did not cease to be misleading or deceptive because the contract authorised JQZ to make amendments that it did not make. Even if it were contractually correct that JQZ could have amended the development consent to remove black privacy screens from Tower A, that possibility did not make the positive representation cease to be misleading or deceptive. 4. Secondly, JQZ disclosed in additional clause 34.3(a)(iii) of the draft contract that the concept drawing and plans in connection with the Development Site were not final, were for marketing and illustrative purposes only, were subject to Authority approval, and could change at any time. 5. This disclosure did not neutralise the misleading or deceptive effect of the privacy screens representation for essentially the same reason as I have given in relation to JQZ's first submission. There were no material changes to the drawings and plans. The possibility that such changes could be made does not alter the fact that Mr Zhu, on JQZ's behalf, misled or deceived the Lonergans into understanding that the subject matter of the contract would have black privacy screens on its balcony. 6. Thirdly, JQZ disclosed by means of additional clause 35.1 that JQZ would cause the Unit to be finished in accordance with the Schedule of Finishes but reserved the right to change the finishes. The Schedule of Finishes contained nothing concerning the black privacy screens. 7. As I have explained above, I am not satisfied that the provision of the black privacy screens ought to have been understood by the Lonergans as a "finish" that should have been specified in the Schedule of Finishes. The Schedule of Finishes did not deal with the exterior structure of Tower A. The Lonergans were entitled to believe, as they did believe, that as the intention was that the black privacy screens would only be installed on the balconies of the three-bedroom units on every third level, they were not a feature intended to be encompassed by the Schedule of Finishes. 8. Fourthly, JQZ submitted that additional clause 35.1(d) was an acknowledgement by the Lonergans that the display suite was not an exact replica of the Unit, but was rather indicative of the general style, quality, and finish of properties within the Prime Development. 9. It is true that clause 35.1(d) was an acknowledgement to that effect, but the Lonergans did not derive their understanding that the Unit would be constructed with black privacy screens on its balcony from their inspection of the display suite. The display suite did not on the evidence include a display balcony. This acknowledgement is not inconsistent with the privacy screens representation being made to the Lonergans in the way in which it was in fact made. 10. Fifthly, JQZ referred to the provision in additional clause 37.2(a) and (b) whereby JQZ disclosed that the boundaries of the Unit may not have been accurately defined and the draft strata plan was subject to survey. Further, JQZ disclosed that the number or configuration of lots in the plan may vary from the number or configurations shown in the draft plan. 11. I find that these disclosures had no effect on the making of the privacy screens representation and its misleading or deceptive effect. So far as the evidence discloses, there was no material change to the boundaries of the Unit, nor was there any change to the number or configurations of lots in the final strata plan. These disclosures have nothing to do with the fact that the levels in Tower A were numbered with Level 14 missing. 12. Sixthly, JQZ relied upon the fact that additional clause 37.5 required the Lonergans to accept, without making any claim, any alterations unless they "substantially, detrimentally, and permanently" affected the Unit in a way that was "other than minor", or the area of the Unit as shown on the strata plan was reduced by more than 5% compared to the draft strata plan. 13. Additional clause 37.5(b) concerning reductions in area is immaterial to the privacy screens representation which had nothing to do with the area of the Unit. As a matter of its construction, additional clause 37.5(a) concerning the significance of variations might be capable of neutralising the privacy screens representation if the issue were to be determined solely on the construction of the contract. That outcome is not clear, however, because the absence of the black privacy screens might be other than minor, even if there is scope to argue that it was not a substantial, detrimental, and permanent alteration. On balance, the better view is that the absence of the black privacy screens was indeed substantial, detrimental, and permanent; but, more fundamentally, the absence of the black privacy screens did not in fact result from any alteration or amendment. The Unit was constructed entirely in accordance with the plans as they existed at the date of the contract. The reason why the privacy screens representation was misleading or deceptive is that it involved a misidentification of the unit that would be constructed with the screens. Additional clause 37.5(a) did not in fact dispel the effect of JQZ's misleading or deceptive conduct. 14. Seventhly, JQZ relied upon additional clause 43.1(c) whereby the Lonergans acknowledged that they had not been induced to enter the contract by, and had not relied on any marketing material, statement, representation, or warranty by or on behalf of JQZ or any agent of JQZ other than those set out in the contract. 15. In my view, the presence of this term in the contract was ineffective to prevent the privacy screens representation being misleading or deceptive for the reasons given by Lockhart J in Henjo. The acknowledgement was completely inconsistent with the true facts as I have found them to be on the evidence. The enforcement by the Court of this acknowledgement would defeat the remedial purpose of s 18 of the Australian Consumer Law. That is particularly so in this case where the plan was preliminary and incomplete. If this acknowledgement were binding on purchasers, it would have the effect that nothing represented by JQZ or its agents would bind JQZ, unless purchasers were able to comprehensively identify all representations upon which they had acted and to seek to have those representations included as terms of the contract. Commercially such an exercise would not be realistic in the time available or in the circumstances. 16. Eighthly, JQZ relied upon the acknowledgement in additional clause 43.2 that the Lonergans had relied entirely upon their own enquiries and investigations in relation to the purposes for which the Unit could be used and the fitness of the Unit for the Lonergans' purposes. 17. This term did not have the effect of absolving JQZ from the misleading or deceptive effect of the privacy screens representation because there was no enquiry or investigation that the Lonergans could realistically have made that would have disabused them of their belief that the Unit would be constructed with black privacy screens installed on its balcony. As the Lonergans were in fact misled or deceived by the privacy screens representation, this term could not have the effect of requiring them to doubt the truth of what they were told by Mr Zhu and to analyse the floorplans for every level in Tower A that they were given in order to make a speculative search for the absence of a Level 14. Nor were they required to make any investigation of why the levels on the draft strata plan were different to the numeration of the levels that the Lonergans were told JQZ would adopt. 18. Ninthly, JQZ relied upon the entire agreement clause in additional clause 65.2 as superseding all prior communications between the parties. 19. I reject this submission for the same reasons that I have given above for finding that JQZ's reliance upon additional clause 43.1(c) does not provide it with an effective defence. 20. Finally, JQZ relied upon the fact that the sunset date for registration of the strata plan was 30 July 2021: Schedule 1; and that this suggested a long period for development consent and construction. 21. If I understand this submission correctly, it is to the effect that the Lonergans should have understood from the fact that registration of the strata plan might be as far away as 30 July 2021 that all manner of changes might be made to the design of the Unit in the interim. The suggestion appears to be that nothing that Mr Zhu represented to the Lonergans could have been understood by them as specifying the final structure of the Unit because the contract gave JQZ so great a latitude to make changes that nothing that was represented about the Unit was, as it were, set in stone. I reject this submission, as the length of time granted to JQZ to obtain registration of the strata plan would not naturally suggest to potential purchasers in the position of the Lonergans that they ought not rely upon what they were told by JQZ's agent concerning the likelihood that JQZ would cause Tower A to be built in the manner represented by the model. The columns representation 1. The Lonergans' submission concerning the columns representation was that it was misleading or deceptive for there to be no such columns in the living room display suite or depicted on the Floor Plan, in the absence of any warning conveyed by JQZ that the construction of such structural columns may be required. 2. So far as the column representation is concerned, the representation is in my view similarly best analysed in a composite way. The absence of a structural column in the living room in the display suite, and absence of structural columns being depicted in the Floor Plan in the living room or on the balcony were, in the absence of an explanation to the contrary, representations of a present fact, being that there was no necessity for JQZ to cause the Unit to be constructed with structural columns in the living room or on the balcony. There was also necessarily an implied representation that JQZ would cause the Unit to be constructed in a manner that matched the display suite and the Floor Plan. Again, this implication may be subject to qualification by reason of the information provided by JQZ to the Lonergans before they executed the contract. The point of my observations is that it would be wrong in my view, to characterise the columns representation as being solely a prediction as to the structure of the Unit when it was constructed. 3. In my opinion, substantial structural columns located in the living areas of relatively small home units, in places that significantly intruded into the living space, are design features whose natural significance would be such to ordinary potential purchasers, such as the Lonergans, as to cause those purchasers to assume that no structural columns would be required unless they were included in the display suite, or depicted in the floorplans, or alternatively a clear and prominent warning was given that structural columns would or may be constructed in the living areas in numbers and at places that the developer could not identify by reason of the fact that the structural design of the building had not been completed. It would not be natural for ordinary potential purchasers who have not been warned of the probable need for the construction of structural columns in the living area to realise that the display suite and the floorplans were deficient by reason of the absence of reference to structural columns. 4. I infer that, as JQZ was aware that the Floor Plan did not depict bulkheads for services, it must also have been aware that structural columns may be required to be constructed in the living areas although not depicted on the Floor Plan. It is in my view obvious that an experienced developer such as JQZ (through the relevant officers of its holding company) would have understood as a result of the fact that a structural engineering design had not been commissioned that the design, when complete, was likely to require the installation of structural columns in the living areas. The probability is that JQZ did not have the information necessary to enable it to give reliable information to potential purchasers about the number, size and location of structural columns. That being the case, the only way that JQZ could avoid a substantial risk of misleading or deceiving potential purchasers was to provide a prominent warning that it was premature for JQZ to be able to provide reliable information about the construction of structural columns in the living areas of the units. A consequence of the display suite and the floorplans not including or depicting structural columns was that a clearly effective warning was necessary for JQZ to avoid engaging in misleading or deceptive conduct 5. JQZ submitted that even though the Lonergans gave as particulars of the columns representation that there was no structural column in the display suite, the Lonergans did not say anything about what was in the model apartment in their affidavits. While that is true, I have already explained above why I infer that there was no structural column in the model living room. I make that inference, because there was no structural column depicted in the living room in the Floor Plan, and I have no doubt that if there in fact was a structural column in the model living room, evidence to that effect would have been given by JQZ. 6. JQZ then relied upon the fact that clause 35.1(d) of the contract was an acknowledgement by the purchaser that the display suite or samples displayed were not exact replicas of the property but rather were indicative of the general style, quality, and finish of the properties within the development. JQZ also relied upon additional clause 34.3(iii), by which JQZ disclosed and the Lonergans acknowledged that the concept drawing and plans in connection with the development site were not final, were for marketing purposes, and could change at any time. 7. As to the first of these submissions, the acknowledgement by the Lonergans that the display suite was not an exact replica of what the Unit would be on completion, and that the display suite was indicative of the general style, quality and finish of the Unit, did grant JQZ some degree of latitude, but the submission begs the question of what latitude was acceptable. In my view, the unexpected construction of substantial structural columns in the living room and on the balcony is not a matter of style, quality, or finish. In the same vein, an acknowledgement that the concept drawing and plans were not final, were for marketing purposes and could change at any time, is not an acknowledgement that JQZ was entitled to make any change that it chose to make. The ambit of the acknowledgement must be a matter of degree, and the issue is the identification of the changes that were contemplated by the provision. The clause in fact provided that the draft documents and concept drawing and plans "are not final, are for marketing and illustrative purposes only, are subject to Authority approval and/or agreement with third parties and may change at any time". The reference to permissible changes could not be open-ended. The reference to "illustrative purposes" must imply that JQZ had genuinely illustrated its understanding of the layout of the Unit as was proposed to be constructed, and it would not follow that the Lonergans had acknowledged that, if JQZ had omitted essential structural components in the Floor Plan that it must have known may be required, that JQZ could add those components at a later time and be free of complaint. 8. JQZ then adverted to the fact that the Lonergans' defence to the cross claim pleaded that JQZ did not disclose the need for the columns before they entered the contract, which they defined as representations by silence, and submitted that the non-disclosure of the location of the columns was not a representation that there would be no columns in the unit or on the balcony. The reasons given for this submission were: * there was no development consent at the time, and no structural drawings had been prepared, so it was not possible for JQZ to state where the columns would be; * the building obviously had to be structurally sound and JQZ was required to use reasonable endeavours to construct it in a proper and workmanlike manner, so there were always going to be columns holding up the building; * the absence of columns in the Floor Plan did not represent they would not be in the Unit because the Floor Plan was for marketing purposes only, was subject to change, the areas were indicative only, it did not include bulkheads for services, and JQZ made no representations in it; * none of the floorplans had columns on them; * there was no indication the columns would go through internal walls because they were described as "stud and painted plasterboard" in the Schedule of Finishes; * the Schedule of Finishes had its own disclaimer and, in clause 35.1(b), JQZ reserved the right to change any finish or item specified in the Schedule of Finishes, provided the replacement item or finish was of at least equivalent quality to that finish or item as originally specified; * in the contract, JQZ was selling the space in the strata unit and not any particular layout or design, as it refused to attach the Floor Plan to the contract, and the Lonergans agreed to accept the Unit as altered or amended unless such alterations, amendments, variations or discrepancies substantially, detrimentally and permanently affected the Unit in a way which was other than minor, in which case the Lonergans would have the right to rescind the contract under additional clause 40; * in the context of a conveyancing transaction where both sides were legally represented, there was no representation from non-disclosure; and * finally, JQZ had reasonable grounds not to inform the Lonergans where the columns would be as it had no knowledge of where they would be. 1. JQZ submitted that once it adduces evidence of reasonable grounds for making a representation as to a future matter, there is no deeming of misleading or deceptive conduct under s 4 of the Australian Consumer Law, and the onus remains with the Lonergans. JQZ submitted that the onus has not been discharged with respect to the columns representation. 2. I do not accept that any of these submissions obviate the misleading or deceptive effect of JQZ's conduct in building the display suite without any internal structural columns, failing to depict structural columns on the Floor Plan, and failing, in the absence of being able to give reliable information as to whether structural columns would be required and where they would need to be constructed, to provide a clear and effective warning to potential purchasers that the marketing campaign was taking place before JQZ was able reliably to provide this information, so that potential purchasers would be warned that the units, when finally constructed, might have an unknown number of structural columns constructed at unspecified locations in the living areas of the units. It might be imagined that the provision of such a warning might be a deterrence to potential purchasers, but it was misleading or deceptive for JQZ to allow purchasers to enter contracts in ignorance of the possibility that structural columns would be constructed in the living areas of the units. 3. I find that the Floor Plan Disclaimer was wholly inadequate as a warning to the Lonergans that the Unit, when constructed, might have structural columns in the places where they were constructed, and in no small part because its font was too small to provide a reasonable warning to potential purchasers. As I have said, I accept that the Lonergans did not read the Floor Plan Disclaimer. In any event, the absence of a reference to the possibility that structural columns would need to be constructed in the living areas of the Unit meant that the Floor Plan Disclaimer was unlikely to be an effective warning. 4. That the Floor Plan Disclaimer stated that the Floor Plan was for marketing purposes only does not assist JQZ, as the exercise of marketing does not absolve the vendor from the requirement that it not provide information to potential purchasers that will lead them into material error. 5. The statement in the Floor Plan Disclaimer that the Floor Plan was subject to change does not inform potential purchasers that there may be a material omission in the Floor Plan. Potential purchasers would naturally assume that any requirement known to JQZ would either be depicted in the Floor Plan or a clear warning provided as to its absence. Potential purchasers would assume that the reference in the Floor Plan Disclaimer to the Floor Plan being subject to change was to potential future changes currently unknown to JQZ. The reference in the Floor Plan Disclaimer to areas being indicative only was itself misleading or deceptive because the Floor Plan as a whole (absent an adequate warning) was not indicative of what was known to JQZ. 6. The matters relied upon by JQZ as to why it was not in a position to inform potential purchasers as to the probable need for and location of structural columns are probably true, but that only reinforces the need for JQZ to give an effective warning in order to avoid engaging in misleading or deceptive conduct. 7. As I have explained, it is not a proper analysis of the conduct constituted by the columns representation that it was only a representation with respect to a future matter for the purposes of s 4 of the Australian Consumer Law. The air-conditioning representation 1. In pars 45 and 46 of their closing written submissions, the Lonergans said that the Floor Plan did not show the location of an air-conditioning unit on the balcony and that this absence amounted to an implied representation that such an air-conditioning unit would not be in the Unit as built. This logic may work in relation to the structural columns, but there is a difficulty when it is applied to the location of the air-conditioning unit. The Lonergans did not lead any evidence concerning the air-conditioning unit, save that they discovered after the completion of the Unit that it was located on the floor of the balcony in a place that would cause the exhaust to blow across the balcony. There was no evidence at all about JQZ's marketing material concerning the air-conditioning of the Unit, or the way that would be achieved. The Lonergans did not give any evidence concerning their expectations concerning the provision of air-conditioning. Nothing was said about whether the model of Tower A incorporated any air-conditioning elements. If the Lonergans expected that the Unit would be air-conditioned, and that that may be achieved by an air-conditioning unit that was located in the Unit, then the device had to be located somewhere. The Lonergans did not say whether they turned their mind to this issue. It may be that the only place where the air-conditioning units could be located without damaging the external appearance of Tower A was on the balconies. 2. As I have recorded above when considering the Schedule of Finishes, one of the items was "Air-conditioning system", which was described as "Ducted system air-conditioning". While there was no reference in any of the documents to the possible need for structural columns, there was reference to the air-conditioning system. 3. The Lonergans may have been entitled to infer from the absence of reference to structural columns that there would be none. The issue with the air-conditioning unit was probably not whether there would be one, but rather as to where it would be situated. Given the dearth of evidence on the issue, I consider that it would not be fair to find that the Lonergans have proved the air-conditioning representation. Did the Lonergans rely upon the representations to enter the contract? 1. In response to the Lonergans' claim that they would not have entered the contract had they known that there would not be black privacy screens and there would be columns on the balcony and a column in the corner of the living room, JQZ's position was that it disputed that the Lonergans relied upon the representations and, in the alternative, submitted that the Lonergans' reliance was not reasonable. 2. I accept the Lonergans' evidence that they did in fact enter the contract believing that the Unit would be constructed with black privacy screens and that there would be no structural columns in the living areas of the Unit. I also accept that, because of their circumstances, they would not have entered the contract for the purchase of the Unit if they had known the truth. Their decision to upgrade from the two-bedroom unit with study to the three-bedroom Unit was relatively marginal financially, and I have explained why I accept that Ms Lonergan's medical condition was a significant factor in the Lonergans' decision to purchase the Unit. While the reaction of the owner of a home unit to the presence of intrusive structural columns in the living areas may be personal to different owners, I accept that the Lonergans would have reacted to knowledge of the possible construction of the structural columns by considering them to be unacceptable. 3. It is necessary to respond to the submissions made by JQZ in support of its argument that the Lonergans did not rely upon the privacy screens representation or the columns representation when they entered the contract. 4. First, JQZ pointed to the fact that Ms Lonergan initially proposed to buy a two-bedroom unit and her purchaser's checklist sent to Mr Zhu on 1 November 2016 identified as fifth and sixth preferences units 10803 and 11003 that were without black privacy screens. Furthermore, on 5 November 2016, Ms Lonergan signed a contract to purchase unit 11505, which did not have the black privacy screens. 5. It does not follow from the fact that the purchaser's checklist identified two units as preferences 5 and 6 that did not have black privacy screens after Ms Lonergan listed four preferences that did have black privacy screens that the Lonergans did not rely upon the black privacy screen representation when they entered into the contract. On the contrary, they made their preference clear that they wanted a unit with black privacy screens, and they succeeded in obtaining a contract to purchase their preferred unit. 6. Furthermore, the two-bedroom unit 11505 was only going to be used by Ms Lonergan as an investment, so it did not matter that it did not have black privacy screens. 7. Next, JQZ submitted that there was no evidence that the Lonergans checked the shade properties of the screens or the direction the balconies of the proposed three-bedroom units in Tower A would face. JQZ asserted that, if they had done so, they would have seen that Tower D blocks the sun from the south-west. JQZ submitted that the black privacy screens were not even discussed in terms of their shade properties, they were discussed in terms of privacy. 8. I accept Ms Lonergan's evidence that any significant level of exposure of her skin to the sun might trigger her medical condition. I do not accept that the evidence establishes that Tower D would substantially block sunlight shining onto the balcony of the Unit. It is possible that Tower D would shade the balcony at some times of the day, but it is improbable that it would totally shade the balcony at all times. 9. In any event, it is sufficient that, as I accept, the Lonergans believed that the black privacy screens would improve Ms Lonergan's ability to use the balcony, and further, the Lonergans had a subsidiary reason for wanting a unit with black privacy screens because they thought that the screens would increase the utility of the balcony by limiting its visual exposure to the many other units in the Prime Development. 10. JQZ then invited the Court to reject Mr Lonergan's evidence that, on 30 October 2016, he told Mr Zhu the reason the Lonergans were interested in units with black privacy screens was that Ms Lonergan had a skin condition that reacted to ultraviolet rays, and that the screens would allow them to enclose the balcony in the future for more privacy and space. The reason given was that Mr Zhu denied that he was given this information. JQZ submitted the nature of the information was such as to make it probable that Mr Zhu would have recalled it if the conversation had taken place as alleged by Mr Lonergan. JQZ also pointed to the fact that Ms Lonergan had not separately given evidence that this information had been conveyed to Mr Zhu. 11. The first observation to be made is that the Lonergans' reliance case does not depend upon the Court accepting that Mr Zhu was given the Lonergans' reason for choosing a unit with the black privacy screens. However, I do not accept that it is probable that Mr Zhu would have recalled being given the information had that happened, and I am not inclined to accept that Mr Zhu would have had a reliable recollection of any particular information that any of the prospective purchasers may have given to him. A passing comment by Mr Lonergan that the black privacy screens would be particularly advantageous to the Lonergans is not such startling information that it is probable that an estate agent whose duty was to introduce the units to a substantial number of prospective purchasers would remember it. Further, I accept the Lonergans' evidence that Ms Lonergan does suffer from the medical condition claimed, and that makes it at least probable that Mr Lonergan would have told Mr Zhu the particular reason why the black privacy screens were attractive to the Lonergans. 12. JQZ then made a number of submissions leading up to the proposition that the Lonergans must be taken to have known that, if they wanted something clarified, they had to raise it through their lawyer and have it put in the contract, especially as Ms Lonergan said that she initially asked whether the provision of black privacy screens would be made a term of the contract. JQZ submitted that, if the black privacy screens were important to the Lonergans' decision to enter the contract, they would have asked their solicitors to raise it formally. They did not mention it, even after Hunt & Hunt's 17 November 2016 letter to them. 13. I do not accept the submission that the Court should find that the privacy screen representation was not a material reason for the Lonergans to choose the Unit because they did not think to instruct Hunt & Hunt to make a formal request that the draft contract be amended to ensure that the Unit was constructed with black privacy screens. It is a natural consequence of a person being misled or deceived that they will act as if the representation that has misled or deceived them is true, at least until they learn of the deception. The Lonergans were induced by the information provided to them by Mr Zhu to believe that every three-bedroom unit on every third floor would be constructed with black privacy screens, and that the Unit, being on Level 18, would be one of those units. I accept their evidence that Mr Zhu told them that it would not be necessary for the contract to deal specifically with the black privacy screens because their location on Tower A was a design feature. Thus, a decision to buy the Unit would bring with it the black privacy screens. In any event, the Lonergans were not expected to instruct Hunt & Hunt to require that every material detail of the proposed Unit should be included in the term of the contract. For instance, the contract said nothing about the Unit being required to have three bedrooms or two bathrooms. In my view, it was reasonable for prospective purchasers in the position of the Lonergans to assume that JQZ would cause Tower A to be constructed in accordance with the model. The terms of the contract that gave JQZ latitude concerning the final form of the development are immaterial, because JQZ evidently did construct Tower A in accordance with the model. The problem was that the Lonergans were misled into believing that the Unit was intended to be on a level that would have black privacy screens. 14. JQZ's next submission was that the correspondence between the parties' solicitors on 17 and 18 November 2016, which showed that Mr Zhu's statements to the Lonergans about their ability to require that a bath be installed in the bathroom and that the sunset date would be 2019 instead of 2021 was wrong, has some relevance to the issue of whether the Lonergans accepted what Mr Zhu said about the black privacy screens and relied upon that information when they entered the contract. I do not see the logic in the proposition that, if the Lonergans learned that some statements made to them by Mr Zhu were incorrect, then they should not have accepted any other statement made by him. It does not follow from the fact that a person has made one incorrect statement that all other statements made by the person should not be relied upon as true. In any event, I accept that Mr Zhu made the statements that constituted his part of the making of the privacy screens representation, and all that is required for the Lonergans to make out their case is for them to persuade the Court that they were misled or deceived by the privacy screens representation, and that they were induced to enter into the contract believing the representation to be true. 15. The next step in JQZ's argument that the Lonergans did not rely upon the privacy screens representation when they entered into the contract was to point to the contract disclaimers in additional clauses 34.3, 35.1, 37.5 and 43.1 that I have considered above, together with the reference in the Hunt & Hunt letter of 17 November 2016 which specifically drew attention to additional clauses 42 and 43, to submit that the Court should find that Mr Lonergan knew he had agreed not to rely on anything the agent said, so that he needed to raise things of importance with JQZ through his solicitor if he wanted to ensure a particular outcome. As Mr Lonergan did not raise the issue of the black privacy screens, JQZ submitted that the Court should find that the issue was not important to Mr Lonergan. JQZ augmented this submission by referring to Mr Lonergan's admitted confusion concerning the difference between how the levels in Tower A were numbered by JQZ and the numbers of the equivalent levels in the draft strata plan. 16. This submission raised the issue of whether the relevant terms of the contract generally, and the suite of disclaimers that JQZ relies upon, have the effect in this case that the Court should find that JQZ's misleading or deceptive conduct did not cause the Lonergans to suffer any loss. 17. JQZ accepted, by reference to the decision of the High Court in Butcher at [130], that contractual provisions, such as the contract disclaimers, as well as entire agreement clauses, are not determinative of reliance upon pre-contractual representations, although JQZ correctly submitted that such provisions are relevant to the determination of the issue. 18. As I state above, I accept the Lonergans' evidence that they entered the contract in reliance of the truth of the privacy screens representation, notwithstanding any of the terms of the contract or the terms of any of the disclaimers upon which JQZ has relied. 19. Another ground put forward by JQZ as to why the Court should not find that the Lonergans relied upon the privacy screens representation when they entered into the contract was based upon the fact that the Unit's number meant that it would be located on Level 18, but the draft strata plan and Hunt & Hunt's 17 November 2016 letter to the Lonergans referred to the Unit as being on Level 16. JQZ relied upon the fact that the Lonergans did not discuss this difference with Mr Zhu, even though Mr Lonergan conceded that he was aware of it and found it to be confusing. JQZ submitted that the Court should not accept that the Lonergans believed that they would be purchasing unit 11803 on Level 18 of Tower A, and that the Court should find that Mr Lonergans knew he had agreed not to rely on anything the agent said. 20. I reject this argument. JQZ represented that the Unit would be constructed on what it would call Level 18, and it was so constructed. The reason that the levels in the draft strata plan differed from the levels as they would be numbered in the completed Tower A was that JQZ had decided to omit Levels 4 and 14 from the way the levels would be numbered in the completed Tower A. JQZ did not make that conduct obvious to anyone who did not study the marketing documents prepared by JQZ in sufficient detail to appreciate that there were no units whose unit numbers indicated that they would be on Level 14. It is not clear why Mr Zhu did not appreciate the true position, but it is clear that he made a mistake when he told the Lonergans that the Unit would be on Level 18, and it would have black privacy screens. 21. JQZ's complex arguments as to Mr Lonergan's confusion about the significance of the numbering of the levels in the draft strata plan go no further than to highlight that the effect of JQZ taking the extraordinary step of leaving out Levels 4 and 14, without making that conduct sufficiently obvious to potential purchasers, was that the Lonergans in fact believed Mr Zhu and entered into the contract on the understanding that the Unit was on a level that would come with black privacy screens, in circumstances where the surrounding documentary confusion did not in fact cause the Lonergans to learn the truth. 22. Finally, on the issue of reliance, JQZ submitted that the Lonergans' conduct after the inspection does not support a finding that they relied on the privacy screens representation. The basis of this submission was evidence that, at the time of the inspection, the Lonergans' finance had fallen through, the valuation by the financier's valuer had been low, and they did not have any approved finance. JQZ also submitted that the Lonergans were generally unhappy with the Unit, and even though Hunt & Hunt's letter of 8 November 2019 after the inspection recorded complaints, it did not assert any rights against JQZ. JQZ submitted that the Lonergans' position became more strident as their financial troubles continued. 23. This submission must be understood in the light of the statement made in the solicitors' 8 November 2019 letter, written the day after the Lonergans inspected the completed Unit, that the Lonergans were "shocked to find that the representations made by your client's agent that black shutters would be built on the balcony for the property has not been carried out". The immediacy of the Lonergans' complaint and its prominence in the list of their grievances supports a finding that they entered the contract expecting that the privacy screen representation was true. 24. I accept that the evidence established that the Lonergans would have had difficulty in obtaining finance to complete the contract, largely because, so far as the evidence went, the Unit appeared to have a value significantly below the price in the contract. It was not, however, proved in a positive way that the Lonergans would have been unable to complete. In any event, JQZ did not make a submission that the Lonergans could not have completed the contract on the issue of whether the Lonergans were entitled to relief if they otherwise proved their misleading or deceptive conduct case. 25. It only became apparent to the Court that the real purpose of JQZ leading evidence that the Lonergans found it difficult to obtain the finance necessary to complete the contract was to support the present submission that the Lonergans had manufactured their concern about the truth of the privacy screens representation because of their growing appreciation that they may not be able to complete the contract for financial reasons. Although Mr Lonergan was cross-examined about the evidence that some applications for finance were rejected, it was not put to him in cross-examination that he and Ms Lonergan had manufactured their concern about the privacy screen representations in order to avoid the consequences of their possible inability to complete, when in fact the absence of the black privacy screens was of no real significance to them. While I do not accept that the concern about the absence of the black privacy screens was manufactured by the Lonergans in response to concern about the difficulty of obtaining finance, I would not have accepted this submission in any event, as it was not fairly put to Mr Lonergan in cross-examination. 26. JQZ sought to support this submission by relying upon some evidence that Mr Lonergan may have in the past installed a screen on the balcony of a house. The submission was to the effect that the absence of the black privacy screens could be fixed. JQZ acknowledged that the strata plan by-laws were not registered until 11 November 2019, after the date of the contract. By-law 5.9, when made, provided: 5.9 Shading and Screening You must have consent from the Owners Corporation to install a sun shade, sun blind, screening, awning or other sun shading device in your Apartment, on your Balcony or on Common Property. 1. This by-law precluded lot owners from installing sun shading devices anywhere without the consent of the Owners Corporation. There is no basis for the Court to infer that the Owners Corporation would have given that consent to black privacy screens being installed on the balcony of a unit on a level that was inconsistent with the major design feature of Tower A, whereby black privacy screens would be installed on certain balconies at matching positions on every third level. There is less reason for the Court to find that the Lonergans believed, or that they ought to have believed, that they would be given the necessary consent. Did unreasonable reliance break the chain of causation? 1. JQZ submitted that it was not reasonable for the Lonergans to rely upon the privacy screen representation such that the chain of causation was broken, relying upon Trilogy Funds Management Ltd v Sullivan (No 2) [2015] FCA 1452; (2015) 331 ALR 185 at [712]-[721] (Wigney J); and Argy v Blunts (1990) 26 FCR 112 at 138 (Hill J). JQZ submitted that it made its position clear to the Lonergans that the building and the property could change and that it was not bound by prior representations in a transaction involving solicitors on both sides. JQZ submitted that, even if the Lonergans established that they had relied upon the privacy screens representation, they had isolated particular conduct from all the rest of JQZ's conduct on a matter that was not objectively significant given the orientation of the balcony, the low cost of it, and the likelihood it could be rectified later as it was unlikely that an owners corporation would prevent an occupant from shading the sun or having privacy. JQZ also submitted that the Lonergans ignored relevant terms of the contract and kept important information from their solicitor. 2. I reject the submission that it was unreasonable for the Lonergans to enter the contract believing that Unit 11803 was on a level that would involve the installation of black privacy screens on the balcony in reliance upon Mr Zhu's explanation. In any event, the matters relied upon by JQZ did not have the effect that it was the Lonergans' unreasonable conduct that was the cause of their entering into the contract such that JQZ's misleading or deceptive conduct was not an operative cause. 3. Furthermore, for reasons given above, I reject the submission that the installation of the black privacy screens was not objectively significant given the orientation of the balcony. As I have just explained, JQZ has not proved that the Lonergans ought to have proceeded on the basis that it was likely that the Owners Corporation would consent to the retrospective installation of black privacy screens in a manner that was inconsistent with the design concept of Tower A. Reliance by the Lonergans on the columns representation 1. As I understand JQZ's submissions, and in particular its comprehensive written outline of final submissions, JQZ has not made a submission that the Court should find that the Lonergans did not rely upon the columns representation in entering the contract. 2. For the sake of completeness, I record that I am satisfied that the Lonergans did enter the contract on the basis of a belief that there would not be a substantial structural column in the corner of their living room and two substantial structural columns on the balcony. I am satisfied that ordinary prospective purchasers who inspected the display suite living room and who looked at the Floor Plan would be led to believe, in the absence of a clear warning to the contrary, that there would be no substantial structural columns in the living areas, and that other parts of Tower A would provide the structural support necessary for superimposed levels. 3. It is unclear why JQZ has relied upon a thicket of submissions as to why the Court should not accept that the Lonergans entered into the contract in reliance upon the privacy screens representation, when nothing has been said in opposition to a finding that they did so in reliance upon the columns representation. Loss and relief 1. I have accepted the Lonergans' case that they entered the contract in reliance on the privacy screens representation and the columns representation. I have found that those representations involved conduct on JQZ's part that was misleading or deceptive. I have also accepted that the Lonergans would not have entered into the contract for the purchase of the Unit had they known the truth, given (a) that they were ambivalent as to whether Ms Lonergan should acquire a less expensive two-bedroom unit as an investment, and (b) that they were purchasing the considerably more expensive three-bedroom unit on the basis that there was a real possibility that they would make it their home for some period. 2. The relief that should be granted to the Lonergans should have regard to the circumstances of the case, being that the subject matter of the representations was of real significance to the Lonergans, although they did not involve matters of fundamental importance to the structure and utility of the Unit. That is reflected in the fact that initially the Lonergans responded to their disappointment upon inspecting the completed Unit by asking JQZ to suspend the completion process to allow negotiations to take place to agree an appropriate reduction to the price as compensation for the loss of amenity to the Lonergans that flowed from the effects of JQZ's misleading or deceptive conduct. As has been seen, JQZ rejected the request out of hand on the basis that the alleged conduct did not occur, that JQZ was not responsible for any representations made by its agent, and that the terms of the contract gave JQZ a latitude in the performance required of it that obliged the Lonergans to complete the contract. The Lonergans do not seek an order that the contract be set aside as such relief is not necessary, the parties having agreed that one or other of them effectively terminated the contract. In practical terms, the issue is whether the application of the relevant provisions of the Australian Consumer Law would have required the Lonergans to have completed the contract and then sued JQZ for compensation for the loss caused by its misleading or deceptive conduct. 3. If this issue had arisen in the absence of the Lonergans having made a successful claim that JQZ had engaged in misleading or deceptive conduct, the focus would have been on whether the Lonergans were required to complete the contract and then to sue JQZ for compensation for breach of any relevant duty. That would have required a consideration of whether JQZ had effectively made time of the essence of the contract when it served the second Notice to Complete. The effectiveness of that Notice to Complete would have depended upon whether, at the time it was served, JQZ was itself in breach of the contract. The Lonergans have not alleged in this case that JQZ did breach any term of the contract. Even then, a breach of contract by JQZ would not have precluded the effectiveness of the Notice to Complete unless the consequences of the breach impeded the reasonable ability of the Lonergans to complete the contract: see HG & R Securities Pty Ltd v Sayer [2009] NSWSC 427; (2009) 14 BPR 27,045 at [96]-[104] (Ward J, as her Honour then was). In the present case, even if the making of the misleading or deceptive representations had been a breach of the contract, it seems unlikely that the consequences of the breach prevented the Lonergans from completing the contract. They did not suggest the contrary of that position in their solicitors' letter 8 November 2019 or any subsequent correspondence or their submissions in these proceedings. 4. But this is not a case where it has been necessary for the Lonergans to assert that JQZ was in breach of the contract, and instead the only question is whether JQZ should be ordered to repay the deposit to the Lonergans with interest, and whether relief should be granted to absolve the Lonergans from the effect of any technical breach of the contract or its termination by JQZ, assuming that it was the termination by JQZ that was the effective one. The Court could either include in the damages awarded under s 236 of the Australian Consumer Law the amount of any damages that would notionally have been ordered in favour of JQZ for breach of contract, or alternatively order under s 243 that JQZ not enforce clause 9.3 of the contract or pursue a claim for damages against the Lonergans. 5. In its submissions, JQZ referred to the following extract from the judgment of Allsop P (as his Honour then was, with whom Macfarlan JA and Sackville AJA agreed at [48] and [49] respectively) in Awad v Twin Creeks Properties Pty Limited [2012] NSWCA 200 (Awad) at [43]-[46], concerning a precursor to s 243 of the Australian Consumer Law: [43] ... Relief under the TPA, s 87, should be viewed not by reference to general law analogues but by reference to the rule of responsibility in the statute that is directed against misleading and deceptive conduct: Marks v GIO Australia Holdings Ltd [1998] HCA 69; 196 CLR 494 at 503-504, 510 and 528-529; Henville v Walker [2001] HCA 52; 206 CLR 459; Murphy v Overton Investments Pty Ltd [2004] HCA 3; 216 CLR 388 at 407; and see generally Bullabidgee Pty Ltd v McCleary [2011] NSWCA 259 at [64]-[72] and Akron Securities Ltd v Iliffe (1997) 41 NSWLR 353 at 364-367. Involved in that rule of responsibility is the public policy of protection of people in trade and commerce from being misled, and the width of the powers given by the TPA that are apt to be employed in a manner conformable with the just compensation or protection of the representee. Whether or not to grant a form of rescission under s 87, or to limit a plaintiff to damages under s 82, is a question in the nature of a discretion to be approached by reference to the facts of the particular case, the policy and underpinning of the TPA and the evaluative assessment of what is the appropriate relief to compensate for, or to prevent the likely suffering of, loss or damage "by" the conduct: see Kizbeau Pty Ltd v WG & B Pty Ltd [1995] HCA 4; 184 CLR 281 at 298; I & L Securities Pty Ltd v HTW Valuers (Brisbane) Pty Ltd [2002] HCA 41; 210 CLR 109 at 117-120 [19]-[29], 127-128 [52]-[57] and 142 [106]; and Akron Securities v Iliffe. An approach that is limited mechanically around a but for causation enquiry will be likely not to involve a full evaluative assessment of the appropriate relief. [44] If a defendant has contravened the norm of the statute and made misleading or deceptive representations that are operative to induce the representee to enter a contract, many factors may influence the question of relief. One of them could be the weight of the influence of the impugned conduct. It is not, however, a determinative factor upon which relief under s 87 turns. To view the matter thus is to constrict the exercise of power contemplated by the TPA. This is how the primary judge appears to have approached the matter. With respect, that was an error. [45] Here the findings of the primary judge were not that the Awads would still have purchased the land. Rather, he was unpersuaded that they would not have done so. The attempt to disentangle these kinds of operative factors on the mind of a representee in respect of the relevant decision may often be an unrewarding exercise. In some cases, however, the relevance of the impugned conduct may be seen only to have affected price, rather than entry at all into a contract. Each case must be assessed individually. Here, though the Peppers representation was not necessarily decisive, there was considerable difficulty in assessing any reliable sum for the value attributable to it. The somewhat unsatisfactory evidence of Mr Foley-Jennings reflects that difficulty. Ascribing a value to a vague but (on the findings) material inducement of this character to enter into a contract may also be an unrewarding task. The difficulty of extracting from the various inducing considerations a value for one ephemeral (though material) consideration may militate against the appropriateness of the task and in favour of an order in the nature of rescission. This might be seen to be particularly so where damages are reduced to reflect the operative contribution of the solicitor found to be negligent. [46] In the circumstances here, if I be wrong in relation to the Peppers representation, I would allow the second aspect of the Awads' appeal and make an order under s 87. The representation was operative; it was intended to be material; and it contributed to the decision to purchase. It was accepted that there was some loss or damage. It would be appropriate, in my view, to give relief conformable to the rule of responsibility and relieve the Awads of the purchase that they were induced to enter into by misleading or deceptive conduct, in particular where ascription of value is so difficult. Any such grant of relief would be subject to counter restitution being able to be made by them. 1. As I understand JQZ's submissions, JQZ accepted that if the impugned conduct on its part caused the Lonergans to enter the contract, the loss of the deposit and the liability for damages for breach of contract would prima facie be the Lonergans' loss arising from the misleading conduct: see written submissions at par 91 and (T 291.13). 2. However, JQZ submitted that relief under s 237 and s 243 of the Australian Consumer Law is discretionary, and one of the relevant factors is whether the Lonergans should be restricted to a claim for damages under s 236, relying on Awad at [43]. JQZ submitted that, if the Lonergans had made a damages claim under s 236, the damages would be subject to reduction for contributory negligence under s 137B of the Competition and Consumer Act. 3. JQZ submitted that the Lonergans' lack of care for their own interests contributed significantly to their loss, and that they were very careless with respect to the privacy screens representation. They failed to check or confirm their understanding through their solicitor or even tell their solicitor about this material matter. They decided to rely on Mr Zhu's conduct, as JQZ's agent, notwithstanding that Mr Lonergan knew of the limitations to Mr Zhu's role, and they ignored the other information available to them which would have informed them that they could not rely on such a representation. JQZ submitted that the responsibility for any loss suffered by the Lonergans should be apportioned 50-70% to the Lonergans, and that their damages should be reduced by that amount. 4. To some degree, the issue of the damages that should be awarded to the Lonergans has been complicated by the fact that, in their amended statement of claim, the Lonergans sought damages for breach of contract in prayer 3, and in the new prayer 4 they specifically sought orders that JQZ refund the deposit to them and that JQZ be restrained from enforcing clause 9 of the contract under relevant provisions of the Australian Consumer Law. As I have explained above, in a somewhat unconventional way, the Lonergans pleaded their Australian Consumer Law claim by reference to allegations in their defence to JQZ's amended cross claim. Nonetheless, the Lonergans pleaded a claim for relief under the Australian Consumer Law, and if the Court were to decide that an award of damages is the appropriate form of relief, then that remedy would be included in prayer 6 seeking further or other order. 5. The effect of JQZ's submission is, as I understand it, that even though the Lonergans did not specifically claim damages for misleading or deceptive conduct, they could have done so, and that would be the appropriate relief to grant in the exercise of the Court's discretion. That being so, the Court should reduce the damages payable to the Lonergans within the submitted range because of their contributory negligence. 6. I do not accept that JQZ has established that any loss suffered by the Lonergans was caused in part by their own negligence. They were, in my view, entitled to accept the privacy screens representation, as its substance was only to identify the Unit as being on a particular level of Tower A that would be constructed with black privacy screens installed. Constructing large strata unit developments with unit numbers signifying floor levels, while entirely omitting some levels, might happen in certain cultures, but it is a course that would be utterly unexpected by prospective purchasers who were members of the general Australian public. I accept the Lonergans' case that, as they were told that the Unit would be on Level 18 by the agent retained by JQZ to procure purchasers for the units, they were entitled to assume that the agent's advice on so simple a matter would be true. 7. JQZ has not made any submission as to what the Lonergans could have done before they entered the contract to ascertain whether structural columns would be constructed in the Unit and, if so, where those columns were likely to be sited. 8. I do not, however, consider that the submission that the damages payable to the Lonergans should be reduced because of their contributory negligence is available to JQZ on the pleadings, as a party who wishes to rely upon a claim of contributory negligence should allege it in the party's pleadings. A party should not be free at the end of the hearing to piece together a case of contributory negligence where the other party has not been given an opportunity to contest that claim based on particulars of the party's conduct that is alleged to have been negligent and contributed to the loss suffered by the party. In this case, there was no contest at the hearing as to whether the Lonergans had contributed to their loss by their own negligence. 9. For the reasons given above, I find that the Lonergans are entitled to relief under the Australian Consumer Law that has the effect that JQZ is ordered to repay to the Lonergans their deposit plus interest and JQZ is precluded from prosecuting a claim against the Lonergans under clause 9.3 of the contract or otherwise for breach of the contract. The parties are directed to confer and to submit short minutes of order to my Associate to give effect to these reasons. 10. The Lonergans are entitled to an order that JQZ pay their costs of the proceedings. Costs should be payable on the ordinary basis unless there is a proper ground for the costs to be payable on some other basis. If the Lonergans wish to claim that their costs should be payable other than on the ordinary basis, they should promptly inform my Associate so that case management orders can be made to deal with that issue. Remaining issues in the proceedings 1. The parties contested with considerable vigour numerous issues that only arose if the Lonergans failed in their misleading or deceptive conduct claim for the relief that the Court has decided they are entitled to receive. Those issues are: * Was the second Notice to Complete ineffective because it was not addressed to both of the Lonergans? * If the second Notice to Complete would otherwise be ineffective, are the Lonergans estopped by reason of a conventional estoppel from denying that the second Notice to Complete was effective? * If the second Notice to Complete was effective (either by itself or pursuant to an estoppel) was JQZ's Notice of Termination served on 22 January 2020 effective to terminate the contract? * Did the Lonergans otherwise repudiate the contract entitling JQZ to terminate by JQZ's Notice of Termination served on 22 January 2020? * Did JQZ, by serving the second Notice to Complete, make an election to affirm the contract such as to prevent JQZ relying on any alleged repudiatory conduct of the Lonergans occurring before the date of the second Notice to Complete? * If JQZ's Notice of Termination was not effective to terminate the contract, did JQZ repudiate the contract by serving it, and, if so, should the Lonergans be precluded from relying on JQZ's repudiation of the contract because they would be taking unconscientious advantage of JQZ's mistake or surprise? * Was the Lonergans' Notice of Termination of 30 January 2020 effective to terminate the contract? * If the Lonergans' Notice of Termination of 30 January 2020 was not effective to terminate the contract, did the Lonergans on 30 January 2020 or by their subsequent conduct in demanding the return of the deposit evince an intention not to be bound by the contract amounting to a repudiation of it? * Did JQZ after 30 January 2020 accept any repudiation by the Lonergans and effectively terminate the contract? * If JQZ did effectively terminate the contract after 30 January 2020, when did that occur as against Ms Lonergan and Mr Lonergan? * If JQZ's termination of the contract was effective, how should JQZ's damages be calculated? * Should the Court exercise its discretion under s 55(2A) of the Conveyancing Act 1919 (NSW) to order the return of all or part of the deposit on the basis that it is unjust and inequitable to permit JQZ to retain it in circumstances where the Lonergans became bound to purchase a property that was different in a fundamental respect from what they expected to receive under the contract because of the privacy screens representation or the columns representation? 1. If my finding on the Lonergans' misleading or deceptive conduct case stands, none of these conceptually complex issues (which have taken more than a page simply to state) will require determination. In Boensch v Pascoe (2019) 268 CLR 593 at 600-1; [2019] HCA 49 at [7]-[8], Kiefel CJ, Gageler and Keane JJ implied that trial judges should decide issues that do not require determination not arising in the light of other findings made by the Court, at least where that will facilitate the determination of appeals without the risk of retrials becoming necessary. In Massoud v Nationwide News Pty Ltd; Massoud v Fox Sports Australia Pty Ltd [2022] NSWCA 150 at [35], Leeming JA (with whom Mitchelmore JA and Simpson AJA agreed at [293] and [294] respectively) said: [35] … Her Honour is not to be criticised for making notional findings on the multitude of issues presented by the parties. Doing so accords with the conventional approach in trial courts. In Gulic v Boral Transport Ltd [2016] NSWCA 269 at [7], the general rule was enunciated that "a judge should determine all issues before him or her to assist the appeal process and obviate recourse to a new trial". See further PPK Willoughby Pty Ltd v Baird [2021] NSWCA 312 at [15] and the cases there cited, where it was said that while a litigant is not entitled to insist that a trial court determine non-dispositive issues and give reasons for doing so, nevertheless when a court chooses not to do so it is generally advisable to explain why that course is being taken. ... 1. I do not propose to decide the remaining issues that I have set out above. My principal reason is that it is obvious from the length and complexity of the reasons given for determining the Lonergans' misleading or deceptive claim that it has taken considerable judicial effort to determine that claim in a proper way. The determination of the remaining issues that do not now arise would require at least the same amount of judicial effort. I cannot justify the time and effort involved given that it would prevent the Court from determining in a timely way many other claims that are awaiting judgment. 2. To reduce the risk of judicial inefficiency if my determination of the misleading or deceptive conduct claim is overturned, I have set out comprehensively above the facts that have been established by the evidence. 3. I think it is warranted that I make the following additional observations. It is clear from the evidence that Mr Lonergan received actual notice of both Notices to Complete. He said in evidence that he was offended that his name was not on either notice as an addressee. Mr Lonergan gave instructions to Hunt & Hunt on behalf of the Lonergans in response to both notices. 4. The issue of whether the second Notice to Complete was effective is in my view a question of law and depends upon whether it is an essential formal requirement of a notice to complete that it be addressed to all the parties to the contract who are under an obligation to complete. The Lonergans' case on this issue relied upon the judgment of Hamilton J in Ng v Chong [2005] NSWSC 270; (2005) 12 BPR 22,903. There may be grounds for distinguishing that decision. The validity of the conclusion reached by his Honour may also, with respect, be a contentious question. I do not think that it is appropriate for a judge at first instance in this Court to express conclusions on these questions by way of obiter dictum, and it is not warranted in the circumstances that I expend the time necessary to consider them properly, and the advancement of the law will not be assisted by my expressing insufficiently considered personal views. 5. In relation to JQZ's conventional estoppel response, the evidence established that the two notices to complete were addressed solely to Ms Lonergan (as well as Hunt & Hunt) because of an administrative error in JQZ's solicitors' office because of the purchaser's details not being adequately updated after Ms Lonergan terminated the first contract under which she was the sole purchaser. On the issue of whether a conventional assumption existed as between JQZ and the Lonergans through their solicitors, it should be noted that the Lonergans' solicitor responded to the two notices to complete using the expressions "our client" and "her", as if he was only acting on behalf of Ms Lonergan: see [159]-[169] above. 6. While the remaining issues that I have not determined probably give rise to complex questions of law, it is unlikely that their determination will, if that becomes necessary, depend upon many significant facts that I have not determined, or that are not obviously established by the evidence. ********** DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 27 October 2022