[2001] ANZ ConvR 354 Reported Decision : (2001) NSW ConvR 55-981 [2001] NSWSC 85 [2001] ACL Rep 335 NSW 24 New South Wales Supreme Court CITATION : Clancy v Prince & 2 Ors [2001] NSWSC 85 revised - 2/03/2001 CURRENT JURISDICTION: Equity FILE NUMBER(S) : SC 2184/98 HEARING DATE(S) : 11/08/00, 15/08/00, 16/08/00 JUDGMENT DATE : 26 February 2001 Estelle Muriel Clancy (Plaintiff; Defendant to the First Cross-Claim) PARTIES : Colin Prince (First Defendant; Cross-Claimant - First Cross-Claim; Cross-Claimant - Second Cross-Claim; Defendant to Third Cross-Claim) Lorie Corrigan Real Estate Pty Ltd ACN 068 351 477 (Second Defendant; First Defendant to Second Cross-Claim; Cross-Claimant - Third Cross-Claim) Loriena Mavis Corrigan (Third Defendant; Second Defendant to Second Cross-Claim) JUDGMENT OF : Santow J C F Hodgson (Plaintiff) COUNSEL : P E King (First Defendant) P T Taylor (Second and Third Defendants) Mark Fraser (Plaintiff) SOLICITORS : Heidtman & Co (First Defendant) Murray Stewart & Fogarty (Second and Third Defendants) CATCHWORDS : CONVEYANCING — Contract of sale of strata titled property — Failure to disclose by vendor or agent to unaware purchaser that laneway contiguous to garage not a public laneway — Appearance of public laneway — Purchaser cancels contract on that account there being no right of way provided free of cost instead — Vendor treats purchaser as having repudiated contract — Misleading advertisements suggesting public laneway or other access — Fraudulent misrepresentation and breach of s42 of Fair Trading Act 1987 by vendor and breach of s52 of Trade Practices Act 1974 (Cth) by estate agent acting on behalf of vendor — agency principles and responsibility of principal — Indemnity and contribution — No contribution required from estate agent — Accessory liability under s75B of Trade Practices Act. Conveyancing Act 1919 s55(2A); s88K Fair Trading Act 1987 (NSW) s42; s72 LEGISLATION CITED : Law Reform (Miscellaneous Provisions) Act 1946 (NSW) s6 Strata Schemes (Freehold Development) Act 1973 (NSW) s20 Trade Practices Act 1974 (Cth) s52; s72; s75; s87 Argy v Blunts and Lane Cove Real Estate (1990) 26 FCR 112 Australian Steel & Mining Corporation Pty Limited v Corben [1974] 2 NSWLR 202 Bialkower v Acohs Pty Ltd and Others (1998) 83 FCR 1 BP Petroleum Development Ltd [v Esso Petroleum Co [1987] SLT 345] Burke v LFOT Pty Ltd [2000] FCA 1155 Civil Service Co-operative Society of Victoria Ltd v Blyth (1914) 17 CLR 601 Clark Equipment Australia Limited v Covcat Pty Ltd (1987) 71 ALR 367 Commercial Banking Company of Sydney Limited v R H Brown & Co (1972) 126 CLR 337 Derry v Peek (1889) 14 App Cas 337 Duke Group Ltd v Pilmer [No 2] ([2000] SASC 418, 8 December 2000, unreported) Edgington v Fitzmaurice (1885) 29 ChD 459 Hamilton v Whitehead (1988) 166 CLR 121 CASES CITED : Hanave v LFOT Pty Ltd (1999) 168 ALR 318 Heydon v NRMA Ltd & Ors (NSWCA 374, 21 December 2000, unreported) Holman v Johnson (1775) 1 Cowp 341 at 343; [1775] 98 ER 1120 Jennings v Zilahi-Kiss (1972) 2 SASR 493 Lezam Pty Ltd v Seabridge Australia Pty Ltd (1992) 35 FCR 535 Lloyd v Grace, Smith & Co [1912] AC 716 Mallan v Lee (1949) 80 CLR 198 Neilsen v Hempston Holdings Pty Limited (1986) 65 ALR 302 NRMA v Morgan (1999) 31 ACSR 435 Oraka Pty Ltd v Leda Holdings Ltd (1997) ATPR 41-558 Oudaille v Lawson [1972] NZLR 259 Pemberton v Southwark LBC [2000] 1 WLR 1672 Street & Hills v Retravision (NSW) Pty Ltd (1995) 56 FCR 588 DECISION : Plaintiff entitled to retain deposit with damages. IN THE SUPREME COURT OF NEW SOUTH WALES IN EQUITY SANTOW J No. 2184/98 Estelle Muriel Clancy Plaintiff Colin Prince First Defendant Lorie Corrigan Real Estate Pty Ltd ACN 068 351 477 Second Defendant Loriena Mavis Corrigan Third Defendant Colin Prince Cross-Claimant (First Cross-Claim) Estelle Muriel Clancy Defendant to First Cross-Claim Colin Prince Cross-Claimant (Second Cross-Claim) Lorie Corrigan Real Estate Pty Ltd ACN 068 351 477 First Defendant to Second Cross-Claim Loriena Mavis Corrigan Second Defendant to Second Cross-Claim Lorie Corrigan Real Estate Pty Ltd ACN 068 351 477 Cross-Claimant (Third Cross-Claim) Colin Prince Defendant to Third Cross-Claim JUDGMENT 26 February 2001 Tables of Contents Page INTRODUCTION AND OVERVIEW SALIENT FACTS Elaboration of pre-contract events Conclusion Contractual provisions Post-contract events THE LEGAL QUESTIONS Question 1: Fraudulent misrepresentation: Mr Prince Conclusion Question 2: Misleading conduct under Statute: Mr Prince. Conclusion Question 2: Misleading conduct under Statute: LCRE and Mrs Corrigan and Mr Prince. Conclusion Question 4: Rescission Question 5: Section 55(2A) of the Conveyancing Act 1919 Question 6: Cross-claims — indemnity and contribution Conclusion OVERALL CONCLUSION AND ORDERS INTRODUCTION AND OVERVIEW 1 The Plaintiff, Estelle Muriel Clancy, seeks, by way of primary relief, a declaration that she has validly rescinded a contract ("the contract") for sale made with the vendor Colin Prince ("the First Defendant") for the purchase by her of a residential property. The property is at 1/98 Spofforth Street, Cremorne (Folio Identifier 1/SP17513) ("the Property"). The Plaintiff rescinded the contract when it was discovered that there was no legal right to access the Property and its carport from the back laneway as it was not a public but a private road. Thereupon the First Defendant forfeited the deposit and subsequently resold. The Plaintiff seeks in consequence refund of her deposit together with damages, interest and costs, as elaborated in the attached schedules, contending that she was entitled to rescind. 2 The Plaintiff also seeks, pursuant to s87 of the Trade Practices Act 1974 (Cth) and/or s72 of the Fair Trading Act 1987 (NSW), inter alia, a declaration that the contract is void and orders that the contract be set aside ab initio, with such other order or relief as the Court thinks fit. 3 That property (Lot 1) was on strata title to which was attached common property. On that common property (denoted "A") was a garage. This was the garage granted to the exclusive use of the proprietor of Lot 1. The by-laws so providing were annexed to the contract. 4 She sues Mr Prince upon representations, claimed to be made by him directly or through his estate agent and which she deems to have relied upon. These were to the effect that access was available to the Property and its carport via a rear lane constituting a public laneway (not an easement). She claims that those representations were (a) fraudulent and false at general law, and/or (b) misleading or deceptive or likely to mislead or deceive so as to constitute conduct in breach of s42 of the Fair Trading Act 1987. 5 The First Defendant cross-claims against the Plaintiff for damages for the allegedly wrongful repudiation by the Plaintiff. 6 The vendor, Mr Colin Prince, owned the Property at all material times. 7 The Second Defendant, Lorie Corrigan Real Estate Pty Limited, ("LCRE" or "the Agent") was retained by the First Defendant to act as his agent for the purposes of the sale of the Property on 28 June, 1997 through a Selling Agency Agreement. The principal of that Agent is the Third Defendant Mrs Corrigan ("Mrs Corrigan"). The Plaintiff also sues the Agent LCRE in relation to those alleged representations, by reason of their being misleading or deceptive within s52 of the Trade Practices Act 1974 ("TPA") (it being concededly a corporation engaged in trade or commerce). The Plaintiff seeks a declaration that Mr Prince and Mrs Corrigan were "involved" in the contravention by LCRE of s52, pursuant to s75B of the TPA. She seeks other consequential relief. 8 As between the three Defendants inter se, there is a dispute as to whether, if the representations were made by the Second and Third Defendants, they were made with or without the First Defendant's authority. Each claims indemnity against the other for the amount of any judgment. 9 The three Defendants plead their respective cases as follows. The First Defendant denies that the claimed representations were made by him and does not admit that the representations said to have been made by the Second and Third Defendants were made and contends that such representations as he did make were true. He also denies that the Plaintiff relied upon or was induced to enter into the contract by the claimed representations and himself relies upon the Plaintiff's express acknowledgment in the contract that the Plaintiff did not (a) rely upon any warranty or representation by the First Defendant or any person on his behalf, and (b) relied entirely upon her own enquiries and/or her inspection of the property. He likewise denies any conduct by him in breach of s42 of the Fair Trading Act 1987 (NSW). Finally he denies that the Plaintiff has suffered any loss or damage, though admitting he retained the deposit, on the basis that the Plaintiff's rescission was a wrongful repudiation of the contract. The First Defendant cross-claims for damage suffered from the alleged repudiation. 10 The Second and Third Defendants similarly deny the representations attributable to all or any of the Defendants, and deny any misleading or deceptive conduct on their respective parts within s52 of the Trade Practices Act 1974 (Cth) 11 These claims arise in circumstances where the Second and Third Defendants also claim in the alternative contribution from the First Defendant towards any verdict against them. salient FACTs 12 The majority of the facts in this case are not in dispute, though certain critical conversations are. Thus to be retained in the file is a comprehensive agreed chronology initialled by me for identification. On 31 October, 1997 the Plaintiff exchanged contracts for the purchase of the Property with the First Defendant. At the time and since 1992, the First Defendant had been the registered proprietor of the Property. On 31 October 1997, a deposit of $38,500 ("the deposit") was paid by the Plaintiff and that deposit was released to the Defendant the same day or shortly thereafter. 13 The Property is part of a strata-titled duplex, the other portion being known as 2/98 Spofforth Street, Cremorne. In this duplex the Property (being 1/98 Spofforth St) forms the ground floor level and 2/98 Spofforth Street forms the upper level. The Property fronts Spofforth Street with pedestrian entry only, via a footbridge. Vehicular access is not possible from the front of the property. At the rear of the property is a two door carport with roller doors on common property which abuts the laneway. That garage was for the exclusive use of the proprietor of Lot 1, the by-laws so providing being annexed to the later sales contract. Though by January 1998, if not before, there were poles and a chain in the way of access (PX2), those were not present prior to exchange of contracts, with the roller doors constructed instead of a fence. There was thus no means of access to the carport other than by a laneway. [PX2- EMC1 and EMC2, PX1 page 45, 46, 94 and MAF 26]. To the knowledge of the vendor (certainly from about 1992 and it would appear earlier from 1988) the laneway was and remained privately owned with no legal right to public access, though giving the opposite impression. Thus the rear lane looked like a public road, there were traffic signs, but no signs barring access or indicating it was private, it was a bitumen laneway, it gave access to a large apartment block from it and it leads to a parking area for various shops. Witnesses called by the Plaintiff, as well as Mrs Corrigan an experienced real estate agent mistakenly concluded it was public. It is not disputed that the Property has never had a legal right of way to access the laneway or carport or the benefit of a public lane. 14 From 28 June, 1997, and up to the time of exchange of contracts, Mr Prince retained the Second Defendant, LCRE as his selling agent. The Third Defendant, Mrs Corrigan, was a director, employee and servant or agent of LCRE and a qualified real estate agent. She, relevantly, attended to the advertising, marketing and selling of the Property. 15 Mrs Clancy maintains that prior to exchange of contracts, representations regarding the use of the car port and access to the Property to the effect of those set out in paragraph 11 of the Amended Statement of Claim were made to her by the Defendants. Paragraph 12 of the Amended Statement of Claim sets out the particulars of how the representations referred to are alleged to have been made. The Plaintiff contends that in reliance upon the representations and induced thereby she entered into the Contract. I quote these pleaded paragraphs below: "11. Prior to 31 October 1997 each and all of Mr Prince, Ms Corrigan and LCRE represented to Mrs Clancy, or made representations to her to the effect that: (a) The Carport was accessible to and useable by the owner of the Property and/or his or her nominees and/or licensees; (b) The Carport was able to be used for the storage of a motor vehicle on the Property; (c) The Carport was accessible across the rear boundary of the Property; (d) Access could be had to the Carport via a laneway (hereafter called "the Laneway") to the rear of the Property; (e) There was no impediment to access to the Carport from the Laneway being exercised by the owner of the Property and his or her nominees and/or licensees; (f) On completion of her purchase of the Property, the Plaintiff and her nominees and/or licensees would be able to access the Carport without impediment; (hereafter jointly referred to as "the Representations"). 12. The Representations were: (a) partly express and partly implied; (b) made by silence; and/or (c) made by silence and/or conduct of Mr Prince and/or Ms Corrigan and/or LCRE. Particulars As to the express parts (i) Advertisements for the sale of the Property placed in the Sydney Morning Herald newspaper by LCRE and/or Ms Corrigan. (ia) Conversation between Ms Corrigan and Anna Clancy on or about 25 October 1997 (ii) Brochure entitled "1/98 Spofforth Street Cremorne" given to Mrs Clancy by Ms Corrigan. (iii) Conversation between Mrs Clancy, Therese Clancy and Ms Corrigan in mid-late October, 1997 at the Property. (iv) The actions of LCRE and/or Ms Corrigan were performed on behalf of and/or as the agent of Mr Prince. As to the implied parts (i) In mid-late October, 1997 Mrs Clancy inspected the Property with Therese Clancy in the presence of Ms Corrigan. (ii) Mrs Clancy was shown the Carport by Ms Corrigan. (iii) The Carport door abutted the Laneway at the rear of the Property. (iv) There were no means of access to the Carport from outside of the Property except via the Laneway. (v) Prior to, or on, 31 October 1997 Mrs Clancy was not informed by the Defendants: (a) that the Laneway was not a public laneway; or (b) that there was, or might be, any restriction upon or possible impediment to the access that could be exercised by the owner of the Property and/or his or her nominees and/or licensees, and by her and her nominees and/or licensees should she purchase the Property, to the Carport from the Laneway or otherwise. (vi) The actions of LCRE and/or Ms Corrigan were performed on behalf of and/or as the agent of Mr Prince. As to the silence and the conduct The Plaintiff repeats the particulars set out above." 16 There is no allegation made that Mr Prince had any conversation with Mrs Clancy, or met her, prior to the exchange of contracts. The allegation against Mr Prince, in addition to the representations conveyed by the physical features of the Property and its surroundings, is first that the various actions performed by LCRE and/or Mrs Corrigan were performed on his behalf and/or as his agent and that in those circumstances he is responsible for them, in the event that they prove to be false, as it is alleged they did. 17 In relation to the physical features of the Property and its surroundings, these were known to Mr Prince when he put the Property on the market for sale. Indeed it is correctly contended that he caused them to be made the more prominent by having the carport and roller doors constructed in place of a fence as existed when he purchased the Property and by taking no positive steps to qualify the representations regarding access thus conveyed. 18 As against Mr Prince, it is further alleged that these representations made by him (directly or through his agent as referred to above), were false to his knowledge or were made by him (directly or through his agent) recklessly or not caring whether they were true or false. 19 There is little factual dispute over what the Plaintiff was shown and told by the Defendants during the events leading to the exchange of contracts. The dates and times the representations were made may differ between the parties but the fact that they happened is not essentially disputed. There is however significant factual dispute as between Mr Prince on the one hand and LCRE and Mrs Corrigan on the other. 20 Then shortly prior to the designated date for completion (28 November 1997) of the contract between Mrs Clancy and Mr Prince, Mrs Clancy was informed by her solicitor that there was difficulty regarding legal access to the lane from the Property. This information came to his knowledge via a chain of telephone conversations initiated by Mr Gordon Mock, one of the owners of 2/98 Spofforth Street, Cremorne. Ultimately, settlement of the contract for the purchase of the Property did not proceed and, by letter dated 16 December, 1997 from Mr Mark Fraser, solicitor, to Messrs. Sidaways, solicitors for the First Defendant, Mrs Clancy elected to rescind the contract (see Exhibit PX1, pp130-131). In earlier correspondence from Mr Fraser to Messrs. Sidaways, an entitlement on behalf of Mrs Clancy to rescind upon the grounds of fraudulent misrepresentation or pursuant to the Trade Practices Act or Fair Trading Act, had been alleged (see letters dated 11 December, 1997 and 12 December, 1997, Exhibit PX1, pp125 and 127-178). Mr Prince disputes the validity of this rescission and claims that it amounts to a repudiation of the contract by Mrs Clancy which he has accepted (see letter dated 18 December, 1997 from Messrs. Sidaways, solicitors, to Mr Mark Fraser, solicitor — Exhibit PX1, p132). 21 Mr Prince refused to return the deposit moneys to Mrs Clancy (see Exhibit PX1, p133). Ultimately, the Property was sold to another purchaser (see contract dated 12 November, 1998 between Mr Prince and Slop Pty Limited - Exhibit PX1). A portion of the settlement moneys in relation to that sale were dealt with by agreement between Mrs Clancy and Mr Prince in the manner set out in the affidavit sworn 4 August, 2000 by Mr Fraser. It is not submitted by the Plaintiff that this dealing with those moneys constitutes any admission by either Mr Prince or by Mrs Clancy as to the merits of their respective positions in these proceedings. Elaboration of pre-contract events 22 I turn now to the details of events leading up to the contract and with certain matters going to credit; where necessary I indicate my findings on facts denied or not admitted. 23 The First Defendant first purchased Lots 1 and 2 at 98 Spofforth Street, Cremorne completing in December 1992; Affidavit Colin Prince 17 July 2000, para 3. The solicitors for the First Defendant, Sidaway and Partners at that time, claimed that the then vendor to Mr Prince was liable for misleading and deceptive conduct concerning an advertisement which failed to disclose the lack of public access over the laneway at the rear of the premises at 98 Spofforth Street. [D3X9, T, 80.25-.30]. After a reduction in the purchase price because of the claimed misrepresentation, the sale was completed. The First Defendant then sold 2/98 Spofforth Street to Mr Mock who completed that purchase on 21 December, 1992; Affidavit Gordon Mock 7 May 1998, para 1. It appears 1/98 Spofforth Street was then let to tenants for a number of years after 1992. 24 The First Defendant claims that Mrs Corrigan first learned of the lack of legal access to the laneway in December 1992; Affidavit Colin Prince 28 July 2000, para 4. However, Mrs Corrigan denies even meeting the First Defendant prior to 1997; T, 126.15-.30. There is no necessity to resolve that issue, but the fact that Mrs Corrigan contracted with a Karen Llatse in entering the 1992 Selling Agency Agreement of 2/98 Spofforth Street, rather than with Mr Prince [Affidavit Colin Prince 15 August 2000, Annexure A], tends to support Mrs Corrigan's account. Indeed in areas of credit, I found Mr Prince a less than reliable witness. This emerged when he gave evidence about his own knowledge of the lack of legal access when purchasing the Property in 1992. His letter of 9 December 1992 falsely claims he was misled by an advertisement, evidently in order to gain a financial advantage to himself in reduced purchase price. I accept as essentially uncontradicted what is put by the Plaintiff in her written submissions of 4 September 2000, para 4 (and see also the further illustrations of his evidence being self-serving and evasive at T, 94.6-.8 and T, 108.15-.28 regarding his understanding of "rear lane access" and his evidence at T, 114.14-.29). 25 Thus Mr Prince had to concede that at some time in 1992 prior to his entering into the contract to purchase the Property and the other half of the duplex, he became aware of the lack of a legal entitlement to access from the rear (T, 79.3-.22, 80.25-.32, 81.1-.10, 83.13-.18 and 83.57 — 84.1). Even this was not strictly accurate as he knew from much earlier, about 1988, that the lane was other than a public laneway. From that knowledge, he therefore knew well prior to contracting to purchase the Property and the other half of the duplex that a legal right-of-way would be needed to utilise the laneway and that without such a legal right, access could be cut off at any time (T, 112.8-.58). Notwithstanding this prior knowledge, Mr Prince, through his then solicitors, by a letter dated 9 December, 1992 (Exhibit D3X9) claimed that he had been misled by an advertisement dated 6 August, 1992, which made reference to access via a Council lane at the rear of the Property, to enter into contracts for purchase of the Property and the other half of the duplex on 7 August, 1992. Mr Prince's initial attempts to deny the falsity of those allegations in Exhibit D3X9 in cross-examination (T, 83.20 — 85.13, 101.31 — 102.14 and, 112.26 — 114.15) further detracts from his credit. For example, the following question and answer appear at T, 113.27-.31: "Q: And it is fair to say that you were not looking at advertisements the day before exchange to work out whether or not you would enter into the contract? That is fair, isn't it? A: Yes, that is fair." Notwithstanding, the following question and answer are recorded at T, 114.3-.7: "Q: And you would not have relied upon an advertisement the day before exchange, given the lengthy period you describe regarding investigating and negotiating a price for exchange? A: It was one of the items I relied upon." The two quoted questions and answers cannot sit together without conflict and illustrate the prevarication here and elsewhere in his evidence. 26 A concrete slab was laid on the Property sometime between late 1992 and early 1993. In approximately November 1995 a carport with a roller door for each car space was constructed over the concrete slab at the rear of the Property and 2/98 Spofforth Street. 27 In June 1997 the First Defendant commenced efforts to sell 1/98 Spofforth Street, initially by retaining Laing & Simmons on about 6 June, 1997 and then the Agent on 28 June, 1997. It is not clear why Laing & Simmons ceased to act for the First Defendant. It was suggested that it was over a disagreement concerning the non-disclosure by the First Defendant of the lack of legal access to the laneway; Affidavit C Park 1 June 1999, para 5; T, 90.5 — 91.50. This is not clear on the evidence and it is not necessary to resolve it. 28 There is some evidence that a for sale sign was put up outside the Property . It is alleged the First Defendant swiftly took down the sign displayed initially by Laing and Simmons and later by the Agent. In explanation the First Defendant cited a fear of burglars who would know the unit was empty. The Second and Third Defendants allege that this was so the owners of the lane, Eaton and Sons, would not notify a potential buyer of the lane situation. [T, 91.55 — 92.30]. Certainly that is, I am satisfied, an inference open on the whole of the evidence. 29 It is disputed between the First and Second Defendants whether a conversation occurred on 25 June, 1997 between the First Defendant and Mrs Corrigan over whether there was a legal right of access at the rear of the property; Affidavit Colin Prince 28 July 2000 para 5; Affidavit Loriena Corrigan 10 August 2000, para 5 and also 18 August 1999, para 5. The First Defendant claims that he explained to Mrs Corrigan that whilst there was some access to the rear of the property it was not legal; Affidavit Colin Prince 28 July 2000, para 6. Mrs Corrigan alleges that after Mr Prince explained that he was going to put a roller door on the back carport — with no mention of the lack of rear access — Mrs Corrigan alleges that she asked if she should market the property with rear lane access to which the Defendant consented; Affidavit Loriena Corrigan 19 August 1999, para 5. I accept that evidence for reasons elaborated below. 30 Thereafter each week she sent Mr Prince a copy of the advertisements, as was not denied by Mr Prince, with what I am satisfied was a misleading reference to "two street entrance"; see Affidavits of Mrs Corrigan and the advertisements themselves. 31 I prefer Mrs Corrigan's account over Mr Prince's for reasons elaborated below. That said I do nonetheless exercise some caution with Mrs Corrigan's evidence, having regard to the instance where she was less than candid with Mrs Clancy, elaborated below. I accept Mrs Corrigan was not made aware of the lack of continuing rear lane access on 25 June 1997, and was not so aware until 23 October 1997 when she first learned of this from Sandi Cleary's solicitor (Sandi Cleary being a potential buyer); affidavit of Mrs Corrigan 18 August 1999 and T, 136.45 — 137.20. As is clear from the evidence, though Mr Prince asked for changes to the advertisements, these were never to remove the reference implying rear lane access. That is a point strongly favouring Mrs Corrigan's version of events over his, as also the fact that Mr Prince did not tell other prospective buyers of the lack of rear lane access. These were Catherine Park (affidavit 1 June 1999, para 5), Patrick Kerr and Mr and Mrs Clarke (affidavit P Kerr 14 August 2000, paras 5, 8). Nor was Sandi Cleary told, who was a potential buyer. Thus, as I elaborate in 36 below, Ms Cleary had negotiated an agreed price but became aware thereafter of the lack of a legal right to rear access. Having raised it with Mr Prince, she refused to proceed with the purchase; affidavit S M Cleary 1 June 1999, paras 12 and 14. 32 For reasons already stated, I did not find Mr Prince a reliable or satisfactory witness; further illustrations of that are found in the written submissions of the Second and Third Defendants of 11 October 2000, paras 15 to 19. In contrast, I found the Plaintiff a truthful witness. Mrs Clancy was careful not to claim a greater recollection of events than she actually had, nor did she overstate her case. Her recollection was reasonably good though not precise on all aspects. She was not at all shaken in cross-examination. Mrs Corrigan appeared uncomfortable, and with reason, at her own lack of candour in her dealings on behalf of Mr Prince with Mrs Clancy, evidently feeling herself constrained by her principal's instructions. Thus at T, 141.10-.40, Mrs Corrigan concedes the following: "Q: And you say in the letter that Mrs Clancy came to have a look at the property at a time she had apparently seen one of the advertisements? A: Yes Q: So when Mrs Clancy came to see the property, you would have been aware she read one of the ads which you then knew were incorrect? A: Yes Q: And you did not take any steps to make sure that Mrs Clancy understood that the advertisements were incorrect, did you? A: No, because I was following the vendor's instructions. …. Q: And you were of the view that Mrs Clancy understood she could use that public lane to access the garage? A: Only because I had instructions the right of way was going to be fixed. [T, 141.10-.40]" Nonetheless, though her evidence reflected that discomfiture, I found that her answers were on the whole reasonably frank, certainly more so than Mr Prince. 33 Turning to Mr Prince his explanation of his conduct in relation to the LCRE advertisements is damaging to both his credit and his case. He concedes he knew of the lack of access since December 1992, he is sent the advertisements by Mrs Corrigan, he concedes the advertisements were potentially misleading and notwithstanding that he claims at one point to have told Mrs Corrigan to change the advertisements. I am unconvinced that as borne out by his evident failure to take proper steps to inform potential purchasers of the position, despite his contending otherwise. In reality he, having consented to the marketing with rear lane access and knowing of the advertisements sent to him by LCRE, took no effective steps, as he could have done, to cause such advertisements in their misleading form to cease. This is a clear case of a principal allowing advertisements to be made not caring whether they were true or false, deliberately shutting his eyes to the deceit they perpetrated; see T, 92.30 - 97.28 and T, 109.4 — 111.20. Thus at T, 110.1 to 110.52 appears the following especially damaging passage of cross-examination of Mr Prince: "Q. Now, you didn't instruct Mrs Corrigan to change the terms of the advertisement so they didn't present what might be a misleading picture, did you? A. I didn't. Q. You could have done that? A. I could have. Q. And Mrs Corrigan didn't undertake to you to correct any misapprehension that flowed from the advertisements, did she? A. She told me she would handle the marketing and she was an expert in that regard. Q. She would do as she saw fit? A. She would handle the marketing, yes. Q. She would so as she saw fit? A. I don't recall her using those words. Q. And you are aware, aren't you, Mrs Corrigan continued to advertise in terms such as we have discussed up to 25 October 1997? A. With some minor changes. Q. But the general thrust of the advertising in almost every case was there was, in effect, legal access to the rear of the property? A. Yes, there were one, I think, two or three advertisements that didn't mention that fact. Q. And you say that you were prepared to let Mrs Corrigan place advertisements which you told her might well be misleading? A. I didn't tell Mrs Corrigan they might well be misleading. I told her I thought they could have been misconstrued and I wanted her to be clear on the terms of the contract and the legal provisions of the right of way. Q. So, you say that you had an agent who was placing ads which could be construed contrary to her understanding of the rights of access and you were relying on that agent to then take further steps to correct any misapprehension that might flow from the advertisements? A. Yes, I did. That was, in fact, explaining the legal position as and when required. Q. If you are relying on an agent to act in such circumstances, you would agree, normally, one would write to the agent and confirm that was what was being done? A. I didn't have any written communication back to Mrs Corrigan in relation to the contract at all. 34 I would find on that, and on the evidence later elaborated about the advertisements being read to the Plaintiff, that Mrs Corrigan, and through her LCRE, misled and deceived the Plaintiff by those advertisements, taking no steps to correct the position. Mrs Corrigan did so on behalf of Mr Prince, who was sufficiently aware of the advertisements, yet permitted their continuance. Relying upon the First Defendant to correct the position by his purchasing a right-of-way does not assist the Second and Third Defendants at all, nor indeed Mr Prince. On Mrs Corrigan's own evidence, she knew that the vendor Mr Prince would insist on being reimbursed the cost of buying the right-of-way, by payment from the Plaintiff, though the Plaintiff understandably never undertook to make any such payment. 35 Initially there were as I have said, two previous buyers before the contract was exchanged by the Plaintiff. Mr and Mrs Clarke and their solicitor Mr Kerr were allegedly present at a conversation with Mrs Corrigan and the First Defendant where the First Defendant claims that he said there was no right of vehicular access at the rear of the property; Affidavit Colin Prince 28 July 2000, para 7 and see T, 102.34-.43. Mr Kerr, who has no interest in the matter, denies such a conversation ever occurred and Mrs Corrigan likewise. I am inclined to prefer their version of events; Affidavit Patrick Kerr 14 August 2000, para 5. In any event, it was put into evidence that Mrs Corrigan wrote to the First Defendant on 10 September 1997 explaining that the sale to Mr and Mrs Clarke had fallen through because the building and pest report were not good; Affidavit Loriena Corrigan 19 August 1999, Annexure I. 36 Ms Sandi Cleary was an interested buyer around the same time as Mrs Clancy. In mid to late October Ms Cleary made an offer to purchase 1/98 Spofforth Street. Ms Cleary states that her motivations for withdrawing from the sale were, amongst other reasons, the discovery that the rear laneway lacked legal access; Affidavit Sandi Cleary 4 June 1999, para 14. Evidence shows that Ms Cleary discovered the lack of access through her own investigations; Affidavit Sandi Cleary 4 June 1999. It appears a conversation took place between Mrs Corrigan and Ms Cleary around 23 October 1997 where the lack of right-of-way over the lane was discussed. Ms Cleary also contends that sometime in October 1997 she also had a similar conversation with the First Defendant during which a lack of right of way was discussed. In a letter to the solicitors for Ms Cleary dated 23 October 1997 Mrs Corrigan states that the laneway did in fact belong to Eaton and Sons. The letter indicates that Eaton and Sons did not intend to close off the access; Affidavit Sandi Cleary 4 June 1999, para 14. 37 I am satisfied on the evidence that on 23 October 1997 Mrs Corrigan was first made aware of the lack of legal access to the laneway. Despite this knowledge she caused a further advertisement to be published in the Sydney Morning Herald on 25 October 1997 indicating the Property had two entrances and parking and refrained from withdrawing it. Affidavit Anna Francesca Clancy 21 May 1999, Annexure A. Mrs Corrigan gave evidence that only after 25 October 1997 as agent did she stop advertising the Property with two street access; T, 140.56 — 141.1. 38 Indeed it was that same advertisement of 25 October 1997 that I am satisfied was read to the Plaintiff, by Anna Clancy, following which Anna Clancy is told by Mrs Corrigan in a telephone conversation, and then tells the Plaintiff, that the Property has "under cover parking at the back of the house which can be accessed via a lane at the back"; Affidavit of Anna Clancy, the Plaintiff's daughter, 20 May 1997, paras 6-8 and affidavit of Mrs Corrigan of 18 August 1997, para 19, and see also under agreed chronology "late Oct 1997". Mrs Clancy's own evidence is essentially consistent with the foregoing, where she says at paras 1 to 3 and 6 to 7 of her affidavit of 20 May 1999: "1. Approximately two times in September-October 1997, my daughter Anna said words to the following effect to me: Anna Clancy: There is a property here in Spofforth Street, Cremorne which is for sale which has been on the market for some time. Why don't you go and inspect the property. When my daughter Anna said this to me, she was holding a newspaper and I took it that she was referring to a property advertised in the newspaper. I cannot remember whether or not she read the advertisement to me on these occasions. 2. Subsequently, my daughters Anna and Therese were at my house. On this occasion, my daughter Anna read the advertisement to me. I cannot recollect what Anna read to me, however, at some time prior to my inspecting the property to which Anna referred, either or both of my said daughters said words to the following effect to me: (the property) has off-street parking. 3. I decided to go and inspect the property referred to by my daughter Anna, that property being known as 1/98 Spofforth Street, Cremorne (hereafter referred to as "the property"). I would not have considered inspecting or purchasing the property if it did not have off-street parking. … 6. During the inspection of the property by my daughter Therese and myself, Lorie Corrigan said words to me to the following effect: This is the part of the common property over which you will have exclusive use (when she said this, she pointed to the land beside the Building on the righthand side when one was looking at the block from Spofforth Street and to the righthand carport). This is your carport (pointing at the righthand carport). It has an automatic remote controlled roller door. The lights for the carport are here (she showed me how to turn them on). 7. When I was looking at the carport with my daughter and Lorie Corrigan, I could see, from the distance that the buildings to the rear of the property were away from the rear boundary and that there was a laneway behind the property." 39 The Plaintiff was given a brochure by Mrs Corrigan prior to entry into the contract entitled "1/98 Spofforth St Cremorne" which stated that the property had a parking facility denoted by the letters "UCP" with her handwritten note underneath "undercover parking" (Affidavit of Mrs Clancy of 20 May 1999, para 11 and of 5 June 1999, Annexure A). 40 Anna Clancy also attests in her affidavit of 20 May 1999, paras 6-8 to Mrs Corrigan telling her on the telephone in late October 1997 shortly after 25 October that "there is undercover parking at the back of the house which can be accessed via a lane at the back", a conversation admitted by Mrs Corrigan who also admits Anna Clancy's evidence that she arranged her mother's inspection with Mrs Corrigan. Anna Clancy also attests to having conveyed that position regarding car space and access to her mother before her inspection (para 7). 41 Between 28 and 30 October 1997 negotiations were carried out over the purchase price. The contemporaneous representations that the Plaintiff alleges were made and upon which she relied include: (a) A "flyer" produced by the agent advertising the property which states that there is "U.C.P" meaning under cover parking; Affidavit Estelle Muriel Clancy 5 June 1999, Annexure A. (b) Estelle Therese Clancy, the daughter of the Plaintiff, and the Plaintiff inspected the Property with Mrs Corrigan on or about 22 October, 2000. During this inspection it is alleged Mrs Corrigan said that the Property had rear lane access; Affidavit Estelle Therese Clancy 4 June 1999, para 6. (c) That the Property was advertised on many occasions between 5 July 1997 and 18 October 1997, with many of the advertisements indicating that the Property had either "two street entrances" with parking or with "two street frontage"; Affidavit of Mrs Clancy's daughter Anna Francesca Clancy 21 May 1999, Annexure A. (d) To that fact, is the further evidence that Mrs Clancy's daughter, Anna Clancy whose evidence I accept, read the advertisement of 25 October 1997 aloud to the Plaintiff, and her sister Therese Clancy though the Plaintiff never actually sighted any of the advertisements. Therese Clancy in her affidavit of 4 June 1999 refers to earlier discussion with her mother "on or about 22 October 1997" and referred to her sister Anna having "read me that ad from the Sydney Morning Herald several times". This must refer to earlier ads, as indeed the evidence of Mrs Clancy (affidavit of 20 May 1999 para 1) suggests. The Plaintiff alleges that she remembers her daughter Anna Clancy telling her the Property had "off-street parking". This was on a later occasion than the two occasions in September-October 1997 when she had seen her daughter Anna with a newspaper which she took to be referring to the Spofforth Street property; Affidavit Plaintiff 20 May 1999, paras 1 and 2. That Mrs Clancy candidly admits that she cannot remember whether or not Anna Clancy read the advertisement to her on these earlier two occasions does not matter and indeed shows she was at pains to put her case fairly. (e) The physical layout of the Property and the laneway are also significant in what they bespoke. There is a roller door carport with access fronting the lane reinforcing the impression of rear lane access of a non-temporary kind. The laneway has traffic signs, signs regarding access and is sealed; PX2, EMC1-5. It reinforces the representation conveyed by the advertisements of permanent rear lane access. 42 A conversation on 30 October 1997, still pre-contract, between Mrs Corrigan and the First Defendant is also disputed between them. Mrs Corrigan alleges that the conversation went something like this: "Mrs Corrigan: Mrs Clancy will pay $385,000. I will issue a sales advice. I have not mentioned the right of way problem." The First Defendant: "I will handle the right of way situation myself. Do not mention the right of way problems to Ms Clancy. I am an architect and I will fix it." [Affidavit L. Corrigan filed 19 August 1999, para 12] Her account of that conversation, especially the above, is consistent with her handwritten note she wrote at the foot of her letter of 28 October 1997 to Mr Eaton which says, "Colin Prince says will handle right-of-way himself." 43 Mrs Corrigan alleges that the conversation ended there. The First Defendant alleges that the conversation went something like this: "Mrs Corrigan: Mrs Corrigan: Mrs Clancy will pay $385,000. I will issue a sales advice. I have not mentioned the right of way problem." The First Defendant: I can arrange a legal right of way of [sic] $25,000 but I would want that in addition to the $385,000.000" Mrs Corrigan: "It would help but you can't put the sale price up." The First Defendant: Well, forget it." [Affidavit of Mr Prince 28 July 2000, para 14] 44 However, Mr Prince in cross-examination conceded that what he told Mrs Corrigan was as follows (after denying that he told her not to mention "the right-of-way problem", a denial I do not find at all credible): "Q: You told her not to mention the right of way problems? A: Not at all Q: You told her you were an architect and you would fix the problem? A: I told her I was an architect and that I would negotiate a right of way with Eatons relative to the cost of it and the conditions of it in addition to $385,000." [T, 97.55 — 8.5] 45 The inference I draw, and the finding I would make is that as of 30 October 1997, the First Defendant issued instructions to Mrs Corrigan and through her to LCRE not to disclose the lack of assured, continuing rear lane access, and that he would fix it, but passing on the cost to the purchaser. 46 After the conversation on 30 October 1997 Mr Fraser, as the Plaintiff's solicitor, explained the Contract to be signed over the phone to the Plaintiff. His subsequent letter of 31 October 1997 (para 6.3) noted "[T]here are no easements or restrictions noted on the certificate of title affecting your use of the common property". [DX6] The cross-examination of Mr Fraser focussed on what was disclosed to the client Mrs Clancy. This was in explaining the contract, though only in terms of whether there was disclosed the lack of any easement or right of way (T, 59.36 — 60.31): "Q. You have told us that the garage or shed at the rear of the property was on common property? A. Yep. Q. It is quite clear there is no easement benefit, no right of way benefit, to the property? A. From the contract, no. Q. You made that clear to Mrs Clancy? A. I wouldn't have referred to a right of way at all. I mean, I told her — as you can see in my letter, there were no easements or restrictions affecting the property. I wouldn't have said to her, "There is no right of way." Q. You have omitted a very important word in that last answer. A. What's that? Q. The word "benefit". A. Yes. Q. There were no easements, either affecting or benefiting the property, were there? A. That's right. Q. And no right of way to the property? A. Well, there is no right of way registered in her favour in the schedule, which is why I wouldn't have mentioned it to her. Q. You told us there was no such right of way benefiting the property both in writing and orally, didn't you? A. I didn't say to her there was no such right of way. I would have said to her there is no easements or restrictions affecting the property. I wouldn't have spoken to her about a right of way in consequence of the certificate of title because there is no mention of it. I wouldn't have said it to her. Q. You know the right of way is an easement as a matter of legality, don't you? A. Yes. Q. Did she ask you, "What is an easement?" A. I don't have any recollection. Q. If she had asked you, you would have explained it to her, wouldn't you? A. A right of way, easement, a drainage right. Q. You would have included all of those in that description? A. Presumably, yes." That cross-examination ignores the fact that the solicitor would not be expected to point to the absence of a right of way, in circumstances where it was reasonably assumed that there was a public laneway with unimpeded legal access. 47 Moreover as appears from this cross-examination, the letter (DX6) and the contract (PX1, p46), that the Plaintiff would not have been alerted from that explanation that there was no assured access to the lock-up garage the subject of the earlier advertisements relied upon or that a right of way was needed to provide that access. But neither would the purchaser's solicitor be alerted from the contract or the circumstances that a right of way was needed because the laneway was not public. Thus there was no disclosure in the contract that the seeming public laneway was not public at all, contrary to its appearance and to the representations made; that in fact it was privately owned, with access capable of being denied at any time by its owner, Mr Tony Eaton. The appearance of the rear lane access was not such as to alert the purchaser that access was not assured, or was other than public; in fact to the contrary. The purchaser and her solicitor were confronted with a rear lane with no signage to indicate it was private, which already provided access to another substantial apartment block and to shops, a lane which was bitumenised, where there were public signs and where the garage directly abutted the laneway with nothing barring access directly to it, all this in a context where the purchaser's permanent access to the garage was betoken both by those physical features and the advertisements referring to a "two street entrance". I set out in 51 below the detailed provisions of the contract, insofar as relied on particularly by the First Defendant and later explain why these do not avail the defendants. 48 Contracts were then exchanged and the steps towards completion of the sale of the Property continued between the solicitors for each party. Completion was proposed for 28 November 1997. 49 The First Defendant was at the very least, economical with the facts in responding to the following requisition issued by Mr Mark Fraser on 4 November 1997 on behalf of the Plaintiff. "Q: "Has any claim [sic] made by a person to close, obstruct or limit the rights of passage or way to and from the land as the same are now ordinarily used…? If so, please furnish details." A: "Not as far as the vendor is aware." [PX1 MAF 12, page 79] The truth of the matter was, as the vendor was aware, that at any time the owner of the access land could have withheld rights of passage to the Property at any time, having the right to do so. A frank response would have been that "whilst no claim had (yet) been made, such a claim could at any time be made". Mr Prince took no meaningful steps to negotiate a right of way with Mr Eaton, either; T, 105.43 — 106.42. Conclusion 50 I accept the Plaintiff's evidence and that of her daughters, set out in 41 above. I further conclude that the Plaintiff, prior to entering into the contract, did rely upon representations holding out a permanent, legally secure, rear-lane access to the Property conferring access to its garage. It operated as an inducement to enter into the contract. I find that the reliance was the consequence of representations, express and implied, as earlier elaborated, including the advertisements whose content as regards that access was passed on to the Plaintiff in the manner earlier set out. That reliance was reinforced by the appearance of the lane as a public one. Finally, I conclude that the representations were, in the case of Mr Prince deliberately false and were, so far as the advertisements are concerned, made by LCRE and Mrs Corrigan with his authority. I later consider (70 and following) whether reliance is nonetheless precluded by the terms of the contract to which I now turn. Contractual provisions 51 The relevant provisions of the contract relied upon by the First Defendant exchanged on October 31, 1997 are as follows. Clause 2.5 reads: "If any of the deposit or of the balance of the price is paid before completion to the vendor or as the vendor directs, it is a charge on the land in favour of the purchaser until termination by the vendor or completion." [DX4] Clause 10.1.5 reads: "The Purchaser cannot make a claim, objection or requisition or rescind or terminate in respect of a promise, representation or statement about this contract, the property or the title, not set out or referred to in this contract;" [DX4] Clause 15.2 reads as follows: "If the parties do not complete by the completion date, a party can serve a notice to complete if that party is otherwise entitled to do so." [DX4] Special Condition 23 is significant, reading as follows: "The Purchaser acknowledges that he does not rely upon any warranty or representation made by the Vendor or any person on behalf of the Vendor but has relied entirely upon his own enquires and inspection of the property. The Contract comprises all terms of the Contract between the Vendor and the Purchaser for the sale of the property." [DX4] Clause 26 reads as follows: "In the event that completion does not take place on or before the completion date, then the Vendor shall be entitled to give notice requiring the Purchaser to complete within fourteen (14) days from the date of service of such notice and making time of the essence of the Contract. It is agreed that a period of fourteen (14) days from the service of such notice shall be a proper and reasonable time. [PX4] Post-contract events 52 On 26 November 1997 the sale first encountered difficulty. A chain was put up outside the entrance to the carport of 1/98 Spofforth Street; Affidavit Gordon Mock 7 May 1998, para 12. The chain was later cut overnight. When Mr Mock, the owner of 2/98 Spofforth Street, became aware of the chain blocking the entrance he informed the First Defendant; Affidavit Colin Prince 28 August 2000, para 9. 53 On 27 November 1997 Mark Fraser, the solicitor for the Plaintiff received a letter from Mrs Corrigan stating that she had a call from Mr Mock who told her about the chain across the back of the Property. She also rang the First Defendant and told him about the chain. She disclosed for the first time to the Plaintiff via a letter to Mr Fraser of 27 November 1997 (PX1, 64) that the Eatons owned the lane and that access would not be permitted until they received $25,000 for a right of way. She went on to say, "Over the period of time that we advertised the property we were not aware that the lane belonged to the Eatons until recently but were aware from the contract that there was no right of way." Her letter is less than candid in its reference to the contract for if, as she says, she did not earlier know of the need for the right-of-way she would hardly have remarked on that provision of the contract save (if then aware) to take a sharp advantage for the vendor. She elides the fact that at least one advertisement, that of 25 October 1997, was not withdrawn and could have been, despite finding out about the problems regarding access on 23 October 1997; T, 143.32-.43. 54 On 27 November 1997 Mr Mock telephoned Mr Tony Eaton, owner of the laneway and Therese Clancy, another daughter of the Plaintiff whom he knew socially, to inform them about the chain. Therese Clancy then informed the Plaintiff's solicitor Mr Fraser about the chain across the laneway. There followed a telephone conversation on 27 November, 1997 between Mrs Corrigan and Mr Fraser in which Mrs Corrigan advised of the problem with legal rear lane access to the Property; Affidavit Mark Fraser 27 May 1999, para 8. Mr Fraser, according to Mrs Clancy, but disputed by Mrs Corrigan, reported to her that, "Loriena Corrigan says she has had a crisis of conscience and felt she had to tell me that there is no legal access over the lane to back of the property." I accept Mr Fraser's account. But none of this means that Mrs Corrigan was aware of the problem before 23 October 1997. 55 On 28 November 1997 the Plaintiff instructed her solicitor not to proceed with completion of the sale until he had investigated the position regarding access to the Property via the rear laneway; Affidavit Mark Fraser 27 May 1999, para 15. 56 On 1 December 1997 the Plaintiff's solicitor wrote to the Solicitors representing Mr Prince explaining that Mrs Clancy wanted to proceed with the purchase of the Property but only if legal access to the laneway was paid for by Mr Prince. After failure of attempts to negotiate, the First Defendant's solicitors served on the Plaintiff's solicitors a notice to complete by 16 December 1997; MAF 13 PX1. 57 On 16 December 1997 the Plaintiff's solicitors served a notice of rescission of contract on the First Defendant and requested a refund of the deposit; PX1- MAF 20. On 18 December 1997 the First Defendant alleged the rescission notice was a repudiation of the contract and served a notice of termination on the Plaintiff claiming absolute entitlement to the deposit on that account; PX1- MAF 21. The First Defendant has refused to return the deposit moneys to the Plaintiff; PX1 page 133. The deposit money is currently held in a bank account awaiting the outcome of this case. 58 The Property was subsequently sold to Slop Pty Ltd at a reduced price. The contract for the sale of the Property, significantly, included the following clause which was not in any of the previous contracts: "The purchaser acknowledges that there is no legally enforceable entitlement to access to the subject land or the common property other than from Spofforth Street and in accordance with Strata Plan 17513. The purchaser shall make no objection, claim or requisition in relation to this matter.: [ PX1 MAF 26] 59 The remaining factual circumstances so far as material are dealt with in answering the legal questions which follow. THE LEGAL QUESTIONS 60 Question 1: Fraudulent misrepresentation. Did the First Defendant either directly, or via the Agent, make fraudulent misrepresentations express or implied to the Plaintiff to the effect pleaded, in relation to unimpeded access to the Carport which the Plaintiff relied upon and which operated as an inducement to enter into the contract? Question 2: Misleading conduct under Statute; Mr Prince. (a) Did Mr Prince in making the representations engage in conduct contrary to s42 of the Fair Trading Act , 1987 (it not being in dispute that the conduct was in trade or commerce for the purposes of that Act)? (b) Is he otherwise liable by reason of representations made by LCRE and/or Mrs Corrigan, whether or not made within or outside the scope of authority? Question 3: Misleading Conduct under Statute; LCRE and Mrs Corrigan, and Mr Prince (a) Did LCRE, in making the representations, engage in conduct likely to mislead or deceive contrary to s52 of the Trade Practices Act 1974 ("TPA") (it not being in dispute that the conduct was "in trade or commerce" for the purposes of the TPA). (b) If yes to (a), was Mrs Corrigan pursuant to s75B of the TPA involved in the contravention of the TPA by LCRE? (c) If yes to (a), was Mr Prince pursuant to s75B of the TPA involved in the contravention of the TPA by LCRE? Question 4: Rescission Was the contract validly rescinded by Mrs Clancy such that she is entitled to refund of her deposit? Question 5: Section 55(2A) of the Conveyancing Act 1919 Is Mrs Clancy entitled to repayment by Mr Prince of the deposit of $38,500, pursuant to s55(2A) of the Conveyancing Act 1919? Question 6: Remedies and cross-claims. (a) Having regard to the answers above, is Mr Prince as against Mrs Clancy, entitled to retain the deposit and obtain damages from Mrs Clancy, including legal costs on sale, loss of rent and interest on his mortgage; (b) If Mrs Clancy obtains judgment against Mr Prince or a declaration in terms of Question 5, is Mr Prince entitled to indemnity against LCRE and Mrs Corrigan in respect of the judgment or damages if a declaration is thus made? (c) If Mrs Clancy obtains any verdict against LCRE, is LCRE entitled to contribution towards and/or indemnity towards the same and pursuant to the provisions of the Law Reform (Miscellaneous Provisions) Act 1946 (NSW) or otherwise? Question 1: Fraudulent misrepresentation: Mr Prince 61 It is convenient that I first set out the principles applicable to fraudulent misrepresentation before turning to their potential application. (1) To constitute a fraudulent misrepresentation, there must first be found all the elements of a misrepresentation. (2) The elements of misrepresentation are as follows: (i) there must be a statement or conduct conveying a representation which is false in not according with the true facts, past or present; (ii) thus a promise or assurance for the future cannot be presently true or false, and does not of itself constitute a misrepresentation; see, for example, Civil Service Co-operative Society of Victoria Ltd v Blyth (1914) 17 CLR 601; (iii) however statements of intention or opinion are capable of being a misrepresentation and indeed fraudulent, where the state of the maker's mind is not consistent with them, so that the person does not hold the opinion professed; Edgington v Fitzmaurice (1885) 29 ChD 459 where Bowen LJ said (at 483) "a misrepresentation as to the state of a man's mind is, therefore, a misstatement of fact"; (iv) a statement of law is not a representation of fact and could not therefore constitute a misrepresentation unless in stating what is necessarily an opinion (as to law) a person does not genuinely hold that opinion; falsely stating something as if it were one's opinion when it is not, is to make a misrepresentation of present fact , namely that one presently holds that opinion; see Oudaille v Lawson [1972] NZLR 259; (v) while mere non-disclosure of facts, even facts material and important, is not itself a misrepresentation, a misrepresentation is capable of being found not only in some positive statement but also in conduct intended to convey a particular impression which is false or where a statement is literally true but, because it does not tell the whole truth, gives a false impression; see for example Jennings v Zilahi-Kiss (1972) 2 SASR 493 per Bray CJ at 507-8 who held that a fraudulent misrepresentation was found where units were described as flats without revealing that they were registered as a lodging house and governed by a requirement which precluded cooking on the premises for "a flat in which one cannot lawfully cook is not, in my opinion, a flat at all"; (vi) the representor must have intended the representee to rely upon the representation, as for example in inducing the representee to enter into a contract, reliance being a question of fact with the burden of proof resting upon the person claiming the misrepresentation; and (vii) the representation must be of a material fact such that, in the case of fraud, the representation must be a real inducement to the party claiming reliance; see for example, Australian Steel & Mining Corporation Pty Limited v Corben [1974] 2 NSWLR 202. (3) For a misrepresentation to be also fraudulent, it must be shown that, "a false representation has been made (1) knowingly, or (2) without belief in its truth, or (3) recklessly, careless whether it be true or false"; Derry v Peek (1889) 14 App Cas 337 at 374 per Lord Herschell. (4) So if a representor deliberately shuts his eyes to a fact or purposely abstains from its investigation, the representor is not honest and he is just as liable as if he had knowingly stated a falsehood; Derry v Peek (supra) at 376. (5) Fraud must be distinctly alleged and proved according to a civil standard of proof, with the standard of proof rising with the gravity of the imputation. (6) There are two principles applicable to a principal in relation to an agent: (i) a principal who uses his or her agent, either with or without the agent's knowledge, to deceive is responsible for any damages that flow from the agent's conduct; see Commercial Banking Company of Sydney Limited v R H Brown & Co (1972) 126 CLR 337 at 343 where Menzies J stated: "A person who makes a false and fraudulent misrepresentation is only liable to the persons to whom it is made, ie to the persons whom it is intended should act upon it … It is not necessary for liability that the misrepresentation should be made directly, it can be made to one, to be passed on to another; it is not necessary that it should be made to a particular person: it can be made to a group to which the plaintiff belongs so that the plaintiff is one of those intended to be deceived. The representation must however, in one way or another, be made to the plaintiff to induce him to act upon it." and (ii) a principal is responsible in an action for damages for the fraud of his or her agent, acting within the scope of the agent's apparent authority and it makes no difference that the agent committed the fraud for the agent's own private advantage and not for the benefit of the principal, so long as the agent was acting within the scope of the agent's apparent authority; Lloyd v Grace, Smith & Co [1912] AC 716 particularly at 725, 731, 733-4 and 736. 62 I turn now to consider the circumstances of the particular conduct and statements to determine whether they establish fraudulent misrepresentation on the part of the First Defendant Mr Prince, either directly or through the agency of Mrs Corrigan acting within the scope of her apparent authority. These are the circumstances which I am satisfied occurred and which ground my conclusion at 50 above. (i) The First Defendant, Mr Prince, had known since December 1992 of the lack of legal access to the laneway fronting the Property; in particular he must be taken to have known that any access depended upon the owner of the laneway, Mr Eaton, not terminating that access as was his entitlement at any time. (ii) Mr Prince was aware that his agent, LCRE, via its principal Mrs Corrigan, was advertising the Property as having "two entrances, Parking" and earlier, "two street frontages" in a series of advertisements from 5 July 1997, with the last of these being, relevantly, 25 October 1997, such advertisements being sent to Mr Prince each week. (iii) By not later than 23 October 1997, Mrs Corrigan, and through her LCRE, was aware of the absence of a legal right to access to the rear entrance including for parking purposes, being that entrance and garage from the Property which directly fronted the laneway, yet the agent did not withdraw the advertisement of 25 October 1997 when so aware as she was in a position to do, nor did Mr Prince direct her so to do. (iv) The advertisement of 25 October 1997 was read by Anna Clancy, daughter of the Plaintiff, to the Plaintiff, and though the Plaintiff does not recollect what was read to her, she recollects that at some time prior to inspecting the property either or both of the Plaintiff's daughters Anna and Therese Clancy, said words to the following effect to Mrs Clancy: "the Property" has off-street parking". (v) The garage at the rear of the Property, to the knowledge of both Mr Prince and Mrs Corrigan, abutted the rear lane, with no fence between it and the rear lane or any other indication that access was not legally available or could cease to be available, so presenting an appearance of unimpeded access, until 26 November 1997 being after the date the contract was entered into on 21 October 1997. (vi) The rear laneway conveyed an appearance of unimpeded right to public access, with traffic signs, bitumenised, conferring access from Spofforth Street both to the Property and to a large apartment block and leading on to a parking area for various shops, there being no signage indicating that the laneway was a private road or with restricted access. (vii) Mrs Corrigan on an inspection of the Property which she conducted with the Plaintiff and her daughter Therese Clancy in late October 1997 exhibited the carport as part of the common property available to her exclusive use, with no disclosure that its access was wholly dependent on Mr Eaton and could be denied at any time and the Plaintiff was at no time informed by Mrs Corrigan, LCRE, Mr Prince or anyone on his behalf that access to the carport was not presently public, but could be restricted or impeded by the owner of the land then or in the future. (viii) A brochure was given to the Plaintiff by Mrs Corrigan prior to entering into the contract which stated that the Property had a parking facility. (ix) Mrs Clancy would not have considered inspecting or purchasing the property if it did not have off-street parking. (x) Anna Clancy shortly after 25 October 1997 before entering into the contract telephoned Mrs Corrigan during which Mrs Corrigan made statements to her about the Property which included a statement to the following effect: "there is undercover parking at the back of the house which can be accessed via a lane at the back", following which Anna Clancy conveyed that information to Mrs Clancy, making an appointment for her mother to go to the Property with Mrs Corrigan; see Affidavit of Anna Clancy of 20 May 1999, para 6 attesting to the conversation with Mrs Corrigan and at para 7 attesting to her discussion with her mother, and para 8 attesting to the appointment being made with Mrs Corrigan, with paras 6 and 8 being admitted by Mrs Corrigan in her affidavit of 18 August 1999, para 19. 63 To this, the First Defendant seeks to take protection against any claim for fraudulent misrepresentation or misleading and deceptive conduct behind a series of arguments. The first argument is to say that access was unimpeded at the time of the contract, in a de facto sense. Though thereafter capable of termination at any time, the Plaintiff was able to approach the Court under s88K of the Conveyancing Act for a compulsory easement, by paying a sum the Court as agreed or determined. The second argument shelters behind the agent's authority being "limited to the contract". The contract "indicated there was no right-of-way to the lane". This was in circumstances, says the First Defendant, where Mrs Clancy had need of explanation from her solicitor Mr Fraser that there was no right-of-way. 64 The first argument is readily refuted, by the circumstances of the way in which the Property was marketed to Mrs Clancy, the appearance of the back lane and the representations that were made to her. The effect of these is that neither she nor her solicitor had any reason to suppose that there was any need for a right-of-way to the lane, it having all the appearance, reinforced by the position of the garage, of public access. Moreover, to argue that, at the time the contract was entered into (though not, be it noted, at completion), access was de facto unimpeded, is specious. Access was capable of denial at any time. That is not "unimpeded access". It is impeded by the lack of any right of access. If the Eatons had exercised their rights, the Plaintiff could have been removed as a trespasser every time she entered the lane. Her position was not even as strong as the "tolerated trespasser", actually permitted by the owner to remain in possession for an occupation fee, pending execution of a writ of possession; compare Pemberton v Southwark LBC [2000] 1 WLR 1672. That no action were taken, till prior to completion merely emphasises how illusory was the so-called access. In short it is true that the plaintiff needed explanation as to the true position. But the responsibility for that could not be on her or her solicitor, when there was no reasonable way either could be expected to know the true position, misled as they were by the vendor and his agent. 65 Second, it is a distortion of the true position to describe the agent's authority as "limited to the contract"; see First Defendant's written submissions of 12 October 2000 at para 7. Quite clearly the evidence shows that the agent's authority extended to marketing the property in accordance with the listing agreement of 28 June 1997 (Annexure A to Mrs Corrigan's affidavit of 18 August 1999). Notably the selling agency agreement did not annex a copy of the contract, simply referring to sale being "as per contract". 66 Thus the agent was acting within the scope of her apparent authority when she made the representations earlier set out, even if contrary to my earlier findings, it were the case that the principal Mr Prince was unaware of any such representations. In fact I am satisfied the evidence is clear that he was sufficiently aware of the representations contained in the advertisements. Moreover, he did nothing to prevent his Agent via those advertisements continuing to hold out that there were "two entrances, parking" or words to similar effect including the brochure which I infer was also issued with Mr Prince's knowledge and certainly with his authority. Thus the agent was acting within actual authority, nor merely apparent authority. Legal responsibility for his agent's acts can thus be readily attributed to Mr Prince; see the principles in 61(6)(i) above. 67 Indeed Mr Prince's knowledge goes further as Mrs Corrigan deposed to a conversation between herself and Mr Prince on 30 October 1997 in her affidavit of 18 August 1999 (para 12). Mr Prince did not deal with that conversation in his first affidavit of 17 July 2000 but only dealt with it in an affidavit sworn on 28 July 2000 (paragraph 14). Whilst in that affidavit he specifically denies saying the words attributed to him in Mrs Corrigan's affidavit, importantly he does not dispute, as one would expect him to do if there were a genuine dispute, what she said to him in particular, namely, "Mrs Clancy will pay $385,000. I will issue a sales advice. I have not mentioned the right-of-way problem." 68 In his cross-examination, Mr Prince says that he cannot recall whether or not Mrs Corrigan told him that Mrs Clancy had not been informed of the right-of-way problem although at one point he appears to be denying that he was so told; see T, 97.41-.46 and again T, 104.53 — 105.46 where he says he does not recall being told this. 69 The fact of the matter is that Mr Prince stood by well knowing that there was an access problem. He chose to have a contract issued on his behalf which made no mention of the lack of access and the need for a right-of-way and allowed the earlier mentioned representations to remain unchecked until recent times. Mr Prince's treatment of the Plaintiff in doing so was not merely sharp; it was deliberately deceptive, with the Agent at first acquiescing, once she became aware of the true facts, only later coming clean. 70 But do the terms of that contract obviate the effect of the representation made or any misleading or deceptive conduct? First, it is necessary to deal with a variant of the first argument. Was the representation limited, as the First Defendant argues, to a representation as to the (practical) availability of access up until the time it was terminated, in fact on 30 October 1997, with the corollary that this means that the representation was wholly fulfilled? One only has to state the argument to see that it is utterly without merit. Quite clearly the effect of the representation as reasonably understood and reflected in the earlier sequence of events and the way the laneway presented itself was that access was a public one, requiring no right-of-way, nor act of grace in not interfering with access on the part of its true owner; certainly not a laneway terminable at will. One would hardly expect the purchaser's solicitor to be alerted to what was in truth a deliberately concealed trap. That deliberate concealment was reflected in the contract, under which the vendor, well aware of the lack of legal access, simply does not disclose that fact or the need for a right-of-way in consequence. This was in circumstances where the preceding events to the contract instigated by the Defendants, including the advertisements and the position of the garage, were calculated to induce an unsuspecting purchaser to enter into a contract on the expectation that the purchaser was assured of access to a garage. In the First Defendant's case, I have no doubt this was done quite deliberately. For Mr Prince well knew the true position as his own earlier experience in purchasing the property demonstrates. 71 Turning to the contract itself, the First Defendant seeks shelter behind its terms, including in particular, clause 10.1.5 and special condition 23, earlier quoted. But for the purchaser to acknowledge that the purchaser does not rely upon "any warranty or representation made by the vendor or any person on behalf of the vendor but has relied entirely upon his own enquiries and inspection of the property" presupposes that he has not in the first place been fraudulently induced by misrepresentation to enter into that contract with its convenient acknowledgment. Essentially, Mrs Clancy as she said, was tricked into entering into the contract. This was a contract, moreover, which perpetrated a deliberate concealment of the true position, while attempting to shift responsibility on to the purchaser for its consequences. 72 The law does not countenance sharp contrivance of that kind. The position can be equated to that applicable to misleading and deceptive conduct, where contractual exemption clauses have not availed. Thus in Clark Equipment Australia Limited v Covcat Pty Ltd (1987) 71 ALR 367 at 371 Sheppard J said: "The remedy conferred by s52 of the Trade Practices Act will not be lost whatever the parties may provide in their agreement. When vendor of goods has engaged in misleading or deceptive conduct, the law makes that person accountable for loss and damage suffered as a result of the unlawful conduct. That conduct will usually have been committed, as in this case, prior to the signing of any contract. If, as a result of the conduct, a person is induced to enter into a contract and suffers loss, an action to recover lies. The terms of the contract are irrelevant." 73 In Oraka Pty Ltd v Leda Holdings Ltd (1997) ATPR 41-558 Burchett J put the position pithily as follows: "It cannot be thought that the very agreement that was obtained by misrepresentation can be made good by incorporating in it a further misrepresentation falsely asserting that it was not procured by the means which were in fact employed. The agreement that so speaks to sustain itself was obtained by a misrepresentation, and no verbal magic of an added clause can change that." 74 While the case was reversed on appeal, the appeal did not affect that aspect of the reasoning; see (1998) ATPR 41-601. 75 Nor can the First Defendant escape by contending that this was a representation as to a matter of law. First, the opinion, if such it were, was never genuinely held that access was available; see the principles earlier set out at 61 especially (2)(iii) and (iv). Thus the First Defendant well knew the position from December 1992 and knew it was otherwise. Even if Mrs Corrigan were unaware of the position until her last advertisement, the First Defendant cannot escape by using his agent, either with or without the agent's knowledge, to deceive; see the principles earlier set out at 61(6). See also Commercial Banking Company of Sydney Limited v R H Brown & Co (supra) at 343 and also at 346 per Gibbs J. 76 Again, while non-disclosure of facts, albeit material and important facts, is not of itself a misrepresentation, the combination of knowing conduct and statements earlier set out renders the totality a misrepresentation that was fraudulent on the part of Mr Prince; see earlier principles at 61(2)(v). 77 Induced, as the Plaintiff was, by fraudulent misrepresentation on the part of the First Defendant, she was entitled to rescind the contract ab initio and validly did so. She was certainly not required instead to accept the status quo and expend yet further money on either buying a right-of-way from Mr Eaton when she was induced to believe she had no need of one, or making an application under s88K of the Conveyancing Act 1919 again at her expense to acquire for further cost a compulsory right-of-way were that awarded. Such a suggestion is to treat Mrs Clancy as at fault rather than the party who deliberately caused her to be induced to enter into the contract by fraudulent misrepresentation. 78 Nor is comfort to be found for the First Defendant in the nature of the title, and in the fact that the garage was located on "common property" for the purpose of the Strata Titles legislation. The owner of Lot 1 had a right of exclusive use of the part of the common property on which was situated the relevant carport (see for example the Plaintiff's Document Bundle, p 44-5). Moreover the terms of s20 of the Strata Schemes (Freehold Development) Act 1973 (NSW) provides that the relevant body corporate here holds the common property as agent for the proprietors of the two lots as tenants in common. Subsection 24(2) provides: "The beneficial interests of a proprietor in a lot in the estate or interest in the common property, if any, held by the body corporate as agent for that proprietor shall not be capable of being severed from, or dealt with except in conjunction with, the lot." There was thus no inherent limitation precluding use of the garage based on it being on common property. That preclusion was caused by denial of access following Mr Eaton's termination of it, as he was always entitled to bring about. 79 Finally, I have earlier determined that Mrs Clancy relied on the false representations made and was thereby induced to enter the contract. It is no answer to that conclusion, were it the case, that the person (Mrs Clancy) the subject of the misrepresentation has been careless or could have discovered the true state of facts if she had made proper enquiry — though I do not consider she was careless or failed to make proper enquiry herself or via her solicitor. Thus the maker of the misrepresentation is not absolved by the other party's mere carelessness, for breach of s52 of the Trade Practices Act, nor the chain of causation broken; see for example Neilsen v Hempston Holdings Pty Limited (1986) 65 ALR 302 and more recently Argy v Blunts and Lane Cove Real Estate (1990) 26 FCR 112 at 136-8. Conclusion 80 The Plaintiff was induced to enter into the Contract by fraudulent misrepresentation on the part of Mr Prince the First Defendant and has validly rescinded that Contract. It also follows that she is entitled to the damages for her costs and expenses, with interest, each as earlier claimed. 81 No fraudulent misrepresentation was pleaded against LCRE or Mrs Corrigan, so the occasion does not arise to consider whether either made any fraudulent misrepresentation. Liability is rather to be determined under s52 of the Trade Practices Act; see below. Question 2: Misleading conduct under Statute: Mr Prince. 82 Were I wrong in my conclusion that the Plaintiff is entitled to rescind the Contract by reason of the fraudulent misrepresentations made to her, I am satisfied that Mr Prince, in making the representations he did, engaged in conduct contrary to s42 of the Fair Trading Act 1987. In this context, silence may constitute misleading conduct within the ambit of the Fair Trading Act. By parity of reasoning, any misleading and deceptive conduct committed by LCRE through Mrs Corrigan is to be attributed to Mr Prince. As to how silence may constitute misleading conduct in a context such as this, I adopt the observations of Giles J in NRMA v Morgan (1999) 31 ACSR 435 at 788 (reasoning which was not itself affected by the subsequent successful appeal to the Court of Appeal sub nom Heydon v NRMA Ltd & Ors (NSWCA 374, 21 December 2000, unreported): "[1429] Silence may constitute misleading conduct as part of all relevant circumstances constituted by acts, omissions, statements or silence, for example if the circumstances are such as to give rise to the reasonable expectation that if a particular state of affairs exists it will be disclosed. Put another way, if the silence gives rise to an inference that the state of affairs does not exist, a failure to disclose that it exists may be misleading conduct. It is sufficient to refer, among the many cases on the subject, to Commonwealth Bank of Australia v Mehta (1991) 23 NSWLR 84; Demagogue Pty Ltd v Ramensky (1992) 39 FCR 31; 110 ALR 608; and Warner v Elders Rural Finance Ltd (1993) 41 FCR 399; 113 ALR 517. [1430] Where the circumstances include that the existence of the state of affairs involves a judgment or an opinion, that it does so must be taken into account in determining whether the silence constitutes misleading conduct. That is so because in the circumstances as a whole the silence may itself be an expression of judgment or opinion by the silent party, to be tested for its misleading nature according to whether the judgment or opinion represented an honest opinion with a rational basis (cf Global Sportsman Pty Ltd v Mirror Newspapers Ltd (1984) 2 FCR 82 at 88; 55 ALR 25; Bateman v Slatyer (1987) 71 ALR 553 at 559; 8 IPR 33), and because the other party's expectation or inference may be affected by his recognition that the silent party is exercising judgment or expressing an opinion. That, however, will only be part of the overall circumstances." 83 Here, the silence of Mr Prince and of his agent Mrs Corrigan about the true state of affairs of the garage access through the laneway was clearly misleading conduct, when considered in context. In particular, an opinion as to the continuance of that access could not be an honest opinion with a rational basis in circumstances where, as Mr Prince well knew since 1992 and Mrs Corrigan knew since at least 23 October 1997, that access could be terminated at any time by Mr Eaton. Conclusion 84 Mr Prince has engaged in conduct contrary to s42 of the Fair Trading Act 1987. Question 2: Misleading conduct under Statute: LCRE and Mrs Corrigan and Mr Prince. 85 LCRE, through Mrs Corrigan, made the representations earlier set out. These, whether or not any fault could be attributed, were likely to mislead or deceive Mrs Clancy, contrary to s52 of the Trade Practices Act 1974, and did so. 86 Mrs Corrigan, pursuant to s75B of the Trade Practices Act, was involved in the contravention of that Act by LCRE, for the reasons earlier stated. It is clear that liability may attach to a natural person under s75B of the Trade Practices Act, where the whole of the conduct of the corporation attracting liability under s52 of the Trade Practices Act was the conduct of that person. 87 Turning to whether Mr Prince is likewise involved in the contravention of the Trade Practices Act by LCRE pursuant to s75B of the Trade Practices Act, I am satisfied that he participated in that conduct so as to be so liable. That he actually committed related forbidden acts is no impediment to that conclusion; see Hamilton v Whitehead (1988) 166 CLR 121 at 129-30 distinguishing the circumstances and legislation to which the observations of Dixon J in Mallan v Lee (1949) 80 CLR 198 at 216 were directed: "It would be an inversion of the conceptions on which the degrees of offending are founded to make the person actually committing the forbidden acts an accessory to the offence consisting in the vicarious responsibility for his acts" His liability stems from his conduct being so closely connected with that of his agent LCRE and its principal Mrs Corrigan that his actions come within the broad ambit of accessary liability in s52. 88 Thus LCRE was Mr Prince's agent, he was aware of the advertisements effected by Mrs Corrigan for LCRE and (via the agency) ultimately for him, he must be taken to be aware of their misleading and deceptive character, he participated in the sense of having knowledge of the essential elements of the conduct giving rise to the contravention of s52 of the Trade Practices Act. He therefore falls squarely within s75B as having aided, abetted, counselled or procured the contravention by LCRE and/or been in any way, directly or indirectly, knowingly concerned in, or party to that contravention. Conclusion 89 Each of LCRE and Mrs Corrigan are liable under s52 of the Trade Practices Act 1974 and Mr Prince has accessary liability pursuant to s75B of that Act. Question 4: Rescission 90 I have earlier answered this question in the context of fraudulent misrepresentation where it is clear that from the findings I have made that Mrs Clancy validly rescinded the contract. The other basis upon which rescission may be sought is by way of remedy following a contravention of s52 of the Trade Practices Act, pursuant to s87(2)(a) of the Trade Practices Act and similarly s72(5)(a) of the Fair Trading Act. Thus the Court is clearly empowered under its wide-ranging powers to declare that the contract is void ab initio pursuant to s87(2) of that Act. I do not accept the First Defendant's arguments to the contrary. I am satisfied that the Plaintiff's pleadings sufficiently encompass that relief. Clearly, the conduct of the Defendants, with their knowledge of the fact that the conduct under charge was misleading, amply justifies making a declaration that the Contract is void ab initio at the suit of the Plaintiff. Clearly the First Defendant is not entitled in the circumstances to treat the Plaintiff's rescission of the Contract as a repudiation of it. Question 5: Section 55(2A) of the Conveyancing Act 1919 91 It is not necessary to answer this question having regard to my earlier answers. Question 6: Cross-claims — indemnity and contribution 92 It is clear from my earlier answers that Mr Prince as against Mrs Clancy is not entitled to retain the deposit or to obtain any damages from Mrs Clancy. 93 Nor is Mr Prince entitled in the circumstances to any indemnity as against LCRE and Mrs Corrigan in respect of judgment or damages against him. That would not do equity as between the parties or properly recognise the Defendants' respective contributions to the deception of the Plaintiff and the predominant role played by Mr Prince in that regard. 94 However, the question remains where there are two sets of Defendants, Mr Prince on the one hand and LCRE on the other, whether, in the circumstances, there should be an entitlement to contribution on an equal or some other basis as between the respective Defendants, particularly at general law. I turn to that question now. 95 Bialkower v Acohs Pty Ltd and Others (1998) 83 FCR 1 (and earlier Lezam Pty Ltd v Seabridge Australia Pty Ltd (1992) 35 FCR 535) confirmed that s87 of the Trade Practices Act does not confer a power to order contribution between defendants. Bialkower determined that contributions were available under s23B of the Wrongs Act 1958 (Vic) which extended to a claim under s82 for breach of s52 under the Trade Practices Act. That section enables contribution between persons liable in respect of the same damage. There is no equivalent section in New South Wales. Section 6 of the Law Reform (Miscellaneous Provisions) Act 1946 (NSW) provides for contribution among joint and concurrent "tortfeasors". But there can be no suggestion that a party, LCRE, guilty only of statutory misconduct under s52 is a "tortfeasor". One may compare most recently the decision of the South Australian full Supreme Court Duke Group Ltd v Pilmer [No 2] ([2000] SASC 418, 8 December 2000, unreported), where contribution was ordered, where the same damage was caused by the commission of a tort as by breach of contract. Contribution was ordered notwithstanding the different approach to calculating damages with contributory negligence compared to contract. In the present case, fraudulent misrepresentation is also found. But that is pleaded only against Mr Prince. There is no finding in that regard against the other two defendants. Nor did Mr Prince plead any action in deceit so far as the other two Defendants are concerned and the belated, unpleaded allegation in his submissions cannot now be countenanced. 96 That said, there remains to be considered contribution at general law. The Full Federal Court in Bialkower at 12 determined the existence of a: "general law doctrine of contribution which determines that the parties between whom it takes place be under co-ordinate liabilities to make good the one loss. Co-ordinate liabilities are those which stem from a common obligation. …We need not decide whether the principle of contribution is limited to cases where there is a common obligation or a co-ordinate liability, or whether contribution can be ordered in any case where the circumstances give rise to an equity in favour of a person who has suffered a loss because of an act intended to benefit others: see Cummings v Lewis (1993) 41 FCR 559 at 592-599" 97 In Hanave v LFOT Pty Ltd (1999) 168 ALR 318 at first instance Moore J at 327-328 held that: "The source of power to order equitable contribution in relation to a liability to pay damages under s 82 arising from conduct contravening s 52 of the TP Act if no relevant state statute confers the power is an open question: see the observations of the Full Court in Bialkower v Acohs Pty Ltd , above, at FCR 13. However, the power has been accepted to exist, at least arguably, in several of the decisions of single judges referred to in Bialkower v Acohs Pty Ltd and, indeed, was accepted to exist by the trial judge, Merkel J, in that case itself: see Acohs Pty Ltd v RA Bashford Consulting Pty Ltd (1997) 144 ALR 528 at 539." 98 Moore J at 328 considered what equity requires to provide for equitable contribution, The parties must share a "common obligation" or "co-ordinate liabilities". Co-ordinate liability categories are not closed. But they do concern liabilities for the same loss and the loss must be of the same nature, same extent or same degree, though it need not derive from breach of the same obligation. Lehane J in a customarily lucid judgment on appeal sub nom Burke v LFOT Pty Ltd [2000] FCA 1155 para 133, like Heerey J, found the source of power in the general law. Moreover, the Full Court determined that the respective liabilities under the Trade Practices Act did not, of their nature, preclude operation of the contribution principles. Thus the Full Federal Court in Burke (supra) concluded by majority that contribution can be ordered, though the liability arises under different causes of action. In that case statutory liability first arose under s52 directly against a corporation, then there was accessory liability against an individual director and finally there was contract liability against a third party legal adviser; compare Lee J (dissenting) at paras 22-23 to Heerey J at paras 103-105, and Lehane J at para 132 who by majority allowed equal contribution notwithstanding those varying bases of liability. Lehane J at para 133, in declining to adopt a possible restriction of those categories that can claim contributions in equity, describes that possible restriction in these terms: "It may be that cases where contribution is required between a corporation liable to pay damages under s82 of the Trade Practices Act in respect of a contravention of s52 of that Act and persons found to have been involved in that contravention within the meaning of s75B would fit within some such limitation." 99 But Lehane J does not adopt that position, pointing out that, "it is not easy to fit BP Petroleum Development Ltd [v Esso Petroleum Co [1987] SLT 345] or Street & Hills v Retravision (NSW) Pty Ltd (1995) 56 FCR 588". He goes on to say, "nor is it easy to see why any such limitation is required." I would agree with Lehane J in that observation. 100 Authorities left unsettled till recently the proportion contributions should take. Moore J in Hanave at 329 considered that authority suggests the burden is in equal proportions unless "there are suitable circumstances in which a true equality of treatment requires proportionate equality." The Full Federal Court in Bialkower at 12-13 considered that historically, equity divided contributions equally unless statute intervened. In Bialkower statute did intervene. The proportion that contributions should be made, in equity or at common law, was not determined. However, the Full Federal Court in Burke v LFOT Pty Ltd (supra) endorsed the conclusion that contributions are to be divided equally between the party in breach of s52 of the Trade Practices Act 1974 and the party with accessory liability under s75 of that Act; see Lehane J at para 135, Heerey J at para 114, Lee J at para 19. That appears the position under current authority, even if not yet definitively settled. 101 There is however a fundamental obstacle in the way of the First Defendant seeking contribution at all. A court will not as a matter of public policy, assist a defrauder to recover contribution from another. As was stated over two hundred years ago by Lord Mansfield in Holman v Johnson (1775) 1 Cowp 341 at 343; [1775] 98 ER 1120 at 1121: "The principle of public policy is this; ex solo malo non oritur actio . No court will lend its aid to a man who founds his cause of action upon an immoral or an illegal act. If, from the plaintiff's own stating or otherwise, the cause of action appears to arise ex turpi causa , or the transgression of a positive law of this country, there the court says he has no right to be assisted. It is upon that ground the court goes; not for the sake of the defendant, but because they will not lend their aid to such a plaintiff." 102 Indeed even on discretionary grounds, contribution if otherwise available would be incongruous here. This is because the First Defendant has been the prime mover in the deception of the Plaintiff, and only against the First Defendant is there any holding of fraudulent misrepresentation. While the circumstances of the Agent not withdrawing the last advertisement does not reflect well on the Agent, and is not excused by the sense of constraint Mrs Corrigan appears to have felt vis a vis her principal, it was her principal the First Defendant who was primarily responsible for the Plaintiff's deception. Conclusion 103 Thus I would not, at Mr Prince's behest in respect of the claim for fraudulent representation against him, order contribution from LCRE or Mrs Corrigan. Nor of course is there any justification for rendering the Third Defendant, Mrs Corrigan, liable separately to contribute, as her position is subsumed in that of the Second Defendant. OVERALL CONCLUSION AND orders 104 The Plaintiff is wholly successful in these proceedings and is entitled to refund of her deposit and to the damages and interest she claims calculated to the current date. She is entitled to a declaration to that effect as well as a declaration that the contract is void ab initio. She is entitled so to recover against the First, Second or Third Defendants. But if she elects to seek a judgment solely against the First Defendant, he is not entitled to contribution or indemnity from the other Defendants. However, if she elects to seek a judgment solely against the Second and/or Third Defendant, each is entitled to contribution at general law (see above), on the basis that the First Defendant should bear half. Costs ordinarily should follow the event though I am prepared to hear the parties on costs if they so wish. Indeed I would wish to hear from the parties as to whether indemnity costs should be ordered. 105 I direct that the parties produce orders giving effect to this judgment within ten days. ********** Last Modified: 03/02/2001 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.