Bonett v The Barron and Dowling Property Group Pty Limited - [2006] NSWSC 975

No judgment structure available for this case.

Reported Decision:
203 FLR 179

New South Wales

Supreme Court

CITATION: Bonett v The Barron and Dowling Property Group Pty Limited & Anor [2006] NSWSC 975
This decision has been amended. Please see the end of the judgment for a list of the amendments.

HEARING DATE(S): 21-23 August 2006

JUDGMENT DATE :
27 September 2006

JUDGMENT OF: Bergin J

DECISION: Plaintiff entitled to declarations of contravention and damages.

CATCHWORDS: [MISLEADING OR DECEPTIVE CONDUCT] - Sale of Property for $11 million falsely represented to be 1,366 square metres (only 1,108 square metres) with waterfrontage, foreshore and uninhibited access to the Harbour (no waterfrontage, foreshore or uninhibited access) - Property as sold valued at $11 million at time of exchange and $10.9 million at time of settlement - [DAMAGES] - Whether plaintiff entitled to damages calculated on pro-rata basis per square metre - Whether plaintiff entitled to damages equivalent to value of "missing" foreshore area with attributes of waterfrontage and access - "Rule" in Potts v Miller only a guide - Time of assessment of loss or damage - Whether assessment of loss or damage should be on the basis of the difference between the value of the Property as purchased and the value it would have had if the representations had been true.

LEGISLATION CITED: Fair Trading Act 1987
Trade Practices Act 1974 (Cth)

CASES CITED: Argy v Blunts & Lane Cove Real Estate Pty Ltd (1990) 94 ALR 719
Clark v Urquhart; Stracey v Urquhart [1930] AC 28
Havyn Pty Ltd v Webster [2005] NSWCA 182
HTW Valuers (Central Qld) Pty Ltd v Astonland Pty Ltd (2004) 217 CLR 640
Janssen-Cilag Pty Ltd v Pfizer Pty Ltd (1992) 37 FCR 526
Marks v GIO Australia Holdings Limited (1998) 196 CLR 494
McCullagh v Lane Fox & Partners Ltd [1994] 1 EGLR 48; [1996] 1 EGLR 35
Murphy v Overton Investments Pty Limited (2004) 216 CLR 388
Potts v Miller (1940) 64 CLR 282
Saunders v Edwards [1987] 1 WLR 1116
Smith New Court Securities Ltd v Scrimgeour Vickers (Asset Management) Ltd [1997] AC 254
Sumy Pty Ltd v Southcorp Wines Pty Ltd (2004) 12 BPR 22,549
Tefbao Pty Ltd v Stannic Securities Pty Ltd (1995) ATPR 41-391

PARTIES: Shaun Keith Alfred Bonett - Plaintiff
The Barron and Dowling Property Group Pty Limited - First Defendant
Anthony Murray Barron - Second Defendant

FILE NUMBER(S): SC 50145 of 2004

COUNSEL: JC Kelly SC/ ST Fendekian - Plaintiff
DL Davies SC/ B McManus - Defendants

SOLICITORS: Piper Alderman - Plaintiff
Hunt & Hunt - Defendants

- 73 -

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION
COMMERCIAL LIST

BERGIN J

27 SEPTEMBER 2006

50145/2004 SHAUN KEITH ALFRED BONETT v THE BARRON & DOWLING PROPERTY GROUP PTY LIMITED & ANOR

JUDGMENT

1 The plaintiff in these proceedings, Shaun Bonett, has been the executive director of the Precision group of companies for the last nine years. The business of Precision was described as “direct investment in commercial properties and finance”. Prior to his involvement with Precision, the plaintiff practised as a solicitor in Adelaide for seven years in the areas of corporate and commercial law. The plaintiff claims damages for alleged misleading or deceptive conduct by a real estate agency and one of its directors in the course of negotiating the sale of a property known as 20 The Crescent, Vaucluse (the Property) which he purchased for $11 million. The previous registered proprietors, Paul and Linda Hogan (the Hogans), retained the services of real estate agents, The Barron & Dowling Property Group Pty Limited, the first defendant, and in particular Anthony Barron, the second defendant (Mr Barron), a director of the first defendant, to sell the Property.

2 The plaintiff claims that the first defendant represented that the Property had an area of 1,366 square metres, when in fact the area was only 1,108 square metres (the area representation). The first defendant admits that such representation was made and that it was false. The plaintiff also claims that the first and second defendants represented falsely that the Property had a waterfrontage to Sydney Harbour (the waterfrontage representation). It is admitted by the defendants that such representation was made and that such representation was false. The plaintiff also claims that the defendants represented that the Property included the foreshore area (the foreshore representation). The defendants deny that such representation was made. The plaintiff further claims that the defendants represented that if the plaintiff were to purchase the Property, he would have a reasonable prospect of obtaining permission to construct a jetty from the land to the Harbour (the jetty representation). The defendants deny that the jetty representation was made. Finally the plaintiff claims that the defendants represented that if the plaintiff were to purchase the Property, he would be entitled to uninhibited access to and egress from the land to the water (the access representation). The defendants deny such representation was made and also claim that if it was made it was not false or misleading.

3 The plaintiff seeks declarations that the first defendant’s conduct contravened ss 52 and 53A of the Trade Practices Act 1974 (Cth) (the TPA) and/or ss 42 and 45 of the Fair Trading Act 1987 (NSW) (the FTA). The plaintiff also seeks declarations that the second defendant’s conduct was in breach of ss 42 and/or 45 of the FTA and/or that he was a person involved in the first defendant’s contraventions of the TPA and/or the FTA. The plaintiff claims damages for the loss he alleges he suffered, being an unexpected short supply of 258 square metres. The defendants deny that the plaintiff has suffered any loss because the real value of the Property is either the price he paid for it or some higher value.

THE FACTS

4 Mr Barron was first introduced to the Property in approximately 2002. At that time his co-director, Kate Dowling, knew the then vendor and Mr Barron knew the Hogans who subsequently purchased the Property in 2002. At the time of the sale of the Property to the Hogans, a survey report was prepared by S J Dixon & Associates Pty Limited, Surveyors, who were engaged by Robinson Legal on behalf of the Hogans. A valuation of the Property was prepared by Ponton Valuations Pty Limited for mortgage security purposes for the ANZ Banking Group. The first defendant retained a copy of the Ponton valuation which included the following:

This is a choice/select harbourside/quasi waterfront property, being a site/lot that runs down from, and is set below, its The Crescent frontage, to adjoin a narrow, rocky foreshore/semi tidal waterfront, this rocky strip (approximately some 10 metres wide or thereabouts), being resumed as we understand (from the original/main lot holding as shown on the annexed Deposited Plan) as a reserve strip accessing/linking generally Parsley Bay with nearby Kutti Beach, somewhat slightly to the north.

The site area as shown on the Deposited Plan is some 1366m² however this was as we understand the original holding, and it has been reduced by resumption/excising the aforementioned strip to a site area now of some 1,110 m², and this lesser area as per the Title document is the basis upon which the valuation has been assessed/determined for Mortgage Security Purposes in this case.

5 In 2003 the plaintiff, who was then living in Adelaide, was considering purchasing a property in Sydney. It was in early October 2003 that Anthony Stewart of Silverstream Pty Limited (Silverstream), who apparently managed the Hogans’ financial affairs, contacted the second defendant advising that the Hogans were interested in selling the Property. On 14 October 2003 Mr Barron and Ms Dowling attended the Property for a meeting with the Hogans to discuss the potential sale. On 21 October 2003 Mr Barron wrote to the Hogans expressing an opinion that if the house were to be placed on the market, a figure in excess of $11 million could be achieved. That opinion was said to be based upon “historical waterfront sales” without any allowance for ongoing capital growth. Mr Barron recommended a sale through “expressions of interest” because such method could “invariably (and discreetly) produce the best result”.

6 During October and November 2003 the plaintiff inspected approximately one dozen properties that were either waterfront or had water views. The plaintiff was interested in a number of those properties including a property in Wunulla Road, Point Piper which had a jetty. The plaintiff liked the idea of a jetty and formed the intention to purchase a boat at some time in the future to use on Sydney Harbour.

7 In late October 2003 the plaintiff was searching for properties on the Internet and found an advertisement for a home in Vaucluse advertised by the first defendant. He telephoned the first defendant and spoke to Mr Barron. He gave Mr Barron his personal details and advised him he was from Adelaide and that he had seen the particular advertisement on the Internet. Mr Barron informed the plaintiff that the advertised property was no longer on the market and the plaintiff claimed that the following conversation then took place:

Plaintiff: I am looking for a top quality property in the eastern suburbs. Either a waterfront property, or one which has water views. A waterfront with a jetty would be very attractive.

Mr Barron: That could place you in a price range of $13-14 million.

Plaintiff: I appreciate that.

Mr Barron: I do have a waterfront in Vaucluse that I think you would like. The owners are looking for a quiet sale and I think they will be sensible about their expectations as to price. I would be happy to give you a private viewing.

8 A day or so later the plaintiff telephoned Mr Barron and made a time to inspect the Property the following Saturday afternoon. On 30 October 2003 Mr Barron sent an email to the plaintiff in the following terms:

Further to our last telephone conversation, I am pleased to confirm an appointment at 20 The Crescent, Vaucluse at 1.30pm this Saturday. (I am coming from another ‘open house’ so hopefully I won’t be running late!).

The house is a classic Professor Wilkinson design and has been fully and faithfully restored by the present owners. It is a waterfront property on a large block of 1366m² and has therefore direct access to Parsley Bay and the harbour. There is a swimming pool, a double garage plus further off-street parking.

The accommodation consists of formal living and separate dining rooms. Superb Poggen Pohl kitchen and large family room. There are 4/5 bedrooms (master with ensuite, dressing and bathrooms)

9 On 31 October 2003 Mr Barron wrote to Mr Stewart of Silverstream enclosing a standard sole agency agreement in respect of the Property. That letter included the statement, “Both Kate and I are looking forward to achieving a great result for the Hogans and I might add that we both think that what they have done to the house is simply fabulous”. The agency agreement was signed by the Hogans on 5 November 2003.

10 On 1 November 2003 the plaintiff attended the Property with his wife and met with Mr Barron and Ms Dowling. This inspection took approximately 40 minutes which included a tour through the house during which Mr Barron said:

This is a Wilkinson house, one of the best of its type. The Crescent is one of the most exclusive streets in Vaucluse. The home is on thirteen hundred and sixty six square metres of deep waterfront land. That is a bigger than average block in Vaucluse.

11 During the inspection the parties went outside the house to an entertaining area at which time Mr Barron said, “You will have unbeatable views over Parsley Bay and Sydney Harbour, facing north-west”. Mr Barron then asked the plaintiff whether he would like to go down to the pool and the waterfront. The plaintiff and Mr Barron then left Mrs Bonett with Ms Dowling and proceeded down towards the waterfront.

12 After the plaintiff and Mr Barron had walked through the landscaped area they reached a wooden fence and gate. They then walked through the gate and stepped onto a wooden platform on the other side of the fence, walked along the platform and down a set of wooden steps across a timber boat ramp and onto the rock shelf adjacent to the water’s edge. While the two men were standing in that location the plaintiff claimed the following conversation took place:

Mr Barron: You might be able to apply for a jetty from here. That is something that is in the discretion of the Waterways Authority but you would certainly be able to make an application.

Plaintiff: Good.

Mr Barron: Obviously there is no guarantee, but I think if you do it the right way you would have a good chance of getting one.

13 The plaintiff claimed that Mr Barron then pointed in the direction of the water’s edge and said “you will have direct access to Parsley Bay and the Harbour. The property extends to the water”. He then turned in the direction of a large cream coloured boatshed on the neighbouring property and said “you might like to do something like this. You have a deep waterfrontage”.

14 After looking around for a short while Mr Barron and the plaintiff then started to walk in a westerly direction towards a wharf. As they did so Mr Barron said that Parsley Bay beach was just further up and that the public ferry service to the wharf was to be reinstated after upgrades to the wharf that were currently being undertaken were concluded. When the two men reached a point near the wharf Mr Barron said “the locals use this area a lot. You could almost swim home from here”.

15 The plaintiff was very impressed with the Property and asked Mr Barron what was the “asking price”. Mr Barron said that it was something in the order of $12 million, but that the plaintiff would be getting “1,366 square metres of Sydney waterfront property” and that “Eastern Suburbs waterfronts are a very good investment”.

16 On 3 November 2003 Mr Barron telephoned the plaintiff and asked him what he thought about the Property. The plaintiff said that he was weighing up his options and that he had seen a number of properties with jetties and really liked the idea of having one. Mr Barron then said “the size of the rock area in front of the fence varies depending on the tide, but you can make an application to put a jetty on the rock area which I showed you”. The plaintiff asked about the contract and advised that he would be going overseas and would not be moving to Sydney until later the following year. Mr Barron informed him that the contract was in the course of being prepared and that he thought there was flexibility in relation to the time for settlement.

Property Description

17 On about 3 November 20003, Mr Barron prepared a draft of a document entitled “Property Description”. The document was in the following terms:

Situated in one of Vaucluse’s most exclusive streets, this two storey Professor Wilkinson designed residence is situated on 1,366m2 of waterfront land facing North West looking into Parsley Bay and Sydney Harbour.

Built approximately 35 years ago, and extensively renovated throughout, the accommodation includes entrance hallway with circular stairway leading to first floor. Formal living room, separate dining room. Large open plan Poggen Pohl kitchen leading through to family area.

Upstairs are 5 bedrooms (one used as exercise room), three bathrooms (master and guest room each with ensuite bathrooms). two dressing rooms and one laundry. Access to double garage from this level.

At swimming pool level, is a low ceiling height storeroom/rumpus room and bathroom leading to area housing airconditioning unit.

Underneath the garage is further storage/wine cellar area.

The downstairs is heated via a separate gas unit and upstairs is heated/cooled via a reverse cycle air conditioning unit.

Inclusions. Fitted floor coverings, blinds, curtains and light fittings excluding chandelier in hallway and wall light fittings in powder room.

Included in kitchen are refrigerator, freezer, dishwasher and microwave oven. Excluded is wall mounted TV.

The following items are available for purchase:

18 Ms Dowling made a number of amendments to the third paragraph of this draft but also wrote on the top of the document “deep waterfront?”. After discussion between Mr Barron and Ms Dowling the document was amended by the addition of the following sentence at the end of the first paragraph:

The Crescent is one of the few streets in Vaucluse which benefits from deep waterfrontage.

19 Mr Barron sent this document to the plaintiff as an attachment to his email of 4 November 2003 which included the statement that “Further to our conversation last night I am attaching some more information regarding the above property”. That email also advised the plaintiff that the listed price was $12 million but that the defendants had been asked to submit all offers to the Hogans.

Mr Jacobs’ retainer

20 Kenneth Edwin Jacobs (Mr Jacobs) is a registered real estate agent and the managing director of Prestige Homes of Australia Pty Limited which carries on business as an affiliate of Christies Great Estates. Mr Jacobs apparently provides services to the Precision group of companies and on 12 November 2003 he sent the following email to the plaintiff in relation to the Property:

As agreed by telephone, my fee to act on your behalf in the purchase of the above property would be 1.1% inclusive of GST of the total sale price.

Could you please confirm your agreement?

21 On 13 November 2003 the plaintiff responded to Mr Jacobs’ email simply stating “ok”. By this time Mr Jacobs had shown the plaintiff a number of residential properties in the eastern suburbs in October and November 2003 and was in the course of showing him a number of other properties.

22 The plaintiff gave evidence that the terms of the Mr Jacobs’ retainer were that he was to assist the plaintiff with negotiating the purchase of the Property and that he was not required to make any particular inquiries or searches in relation to the Property (tr 39-40). He was required to assist the plaintiff with the “commercial negotiation” (tr 40). The plaintiff also said that Mr Jacobs was retained to assist him to locate properties and to conduct negotiations as a go-between with Mr Barron or whichever other agent might be engaged in selling a property (tr 40).

The draft contract

23 On 5 November 2003 Mr Barron forwarded a copy of the draft contract for the Property to the plaintiff. That contract included a copy of the Deposited Plan for the Property (DP 3929) with a survey dated February 1902. This was the Deposited Plan referred to in the Ponton valuation showing a site area that converted to 1,366 square metres. The front page of the Certificate of Title that would have shown smaller site area was not included in that contract.

24 The plaintiff wrote by email to Mr Barron on 10 November 2003 thanking him for some floor plans that he had sent to him and advising him that he had read the draft contract. The plaintiff also advised Mr Barron that he had asked Mr Jacobs to act as a buyer’s agent and to obtain advice from a valuer.

Mr Parson’s initial valuation

25 Gregory Parsons, a director of Colliers International Consultancy and Valuation Pty Limited, provided some initial valuation advice to the plaintiff on 14 November 2003. Mr Parsons provided some “calculations” in an email of that date and advised that based on the calculations “the value range is definitely in the $11-$12m range with my narrower fair market range for say a bank within $11.5 to $11.9”. This initial valuation appears to have been made on the basis that the area of the Property was 1,366 square metres.

The second inspection

26 On 15 November 2003 the plaintiff, Mrs Bonett and Mr Jacobs attended the Property with Mr Baron and Ms Dowling for the second inspection. The second inspection took approximately half an hour and did not include a visit to the waterfront. Mr Barron once again said that the property had an area of 1,366 square metres.

The plaintiff offers $10 million

27 Following this inspection the plaintiff decided to make an offer of $10 million for the Property and Mr Jacobs apparently made that offer on the plaintiff’s behalf. Mr Jacobs subsequently advised the plaintiff that his offer had been rejected but that the Hogans had counter-offered with $11,250,000. The plaintiff advised Mr Jacobs that he was not interested in that price and that the offer of $10 million stood. Mr Jacobs later telephoned the plaintiff and advised him that the Hogans would not take $10 million and that they were not willing to move from the counter-offer they had made. At this stage the plaintiff was planning to have a holiday in December/January and did not wish to be rushed into a higher price. He advised Mr Jacobs that he thought he would “let it ride for a while”.

28 On 24 November 2003 Mr Barron wrote to the plaintiff in the following terms:

I am obviously very disappointed to hear that you do not wish to proceed with the purchase of The Crescent which came as a complete surprise. I genuinely felt that both you and Vanessa were very keen on the property and it was only a matter of agreeing on a price.

Anyway, I would like to stay in touch and if any more suitable property comes in then I will be in touch. I have to say in conclusion, I do not think that you will get a better property than The Crescent for the money.

We have now been instructed to put the house on the market and we are starting to run some more people through this week.

29 On 25 November 2003 the plaintiff responded to Mr Barron’s email in the following terms:

We are keen on the property. It is beautiful, however has limitations for us. We are seeking a property with:

1. A 4 car garage or more.

2. Larger 3 and 4 bedrooms.

4. A 5th bedroom and guestroom.

We did find the driveway issues peculiar.

Having said all of that we were prepared to proceed with a purchase at 10m and we thought that we would more than likely find another place in the next 3 to 5 years and sell this one.

If you can get around 11m for the property that’s great, but with the potential uncertainty in the market and the fact that we might not be long term owners of the property, we resolved that we had made our best offer.

30 Shortly after this exchange of emails Mr Barron telephoned the plaintiff and advised him that he was disappointed that he had not moved from $10 million. He suggested that the plaintiff should have a “good think” about it and he thought he could get the vendors down to $11 million. He said “you’d be getting a $13 million property for $11 million”. The plaintiff advised Mr Barron that he thought that it was a great house but he did not wish to rush. He informed him that he was going overseas and would not be back until the middle of January. Mr Barron advised the plaintiff that he understood but suggested that he should act quickly otherwise he may “miss out”.

The advertisement

31 An advertisement for the Property was published in the Wentworth Courier, a local newspaper, on 3 December 2003. That advertisement, which the plaintiff read, contained various photographs of the Property and the following description:

Situated in one of Vaucluse’s most exclusive streets, this two storey Professor Wilkinson designed residence is situated on 1,366 m2 of waterfront land. The Crescent is one of the few streets in Vaucluse which benefits from deep waterfrontage. Facing North West and looking into Parsley Bay and Sydney Harbour, it was built approximately 35 years ago, and recently extensively renovated throughout. The accommodation includes entrance hallway with circular stairway leading to first floor bedrooms. Graceful formal living and separate dining rooms. Study with fireplace. Large open-plan ‘Poggen Pohl’ kitchen leading through to family room. All entertaining areas open out via French doors to a level lawn and well established gardens and onto beautifully landscaped waterfront terraces. Upstairs are 4 bedrooms, three bathrooms (master & second bedrooms each with ensuite bathrooms and Juliet balconies).

Two dressing rooms and one laundry. At swimming pool level, there is a storeroom/rumpus room and bathroom and underneath the double garage is further storage/wine cellar area.

‘A METICULOUSLY APPOINTED WATERFRONT RESIDENCE’

Further negotiations

32 The plaintiff and his wife returned to Australia from their overseas holiday on 15 January 2004. A week or so after their return Mr Barron telephoned the plaintiff who claimed that the following conversation occurred:

Mr Barron: Shaun, The Crescent is still on the market. I think you should really bite the bullet and offer the $11 million. It is an excellent investment and I think in five year’s time it will have appreciated well and be worth perhaps $18 million to $20 million. Waterfronts are as rare as hens’ teeth and they hold their value even when the market slumps. You would be getting 1,366 square metres of Sydney waterfront property. It would be a pity if you missed out.

33 After this telephone conversation with Mr Barron the plaintiff decided to offer $10.5 million. He telephoned Mr Jacobs and advised him of his decision and asked him to make that offer. A short time later Mr Jacobs telephoned the plaintiff and advised him that the offer had been rejected and that the owners were sitting on $11.25 million. The plaintiff asked Mr Jacobs to try $10.7 million but that was also rejected. The plaintiff then asked Mr Jacobs to try $10.8 million. That was also rejected but on this occasion there was a counter-offer of $11 million. The plaintiff advised Mr Jacobs that he would accept the $11 million counter-offer but advised that he wanted to negotiate an extended settlement period to the end of May or early June. Mr Jacobs advised the plaintiff that he would see what he could do. Mr Jacobs rang the plaintiff shortly afterwards and said that the Hogans were prepared to extend settlement to 1 June 2004. The plaintiff advised him that he would go ahead on that basis.

Contracts exchanged

34 On 22 January 2004 the plaintiff instructed his solicitors in Adelaide, Piper Alderman, to act for him in relation to the purchase of the Property. He sent the solicitors the draft contract and the advertisement from the Wentworth Courier. Contracts were exchanged on 4 February 2004.

Discrepancies discovered

35 On 6 April 2004 the plaintiff received a call from Mr Parsons who had prepared a written valuation for the National Australia Bank on 1 April 2004. Mr Parsons advised the plaintiff that there was a “bit of a problem” with the Property in that it was smaller than 1,366m². Mr Parsons advised the plaintiff that some time in the early part of the last century some of the harbourside land was compulsorily acquired. He also advised that because the title was in old terminology there had been a mix-up in the conversion of it to square metres. He also said that the plaintiff had no chance of putting a jetty on the property because that “rocky part” did not belong to him as the land that had been acquired was “public open space”.

36 The plaintiff then telephoned Mr Barron who said that he had just heard about the size of the Property. Mr Barron said “I am so sorry. I hope this won’t ruin our relationship. If I could buy the property back from you, I would”. The plaintiff said that he was very disappointed and that he would have to consider his position. He then sought legal advice.

37 On 5 May 2004 Piper Alderman wrote to Mr Barron in the following terms:

We refer to previous communications and to the contract for the sale of the above property exchanged on Wednesday 4 February 2004 for our client, Mr S K Bonett as purchaser, and Mr and Mrs Hogan as vendor for whom you were acting as agent.

As you may know, it has come to our client’s attention that the area of the property is only 1,106.6m², that there is land separating the boundary of the property from the water and that the property is not a deepwater frontage property.

The property was advertised and represented by you to our client as being “situated on 1,366m² of waterfront land” and being in “one of the few streets in Vaucluse which benefits from deepwater frontage”.

Those representations were made on a number of occasions by you to our client and very much influenced our client’s formulation of the sum he was willing to pay to purchase the property.

When our client’s original offer was not accepted, you emphasised to our client on a number of occasions that the size of the property and the fact that it was deepwater frontage property meant that it was worth in excess of the sums originally offered by our client, and therefore our client should increase the price he was willing to pay to purchase the property. In reliance on the information and representations provided by you to our client, our client eventually agreed to pay the sum of $11,000,000.00.

We understand that you have recently spoken with our client about these matters, apologised for providing incorrect information and advising that the misrepresentations were made by you innocently.

Our client has no reason to believe that you were aware of the inaccuracies in the representations you were making about the property and our client remains willing to proceed to settlement on the nominated date of 1 June 2004.

Nevertheless, the fact remains that our client will now only receive a property of 1,106.6m² in area without deepwater frontage, as opposed to the property he thought he was purchasing namely, a deepwater frontage property of 1,366m² in area. The difference in value could well exceed 20% of the $11,000,000.00 purchase price.

The purpose of this letter is:

1. To put you on notice of our client’s claim.

2. To seek from you a proposal to appropriately compensate our client for the loss it will suffer as a result of these discrepancies.

38 The solicitors for the defendants requested clarification of the nature of the claim made by the plaintiff and in particular whether it was a claim for compensation under clause 7 of the Contract and, if so, what amount was being claimed. Piper Alderman advised that the claim was not one for compensation under clause 7 but requested a proposal from the defendants prior to settlement.

39 The defendants’ solicitors advised that the defendants relied on special conditions 4(a) and 4(b) of the Contract and that there was no intention to make any proposal prior to settlement. Piper Alderman responded advising that they did not consider that those special conditions allowed the defendants to avoid liability and responsibility for misrepresentations and misleading and deceptive conduct. They also advised that whilst the plaintiff was willing to proceed to settlement on the due date he did so on the basis that all his rights were reserved. Settlement occurred on the due date.

Proceedings commenced

40 The plaintiff commenced these proceedings on 20 October 2004. The proceedings were heard on 21, 22 and 23 August 2006 when Mr JC Kelly SC, leading Ms ST Fendekian, of counsel, appeared for the plaintiff and Mr DL Davies SC, leading Mr B McManus, of counsel, appeared for the defendants.

The claims

41 The plaintiff claims that the first defendant contravened ss 52 and 53A of TPA (and ss 42 and 45 of the FTA) and that the second defendant was “involved” in those contraventions. Those sections provide relevantly:

(2) Nothing in the succeeding provisions of this Division shall be taken as limiting by implication the generality of subsection (1).

…

(b) make a false or misleading representation concerning the nature of the interest in the land, the price payable for the land, the location of the land, the characteristics of the land, the use to which the land is capable of being put or may lawfully be put or the existence or availability of facilities associated with the land; or

42 Section 82(1) of the TPA provides that a person who “suffers loss or damage by conduct of another person that was done in contravention” of ss 52 and/or 53A “may recover the amount of the loss or damage by action against that other person or against any person involved in the contravention”.

43 Section 75B of the TPA (and s 61 of the FTA) provides relevantly that the reference in s 82 to any person “involved” in the contravention is to be read as a reference to a person who “has aided, abetted, counselled or procured the contravention” (s 75B(1)(a)) or who “has been in any way, directly or indirectly, knowingly concerned in, or party to, the contravention” (s 75B(1)(c)). The section “requires that the party with alleged accessorial liability have intentionally aided, abetted, counselled or procured the contravention by the principal”: Marks v GIO Australia Holdings Limited (1998) 196 CLR 494 at 527 per Gummow J.

44 The plaintiff also claims that the second defendant contravened ss 42 and/or 45 of the FTA. The only relevant difference in the provisions of the FTA is that the word “person” is used instead of the word “corporation”. As there is no relevant difference in the principles to be applied I will only refer to the provisions of the TPA. As I have said earlier, the plaintiff claims damages for the loss he alleges he suffered, being an unexpected short supply of 258 square metres. The defendants deny that the plaintiff has suffered any loss because the real value of the Property is either the price he paid for it or some higher value.

The disputed representations

45 As I have said earlier the first defendant admits that the area representation was made and that it was false. The defendants admit that the waterfrontage representation was made and that it was false. These admissions were made on the defendants’ behalf by Mr Davies (tr 151) notwithstanding that Mr Barron claimed in his evidence that he “still” believed it was a “waterfront property” (tr 97). The three representations in issue are the foreshore representation, the jetty representation and the access representation.

The foreshore representation

46 The plaintiff’s affidavit evidence (sworn 6 May 2005) was that when he went down to the water’s edge with Mr Barron during the first inspection, Mr Barron said “the property extends to the water” (par 26). The plaintiff was cross-examined in relation to the foreshore representation and his evidence included the following (tr 27):

Q. It was your understanding, you say, that your property went down beyond the last cliff on to the rock ledge?
A. Yes, to the water.

Q. To what you understood to be the high water mark?
A. Not to the high water, to the water.

Q. You thought it went beyond the high water mark to the water?
A. That's what Mr Barron told me.

47 In further cross-examination the plaintiff gave the following evidence (tr 50):

Q. Mr Bonett, I want to suggest to you that at no time did Mr Barron say to you that this property had deep waterfrontage.
A. That's completely incorrect.

Q. And I want to suggest to you that at no time did he say that the property went to the waterfront?
A. He actually took me down and showed me to where it went.

48 Mr Barron’s affidavit evidence (sworn 9 June 2005) in respect of this matter was as follows:

The Property extends to the water

49 Mr Barron’s evidence in cross-examination was somewhat inconsistent. He said that he “never regarded” the area of the rock ledge between the water and the property as being park area because it gets very wet (tr 85). He then conceded that it was part of the park but only at certain times of the day (tr 85). Ultimately, he accepted that it was part of the park (tr 85). However, in earlier cross-examination (at tr 84) the following evidence was given:

Q. Is this right, for your part you believe it was your belief as at 3 November 2003 that this property, 20 The Crescent, did have a deep waterfront?
A. Yes.

Q. From what you have just said from your discussion with Miss Dowling, it is your belief that she too as at this date believed that the property had a deep waterfront?
A. Indeed.

Q. Meaning that by that, that it was your belief that the property extended to a point where it was bounded by deep water?
A. No.

Q. What is your concept of a deep waterfront in this context, what did you have in mind at the time?
A. Well, my concept of a deep waterfront is that it has access to a deep waterfront. Okay, as far as I was concerned this is a waterfront property and that there was access to the deep waterfrontage.

Q. Is this right; as at 3 November 2003 you had the clearest understanding that there was an area of land public open space between the property and the water?
A. Well, I knew that the public could pass in front at varying different times of the tide, yes.

Q. You actually knew, I suggest, that there was a strip of land between the property and the water which was part of Parsley Bay Park?
A. Right.

50 Mr Barron accepted that he knew that the park was a public reserve and that it had been reserved and dedicated for the purpose of public recreation (tr 86). Mr Kelly cross-examined Mr Barron in respect of the inclusion in the property description document of the sentence in the first paragraph, “The Crescent is one of the few streets in Vaucluse which benefits from deep waterfrontage”. Mr Barron gave the following evidence (tr 88-89):

Q. This document in its first paragraph, last sentence, says, "The Crescent is one of the few streets in Vaucluse which benefits from deep waterfrontage"?
A. Correct.

Q. And what you were intending to convey and believed that you were acquiring by conveying those words was that the property at number 20 The Crescent had a deep waterfrontage?
A. No.

Q. Were you meaning and intending to convey that other houses in the street may have a deep waterfrontage but not number 20?
A. The fact is The Crescent does have several waterfrontages which do benefit from deep waterfrontages. It is certainly a plus feature for any property to have a deep waterfrontage as such, but I didn't imply when we put that in that the property that we had, number 20, benefited from a deep waterfrontage as such.

Q. Is this right; after your deliberations with Miss Dowling you had pursuant to the question deep waterfront, you resolved to craft your document in such a way as to suggest that other people in the street might have deep waterfrontages but not necessarily the subject property?
A. That's correct.

Q. So you were actually intending, were you, to portray the picture which fell short of anyone minded to express an interest in number 20, to the effect that it, unlike the others in the street, didn't have one?
A. That's correct.

Q. This was rather deliberate on your part, was it, in the writing of that sentence?
A. I suppose you could say that, yes.

51 Mr Barron gave the following further evidence in cross-examination in relation to the conversation that occurred during the first inspection on the rock ledge, near the water’s edge (tr 92-93):

Q. You turned and pointed out a number of features?
A. Uh-huh.

Q. You pointed, for example, at the substantial cream coloured boat shed which was immediately adjacent to the boundary on the northern side?
A. Correct.

Q. You said to him words to the effect, "You might like to have something like this"?
A. Correct.

Q. Immediately in front of this that you pointed and each of you observed what is a cut out slipway in the rock?
A. Uh-huh.

Q. Leveled with concrete?
A. Correct.

Q. In pointing out and saying to him you might like to have something like this, you were intending to convey to him by the words you used the impression that he might like to have one of these boat sheds with one of these slipways?
A. Correct.

Q. Yes?
A. Uh-huh.

Q. You didn't say to him, "We are now standing in Parsley Bay Park and there is no way in the world that a public reserved space will be made over to you"?
A. No.

Q. Is this right; at that point you believed that the land did have a deep waterfrontage in your own mind?
A. In my own mind.

Q. Your mind, in distinguishing, is this right, between waterfrontage and reserve frontage?
A. Right.

52 Mr Barron’s evidence was rather incredible in some respects. I have already dealt with the inconsistencies in relation to the park area. In addition to that Mr Barron said that his concept of a “deep waterfront” was that “it has access to a deep waterfront” (tr 84) and yet his cross-examination in relation to the inclusion of the words in the Property Description (“The Crescent is one of the few streets in Vaucluse which benefits from deep waterfrontage”) exposed a quite different understanding (tr 88-89). His denial that he intended to convey in that document that the Property had a deep waterfrontage indicates that he understood that there was a difference between deep waterfrontage and mere access to deep waterfrontage. That is so notwithstanding his later evidence that his mind just blurred “waterfrontage” and “reserve frontage” (tr 93).

53 There was other extraordinary evidence. Mr Barron said that he believed that the Property ended at the fence that is some distance from the ledge at the water’s edge on which the two men stood during the inspection (tr 104). However he also gave evidence that he had “always” treated the Property “as a waterfront because at any stage during the day with certain tides water does lap the property” (tr 91). He qualified that evidence somewhat by his later answer, “water at a certain tide will lap the property” (tr 91). There was a view of the Property on the first day of the hearing and there is photographic evidence of the position of the fence to which Mr Barron referred in his evidence (Ex A: 465-468). In the photographs there are rowing boats and a water craft lying loose on the timber boat ramp approximately 1 to 2 metres below the fence, suggesting that water does not lap the timber walkway let alone the Property. It is also apparent that if the Property boundary is at the fence there is rock-face jutting out from that position such that even if there were to be a “certain tide” it would not “lap” the Property.

54 Mr Barron had described the property in the 30 October 2003 email to the plaintiff as a “waterfront property” that had “direct access to Parsley Bay and the Harbour”. Of course such a description fits within Mr Barron’s claimed concept of “deep waterfrontage”. He also described the Property in the advertisement as “waterfront land”.

55 The plaintiff presented as a highly intelligent man with a capacity to seize an opportunity in cross-examination to put his case. His years as a solicitor, prior to moving into property investment, might have caused him to develop this rather unfortunate attribute but that does not mean that I regard his evidence as unreliable. In fact the plaintiff made reasonable and sensible concessions when pressed by Mr Davies in cross-examination, evidenced, for instance, in the following passage of evidence (tr 33):

Q. Let me ask you this; if this property had in fact gone to the water as you thought but its total area in that regard was only 1108 square metres, would you have bought it?
A. If it had gone to the water and it was only 1100 square metres?

56 I prefer the evidence of the plaintiff to that of Mr Barron. I am satisfied that the plaintiff’s evidence that Mr Barron informed him that “the Property extends to the water” is to be believed. On balance I am satisfied that the foreshore representation was made.

The jetty representation

57 The jetty representation as pleaded in paragraph C 10(d) of the Amended Summons is that “if the plaintiff were to purchase the Property, he would have a reasonable prospect of obtaining permission to construct a jetty from the land to the harbour”. The pleaded particulars state that at the first inspection Mr Barron said to the plaintiff:

You might be able to apply for a jetty from here. That is something that is in the discretion of the Waterways Authority but you certainly will be able to make an application. Obviously there are no guarantees that you will get it but I think if you do it the right way you have a good chance of getting one.

58 The plaintiff’s affidavit evidence was that this representation was made at the first inspection on the rock ledge at the water’s edge. The plaintiff gave affidavit evidence consistently with the particulars and also gave evidence that in a telephone conversation on 3 November 2003 Mr Barron said: “The size of the rock area in front of the fence varies depending on the tide, but you can make an application to put a jetty on the rock area which I showed you”.

59 The plaintiff was cross-examined in relation to the jetty representation and gave the following evidence (tr 29-31):

…

Q. Mr Barron only said to you, did he not, I suggest, that you could make application if you wanted to but gave you no further assurances?
A. He said more than that.

60 In his affidavit evidence Mr Barron accepted that he said that the plaintiff might be able to apply for a jetty, that it was in the discretion of the Waterways Authorities and there would be no guarantee. He denied however that he said that if the plaintiff did it the right way he would have a “good chance of getting one”. His evidence in cross examination included the following (tr 86-87):

Q. You had the clearest possible understanding when you spoke with Mr Bonett that there was no way in the world he would ever get a jetty across Parsley Bay Park, I suggest?
A. I never suggested that he could. He asked me whether he could.

Q. You knew that he was interested in the prospect of obtaining a jetty?
A. It was something that was discussed.

Q. Come on Mr Barron, you knew that he was interested in being able to get a jetty?
A. Not necessarily, sir, no, I don't agree with you.

Q. You say you didn't have any belief that he was vaguely
interested in?
A. He asked the question, "Can I get a jetty in here?", and all I said was, "You have to apply to the Waterways division”.

Q. What I am suggesting, Mr Barron, is that answer is untruthful. You knew full well that this man didn't have a prayer when it came to a jetty?
A. No, I can't say that.

61 His evidence in cross-examination also included the following (tr 106-107):

Q. Is this right, just reverting to the waterside first conversation again: What you were intending to convey to Mr Bonett, by the words that you used, and your actions and your conduct down there at that point of the sales activity, was, if he were to purchase the property, he'd have a reasonable prospect of obtaining permission to construct a jetty from the land to the harbour?
A. No. I disagree with that.

Q. Is this right: You were intending to convey to him that he would have some sort of prospect?
A. That it was a possibility.

Q. You weren't talking possibilities in any jesuitical sense, in some form of remote, fanciful, academic possibility, in the way the sky might fall. You were talking about real possibilities?
A. No. I just implied that there might have been a possibility.

Q. Why can't you agree with me that the possibility that you were seeking to convey to him was at least a real possibility--
A. It was a possibility.

Q. --as distinct from a fantasy?
A. It was a possibility.

Q. A real possibility?
A. No. I am not saying real possibility. I would disagree.

Q. So, you would have her Honour understand that you were not intending to convey anything so banal as he would even have a reasonable prospect?
A. No.

Q. You were talking at it in a way, and in terms, in which you were seeking to convey nothing more than an academic possibility--
A. That's correct.

Q. -of the most theoretical variety?
A. Correct.

62 Although Mr Barron and the plaintiff differ as to when Mr Barron was advised of the plaintiff’s interest in having a jetty, there is no issue that at least at the first inspection the matter was raised. Mr Kelly seems to have redefined the expression “Jesuitical” from the ordinary meaning of “dissembling or equivocating” (The New Oxford Dictionary of English) or “sly, crafty, casuistic (intellectually dishonest)” (The Macquarie Dictionary: Federation Edition) to “remote, fanciful, academic” and/or “theoretical”. In those circumstances, Mr Barron’s admission that his intention was to convey a Jesuitical possibility is to be understood as an intention to convey a “remote, fanciful, academic” and/or “theoretical” possibility rather than an admission that he was dissembling or equivocating.

63 On the one hand the evidence extracted above at tr 86-87 suggests that Mr Barron did not believe that a jetty was out of the question or a mere academic possibility. Indeed he said that he was “quite sure there are instances where there are jetties going across park areas in other parts of Sydney”. On the other hand his evidence at tr 106-107 suggests that he intended only to convey a theoretical possibility. The real question is whether he said that if the plaintiff made his application in the “right way” he would have a “good chance” of getting a jetty.

64 The circumstances surrounding this conversation at the water’s edge on 1 November 2003 included the following: Mr Barron believed that the area of the Property was 1,366 square metres; he believed that it was a “waterfront” property; he had already advised the plaintiff by email dated 30 October 2003 that the Property had “direct access” to Parsley Bay and the Harbour and in that regard it was within his so-called concept of a deep waterfrontage; he had advised the Hogans that he was looking forward to achieving a “great result” and he was “working hard” on the plaintiff to persuade him to purchase the Property.

65 Both Mr Barron and the plaintiff agree that Mr Barron said that there were no “guarantees”. The use of that expression is peculiar if all that was being suggested was a theoretical or remote possibility. It is probable that the use of that expression was to temper the suggestion that the “chance” of a successful application if done in the “right way” was “good”. I am satisfied that it is more probable that not that Mr Barron said that if the plaintiff made the application in the “right way” he would have a “good chance of getting one”.

66 Mr Davies submitted that even if I am satisfied that these words were said, they do not amount to the representation as pleaded that the plaintiff would have “reasonable prospects” of getting a jetty. I disagree. It is true that there was the rider that there were no guarantees but, in my view, to suggest that he had a “good chance” in this context means that although it was not certain, he had reasonable prospects of getting a jetty or obtaining approval for a jetty. I am satisfied that the jetty representation was made.

The access representation

67 The pleaded representation is that “if the plaintiff were to purchase the Property, he would be entitled to uninhibited access to and egress from the land from the water” (C 10(c)). It is claimed that this representation is implied from Mr Barron’s conduct and from the use of his words, “direct access”. The plaintiff claimed in his affidavit evidence that Mr Barron had said to him at the first inspection that he would have “direct access to Parsley Bay and the Harbour”. Mr Barron gave affidavit evidence that he “may well have said” those words. Of course by this time, 1 November 2003, Mr Barron had already represented that the Property was “a waterfront property” and “has therefore direct access to Parsley Bay and the harbour” in his email to the plaintiff dated 30 October 2003.

68 It appears that the basis upon which Mr Davies maintained (although it seemed to me not vigorously) the denial on the defendants’ behalf is the use of the term “uninhibited” in the pleaded representation (tr 151-152). In his cross-examination Mr Barron accepted that at the first inspection he said to the plaintiff words to the effect, “you will have direct access to Parsley Bay and the Harbour” (tr 105). In further cross-examination he gave the following evidence (tr 107-108):

Q. Didn't you say to him that you will have direct access?
A. That's correct, yes.

Q. Meaning that, if he purchases the property, he will have direct access?
A. That's correct.

Q. If he purchases the property he will have direct access to Parsley Bay and the harbour?
A. Correct.

Q. But in some sort of sense of there would be at least the theoretical possibility in that regard?
A. Correct.

Q. Of course, all sorts of things could happen in relation to Parsley Bay Park. For example, the Government could reclaim land and build out picnic facilities and things like that?
A. It's conceivably possible.

69 The same observation can be made in respect of the use of the term “Jesuitical” in this evidence as was made in respect of the evidence relating to the jetty representation. The question is whether the use of the words “direct access” meant or implied that the plaintiff would have “uninhibited access”. The expression “uninhibited” in this context is to be understood as “without restraint” (The New Oxford Dictionary of English) or “not impeded or restricted” (The Macquarie Dictionary: Federation Edition). I think it is fairly clear that the use of the words “direct access” meant access that was not restrained or inhibited in any way. I am satisfied that the access representation was made.

Were the representations misleading?

70 As I have already said, the defendants admitted that the area representation and the waterfront representation were false and there is no proper foundation to maintain that the foreshore representation was other than false. That leaves for decision the questions whether the jetty representation and the access representation were false or misleading. It is accepted that both were representations in respect of a future matter and thus s 51A of the TPA applies. Section 51A provides:

(1) For the purposes of this Division, where a corporation makes a representation with respect to any future matter (including the doing of, or the refusing to do, any act) and the corporation does not have reasonable grounds for making the representation, the representation shall be taken to be misleading.

(2) For the purposes of the application of subsection (1) in relation to a proceeding concerning a representation made by a corporation with respect to any future matter, the corporation shall, unless it adduces evidence to the contrary, be deemed not to have had reasonable grounds for making the representation.

71 The evidence given by Mr Barron in relation to what he intended to convey (as opposed to what was said) to the plaintiff about a jetty was very unimpressive. Here was a licensed real estate agent of some thirty years experience “working hard” to persuade the plaintiff to outlay, at that stage, at least $11 million. I found it extraordinary that he would agree to the suggestion that he was floating mere “remote” and/or “theoretical” possibilities about a jetty with the plaintiff. But that is what he claimed to be the truth. If that be so, there were no reasonable grounds for making the representation. In any event he knew that any jetty would have to cross over Parsley Bay parkland and although he said that he knew of jetties across park areas in other parts of Sydney, that is not a reasonable basis to represent that the plaintiff would have a “good chance” of getting a jetty in front of this Property if he made his application in the “right way”. I am satisfied that the jetty representation was misleading.

72 There was no reasonable basis for making the access representation. The plaintiff would not and does not have unrestrained access to Parsley Bay and the Harbour. That access is restrained by the rights of members of the public to stand and/or sit in his way should they wish to do so because it is public recreational land. I am satisfied that the access representation was misleading.

Reliance

73 The plaintiff gave the following relevant affidavit evidence in respect of reliance upon the representations:

74. Had I been aware that:

(a) the ara of the Property was not 1,366 square metres but approximately 1,108 square metres;

(b) the Property did not have a waterfrontage to Sydney Harbour, but instead had an area of public open space between it and the water’s edge;

(c) the Property did not include the area from the fence down the wooden platform, steps, boat ramp and rock shelf to the water’s edge, where I had been shown by Mr Barron;

(d) I had no chance of having a jetty; or

(e) the Property did not have direct access to the Harbour but was set back from the water’s edge by an area of public open space,

I would not have gone ahead and purchased the Property as and when I did.

75. When I made my decision to make an offer for the Property of $10 million and later increased that offer, progressively to $11 million, I believed as a result of what Mr Barron had told me in our various conversations and shown to me in the first and second inspections and from what was written in the above emails to me dated 30 October and 4 November 2003 and said in the advertisement that the Property had an area of 1,366 square metres, a deep waterfrontage to Sydney Harbour and included the foreshore area pointed out to me by Mr Barron during the first inspection, and I also believed as a result of what was said and done on those occasions that, if I were to proceed to purchase the Property, I would have a reasonable prospect of obtaining permission to construct a jetty from the Property to the Harbour and I would be entitled to uninhibited access to and egress from the land to the water. They were positive attributes which I believed would not only contribute to my enjoyment of the Property if I became its owner but would also enhance its resale potential and add to its value to me as an investment for myself and my family in the future. In my mind, those features tended to outweigh the negative attributes to the Property about which I had some concern, namely, the car-parking situation and the bedroom accommodation.

76. I am not saying that I would not have been interested in the Property had I known that the area of the Property was not 1,366 square metres but was approximately 1,108 square metres; or did not have a waterfrontage to Sydney Harbour, but instead had an area of public open space between it and the water’s edge; or did not include the area from the fence down the wooden platform, steps, boat ramp and rock shelf to the water’s edge, which I had been shown by Mr Barron; or that I had no chance of having a jetty; or that the Property did not have direct access to the Harbour but was set back from the water’s edge by an area of public open space. The Property was, to my observation, a beautiful home. Had I known any of those matters, however, I would not have been interested in purchasing the Property for $11 million or anything like that sum. I would have looked longer and harder at alternative properties, including the Wunulla Road property to which I have referred, before I made a decision to make an offer; I would have started the bargaining process, if I had started it at all, at a figure less than $10 million; and I would have bargained much harder rather than agree to pay $11 million for a property which did not have all of the attributes which led me to buy at that price and would not be available when I chose to resell.

74 Mr Davies submitted that the real issue in the case is whether the plaintiff suffered any real damage. Notwithstanding that concession Mr Davies did cross-examine the plaintiff in respect of his claim that he relied upon the representations. That evidence is as follows (tr 30-31):

Q. I want to suggest to you that the reason you decided to purchase this property was nothing to do with the fact that you were told that it was 1366 square metres, it was because of what you saw about the property and understood generally about its facilities?
A. That's not the case, I relied very heavily on the fact that it was a large block of 1366 square metres and that it was a waterfront property.

So, I guess to go back to what you put to me, quite the contrary in fact. Whilst the property presented beautifully it had limitations with the size and quantity of the bedrooms and the garaging. They were matters I pointed out to the agent. Having said that, relying on the fact that it was a larger block and that it was a waterfront property I thought that with those additional benefits it still might suit my family's needs over the medium term.

75 In further cross-examination the plaintiff gave the following evidence (tr 33-34):

Q. You would understand, would you not, that one doesn't work out per square metre rates for land to buy for homes as opposed to development sites?
A. Again, all I can suggest to you is that I believe that waterfronts are quite unique in a class that the square metreage of the land of waterfront is what is specifically used to determine their value.

Q. That is your understanding, is it?
A. Yes.

Q. From things you have learnt in relation to this case?
A. Yes.

Q. Putting aside your desire to have land to the waterfront and put a jetty on it if you are allowed, you were happy to purchase that property with the improvements on it no matter what the size of it was because you liked the property, its aspect, its improvements and its location?
A. No, that's not the case.

Q. So you say that if you had known before you entered into the contract that it was only 1100 square metres, putting aside the ability to be able to use the waterfront, you wouldn't have purchased it?
A. At the time I was looking at alternative properties. One of those alternatives was a home with a jetty in Point Piper of a similar price range. Rather than speculating all I can say is that if I had known this further limitations to do with the property, given it was a reasonable contemplation of whether I went ahead and purchased it or not, if I did go ahead and still purchase it, it certainly appears to me that I would have done so in a completely much, on better terms shall I say.

Q. Let me ask you this; if this property had in fact gone to the water as you thought but its total area in that regard was only 1108 square metres, would you have bought it?
A. If it had gone to the water and it was only 1100 square metres?

Q. Yes?
A. The fact that it would have gone to the water would have meant that I would have had the opportunity to apply for a jetty, which is something that I wanted. So, it probably would be more likely that I would have proceeded with the sale if it had gone to the water and was of 1100 square metres than if it didn't.

Q. So, may we understand from that that the significant matter is not so much the area but the going to the water?
A. No, they are both significant issues.

76 Mr Davies also suggested to the plaintiff that he relied upon Mr Jacobs. He was cross-examined in the following way (tr 53-54):

Q. In your discussions with Mr Ken Jacobs before you found out about the true position in relation to this property, did Mr Jacobs tell you that the prospects of getting a jetty were unlikely in any event?
A. I don't recall but he may have. I don't rule it out either.

Q. Does that mean that the getting of a jetty was not a very significant matter for you when deciding whether or not to purchase this property?
A. No, that's not what it means. If you want me to elaborate I will.

77 The plaintiff’s solicitor’s file was inspected and Mr Davies advised the plaintiff that there was nothing within the solicitor’s file to evidence any enquiries being made of the Waterways Department/Authority in relation to the prospect of having a jetty at the Property. The plaintiff gave evidence that he was not sure whether it was his lawyers or himself who may have made contact with the Waterways Authority to make an inquiry (tr 54).

78 Mr Davies further tested the plaintiff in respect of his reliance upon Mr Jacobs and/or Mr Parsons in the following manner (tr 54-57):

Q. When you found out about the true position in relation to the land did you tell your solicitors that you did not want the consultants that you had engaged paid until the matter was satisfactorily resolved?
A. I may have.

Q. Was that because you felt that the consultants had let you down in that regard?
A. No it was because I felt that I had been let down and I wanted to investigate, I wanted to investigate exactly how this happened.

Q. But one possibility was, was it, that it was your consultants, either Mr Parsons or Mr Jacobs, or both, who had let you down?
A. When you are, at the time I was very disappointed with what had occurred, with what I had found out and I wasn't jumping to any conclusions. I wanted the matter properly looked at.

Q. But you see you told us yesterday that it was only Mr Jacobs retainer to locate properties for you and then engage in negotiations, is that right?
A. That's correct.

Q. So, he could not have been at all responsible for this according to your evidence, could he?
A. That's correct.

Q. But nevertheless you said neither he nor Mr Parsons presumably was to be paid until the matter was satisfactorily resolved?
A. Certainly with respect to Mr Parsons I paid all his accounts. I know that for certain. I think the real issue with Mr Jacobs was more about him being a gentleman about the matter and respecting my position that I wanted this matter satisfactorily sorted out before I made any payment to him. I wouldn't call what occurred to be a successful purchase.

Q. But Mr Bonett, this is not about Mr Jacobs being a gentleman, this is about your statement to your solicitors that you did not want your consultants paid until this matter had been satisfactorily resolved, isn't it?
A. I acknowledge that I may have made that statement, yes.

Q. I suggest you did so because Mr Jacobs’ retainer was far higher than you have said?
A. No, no. The retainer with Mr Jacobs was to assist me, assist me in the negotiation of the property in order to achieve a successful purchase. I guess from my perspective what occurred was not a successful purchase.

Q. But that wasn't Mr Jacobs’ fault according to your evidence now, was it?
A. It wasn't his fault, but he might, from my point of view the outcome that occurred was not a successful purchase.

…

Q. Did Mr Jacobs advise you that this was a waterfront property?
A. I didn't ask for Mr Jacobs to verify the fact that it was a waterfront property, I believe Mr Jacobs harboured on the same view that I did that it was a waterfront property.

Q. Did Mr Jacobs advise you it was a waterfront property?
A. No.

…

Q. In fact he told you, didn't he, that it was unlikely, that's all he said, unlikely that you would be able to put a jetty there, didn't he?
A. As I said to you before, he may have.

Q. He didn't say to you it would be impossible because you don't own to the waterfront, did he?
A. I'm sure I would remember that if he had.

Q. So that in that way you relied on Mr Jacobs about the property you were purchasing, didn't you?
A. No.

79 Mr Davies contrasted the fact that Mr Parsons had been paid and Mr Jacobs had not to suggest that Mr Jacobs’ retainer was inclusive of making investigations and effectively advising the plaintiff. Mr Jacobs gave evidence and was cross-examined. He said that he believed that the Property was an actual waterfront up until the time that the discrepancy in the land size was discovered. Mr Jacobs was not cross-examined at all in relation to the breadth of his retainer. It was not suggested to him that he had an obligation to advise the plaintiff in respect of the nature of the land, the size of the land, whether it was a waterfront and/or the likelihood of him obtaining a jetty.

80 There is no suggestion in this case that the plaintiff’s own conduct was so dominant in the causal chain as to be regarded as the real or effective cause of any loss or damage: Argy v Blunts & Lane Cove Real Estate Pty Ltd (1990) 94 ALR 719 at 744 per Hill J. As I have said before Mr Davies accepted that the real issue in the case is whether the plaintiff suffered any loss or damage. However, for abundant caution I have dealt with the question of reliance having regard to the cross-examination of the plaintiff and his witnesses.

81 The plaintiff’s evidence in cross-examination focused mainly on the reliance he placed on the area representation and the waterfront representation. Although separately made, the foreshore representation and the access representation seem to me to have some overlap with the waterfront representation. I have no doubt that the plaintiff relied on each of those representations. He was led by the defendants to believe that he would be purchasing a waterfront property of 1,366 square metres that included the area of the rock ledge to the water that would give him uninhibited access to the water. I am satisfied that he relied on each of those representations.

82 The jetty representation is in a different category. I accept that the plaintiff was attracted by the prospect of having a jetty and that he had the idea that he would purchase some type of watercraft in the future for use on the Harbour. However, realistically, I am satisfied that the plaintiff knew there were no guarantees that he would be able to obtain approval for a jetty and he would have to take his chances, even though Mr Barron had suggested they were “good” if he made his application in the “right way”, whatever that might mean. Indeed he said that prior to exchange of contracts (tr 54):

I do remember some enquiry being made with the Waterways department, whether this was my lawyers or whether I picked up the phone and had a chat with someone, I don't think I can say definitively. I wasn't out to make any application in a hurry, so the answer I gave was to the best of my knowledge. It might well have been that I picked up the phone to make that enquiry.

83 The plaintiff did not give any evidence in relation to the outcome of the “enquiry” or the “chat”, but this evidence supports the conclusion that he knew it was a matter for the relevant authority as to whether he obtained approval for a jetty. The fact that he was not in a “hurry” to make an application is also relevant to the consideration of whether he relied on this representation. On balance I am not satisfied that the jetty representation was relied upon by the plaintiff. On the other hand, this evidence is certainly consistent with the plaintiff having the understanding that the Property included the foreshore area.

123 It is apparent that in Havyn the Court of Appeal was not referred to the then recent decision of the High Court in HTW Valuers (Central Qld) Pty Ltd v Astonland Pty Ltd (2004) 217 CLR 640 in which the Court said at 656-657:

Potts v Miller

Gould v Vaggelas

124 In HTW Valuers, with reference to Marks v GIO Australia Holdings Ltd, Henville v Walker (2001) 206 CLR 459, I & L Securities Pty Ltd v HTW Valuers (Brisbane) Pty Ltd (2002) 210 CLR 109 and Murphy v Overton Investments Pty Ltd, the Court said at 667 (footnote omitted):

65. … The deduction of true value at the acquisition date from the price paid is no more than a guide to the assessment of damages under s 82. Section 82 does not in terms refer to that method, and the width of s 82 permits other approaches to the assessment of damages so long as they work no injustice.

125 One such “other” approach that the plaintiff propounds as appropriate in this case is that adopted by Hodgson J, as his Honour then was, in Tefbao Pty Ltd v Stannic Securities Pty Ltd (1995) ATPR 41-391. In that case a developer/purchaser was induced by misleading conduct of the vendor’s agent into believing that the subject property (Lot 1), comprised 12 acres, or possibly 12.5 acres, when it comprised only 10.75 acres. Lot 1 was purchased at the same time as three other Lots that the developer believed had a combined area of 24.85 acres. Hodgson J said at 40,343:

The total actually paid for the four blocks, in the belief that they were about 24.85 acres in all, was $1,251,000.00, giving an average of $50,346.00 per acre. The true area was 23.6 acres which, at $50,346.00 per acre, would give just over $1,188,000.00. On that basis, it seems to me that the cross-claimants would have suffered an actual loss of $63,000.00 by reason of the deficiency in the acreage.

126 It seems to me that Hodgson J only utilised the pro-rata analysis of cost per acre for the purpose of limiting the plaintiff’s damages. His Honour had before him a valuation of the true value of Lot 1 at $480,000 that compared to the purchase price of $570,000, the difference being $90,000. That evidence was consistent with the Potts v Miller approach. However that alleged loss of $90,000 was for a difference between 10.75 acres and 12.5 acres being 1.75 acres. His Honour held that the plaintiff was not led to believe it was 12.5 acres but rather 12 acres and the damages were adjusted to $63,000 to accommodate that limitation, that is a difference of 1.25 acres. In effect, there was a partial application of the rule in Potts v Miller with the pro-rata approach being adopted to limit the damages to the 1.25 acres at $63,000.

127 The plaintiff also relied upon my decision in Sumy Pty Ltd v Southcorp Wines Pty Ltd (2004) 12 BPR 22,549. In that case the area of the property (80 acres) was misdescribed in the contract (equal to 100 acres) and the discrepancy was not discovered until some years after completion. The plaintiff in that case accepted that “the usual measure of damages for misrepresentation inducing a purchase of property is the difference between price and value, but submitted that it is wrong to assume that this measure is always to be applied” ([99]). Sumy was decided before the High Court delivered its reasons in HTW Valuers declaring that such an approach is “only a guide”. In any event the passage in Sumy relied upon by the plaintiff is as follows:

101 The evidence in this case is that the plaintiff would not have entered into the contract at the particular price had it known that the area was only 80 acres instead of 100 acres. It calculated the purchase price it was willing to pay on the basis of an area of 100 acres. The plaintiff claims that its damage is really in the nature of consequential damage, that is, that it is now only able to develop and yield profit on 80 acres, when it should have been able to yield profit on 100 acres. The plaintiff was never going to be able to obtain 100 acres at this particular site. There is no evidence that any comparable site was available to it to purchase that would yield anything like the extraordinary increase in the value of the land over the 6-year period.

102 The plaintiff was able to purchase the land for half of its true value at the time the contract was entered into. I am satisfied that in this case it is appropriate to measure any damage the plaintiff has suffered as the difference between the price it paid and the value of the land at the time it paid the price. The consequence is that the plaintiff is not entitled to any damages because the value was far greater than the price it paid.

103 If I am wrong in that conclusion an appropriate measure of damages may be the difference between $1,625,000 paid on the basis of 100 acres and the amount for 80 acres assessed on a pro rata basis at $1,300,000, being $325,000 plus interest.

128 The plaintiff claims that he was prepared to and did in fact pay $11 million for 1,366m² of land (equating to $8,052.70 per square metre) but received only 1,108m² meaning that he paid $8,052.70 per square metre for 258m² that he did not receive, totalling a loss of $2,077,596. It was submitted that such method of calculation accords with the method of assessment employed in Tefbao and the alternative approach suggested in paragraph [103] of Sumy.

129 The plaintiff submitted that it is irrelevant that the value of the Property even at 1,108m² may have been equal to the price that he paid for it because the defendants are not entitled to take the benefit of the plaintiff’s bargain to cushion their damages. Mr Kelly embarked upon the following suggested analogy:

Assume that a plaintiff is induced to purchase “1 dozen” eggs on special at $2.40 per dozen but finds that there are only 11 eggs in the carton when he arrives home. He suffers a loss for the unexpected short supply of 1 egg, namely, 20 cents. It is not open for the defendant to say that the price of a dozen eggs is normally $3.60, the value of the 11 eggs received was $3.30 and the plaintiff suffered no loss because the value he received exceeded the price he paid. The fallacy in that argument is that it does not compare like with like. The plaintiff bargained for a dozen eggs at a good price; not a dozen eggs at market price.

130 It was also submitted that the value of the short supplied egg is to be assessed by reference to the price paid not the market value of 30 cents. If 30 cents were used, the plaintiff would be making a profit of 10 cents from the defendants’ contravention, as distinct from being compensated for his loss. The plaintiff conceded that he was not entitled to damages for loss of expectation or loss of profit unless it be shown that reliance had deprived him of an opportunity of entering into a different contract under which he would have made such a profit. That is not the position in this case. It was submitted that the plaintiff is entitled to retain the benefit of his bargain and he is not obliged to yield any part of the bargain to the defendants.

131 The plaintiff claimed that this is a case of a clear cut contravention causing him to do something that he would not otherwise have done, that is, causing him to bind himself to a contract where he had an obligation to make a payment larger than he was led to believe he was obliged to make. He was led to believe that he was obliged to make a payment of $11 million for 1,366 square metres but his obligation was much larger. He was obliged to make a payment of $11 million for 19% less land. It was submitted that the defendants’ conduct caused him to be in a situation in which what he received is less than that for which he bargained.

132 The plaintiff’s evidence was that if he had been aware of the true position in respect of the area, the waterfrontage, the foreshore, and the access, he “would not have gone ahead and purchased the Property as and when [he] did”. He also gave evidence that he was not saying that he would not have been interested in the Property had he known the true position but that he would “not have been interested in purchasing the Property for $11 million or anything like that sum”. His evidence was that if he had known the true position he would have started the bargaining, if he started it at all, at a figure “less than $10 million” and he would have “bargained much harder rather than agree to pay $11 million for a property which did not have all the attributes which led [him] to buy at that price”.

133 The defendants submitted that this evidence does not assist the plaintiff. It was submitted that he has not proved any “actual” damage and has not established that he could have purchased the Property for less than $11 million. When the true position was discovered the plaintiff attempted to negotiate a better price but the Hogans would not move from the contracted terms. That position does not really assist the defendants because at that time the plaintiff was obliged to complete the contract and I am satisfied that the advice he received in relation to the non-availability of a compensation claim under the contract was correct. There was no suggestion that the plaintiff’s completion of the contract affected any relevant issue in the proceedings.

134 In McCullagh v Lane Fox & Partners Ltd [1994] 1 EGLR 48 (affirmed on appeal [1996] 1 EGLR 35) the plaintiff and his wife saw an advertisement for a house “occupying a unique position on the River Thames, … gardens of nearly one acre and a private 90’ river frontage. Front and rear gardens of nearly 1 acre”. During the inspection of the property the agent informed the plaintiff and his wife that the true area was 0.91 acres. The plaintiff agreed to purchase the property for £875,000. The true area was in fact half an acre. The plaintiff gave evidence that if he had been told the true area he would have “reduced his offer, but more probably not continued with the purchase”. In the present case the plaintiff did not go so far as to say that he would not have continued with the purchase of the Property. In McCullagh the plaintiff contended that the true value of the property did not exceed £550,000. Coleman J did not accept the plaintiff’s expert’s valuation at that price and concluded that the purchase at £875,000 “was not at a price in excess of its market value” and accordingly the plaintiff had suffered no loss because he had paid “no more than it was worth with the area that in truth it had”. The defendants in this case contend that the plaintiff has not suffered any actual loss or damage because he has paid no more than the Property is worth with the area that it in truth has.

135 Mr Kelly submitted that if one were to apply the rule in Potts v Miller the damage suffered by the plaintiff would be masked and the just and true assessment of loss would not occur. It was submitted that to apply the Potts v Miller rule in the circumstances of a short supply is to gift to the defaulting defendant the benefit of the bargain that was struck. It was also submitted that, as in Murphy v Overton, the loss was a pure unexpected cost, in this case there has been a pure unexpected short supply that is compensable. The unexpected expense in Murphy v Overton was compensable as damage and it was submitted that this is the perfect corollary of unexpected short supply, in other words, the other side of the identical coin. It is submitted that the actual loss identified is the cost specifically paid for what was not supplied, calculated as $8,052.70 per square metre as a pro-rata amount in the same way as referred to in paragraph [103] in Sumy.

136 The plaintiff makes no claim for consequential loss. In Smith New Court Securities Ltd v Scrimgeour Vickers (Asset Management) Ltd [1997] AC 254 Lord Steyn said at 284 (referred to with approval in HTW Valuers (Central Qld) Pty Ltd v Astonland Pty Ltd at 667 par 63):

It is right that the normal method of calculating the loss caused by the deceit is the price paid less the real value of the subject matter of the sale. To the extent that this method is adopted, the selection of a date of valuation is necessary. And generally the date of the transaction would be a practical and just date to adopt. But it is not always so. It is only prima facie the right date. It may be appropriate to select a later date. … Moreover, and more importantly, the date of transaction will be simply a second order rule applicable only where the valuation method is employed. If that method is inapposite, the court is entitled simply to assess the loss flowing directly from the transaction without any reference to the date of transaction or indeed any particular date. Such a course will be appropriate whenever the overriding compensatory rule requires it. … There is in truth only one legal measure of assessing damages in an action for deceit: the plaintiff is entitled to recover as damages a sum representing the financial loss flowing directly from his alteration of position under the inducement of the fraudulent representations of the defendants. … In an action for deceit the price paid less the valuation at the transaction date is simply a method of measuring loss which will satisfactorily solve many cases. It is not a substitute of the single legal measure: it is an application of it.

137 Although the plaintiff has given evidence that he would not have purchased the Property at $11 million had he known the true situation, he has not given evidence of the maximum amount he would have paid for the Property. Importantly he has not given evidence that if the vendors would not have moved off, say, $10.9 million, he would not have purchased it. It is not possible to know whether the vendors would have reduced their counter-offer below $11 million. The plaintiff did not give evidence that he utilised a calculation of dollars per square metre in deciding to purchase the Property at $11 million. He did say that he understood that the square metreage of waterfronts was specifically used to determine their value, but he accepted that this was an understanding that he had learnt in relation to this case. He did not suggest that he utilised it in a formula or calculation in making his offer. His evidence, which I accept was truthful evidence, was that the area of the Property and the waterfrontage were “relied very heavily on” by him in his decision to purchase it (tr 30-31). I accept that he had the area and waterfrontage in mind when he made the offer.

138 The misleading representation as to area was in breach of s 52 of the TPA. The misleading representations in relation to water frontage, foreshore and access were in breach of s 53A of the TPA. The plaintiff is entitled under s 82 of the TPA to “recover the amount of the loss or damage” he has suffered. The strict application of the rule in Potts v Miller may allow an agent to escape liability to pay damages to a person that was induced into buying a property smaller than represented and without the misrepresented attributes (a foreshore, waterfrontage and uninhibited access to the water) that were important in the decision to buy, if the value of the smaller property without the important attributes is equal to the amount paid. That approach would seem to allow agents to embellish their sales pitches to include all sorts of attributes to the property that do not exist, so long as the price paid for the property, absent the attributes in the sales pitch, is equal to the real value of the property. That may be another very good reason why comparison between price paid and real value is only a guide in measuring loss. However it must be remembered that there is no punitive aspect to the provisions of s 82 of the TPA and the section is concerned solely with the recovery of the amount of the loss or damage suffered: Marks v GIO per Gaudron J at 501, [9].

139 I am of the view that to measure loss at a dollar figure per deficient square metre would work an injustice in this case. I have already explained why Tefbao is distinguishable. The observations I made in paragraph [103] in Sumy related to a developer who claimed consequential loss and are inapposite and in any event were qualified by: (a) the approach that I had adopted in comparing price paid to value being wrong; and (b) the use of the word “may”.

140 There is a degree of overlapping in the misrepresentations. The difference in area was really the amount of land in the foreshore area with its attributes of waterfrontage and access. The bargain the plaintiff was induced to make by the defendants’ contraventions, if the representations had been true, would have been a better bargain than the one he actually achieved. He would have had a larger property with a waterfront, the foreshore and access, with the foreshore area valued by Mr Dundas at $845,000. He would have therefore paid $11 million for a property worth $11.845 million. The plaintiff claims that this is the loss that he suffered. This approach may present as rather attractive, particularly when one has regard to the prospect, referred to above, of an agent avoiding liability for payment when the sales pitch has been riddled with representations in contravention of the TPA and/or FTA. Such a measure is the difference between the value of the property as purchased and the value it would have if the representations were true. This would be a development that has hitherto not been approved: Marks v GIO per McHugh, Hayne and Callinan JJ at 514-515 pars 50-51; Smith New Court Securities Ltd v Scrimgeour Vickers per Lord Steyn at 281 (not entitled to the benefit of the bargain measure); see also Holmes v Jones (1907) 4 CLR 1692.

141 As attractive as the approach may be, I do not think that the High Court’s further loosening of the tether that previously tied the rule in Potts v Miller to the assessment of loss or damage under s 82 of the TPA in HTW Valuers (Central Qld) Pty Ltd v Astonland Pty Ltd means that it is appropriate to measure the loss on the basis of the difference between the value of the property as purchased and the value it would have had if the representations had been true. If that is wrong and it is permissible to measure loss or damage on this basis, then the plaintiff’s loss would, on one view of the evidence, be $845,000, notwithstanding the difficulties Mr Dundas encountered in the valuation exercise.

142 The contract for the purchase of the Property had a deferred or delayed settlement date. In such circumstances it is permissible to assess the loss at the date of the settlement: Saunders v Edwards [1987] 1 WLR 1116 per Kerr LJ at 1124 and Nicholls LJ at 1130. In any event, I am of the view that the appropriate time at which to assess loss in the circumstances of this case is at the date of settlement. The price paid was $11 million and the value at settlement was $10.9 million. Applying the “guide” provided by the so-called usual rule in Potts v Miller and in the absence of evidence from the plaintiff of the maximum amount below $11 million he would have paid for the Property, I am satisfied that the appropriate measure of the plaintiff’s loss or damage is $100,000. The fact that the Property has increased in value since the purchase is not a matter that in this case impacts upon the plaintiff’s entitlement to recover the amount of that loss.

Conclusion

143 The plaintiff is entitled to the declarations he seeks except in relation to the jetty representation. The defendants are liable to the plaintiff for damages in the amount of $100,000. The parties are to bring in Short Minutes of Order including agreed orders as to interest and costs. The matter is listed at 9.30 am on 4 October 2006 for that purpose. If the parties are unable to agree on interest and/or costs orders I will hear argument on that day.

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27/09/2006 - Amendment to paragraph 124 - Paragraph(s) 124

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Citations

Bonett v The Barron and Dowling Property Group Pty Limited [2006] NSWSC 975

Most Recent Citation

Bennett v Elysium Noosa Pty Ltd (in liq) [2012] FCA 211

Cases Citing This Decision

4

Street v Luna Park Sydney Pty Ltd [2007] NSWSC 588

Bennett v Elysium Noosa Pty Ltd (in liq) [2012] FCA 211

Cases Cited

13

Statutory Material Cited

2

Murphy v Overton Investments Pty Ltd [2004] HCA 3

Marks v GIO Australia Holdings Ltd [1998] HCA 69

See v Hardman [2002] NSWSC 234

CITATION:	Bonett v The Barron and Dowling Property Group Pty Limited & Anor [2006] NSWSC 975 This decision has been amended. Please see the end of the judgment for a list of the amendments.
HEARING DATE(S):	21-23 August 2006
JUDGMENT DATE :	27 September 2006
JUDGMENT OF:	Bergin J
DECISION:	Plaintiff entitled to declarations of contravention and damages.
CATCHWORDS:	[MISLEADING OR DECEPTIVE CONDUCT] - Sale of Property for $11 million falsely represented to be 1,366 square metres (only 1,108 square metres) with waterfrontage, foreshore and uninhibited access to the Harbour (no waterfrontage, foreshore or uninhibited access) - Property as sold valued at $11 million at time of exchange and $10.9 million at time of settlement - [DAMAGES] - Whether plaintiff entitled to damages calculated on pro-rata basis per square metre - Whether plaintiff entitled to damages equivalent to value of "missing" foreshore area with attributes of waterfrontage and access - "Rule" in Potts v Miller only a guide - Time of assessment of loss or damage - Whether assessment of loss or damage should be on the basis of the difference between the value of the Property as purchased and the value it would have had if the representations had been true.
LEGISLATION CITED:	Fair Trading Act 1987 Trade Practices Act 1974 (Cth)
CASES CITED:	Argy v Blunts & Lane Cove Real Estate Pty Ltd (1990) 94 ALR 719 Clark v Urquhart; Stracey v Urquhart [1930] AC 28 Havyn Pty Ltd v Webster [2005] NSWCA 182 HTW Valuers (Central Qld) Pty Ltd v Astonland Pty Ltd (2004) 217 CLR 640 Janssen-Cilag Pty Ltd v Pfizer Pty Ltd (1992) 37 FCR 526 Marks v GIO Australia Holdings Limited (1998) 196 CLR 494 McCullagh v Lane Fox & Partners Ltd [1994] 1 EGLR 48; [1996] 1 EGLR 35 Murphy v Overton Investments Pty Limited (2004) 216 CLR 388 Potts v Miller (1940) 64 CLR 282 Saunders v Edwards [1987] 1 WLR 1116 Smith New Court Securities Ltd v Scrimgeour Vickers (Asset Management) Ltd [1997] AC 254 Sumy Pty Ltd v Southcorp Wines Pty Ltd (2004) 12 BPR 22,549 Tefbao Pty Ltd v Stannic Securities Pty Ltd (1995) ATPR 41-391
PARTIES:	Shaun Keith Alfred Bonett - Plaintiff The Barron and Dowling Property Group Pty Limited - First Defendant Anthony Murray Barron - Second Defendant
FILE NUMBER(S):	SC 50145 of 2004
COUNSEL:	JC Kelly SC/ ST Fendekian - Plaintiff DL Davies SC/ B McManus - Defendants
SOLICITORS:	Piper Alderman - Plaintiff Hunt & Hunt - Defendants