Brown v Grady

[2003] FMCA 559

FEDERAL MAGISTRATES COURT OF AUSTRALIA

BROWN & ANOR v GRADY & ANOR [2003] FMCA 559

PRACTICE AND PROCEDURE – TRADE PRACTICES – Summary dismissal – no reasonable cause of action alleged – application dismissed.

Fair Trading Act1999
Sale of Land Act 1962

O’Brien & Anor v Smologonov & Anor (1984) 53 ALR 107;
Argy & Anor v Blunts & Lane Cove Real Estate Pty. Ltd & Ors (1990) 26 FCR 112
Wilson v Union Insurance Co (1992) 112 FLR 166, 181

Applicant: CAROLINE LOUISE BROWN & ANOR

Respondent: KAREN LYNN GRADY & ANOR

File No: MZ333 of 2001

Orders made: 26 November 2003

At: Melbourne

Hearing date: 12 November 2003

Judgment of: Hartnett FM

REPRESENTATION

Counsel for the Applicants: Mr Miller

Solicitors for the Applicant: Randles Cooper & Co Pty Ltd

Counsel for the Respondents: Mr Lloyd

Solicitors for the First Respondent: Lidstrom & Associates

Solicitors for the Second Respondent: Kenyons Lawyers

ORDER

1. The first-named respondent’s application filed the 12 November 2003 is dismissed.

2. The first-named respondent pay the costs of the applicants as agreed and failing agreement as determined by the trial Federal Magistrate.

3. Certify.

FEDERAL MAGISTRATES
COURT OF AUSTRALIA AT
MELBOURNE

MZ333 of 2003

CAROLINE LOUISE BROWN & ANOR

Applicant

And

KAREN LYNN GRADY & ANOR

Respondent

REASONS FOR JUDGMENT

1. By application filed the 17 October 2003 the first respondent in the pending proceedings sought an order that the proceeding no. MZ333 of 2003 be stayed or dismissed as against her.  The basis of the application as asserted by the first respondent was that no reasonable cause of action is disclosed against her in the Statement of Claim filed the 9 April 2003.  In support of that application the first respondent relied upon an affidavit sworn by her on the 8 October 2003 and filed 17 October 2003 and written submissions dated 11 November 2003.  The applicants opposed the making of the order sought by the first respondent and argued the dismissal of the application.  Written submissions were filed on behalf of the applicants dated November 2003.

History

1. The first respondent is the vendor of the property known as and situate at Unit 1, 205 Johnston Street, Fitzroy in the State of Victoria.  The applicants are the purchasers of the property pursuant to a contract of sale of real estate dated 10 January 2002.  At all material times the second respondent was the duly appointed agent of the first respondent.  Whether it was acting within the scope of its authority is not admitted in paragraph 8 of the Defence dated 22 May 2003 albeit apparently conceded in paragraph 8 of the submissions made on behalf of the first respondent in these proceedings.  Likewise in submissions the first respondent accepts that the second respondent was acting in trade or commerce in relation to the sale of the property and that things said and done by the second respondent as agent in relation to the sale of the property bind the first respondent as principal.

2. The property was zoned “Business Zone 3” under the Yarra Planning Scheme.  By Clause 34.03-1 Section 3 of the Scheme, a prohibited use of Business Zone 3 is accommodation (other than a Caretaker’s house).  By Clause 74 of the Scheme, Caretaker’s house is defined as “A dwelling on the same site as a building, operation or plant, and occupied by a supervisor of that building, operation or plant.”

3. The first respondent was aware of the zoning controls over the property and the limited uses to which the property could be put, namely, property to be used for business or trade and commerce.  Nevertheless the first respondent, following her purchase of the property in November 1998, lived in the property continuously from the time of completion of its purchase until settlement of the sale of the property to the applicants.  She used it as a private residence deriving no income from it nor carrying out any business activity.

4. The applicants allege that the second named respondent engaged in misleading or deceptive conduct in relation to the sale of the property. This is denied by both the first and second respondents. It is further alleged that the first respondent engaged in misleading or deceptive conduct for the purposes of s.9 of the Fair Trading Act1999 in relation to the sale of the property.

5. The applicants allege the first respondent was engaged in trade or commerce as she was selling land that was a business or commercial establishment prescribed and defined by its zoning controls.  Hence the land sold was business, or commercial land.  It is alleged that it was misrepresented by the first respondent as being private residential land. 

6. The first respondent argues that from her perspective she was engaged in a one-off sale of her home rather than an act done in a business context.  As such she was not engaged in trade or commerce.  (See O’Brien & Anor v Smologonov & Anor (1984) 53 ALR 107; Argy & Anor v Blunts & Lane Cove Real Estate Pty. Ltd & Ors (1990) 26 FCR 112.)

Consideration

1. The power to dismiss an application for summary judgment should be exercised with great caution and only in cases that are absolutely hopeless (Wilson v Union Insurance Co (1992) 112 FLR 166, 181). In this case the applicants claims are not so absolutely hopeless or unsustainable or untenable that it is plain and beyond rational debate that they cannot succeed at trial.

2. What is to be determined here is whether the property was a private home – as used by the first respondent – or commercial land as defined by its zoning controls in which case it might be considered a transaction in trade or commerce.

3. The remaining matter is that of the allegation that the second respondent prepared a misleading and deceptive advertising brochure with the knowledge and consent of the first respondent which failed to disclose the fact that the premises could not be used for residential purposes. This is denied by the respondents and the determination of this coupled with its relevance and/or relationship if any with the vendors statement under s.32 of the Sale of Land Act 1962 is a matter for trial.

I Tracey Jones certify that the preceding ten (10) paragraphs are a true copy of the reasons for judgment of Hartnett FM

Associate:  T. Jones

Date:  2 December 2003