Century Legend Pty Ltd v Ripani

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Federal Court of Australia

Century Legend Pty Ltd v Ripani [2022] FCAFC 191

Appeal from: Ripani v Century Legend Pty Ltd [2022] FCA 242
File number(s): VID 148 of 2022
Judgment of: MARKOVIC, MCELWAINE AND MCEVOY JJ
Date of judgment: 30 November 2022
Catchwords:

CONSUMER LAW - misleading and deceptive conduct - contract of sale for apartment sold “off-the-plan” - where primary judge found render contained in marketing materials misleading and deceptive - whether the primary judge erred in rejecting the evidence of a witness - whether the primary judge erred in finding the exclusion clauses in the contract were ineffective in negating the misleading or deceptive conduct of the appellant - whether the primary judge erred in concluding the respondents were entitled to statutory rescission – appeal allowed in part - limited new trial ordered pursuant to ss 28(1)(f) and 30 of the Federal Court of Australia Act 1976 (Cth)

EVIDENCE – application for leave to adduce further evidence upon hearing of the appeal - exercise of discretion pursuant to s 27 of the Federal Court of Australia Act 1976 (Cth) - evidence could have been obtained for the purposes of the trial - no satisfactory explanation offered by the appellant as to failure to obtain evidence prior to the trial - application refused

Legislation:

Competition and Consumer Act 2010 (Cth), Sch 2 (Australian Consumer Law) ss 18, 236, 237, 243

Federal Court of Australia Act 1976 (Cth) ss 24, 27, 28(1)(f), 30, 37M, 37N
Cases cited:

Aldi Foods Pty Ltd v Moroccanoil Israel Ltd (2018) 261 FCR 301; [2018] FCAFC 93

Australian Steel and Mining Corporation Pty Ltd v Corben [1974] 2 NSWLR 202

Awad v Twin Creeks Properties Pty Ltd [2012] NSWCA 200

Butcher v Lachlan Elder Realty Pty Ltd (2004) 218 CLR 592; [2004] HCA 60

Campbell v Backoffice Investments Pty Ltd (2009) 238 CLR 304; [2009] HCA 25

Community and Public Sector Union v Telstra Corporation Ltd (2001) 112 FCR 324; [2001] FCA 564

Demagogue Pty Ltd v Ramensky (1992) 39 FCR 31

Devries v Australian National Railways Commission (1993) 177 CLR 472

Expectation Pty Ltd v PRD Realty Pty Ltd (2004) 140 FCR 17; [2004] FCAFC 149

Fox v Percy (2003) 214 CLR 118; [2003] HCA 22

Harvard Nominees Pty Ltd v Tiller (2020) 282 FCR 530; [2020] FCAFC 229

Lee v Lee (2019) 266 CLR 129; [2019] HCA 28

Marks v GIO Australia Holdings Ltd (1998) 196 CLR 494

Moore v Minister for Immigration and Citizenship (2007) 161 FCR 236; [2007] FCAFC 134

Prouten v Chapman [2021] NSWCA 207

Queensland v Masson (2020) 94 ALJR 785; [2020] HCA 28

Rosenberg v Percival (2001) 205 CLR 434; [2001] HCA 18

Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd (2004) 219 CLR 165; [2004] HCA 52

Wardley Australia Ltd v Western Australia (1992) 175 CLR 514

Spencer Bower & Handley, Actionable Misrepresentation (5th ed, LexisNexis, 2014)

Division: General Division
Registry: Victoria
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Details
Case
[2022] FCAFC 191
Decision Date

CaseChat Overview and Summary

In Century Legend Pty Ltd v Ripani, the appeal was brought against the decision of the Federal Circuit and Family Court of Australia, which found the appellant, Century Legend, liable for misleading and deceptive conduct in relation to the sale of an apartment. The primary judge concluded that Century Legend engaged in misleading and deceptive conduct by including a render in its marketing materials that did not accurately depict the apartment. The court also found that the exclusion clauses in the contract were ineffective in negating the misleading and deceptive conduct. The primary judge granted the respondents, the Ripanis, the right to rescind the contract and recover their losses. Century Legend challenged the primary judge’s findings, arguing that the evidence of a witness, Ms Hart, was wrongly rejected, that the exclusion clauses should have been upheld, and that the Ripanis were not entitled to statutory rescission. The court found that the primary judge was correct in rejecting the evidence of Ms Hart and in finding the exclusion clauses ineffective. However, the court found that the primary judge erred in concluding that the Ripanis were entitled to statutory rescission. The appeal was allowed in part, and a limited new trial was ordered. The new trial would be limited to the issue of whether the respondents continued to rely on the misleading or deceptive conduct of the appellant within the period April 2017 to the date the contract of sale became unconditional in August 2017, and if resolved in favour of the respondents, the relief that should be granted. The new trial would also be bound by the findings and determinations made by the primary judge, save for those relevant to the limited issue of reliance. The parties may adduce such evidence and make such submissions in accordance with the case management orders of the judge who hears the new trial. All questions of costs of the trial before the primary judge are to be determined by the judge who hears the new trial.
In addition, the court denied the appellant's application for leave to adduce further evidence upon hearing of the appeal. The court found that the evidence could have been obtained for the purposes of the trial and that the appellant had no satisfactory explanation for its failure to obtain the evidence prior to the trial. The application was refused.

Orders

Orders of the court

1. Leave is granted to the appellant to amend the notice of appeal in the form of the document provided to the Court on 8 August 2022.

2. The appeal is allowed.

3. The orders made in proceeding VID 266 of 2020 on 18 March and 13 April 2022 are set aside.

4. Pursuant to ss 28(1)(f) and 30 of the Federal Court of Australia Act 1976 (Cth) there be a new trial of the proceeding:

(a) limited to the issue of whether the respondents continued to rely on the misleading or deceptive conduct of the appellant within the period April 2017 to the date the contract of sale became unconditional in August 2017, and if resolved in favour of the respondents, the relief that should be granted; and

(b) on the basis that:

(i) the parties are bound by each other finding of fact and determination made by the primary judge, save for the findings and determinations relevant to (a);

(ii) the parties may adduce such evidence and may make such submissions in accordance with such case management orders as the judge who hears the new trial thinks fit; and

(iii) all questions of costs of the trial before the primary judge are to be determined by the judge who hears the new trial.

5. The orders made by Beach J on 28 March 2022 are dissolved.

6. Within 7 days the parties are to provide written submissions of no more than 5 pages on the question of the costs of the appeal.

7. Subject to any further order of the Court, the costs of the appeal will be determined on the papers.

Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

Background

Background to the litigation

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Evidence

Evidence Before The Court

I address the remaining appeal grounds seriatim.Ground one: rejection of the evidence of Ms Hart This ground invites this Court to overturn the rejection by the primary judge of the evidence of Ms Hart, which was in part based on his assessment of her demeanour and his acceptance of the evidence of the respondents as credible. At PJ [215]-[216] his Honour summarised his assessment and findings as follows:In relation to Ms Hart’s demeanour as a witness, I found her to be vague and evasive in relation to the critical questions concerning the circumstances in which she claims to have orally informed the Ripanis of the inaccuracy of the render. That is not a criticism of Ms Hart in relation to her understandable uncertainty of recollection about particular meetings or discussions relative to others. Rather, it is her uncertainty about the impetus for the critical changes to the floor plans, which I have described at length, that is more significant in reaching the conclusion that Ms Hart’s evidence was reconstructed and unreliable, notwithstanding her ostensible positon as a disinterested witness.The Ripanis, on the other hand, gave evidence that revealed a straightforward and plausible course of events. They were attracted to apartment 14.01 because of the appeal of the free span opening. They were told by Mr Tran that the render depicted apartment 14.01 and they had no reason to doubt that statement. They did not believe, or contend in this proceeding, that they expected the apartment to look identical to the render. They understood that there was a degree of interpretation in the render. But equally, they took from the render what it conveyed; specifically, a free span opening effectively the width of the internal living areas. At issue is the evidence of Ms Hart that in June 2017, and perhaps earlier in May 2017, before the contract became unconditional by reason of the approval by the respondents of the Option E floor plan, she explained to the respondents that the doors on the western side of the apartment could not be constructed with an opening as wide as depicted in the render. The precise evidence that she gave, and the circumstances which led to it being adduced, were examined by the primary judge and summarised as follows in his reasons:160Century Legend submitted that Ms Hart’s was (sic) evidence was, in effect, that during subsequent meetings in May and June 2017, she explained to the Ripanis the position of the doors on the western façade and told the Ripanis there would not be a single opening onto the terrace. In particular, Century Legend submitted that the Court should accept the following aspects of Ms Hart’s evidence:(1)that during meetings with the Ripanis prior to them entering into the contract of sale, Ms Hart pointed to, and annotated, various floor plan to show the Ripanis where the openings would be between the internal living area and external terrace;(2)that in a meeting with the Ripanis on a date she could not recall in May 2017, she specifically told the Ripanis that it was not possible to have a single large opening along the western façade because of the wind loading; (3)that in that same meeting in May 2017, she also said there had to be a series of smaller openings, but there would be a large opening centred on the fireplace allowing for access to the external terrace; and (4)that in a meeting on 9 June 2017, she discussed the size of the openings between the interior and exterior with the Ripanis and mentioned, by reference to the glazing mullions, that the opening would be approximately 3 to 4 metres.Ms Hart says these matters are reflected in annotated versions of the Option B floor plan (see Annexure V) and Option C floor plan (see Annexure VI).161In substance, Ms Hart’s evidence was that she explained to the Ripanis that it was “impossible” to have any wider opening than had been indicated by the floor plans and that the Ripanis were “disappointed” upon being informed of this.…172As I have said above, Century Legend’s defence, as pleaded and opened, proceeded on the tacit assumption that there was no discussion of the opening in pre-contractual meetings such that it would have disabused the Ripanis of any misapprehension created by the render. It was not opened that Ms Hart told the Ripanis that what was depicted by the render could not be constructed. Rather, until Century Legend’s defence developed and altered as a result of Ms Hart’s evidence, not previously mentioned, the gravamen of Century Legend’s defence was that it was discernible from the various iterations of the floor plans, discussed at meetings between the Ripanis and Ms Hart, that the free span opening depicted in the render would not be built. This original defence as to causation is still pressed, notwithstanding that if Ms Hart’s evidence were accepted there would hardly be any need to decide whether scrutiny of the floor plans disabused the Ripanis of any misapprehension about what the render represents.…174Ms Hart’s evidence is relevant to Century Legend’s original defence but only tangentially. The discussions between Ms Hart and the Ripanis about the floor plan and fit out were relevant as occasions when it may be expected the Ripanis considered the floor plans, including the depiction of the internal living areas and the terrace. Thus, as opened, Ms Hart was to give, in effect, only contextual evidence relevant to the question of reliance by the Ripanis. However, as I have said, on the second day of Mrs Ripanis cross-examination, it was suggested to her, for the first time, that Ms Hart had explained by reference to two iterations of the floor plan (Option B and Option C, see Annexure V and Annexure VI, respectively) that the free span opening depicted in the render could not be constructed. Century Legend submits that Ms Hart thereby corrected any misunderstanding the Ripanis may have had concerning the expanse of the free span opening.

Decision

Reasons for decision

Detriment of that type was suffered by the respondents. This ground therefore fails.Conclusion For these reasons, I would allow the appeal and order as follows:1.Leave is granted to the appellant to amend the notice of appeal in the form of the document provided to the Court on 8 August 2022.2.The appeal is allowed.3.The orders made in proceeding VID 266 of 2020 on 18 March and 13 April 2022 are set aside.4.Pursuant to ss 28(1)(f) and 30 of the Federal Court of Australia Act 1976 (Cth) there be a new trial of the proceeding:(a)limited to the issue of whether the respondents continued to rely on the misleading or deceptive conduct of the appellant within the period April 2017 to the date the contract of sale became unconditional in August 2017, and if resolved in favour of the respondents, the relief that should be granted; and(b)on the basis that:(i)the parties are bound by each other finding of fact and determination made by the primary judge, save for the findings and determinations relevant to (a);(ii)the parties may adduce such evidence and may make such submissions in accordance with such case management orders as the judge who hears the new trial thinks fit; and (iii)all questions of costs of the trial before the primary judge are to be determined by the judge who hears the new trial.5.The orders made by Beach J on 28 March 2022 are dissolved.6.Within 7 days the parties are to provide written submissions of no more than 5 pages on the question of the costs of the appeal. 7.Subject to any further order of the Court, the costs of the appeal will be determined on the papers.

Ratio Decidendi

Legal Principle Established

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