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Charles Lloyd Property Group Pty Ltd v Buchanan

Charles Lloyd Property Group Pty Ltd v Buchanan

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Case Copied 5 April 2013 40 min read

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IN THE SUPREME COURT OF VICTORIA
AT MELBOURNE

COMMERCIAL AND EQUITY DIVISION

S CI 2012 03385

CHARLES LLOYD PROPERTY GROUP PTY LTD	Plaintiff
- – and –
VALDA LORRAINE BUCHANAN	Defendant

JUDGE:	MUKHTAR AsJ
WHERE HELD:	Melbourne
DATE OF HEARING:	1 November, 17 December 2012
DATE OF JUDGMENT:	5 April 2013
CASE MAY BE CITED AS:	Charles Lloyd Property Group Pty Ltd v Buchanan
MEDIUM NEUTRAL CITATION:	[2013] VSC 148	Revised 5 April 2013

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CONTRACT ― Sale of land ― Sale of undeveloped and forested land for subdivisional development ― Occurrence of past suicide on land ― Non disclosure by vendor to purchaser of that fact ― Subsequent discovery of event by purchaser ― No assertion by vendor of wrongful silence by vendor on a material matter ― Agreement to extend completion date of contract despite discovery ― Purchaser failed to complete and failed to remedy default ― Vendor’s rescission ― Purchaser’s action to annul contract on the grounds of misleading and deceptive silence ― Vendor’s application for summary dismissal ― Application granted

FAIR TRADING ― Misleading and deceptive conduct ― “Engaging in conduct“ ― Conduct by silence ― Mere silence ― Elements of liability ― Requirement for materiality ― Requirement for reliance and being led into error ― Fair Trading Act ss 3, 9

PRACTICE AND PROCEDURE ― Summary dismissal ― Applicable test under Civil Procedure Act ― “No reasonable prospect of success” ― Differentiation from established test under Rules of Court for summary judgment ― Civil Procedure Act ss 63, 64 ― Rules of Court r 22, 23

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr A Morrison	Burchartz Intellex
For the Defendant	Mr M Campbell	Heinz & Partners

HIS HONOUR:

In this case a purchaser of a large area of vacant land at Mount Clear (near Ballarat) who was in default under the contract of sale has sued the vendor under the Fair Trading Act to annul the contract on the ground that it was misled and deceived by the pre-contractual silence of the vendor about something which the purchaser says was material. The vendor did not disclose that two years before the contract was made a young man had committed suicide in a forested area on the land.

The plaintiff seeks to portray the case as a type which is referred to in legal discourse as “psychologically stigmatised property”.[1] Such a defect is not one of title. Nor does it go to the physical features of the land. The stigma in such cases might emanate from some non-physical defect that causes emotional or psychological discomfort to a buyer. A publicised, and extreme, example in Australia was the case of Hinton[2] in which a real estate agent in New South Wales was prosecuted successfully by the Commissioner of Fair Trading for marketing a home in North Ryde without revealing to the unknowing purchasers the material and horrible fact that a young man had murdered his parents and sister in the house.
[1]See Eileen Webb, ”Houses…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2013] VSC 148
Decision Date: 5 April 2013

CaseChat Overview and Summary

In Charles Lloyd Property Group Pty Ltd v Buchanan, the purchaser sought to annul a contract for the sale of undeveloped and forested land for subdivisional development, claiming the vendor's non-disclosure of a prior suicide on the land constituted misleading and deceptive conduct. The case was heard in the Supreme Court of Victoria. The purchaser, upon discovering the suicide, did not communicate this fact to the vendor, who did not assert wrongful silence by the vendor on a material matter. Despite the discovery, the parties agreed to extend the completion date of the contract. However, the purchaser failed to complete and remedy their default, leading the vendor to rescind the contract. The purchaser then initiated an action to annul the contract on the grounds of misleading and deceptive silence, which the vendor sought to dismiss summarily.

The central legal issues the court had to address were whether the vendor's silence regarding the past suicide constituted misleading or deceptive conduct under the Fair Trading Act, and whether the purchaser's claim had a reasonable prospect of success under the Civil Procedure Act. The court had to determine whether the mere silence by the vendor, without any assertion of wrongful silence or materiality, could amount to misleading and deceptive conduct. Additionally, the court needed to assess whether the purchaser had relied on the silence and been led into error, which are essential elements of liability under the Act.

The court found that the vendor's silence did not amount to misleading or deceptive conduct. The silence was not accompanied by any assertion of wrongful silence or materiality, and the purchaser did not rely on the silence or was led into error. The court further noted that for conduct by silence to be misleading or deceptive, it must meet the statutory requirements of materiality and reliance. Given these findings, the court held that the purchaser's claim had no reasonable prospect of success. Consequently, the vendor's application for summary dismissal was granted.

The final orders of the court were that the purchaser's action to annul the contract was dismissed, and the costs of the application were awarded to the vendor. The court emphasised that the application for summary dismissal under the Civil Procedure Act required a lower threshold than the established test under the Rules of Court for summary judgment, focusing on whether there was a reasonable prospect of success rather than whether there was no reasonable argument in law or fact.

Orders