Ciccone v Ark Projects P/L
[1999] VSC 98
•31 March 1999
SUPREME COURT OF VICTORIA
CAUSES JURISDICTION Do not Send for Reporting Not Restricted
No.6364 of 1995
| DOMENIC CICCONE AND V. ARK PROJECTS PTY LTD AND | Plaintiffs Defendants |
| No. 8346 of 1995 | |
| ARK PROJECTS PTY LTD V. DOMINIC CICCONE AND | Plaintiff Defendants |
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JUDGE: | Hansen J. | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 15-18, 22-23 March 1999 | |
DATE OF JUDGMENT: | 31 March 1999 | |
CASE MAY BE CITED AS: | Ciccone v Ark Projects P/L and Anor. | |
MEDIA NEUTRAL CITATION: | [1999] VSC 98 | |
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| SALE OF LAND - Contract signed for purchase of vacant land - Planning permit for 14 units - Land partly on old quarry and filled with inert waste - Engineering report attached to s.32 statement - Whether purchaser aware of site conditions - Public auction - Whether agent represented that contract not binding unless approved by purchasers’ sons - Whether duty to disclose site conditions. TRADE PRACTICES - Misleading and deceptive conduct - Duty to disclose - Information given to purchasers prior to auction - Statements by auctioneer at public auction - Silence - Trade Practices Act, s.52. EQUITY - Purchasers of Italian background - Whether unconscionable conduct - Disabling circumstances - Ability to understand transaction - Whether contract voidable. |
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APPEARANCES: | Counsel | Solicitors |
| For the plaintiffs | Mr P. G. Cawthorn | Deacons Graham & James |
| For the first defendant | Mr B. M. Dennis | Richmond & Bennison |
| For the second defendant in 6364 of 1995 | Mr G. A. Watkins | Coltmans Price Brent |
HIS HONOUR:
Ark Projects Pty Ltd (“Ark”) is owned by Anthony Monteleone and his wife. In March 1990 Ark purchased vacant land at 77-79 Rufus Street, Epping for $225,000. Part of the site had been a quarry. Subsequently the quarry was part of the Preston tip. That part of the site which had been within the tip was filled with inert waste “some 22 years ago” (according to a decision of the Administrative Appeals Tribunal of Victoria, Planning Division, given on 10 May 1991 and referred to below). The waste consisted mainly of large basalt pieces, floaters and clay. When Ark acquired the property there was an existing planning permit for nine units and a second planning permit for 11 units with a condition that required an engineer’s report to be submitted to and approved by the responsible authority stating that the area of fill was suitable for the siting of two of the units and that the foundations proposed were adequate.
Ark desired a more intense development for the site. It obtained a report including proposed footing plans from Mitford Engineering dated 13 October 1990. The report was prepared by Dr Holland who has since died. The report proposed a development of 14 single storey units with units 9 to 12 inclusive being built on the filled land within the old quarry site.
The report commenced with a description of the site. Further to what I have mentioned as to the type of fill the report stated that:
“No household type waste was known to have been used as filling. Aerial photographs suggest that this quarry was confined to Lot 4, with rear vertical sides and a depth of up to about eight metres.”
The site comprises two Crown allotments numbered 4 and 5. The report does not state the depth of the fill on the site or the inclination of the side of the old quarry that is within the site. Some information bearing on these matters is contained in the borehole report of Statewide Geotechnical Services Pty Ltd to Ciccone Constructions Pty Ltd (“Ciccone Constructions”) dated 31 July 1995.
The report went on to refer to the taking of 16 boreholes over the likely building area for soil testing purposes, recommended appropriate footing systems, and commented on matters of construction, landscaping and long term maintenance. Details of the soil profile were said to be given on a borehole plan and site investigation logs. The report specified different footing recommendations for units 9-12 on the one hand and the balance of the units on the other. The report concluded by stating that concrete floor cracking due to shrinkage is inevitable, that there is no evidence to suggest that such cracking will affect the long term structural slab performance but, because such cracking can continue for up to 18 months, it is desirable to delay the placement of brittle floor tiles as long as possible and to use a flexible adhesive and a weak grout.
Ark sought planning approval from the responsible authority for the 14 unit development. That was refused and Ark appealed to the Administrative Appeals Tribunal. The Tribunal gave its decision on 10 May 1991, being the decision referred to above. The appeal was allowed and it was directed that a permit issue for the staged construction of 14 units subject to a number of conditions. One condition was that the design of the footings, inspections and treatment of the site be in accordance with all details in the Mitford Engineering report and that the construction be supervised by Dr Holland and his staff.
The written reasons for decision of the Tribunal disclose that it was satisfied that the site was suitable for unit development so long as the work was done as stipulated by and under the direction and inspection of Dr Holland. The Tribunal further stated in its reasons that:
“The quarry site will need to be shown on plans and prospective purchasers should have adequate knowledge of the existence of the site history.”
The planning permit was for a limited period and was subsequently extended for the development to be completed by 10 May 1997.
Ark could not proceed with the development due to a medical condition suffered by Mr Monteleone. On 24 January 1995 Ark signed an exclusive auction authority whereby it appointed Stockdale and Leggo Real Estate Pty Ltd (“Stockdale and Leggo”) of 780 High Street, Epping, as agent for the auction of the property on 4 March 1995 at 1:00p.m. The authority provided for the payment of the agent’s professional fees being the agent’s fees (or commission) and marketing expenses, the latter of which were payable whether or not a sale took place. The agent’s fees were payable if the property was sold during the currency of the authority. Clause 4 of the conditions appended to the authority stated that where the purchaser does not complete the purchase and the vendor is entitled to forfeit the deposit the vendor will take all reasonable steps to recover it and to pay the professional fees from the sum of the deposit paid or recovered. Clause 8.2 of the conditions stated that if the property is sold and no deposit is received by the agent the vendor will pay the total of the fees and marketing expenses on demand.
The authority was obtained for Stockdale and Leggo by Patrick Joseph Broderick, an employee of Stockdale and Leggo. He made the arrangements for the auction. That included an advertising flyer and a newspaper advertisement in which the property was described as a “Magnificent Development Site” and the following was stated:
“Town Planning approval for 14 units or suitable for other use subject to approval.”
The advertising did not refer to the fact that part of the site had been a quarry, that the quarry had been filled or the type of fill or to the existence of a report dealing with the soil characteristics and containing footing recommendations. While there is some difference in the evidence on the point I find that an auction board was erected on the property. There was little evidence as to the information stated on the board. I find that the information on the board was to the same or similar effect as the advertising mentioned.
For the moment I move to the auction which was duly held on 4 March. The auction was conducted by Phillip John Dare who was the principal of Stockdale and Leggo. In addition, Broderick attended the auction. Also present was Peter Lazov who was then employed as a licensed sub-agent or agents representative by Stockdale and Leggo (Preston) Pty Ltd at Thomastown. That is a separate business from the Stockdale and Leggo business conducted by Dare at Epping. According to Dare there are Stockdale and Leggo offices throughout Victoria; they work as a network of offices; they share listings and can have conjunctional arrangements, in aid of providing better service and achieving better results for clients. Lazov attended the auction because he had introduced a married couple, Domenic Ciccone and Catherine (or, it seems from the way that she gave her name in giving evidence, Catarina) Ciccone to the property.
Mr and Mrs Ciccone attended the auction. They lived nearby at 11 Parfrey Ave, Lalor. They were driven to the auction by their youngest son Anthony Ciccone who was then aged 17.
The auction was conducted and after twice referring the matter to the vendor Dare passed the property in. Mr Ciccone was the highest bidder at $225,000. There was then a negotiation in which he refused to increase his offer. The vendor accepted the offer on terms of a deposit of 10% and the balance in 60 days. At Dare’s request Mr and Mrs Ciccone and their son went to Dare’s office, which was close by, to complete and sign the contract of sale. There were three identical parts of the contract. Each was signed. It was arranged, in circumstances I refer to below, that Dare would attend at the Ciccones’ home later that day to collect the deposit. The Ciccones departed. Later the contract was signed by the vendor. Later again, Dare attended at the Ciccones’ home to give them an executed part of the contract and receive the deposit. I refer to what happened below: in short, the Ciccones refused to pay the deposit. They never paid the deposit and refused to proceed with the contract.
On 17 March 1995 Ark commenced a proceeding in the Magistrates’ Court for the recovery of the unpaid deposit and interest.
As may be expected there was correspondence between the parties including Stockdale and Leggo. In the court book as it was finally tendered most of the correspondence was omitted. This was a sensible course as nothing turned on it. Some items of correspondence remain in the court book. There is a letter from the Ciccones’ solicitor, Kenyons, dated 31 March 1995, in which it was stated that Mr and Mrs Ciccone would not be proceeding with the contract for a variety of reasons. The letter stated the following reasons: the Ciccones did not read English and could not have understood the contract; they were not told there was fill and in any building allowance would have to be made for it; Mr Ciccone had recently been ill; the agent placed pressure on the Ciccones when they expressed a desire to have the documents checked by their son who can read and write English; and the Ciccones did not know there was not a cooling off period. The solicitors suggested that the parties should “walk away” from the contract. A reply to this letter is not included in the court book.
There is a letter from Dare to Ark in June 1995 noting that Stockdale and Leggo was entitled to payment of its fees and expenses. Then there is a letter later in June from one of the Ciccones’ sons, John, on the letterhead of Ciccone Constructions, to the Real Estate Institute of Victoria Ltd complaining about aspects of the conduct of Dare who, John alleged, had assured Mr Ciccone that the contract would not be binding until it was “proofed” by his sons. In the court book as tendered subsequent correspondence from the Real Estate Institute of Victoria that stated that the matter would be held over due to the litigation has been omitted. That correspondence was in the court book through most of the trial and omitted by the parties on the ultimate tender.
On 30 June 1995 Mr and Mrs Ciccone commenced a proceeding in this Court against Ark and Stockdale and Leggo. The statement of claim has been amended three times, the last occasion being on the first day of the trial before me. I refer below to the relief sought by the Ciccones. Basically it is to avoid the contract. The defendants filed amended defences during the trial in response to the amended statement of claim. There is no counterclaim. Further, each defendant seeks contribution from the other under s.23B of the Wrongs Act.
On 27 September 1995 Ark’s solicitors, Price Brent, wrote to the Ciccones’ solicitors. They referred to the Ciccones’ “clear refusal to proceed to complete their purchase” and advised that Ark accepted their repudiation. They further advised that Ark was taking steps to re-sell the property by auction on 21 October 1995. For the purpose of the sale Ark obtained a valuation of the property from Davies and Pringle at a cost of $700. Ark appointed a real estate agent called Duncan and McIntyre as agent for the sale. The property was passed in with no genuine bid on 21 October 1995.
Late in 1996 Monteleone was approached by parties interested in purchasing the property and a contract of sale dated 24 December 1996 was entered into with Mary Irving and/or nominee as purchaser for $180,000 payable as to 10% by way of deposit and as to the balance on 24 March 1997. It appears from a statement of adjustments that the purchaser had become Larncott Pty Ltd and that settlement under the contract occurred on 9 April 1997.
Since then the property has been developed by the building of 18 town houses some of which are single and some of which are double storey.
Ark’s Magistrates’ Court case was uplifted to this Court and an amended statement of claim was filed on 23 February 1998. Mr and Mrs Ciccone are the sole defendants. The relief sought is a declaration that the Ciccones repudiated their obligations and that Ark has validly determined the contract, and damages. The damages claimed are the loss on the sale being the difference between the price on the sale to Mr and Mrs Ciccone and the price which Ark subsequently obtained for the property, outgoings on the property, the cost of the valuation, Stockdale and Leggo’s fees and expenses, and interest.
An amended defence in that proceeding was filed in November 1998. By leave granted at the trial Ark filed a reply and the Ciccones filed a rejoinder.
The two cases were heard together. The evidence was common to both. In substance the cases raise one set of issues for determination. The issues could have been raised in one proceeding by way of claim and counterclaim but the parties did not proceed in that way.
To complete this overview of the case I now refer to the issues raised in the pleadings.
The claim by Ark is straightforward. It sues on what it alleges was a valid and enforceable contract of sale which it rescinded following the purchasers’ repudiation of their obligations. In their defence the Ciccones alleged that the contract of sale included a term “implied in conversations” with Dare on the date of the auction. The pleading is defective in that it does not specify the alleged term. What it does is state in particulars that:
“Mr Dare caused the Defendants to believe they were not bound by the contract unless their sons perused and approved the contract. This was a condition precedent to the contract.”
It is alleged that this condition precedent was not satisfied. It is alleged that the defendants’ sons did not approve the contract and that the agent was so informed on 4 March 1995. The only other positive thing stated in the defence is that the defendants relied on the matters pleaded in their second further amended statement of claim in their proceeding. That is now to be taken as a reference to their statement of claim as it was further amended at the trial.
By its reply to that defence Ark alleged two things. First, that the alleged condition precedent was by virtue of the operation of general condition 11 and special condition 11 of the contract of sale merged in the contract and excluded or cancelled. Secondly, that any such condition was not in writing and is therefore unenforceable by virtue of s.126 of the Instruments Act 1958. It is convenient at this point to note that general condition 11 provides, so far as relevant, that:
“These conditions prevail over the conditions in any earlier contract
. . .”
Special condition 11 is an entire agreement provision. In so far as is relevant it states:
“The provisions contained herein or implied by statute cover and comprise the whole of the agreement between the parties. The Purchaser expressly agrees and declares that all collateral or other agreements and all previous negotiations, representations, promises, warranties, arrangements, undertakings and statements (if any) whether expressed or implied as to the subject matter hereof and/or as to the property and/or as to the intentions of either party are merged herein and otherwise are excluded and cancelled.”
To this pleading the defendants filed a rejoinder which alleged that Ark is estopped from relying on general condition 11, special condition 11 and s.126 of the Instruments Act. The estoppel is alleged to arise in the following circumstances. It is alleged that on 4 March 1995 Ark represented that if Mr and Mrs Ciccone signed the contract it would not be considered binding unless their sons John and Patrick perused and approved the contents. The representation is stated in particulars to be oral and implied. Insofar as it was oral it is stated to be contained in a conversation between Dare and Mr and Mrs Ciccone to the effect alleged. Insofar as it was implied the implication is stated to arise from the fact that a deposit was not given and Mr and Mrs Ciccone told Dare they did not understand English. It is then alleged that to Ark’s knowledge Mr and Mrs Ciccone relied on the representation to their detriment in signing the contract without having first obtained the approval of their sons. These circumstances are alleged to render it unconscionable for Ark to resile from the representation by relying on the conditions of contract and s.126. Thus the estoppel arose.
All these issues and more, are raised in the pleadings in the Ciccones’ case. At an early part of their statement of claim Mr and Mrs Ciccone alleged that prior to the auction they did not receive a copy of the contract of sale and statement under s.32 of the Sale of Land Act 1962 and an explanation of their terms and effect, that they were unable to read the English language, that they had not seen the property before the auction, and that unknown to them the property or part of it was formerly a rubbish tip and was filled or reclaimed land. It was then alleged that Stockdale and Leggo were aware of these matters and of the following further matters: that the cost of building on the site would be significantly more expensive than on a site that was not (in part) a filled quarry; that four of the units would be built on reclaimed land; and that the factor of concrete shrinkage for 18 months would delay completion of the unit development. In those premises, it was alleged, Ark and Stockdale and Leggo were under a duty to Mr and Mrs Ciccone to advise or disclose that the property had been a rubbish tip and had been filled, that the property was not suitable for the unit development, that the building costs would be significantly more expensive than otherwise, that the planning permit contemplated four units on filled land, and that the presence of concrete shrinking for 18 months would delay completion. It is then alleged that Stockdale and Leggo did not advise Mr and Mrs Ciccone of these matters by reason whereof they impliedly represented that the property was a suitable site for the 14 unit development and that it would not be significantly more expensive to build than otherwise would be the case.
Pausing at this point in the pleading, these allegations raise a number of issues of fact upon which I must rule. One issue can be clarified immediately. That concerns the use in the pleading (and in the oral evidence) of the phrase “rubbish tip”. If by the use of that phrase it is being alleged that the fill on the property consisted of or included rubbish such as household or industrial waste, I reject the allegation. That allegation was not established by any of the evidence at the trial. I do not regard as cogent or satisfactory evidence in this respect some of the loose and unfounded statements in Mr and Mrs Ciccones’ case, particularly in the evidence of John Ciccone to the effect that general rubbish had been dumped in the quarry. The case was conducted before me on the basis that the statements as to the site contained in the Mitford Engineering report and the decision of the Tribunal were correct. Further, Mr and Mrs Ciccone did not call any properly qualified evidence to challenge those statements.
I return to the allegations in Mr and Mrs Ciccones’ statement of claim. The next allegation pleads that the defendants represented that if the Ciccones signed the contract it would not be considered binding unless their sons John and Patrick perused and approved of the contract. This plea is the same as the plea made in Mr and Mrs Ciccones’ rejoinder in Ark’s proceeding. There the plea was made in support of the estoppel. In Mr and Mrs Ciccones’ proceeding the plea is the basis of a number of allegations. It is alleged that Ark owed Mr and Mrs Ciccone a duty of care to ensure that representations made by it or on its behalf were true and to advise of any fundamental deficiencies or peculiarities in or with the property. In particulars it was alleged that this duty arose from the relationship of potential vendor and potential purchaser which existed prior to the execution of the contract. It was then alleged that Stockdale and Leggo made the representations and failed to disclose the matters which they should have disclosed in order to induce Mr and Mrs Ciccone to enter into the contract.
It is alleged that if Mr and Mrs Ciccone had known that the several representations were not true, they would not have executed the contract.
Mr and Mrs Ciccone then alleged that their lack of English and of an opportunity to obtain assistance in reading the contract meant that they did not discover that the property was a rubbish tip and filled land, or a suitable site for the unit development or that building costs would be significantly more or that the planning permit contemplated four of the units being built on filled land, or the matter of concrete shrinkage.
Then it is alleged that Stockdale and Leggo warranted the truth of its representations which were alleged to be false or untrue.
Then it is alleged that Ark was in breach of its duty of care to Mr and Mrs Ciccone.
Then the pleading of the Ciccones’ case turns to the Trade Practices Act 1974 and matching provisions in the Fair Trading Act. It is alleged that in what it said and omitted to say Stockdale and Leggo engaged in conduct that contravened s.52, s.53 A(1)(b) and s.59(2) of the Trade Practices Act, that Ark aided and abetted, counselled or procured or induced the contraventions, that Stockdale and Leggo’s conduct was within the scope of its agency, and that by reason of s.84 of the Trade Practices Act the conduct of Stockdale and Leggo is deemed to have been engaged in by Ark.
The next step in the pleading is to allege that Mr and Mrs Ciccone were at a disadvantage and that Stockdale and Leggo on its behalf or on behalf of Ark took unconscientious advantage of the Ciccones when it knew or ought to have known of their disadvantage. Extensive particulars are given of the alleged disadvantage. They are: that Mr and Mrs Ciccone were not given an opportunity to obtain independent advice on the contract; that they were not aware of the detailed contents of the planning permit; that they relied upon the truth of the representations; the non-disclosure of facts concerning the site; that in the circumstances Mr and Mrs Ciccone were unable to make a worthwhile judgment as to what was in their best interest; they were not warned or aware of the problems associated with the unit development; they were not given a copy of the contract; they were “of Italian origin, uneducated, had limited business experience and were unable to read English sufficiently or at all so as to become aware of the contents of” the s.32 statement; and that the Ciccones were not given the opportunity to obtain assistance from a person who could read English sufficiently to become aware of the contents of the s.32 statement. It is alleged that the procuring of the Ciccones’ signature to the contract was unconscionable and that the contract was or is void or voidable.
Finally it is alleged that the contract was subject to the condition precedent as to the Ciccones’ sons perusing and approving the contract that is alleged in the Ciccones’ defence in Ark’s proceeding. There is a difference in the two pleadings however in that in the statement of claim in the Ciccones’ proceeding the condition is stated in particulars to have been agreed between Dare and the Ciccones on 4 March 1995 at Dare’s office. No implication is relied upon.
Little need be said about the defences. The case turns very much on the facts and there are significant differences between the accounts given by and on behalf of the Ciccones on the one hand and Ark and Stockdale and Leggo on the other. In addition to the points taken against the Ciccones which I have already mentioned, the following points are made. Ark alleges that if Stockdale and Leggo acted as the Ciccones allege, it was acting outside the scope of its authority as agent for Ark; Stockdale and Leggo deny this and allege that in all that they did they acted as Ark’s agent.
In its defence Ark alleges that prior to signing the contract the Ciccones knew that the property had been a quarry and that they were aware of the Mitford Engineering report. In its defence Stockdale and Leggo allege that on 28 February 1995 and prior to the auction on 4 March the Ciccones were given a copy of the Mitford Engineering report. It is further alleged that prior to the auction Dare handed a copy of the contract and s.32 statement to the Ciccones and that during the auction he explained the terms of the contract. These and related matters were the subject of conflicting evidence at the trial.
The defences further deny the existence of any condition or representation as to the contract not being binding unless approved by the Ciccones’ sons.
That is a sufficient reference to the pleadings. It is appropriate to note at this point that in his final address counsel for the Ciccones put his case on the following bases:
1.that Ark and Stockdale and Leggo contravened s.52 of the Trade Practices Act:
“because in all the circumstances [there] should have been disclosed and stated clearly in terms comprehensible by Mr and Mrs Ciccone that the land had been a quarry and was filled land. Mr and Mrs Ciccone:
•Did not receive a copy of the contract or the Section 32 Statement;
•Had not seen the land before the auction;
•Were unable to read English;
•Did not know that the land was a former quarry and tip.
The Vendor’s Agent knew those things or, at least, they ought to have been evident to it.”
Reference was made to the cases which have established that silence on a point in discussions can be a relevant circumstance for the purpose of s.52: Commonwealth Bank of Australia v Mehta (1991) 23 NSWLR 84 at 88; Demagogue Pty Ltd v Ramensky (1992) 39 FCR 31 at 32; and Winterton Constructions Pty Ltd v Hambros Australia Ltd (1992) 39 FCR 97 at 114. It was submitted that in the circumstances a duty to disclose the matters concerning the nature and characteristics of the land and the effect on building costs arose and that the agent did not meet that duty because he did not disclose those matters in words that Mr and Mrs Ciccone could comprehend. It was submitted that it was natural for the Ciccones to expect that the contract and s.32 statement was “standard and had no unusual features”, and that any “significant” departure from the standard should have been advised to the Ciccones; see Gregg v Tasmanian Trustees Ltd (1997) 73 FCR 91 at 108. It was submitted that no clear and cogent explanation was given, in particular that part of the property had been a quarry and filled. In this respect it was significant that the Tribunal had said that purchasers should be advised, that Monteleone knew that there was potential for a problem because of concrete shrinkage and had attached the Mitford Engineering report to the s.32 statement, and that settlement and cracking would occur.
The Ciccones gave evidence that if they had known the property had been a quarry or a tip they would not have signed the contract. Thus, it was submitted there was reliance by them and because the true facts were to the contrary and the Ciccones had no reason to be aware of any problem with the property, there had been misleading and deceptive conduct within the meaning of s.52. Counsel based his case under the Trade Practices Act on s.52.
It was submitted that the Ciccones had suffered loss being the extra costs that would be incurred in building in accordance with the Mitford Engineering recommendations, as against building on unfilled land. It is not disputed that there is such an extra component of costs: see the Mitford Engineering report and the evidence of David Bryce Slade. As to the need to establish loss and damage see Marks v GIO Australia Holdings Ltd (1998) 73 ALJR 12 at 23.
It was submitted that the appropriate relief was an order declaring the contract to be void under s.87 (2) (a) or an order refusing to enforce the contract (s.87 (2) (ba) ).
2.That before the contract was signed it was represented that if Mr and Mrs Ciccone signed the contract it would not be considered binding unless read and approved by their sons.
It was submitted that this was a representation as to a future matter because it conveyed that the intention of the representor was that if the contract was not approved it would not be contended that the representee was bound by it. The representor for this purpose was Dare. Accordingly s.51A of the Trade Practices Act applied and the onus was on the representor to establish that it had reasonable grounds for making the representation. It was submitted that no such evidence had been adduced and, moreover, that the lack of intention to honour the representation is seen later in the day (4 March) when Stockdale and Leggo acted contrary to the representation. As to the operation of s.51A in a contractual setting see Futuretronics International Pty Ltd v Gadzhis [1992] 2 VR 217 at 238-241. In these circumstances a contravention of s.52 was established.
Finally on this aspect it was pointed out that a contractual provision such as special condition 11 cannot operate as a defence to a claim under s.52. See Henjo Investments Pty Ltd v Collins Marrickville Pty Ltd (1998) 79 ALR 83 at 98-99, and Petera Pty Ltd v EAJ Pty Ltd (1985) 7 FCR 375 at 378.
3.Alternatively, it was a condition precedent to the operation of the contract that the Ciccones’ sons approve of it. In the course of his submissions in final address counsel for Mr and Mrs Ciccone stated that their evidence had only been that their sons “read” the contract. In other words he stated that their evidence did not establish the further element alleged in the pleading that the sons “approve” of the contract. He submitted that the element of approval should be inferred from the word “read” taken in the circumstances. It should also be inferred, counsel submitted, that Dare had so agreed. It was submitted that the objective circumstances, in particular the facts that the deposit was not paid and the Ciccones’ lack of facility in English suggest that Dare did so agree.
It was submitted by Mr and Mrs Ciccones’ counsel that this condition precedent was a separate contractual promise and not a contract for the sale or disposition of an interest in land which s.126 of the Instruments Act required to be in writing. He also submitted that neither the general or special condition 11 relied on by Ark precluded reliance on the alleged separate colateral contract. Alternatively, as previously mentioned, Ark was estopped from denying the condition precedent and that the Ciccones had not approved the contract. It is unnecessary at this point to further develop this aspect of the submission or to list the authorities referred to by counsel.
4.That when Mr and Mrs Ciccone signed the contract they were under a special disability because they could not read English, they did not understand the unusual nature of the land, they did not understand the “deficiency” affecting the land, they were not given an opportunity to seek independent legal advice, and the contract was not translated for them.
It was submitted that this special disability was made known to Ark through its agent Stockdale and Leggo and that the Ciccones have an equity to set aside the contract: The Commercial Bank of Australia Ltd v Amadio (1981-1982) 151 CLR 447.
I now turn to deal with the facts.
Mr and Mrs Ciccone were born in Calabria within a day or two of each other in September 1939. Mr Ciccone attended primary school to the age of 13. He has had no further schooling. He has not been educated in the English language. When he left school he worked in a family timber business. He also worked in some other European countries. Mr and Mrs Ciccone lived in the same village and married in 1960. Mrs Ciccone has always been a housewife and generally assisted in family activity such as when they were tobacco farming as I mention below. After having two children, Patrick and John, they migrated to Australia in 1960, after which they had three more children Katerina, Raffaline and Anthony. They had a lot of relatives in Australia.
Mrs Ciccone said in evidence that she does not speak English and cannot read or write in the English language. At home they speak Calabrese. She gave her evidence through an interpreter. I thought, observing her closely while she gave her evidence, that she has some, although a limited, comprehension of English words. I accept that she does not read or write English. She impressed me as being an alert and intelligent woman.
Mr Ciccone did not give his evidence through an interpreter. He did not need to. I observed him closely while he gave evidence. He was quick to comprehend questions and alert to what he wished to say in answer. He too is an alert and intelligent person. He said that he cannot read or write English. This is a difficult matter to assess. One factor in this regard concerned his dealings with land and the many documents he has had to sign over the years. Notwithstanding his obvious ability with the spoken word, and an obvious understanding of the spoken word, I accept that he has no appreciable ability to read or write in English. I doubt that he is bereft of ability in regard to reading English but the extent to which he can do so appears not to be significant.
Since arriving in Australia Mr and Mrs Ciccone have a record of hard work and success of which they and their family should be proud. They have worked very hard and succeeded in a material way, as well as raising a family.
When they came to Australia the Ciccones landed in Melbourne. They went to a relative’s tobacco farm at Buffalo River near Myrtleford. In their third year Mr Ciccone entered into a share farming arrangement with Nick Motta who owned the land. Mr and Mrs Ciccone provided the labour. In about 1971 they and some other people purchased a part of Motta’s farm for $85,000 which was financed as to $40,000 by a loan from the ANZ Bank on the security of a mortgage over the land. The Ciccones said that they had the documents explained to them by their cousin. This was a theme that ran through their evidence: that legal type documents were always explained or interpreted for them by another person before they signed them.
The land purchased from Motta was worked as a tobacco farm. Mr and Mrs Ciccone worked on it.
In about 1974 the Ciccones left this property. It would seem that their interest was acquired by the other persons who had been the purchasers with them. This was done contemporaneously with the purchase by Mr and Mrs Ciccone and some other persons of a tobacco farm at Mount Beauty for $250,000. They had a solicitor. The property was farmed in partnership. The Ciccones lived on the property. In 1975 or 1976 they bought out some of the other interests and in 1980 or 1981 they bought out the remaining interests in the property. Thus the Ciccones became the sole owners of the property. At each stage there were legal documents and the same solicitor acted for them. The solicitor became a very good friend. He acted for the Ciccones in subsequent transactions. He did not give evidence before me.
In 1981 Mr and Mrs Ciccone commenced to subdivide the Mount Beauty farm into five or six allotments. They engaged a surveyor for the purpose. They sold the subdivided lots. The same solicitor acted for them in these transactions. At the same time the Ciccones continued to work the farm.
In 1986 Mr and Mrs Ciccone moved to Melbourne. They purchased a block of land and built a house. Again they had legal assistance, this time from an Italian solicitor in Brunswick. They obtained a loan from the ANZ Bank.
Ciccone Constructions was established in 1982 when Mr and Mrs Ciccone were still on the tobacco farm. It was established to act as trustee for the Domenic Ciccone Family Trust which is for the benefit of the family. It conducts an earthworks contracting business in Melbourne. It appears that earthworks activities had been engaged in from as early as around 1982, including by Mr Ciccone. Patrick and John instigated the establishment of the earthworks business in Melbourne. Mr Ciccone agreed to this activity and heavy equipment was acquired with lending assistance from the ANZ Bank. Of course the transactions were effected by documents including a guarantee by Mr Ciccone. Mr and Mrs Ciccone continue as the only directors and shareholders of Ciccone Constructions and they are the cheque signatories. The business is successful. On a day to day basis it seems that Patrick and John run the business. At the same time Mr Ciccone works in the business and he and his wife retain control of it. It is a family business and both because of their control and the culture in the family regarding the role of parents Mr and Mrs Ciccone are consulted on important matters. I formed the view that they were not tokens in this respect and that Mrs Ciccone maintained a strong eye on the financial side.
In about 1992 to 1994 Mr and Mrs Ciccone purchased a property in Wodonga using sale proceeds from the Mount Beauty property. This was subdivided into 30 or 34 allotments. Mr and Mrs Ciccone still own three or four lots; all the others have been sold. Mr Ciccone said in evidence that income from the subdivision was about to be received in February/March 1995. This is consistent with evidence of Mrs Ciccone, although on her evidence the money might have been due a little later. I conclude on the evidence that there was sufficient money coming in to cover the cost of buying the Rufus Street property.
In 1993 or 1994 Mr and Mrs Ciccone and another couple purchased some industrial land in Thomastown. Mr Ciccone said that his son John dealt with this transaction. A solicitor acted for them. The property has been subdivided. The Ciccones retained part of the land which is used by Ciccone Constructions as a depot and yard for its business purposes, another part was retained by the other owners who have built a factory on it, and the balance was divided into a number of industrial blocks. Mr Ciccone’s evidence was a little confusing as to the number of blocks produced in this third part of the subdivision. I accept as correct his evidence that seven or nine of these further lots have been sold and that another 14 or 16 are left.
This history discloses a significant amount of activity in land transactions including the obtaining and securing of finance. Each transaction involved Mr and Mrs Ciccone as a party and as signatories to documentation. It is obvious, and I so find, that Mr Ciccone developed, and by 1995 held, an understanding of the nature and effect of conveyancing and finance documents such as a mortgage, and the financial side of such transactions. He impressed me as an astute, hardworking person, careful and aware of what he was doing from time to time.
Mr Ciccone said he has suffered heart problems, and that he had a heart attack and was sent to hospital in February 1995 or 1994. It seems that the correct year was in 1995 shortly before the events that give rise to this case.
I now turn to the relevant events concerning the sale of the Rufus Street property. This is the area in which there are significant and irreconcilable differences in the evidence.
Who did give evidence? For Ark, evidence was given by Mr Monteleone and his brother Nicholas whose relatively brief evidence was concerned with the auction which he attended. Counsel for Ark also called Dare. For Mr and Mrs Ciccone evidence was given by themselves, their sons John and Anthony and their daughter-in-law Franceschina (Patrick’s wife), and Slade who is a geotechnical engineer. For Stockdale and Leggo evidence was given by Lazov and Broderick; of course Dare would have been called if he had not already been called by Ark. The respective interests of the parties to succeed in their own cause is obvious. Broderick is in a different position as he no longer is an employee of Stockdale and Leggo. Nor is Lazov any longer an employee of the other Stockdale and Leggo business, although he retains an interest in receiving his commission entitlement on the sale. No commission at all has yet been received by Stockdale and Leggo in Epping and, in consequence, I infer no commission has been passed onto Lazov or his then employer.
Regarding the evidence overall, I prefer the evidence of Dare, Broderick and Lazov to the evidence of the Ciccones. I regard the former three witnesses, and the Monteleones, as honest and reliable witnesses who sought to give evidence as accurately as they could from their best recollection. Regrettably I am forced to criticise the evidence given by and for the Ciccones which, as appears below, I do not accept in critical respects both in terms of credibility and on the probabilities.
I now turn to deal with the facts. In doing so I will adopt the course taken by counsel and consider the facts in the chronological order in which the relevant events occurred. As I do so I will make findings.
The first step in the story is that, having determined to sell the property, Mr Monteleone prepared the s.32 statement and the contract of sale and gave them to Broderick on 16 February 1995. In preparing these documents he had the benefit of the like documents used by the vendor to Ark when it purchased the land. In particular, in making up the s.32 statement, he attached, in addition to the usual certificates, the planning permit for the construction of 14 units and the Mitford Engineering report including the borehole plan upon which is marked the “approximate outline of quarry”. He also attached a letter from the responsible authority which notified an extension of the planning permit and stated that the conditions in the permit must be complied with.
It is not suggested by any counsel that as drawn, and ultimately completed, the contract was not effective to operate as a sale of the property. Nor was it submitted that the s.32 statement, considered as such, did not meet the requirements of s.32.
Mr Monteleone said in evidence that four or five days later Broderick enquired about the footing plans so he gave them to Broderick the next day and discussed them with him. He indicated to Broderick which units were in the filled area and he pointed out the different footing requirements and stated that the slabs in the filled area would cost about $2,000 extra each. The footing plans are those in the court book at pp.343-367.
The story then moves to Lazov. He introduced the Rufus Street property to Mr and Mrs Ciccone. It happened in this way. In late February 1995 he attended at the Ciccones’ house to see Patrick Ciccone and his wife about another property. Mr and Mrs Ciccone were present at the discussion. Lazov said that Mr Ciccone said he was looking for a development site and that he (Lazov) said he had a property at Mill Street for 18 units and another in Rufus Street for 14 units. He did not say anything about part of the Rufus Street property having been a quarry; he was not aware of that at the time. Lazov suggested that the Ciccones see the property. Lazov said in evidence that if he was to claim commission he was required to have shown the purchaser the subject property and register the introduction with Stockdale and Leggo prior to a sale. This was a factor why he would have wished to show the Ciccones the property.
Lazov said in evidence that he took Mr and Mrs Ciccone in his car to see the Rufus Street property and the Mill Street property. He believed that he did so on 28 February. He went on to say that after he dropped them off home he went to the Stockdale and Leggo Epping office. He believed that Dare was there and that he (Lazov) got their file on the property and photocopied documents on it. He identified the Mitford Engineering report and the borehole plan as documents he copied. He went “back to them” at their house and gave them the information he had obtained off the file.
Lazov further said in evidence that prior to the auction, his evidence suggests on Friday 3 March, he telephoned the Ciccones and was told that they were coming to the auction. It is not clear to whom he spoke.
A factor supportive of this evidence is that the s.32 statement including the Mitford Engineering report was in the file when Lazov says that he attended the office and copied documents. I accept Mr Monteleone’s evidence as to the documents he gave Broderick.
There is also evidence of Dare which is supportive of this evidence. First, Dare said that he was in the office when Lazov came in. It is an open office and he saw Lazov come in and ask for the Rufus Street property file which was in a filing cabinet situated behind Dare’s secretary and to whom Dare was then talking. According to Dare, Lazov obtained the file, “photocopied it, and went and he said he was going down to give it to the Ciccones”. That answer was given in response to a question that was directed to provision to the Ciccones of the s.32 statement including the Mitford Engineering report. I would infer on a consideration of all of the evidence and the probabilities that the contract of sale too was copied and provided to the Ciccones.
As against this, what is the evidence of the Ciccones? It is very different. They agree that Lazov attended at their home on one occasion in late February 1995. Lazov told them that there was a block of land in Epping available for 12 or 14 units that was going to auction. He told them it was a good block but otherwise, it would seem on their evidence, nothing about the block. According to them he never saw them again until they met him at the site shortly prior to the auction and he did not give them any written information about the property. Nor did Lazov drive them to see the land. Their evidence is that they did not see the land prior to the auction. Their youngest son Anthony drove them to the auction. They did not tell their sons John and Patrick they were going to the auction. Before the auction commenced Mr Ciccone (who was the active party of the two) was not given a copy of the contract to read; there is evidence to the contrary of this which I mention below.
A question was asked of Anthony as to how he knew where the property was to which his parents wanted him to drive. Anthony said in evidence that his father gave him a “rough introduction of where the property was and he said it was in relation to behind the Epping pub”. He said they drove to “the street after” and then “noticed some people standing in front of a piece of land so we presumed that that was the place”. In cross-examination Anthony further said that when he set out he did not know the name of the street the property was in; his father had said it “was a street after the Epping pub”. I regard that evidence as unlikely.
The fact is that Mr Ciccone, an experienced person in land transactions, and an alert and intelligent person, went to the auction intending to bid for this development site and he successfully bid to $225,000. It is against the probabilities that he did so on the basis of only one introductory conversation with Lazov, and having never inspected the property or received any documentation concerning the site or the nature and manner of the development whatsoever. Dare is a very experienced estate agent including in relation to dealing with persons of Italian extraction and his evidence, in part, is worth noting here: he was not conscious in his dealings with the Ciccones that Mr Ciccone suffered any limitation in comprehending what was being said; Mr Ciccone’s actions indicated that he had been involved in the purchase of real estate before; Mr Ciccone indicated to Dare that he was well aware of the site and what the site entailed, that indication being constituted by Mr Ciccone saying to him that he would not pay anymore than $225,000 and that that was as much as he wanted to pay and that he had the trucks and equipment to deal with the rock and the problems. It must be allowed that this latter statement might have been made in reference to a pile of rocks that were located on the left hand corner of the property. On the other hand, if the fact is that Mr Ciccone had the Mitford Engineering report his statement may refer to and expose an understanding of the underlying site condition. I find, on a consideration of all of the evidence, that this evidence of Dare accurately reflects Mr Ciccone as Dare found him and dealt with him. It is consistent with Mr Ciccone’s experience in dealing with real estate. It also contains indications that the Ciccones attended the auction with a greater degree of knowledge of the property for sale than they stated in their evidence.
I accept the account of events given by Lazov. I reject the accounts given by the Ciccones wherever it conflicts. In so concluding I take account of Mr Ciccone’s answer to an interrogatory of the second defendant in which he swore, on 6 August 1997, that Lazov made representations to him at his house on two occasions, in about late February 1995 and a couple of days prior to the auction. In other words, he swore then that Lazov attended at his home on two occasions prior to the auction. And on each occasion spoke about the Rufus Street property. That is Lazov’s evidence. Yet in the witness box the Ciccones’ case was that Lazov only visited once. I reject that evidence as false. I accept Lazov’s evidence that he visited twice and that he took Mr and Mrs Ciccone to inspect the property.
These conclusions mean that in fact Mr and Mrs Ciccone had inspected the property with Lazov and that Lazov had given them a copy of the Mitford Engineering report prior to the auction. I find too that he had provided them with a copy of the planning permit and of the contract of sale. I am satisfied as to these matters both on the acceptance of the evidence of Lazov and Dare and on the probabilities as to what occurred. Lazov’s interest lay in obtaining a commission and his actions (as he describes them) are likely as a matter of probability. I find that Mr and Mrs Ciccone attended at the auction with a knowledge of the property gained from the information given to them and intending to purchase the property as a development site. Not only do I reject their evidence but in my view it is improbable that they attended the auction, somehow managing to find the property, and bid as Mr Ciccone did with no knowledge of the property.
I now proceed to the events at the auction at the property.
I have already mentioned that Dare introduced himself to Mr Ciccone. The Ciccones arrived at around 12 noon or 12:30 p.m. The auction was due to start at 1:00 p.m. Anthony said that he parked the car on the opposite side of the property, that his parents left the car and that he stayed in the car attending to some school work. He was not with them during the auction and did not hear it. He picked the story up after the auction when he said he saw his parents walking to the car. For the moment I will deal with what happened up to the commencement of the auction.
Mr Ciccone said that there was an auction board but he was not able to read it. He said that before the auction started Lazov said to him it was a beautiful block but he did not speak to Dare and Dare did not give him a copy of the contract of sale or the s.32 statement. He further said that he did not know the dimensions of the property; it was not necessary to know them if the agent said it was available for 12 or 14 units. He said that Dare then conducted the auction.
Mrs Ciccone was asked if she had any discussion or saw her husband have any discussion with anybody after she got to the Rufus Street property before the auction. I note that she answered this question “No” without the aid of the interpreter. This was one of several occasions on which she gave an indication that her understanding of the English language was somewhat better than she would have it. She went on to say that nobody handed her any document before the auction and she did not see anybody hand a document to her husband before the auction. In fact she moved away from her husband and stood under a tree out of the sun during the auction and while she saw him talking she did not know what happened. She said she watched her husband. At another point in her evidence she indicated that she understood dollar amounts and I took her evidence to be that she was aware that dollar amounts were being called out.
Notwithstanding Mrs Ciccone’s evidence as to her husband not speaking to anyone, their counsel in his final address put submissions on the basis that Lazov and Mr Ciccone did speak prior to the auction. Indeed he relied on Lazov having said to Mr Ciccone that it was a beautiful block.
On the other side is the evidence given by Lazov and Dare to which I have already referred. Dare said that he arrived at the site ten to fifteen minutes before the advertised time for the auction. He said that Lazov or Broderick pointed out Mr and Mrs Ciccone as the people who had shown interest in the property and he went up and introduced himself. He said that he handed them the contract of sale including the s.32 statement. He also gave the contract (there were three parts) to some other people. This was to enable them to peruse it and ask any questions they may have. He spoke to the Ciccones for a short time and moved on and spoke to some other people. Dare said that there was a young man with Mr and Mrs Ciccone and they were standing by their car. He said that he spoke to them in English and had no difficulty in communicating with them. Later, before the auction, he returned to them and asked if they had any questions in relation to the contract to which Mr Ciccone said “No” and he took the contract back. He then proceeded to commence the auction.
In cross-examination Dare said that he could not say that he had seen Mr and Mrs Ciccone read or look through the contract, as his attention had been on other persons. His conversation was with Mr Ciccone. In further cross-examination he said that when he spoke to Mr and Mrs Ciccone before the auction he did not talk about the soil report and the filling. He did what he always does which is to hand an interested party the contract and ask them to look at it and raise any questions with him.
Monteleone, Lazov and Broderick gave evidence which is consistent with Dare’s account. Monteleone said he arrived at the auction a bit after 1:00p.m., but before it commenced. He saw what he described as an elderly couple, and which he later found out were Mr and Mrs Ciccone, talking to Dare. His observation was that Dare was showing them the contract. After a few minutes Dare came over and pointed them out as interested parties. In cross-examination he said he could not identify the document from where he was; he assumed it was the contract. It was not the advertising flyer because he observed pages being flicked through. He did not hear the conversation. He had no conversation with Mr and Mrs Ciccone before the auction.
Lazov said that when he arrived a few minutes before the auction he said hello to Mr and Mrs Ciccone. He could not remember saying it was a good block. He introduced Dare to Mr and Mrs Ciccone. He told Dare that these were his buyers. Lazov did not remember what was said. His evidence supports that Dare handed Mr Ciccone the contract and the s.32 statement. Lazov also said that the contract and s.32 statement were displayed on a special board.
Broderick spoke to Mr and Mrs Ciccone before the auction to identify if they were interested in buying. He saw Dare speak to them and hand Mr Ciccone a copy of the contract. He was not sure what Mr Ciccone did with it. He said that the contract was not on display.
I have no hesitation in rejecting the Ciccones’ evidence on this aspect of what happened at the site prior to the auction. The evidence of Dare, Lazov and Monteleone is consistent and establishes to my satisfaction, both on the probabilities as to what was likely to have happened and because I accept that evidence as credible and truthful, that Dare did speak to Mr and Mrs Ciccone and he did give them the contract and s.32 statement for their perusal and he did ask if they had any questions to which the answer was “No”. I reject the evidence of Mr Ciccone that Lazov said it was a beautiful block. While an agent might make a puffing statement about a site I am not satisfied that he made that statement at the site. Even if he did say it was a beautiful block or a good block, it would not alter the result in this case, in my view.
I now turn to events during the auction. Mr Ciccone was asked what Dare did when he conducted the auction; he said “whatever they say, and after they started the auction”. His evidence indicated that Dare had a contract in his hand. He was asked if Dare said there was a soil report to which Mr Ciccone replied that “To be honest I can’t remember”. He said Dare’s introduction took five to ten minutes but he could not remember. He bid until $225,000. The property was passed in and would be referred to the owner. Mr Ciccone said that he and his wife started walking to their car. He said that the agents came after him and said that they would give the block to him to which he said “O.K., thank you very much”. The agent then said come to the office to sign the contract. Mr Ciccone said in evidence that he said that before he went to the office he had to find one of his sons to come and read the contract, and that after he would come to the office.
Pausing at that point, Mrs Ciccone gave no evidence as to what Dare said in the conduct of the auction. She picked the story up when “My husband came back and said ‘It’s finished, the block has been left, no one bought it’ ”. She said her son came out of the car and the man (obviously Dare) said they would give the land “for what he said”; Mr Ciccone told her that the man said that. Then, when they were travelling in the car after the auction, she says that Mr Ciccone said that we have to go and get the children to look at the contract. She said they were travelling to find a telephone box to ring up the children. She then said that Mr Ciccone “said to the man that was yelling that we weren’t going to sign anything until my sons” at which point there was an objection. The interpreter then went on to say that the man answered that that was fine with him. Obviously the man in question was Dare. When Mrs Ciccone gave this evidence as to what Mr Ciccone said to Dare and what Dare had said in reply she did not explain how she understood the English because it was in English that they spoke. This was one of the instances concerning her understanding of English which I referred to earlier. Of course, her husband may later have told her of this conversation. That is consistent with other evidence she gave as to what her husband said as to discussions with the agent. In other words parts of her evidence were hearsay.
It is also important to note that their son Anthony is educated in English and I find was well capable of reading the contract. Mr and Mrs Ciccone said that they preferred to rely on their elder and more experienced sons Patrick and John for this purpose. They said that they had assisted them in that regard in the past.
The evidence of Mrs Ciccone I have referred to was given in chief. I have regard to what she said in cross-examination but do not set it out.
Anthony heard nothing that was said during the auction. He said he got out of the car as his parents walked towards it, and that his father said the block was passed in and to take them home. Then a man came up and said the owners have accepted his price, if he could go back to the office to sign the contract. Anthony said that his father responded that he could not read or write English and he could not sign the contract without his brothers being there. They were given the address and got in the car. He said that on the way he tried to call John and Patrick from a telephone box but both were unavailable. They then proceeded to Dare’s office but before picking up what happened there I must note other evidence as to the auction.
Dare gave evidence before the Ciccones, and following Monteleone and his brother. Anthony Monteleone gave an account of what Dare said in his opening remarks in the auction: that it was a public auction at which the cooling off period did not apply, he went through the particulars of sale, including a description of the property and the terms of sale, then some of the conditions, clauses about the auction process, the s.32 statement, and the penalty interest rate. He said that he then went on to go through the s.32 part of the contract, through the planning, information about the planning scheme and the zoning. He referred to the permit for 14 units and indicated that plans had been prepared. He then went through the certificates and at that point he (Monteleone) moved back to his family so he missed the bits about the certificate and the references to the Mitford Engineering report, if they were made. He then gave an account which is both probable and in accordance with evidence of Dare and Broderick of the process of the auction in relation to Dare referring bids to the owner and as to a negotiation after the property had been passed in. In this latter process Dare spoke to Mr Ciccone a couple of times. Dare did not just go up to him as he was walking away, as Mr Ciccone said in evidence. Dare tried to get more money but Mr Ciccone refused and in the end Monteleone agreed to sell, and Mr Ciccone agreed to buy at his price. I accept this evidence as to the course of events after the auction and reject the account given by the Ciccones. Anthony Monteleone said that Dare told him the Ciccones would sign the contract at his office and Monteleone arranged to come to the office later to sign it.
In cross-examination as to what Dare said during his introduction to the auction, Monteleone said that he did not mention building permits or working drawings. Of course, a building permit did not then exist. Further, as Monteleone explained in re-examination, by working drawings he understood the full set of drawings required to get a building permit. They had not been prepared. The drawings at court book pp.343-367 were insufficient to obtain a building permit. I accept that evidence.
Nicholas Monteleone, who was an honest and reliable witness, gave evidence as to what Dare said. He said that Dare had two documents which he referred to as a contract of sale and a s.32. He referred to the permit for 14 units and there was a plan that accompanied the document and “he referred to an engineering report that indicated there was fill in the back of the property”. I find that the plan Dare referred to was the borehole plan attached to the Mitford Engineering report. This is the essence of his evidence for present purposes. I accept the evidence. It is consistent with what I find, that Dare was an experienced estate agent, and was careful to mention all relevant matters in the contract and s.32 statement concerning the site. Finally, in cross-examination Nicholas Monteleone said that he could not recall Dare saying that the property had been a quarry or a tip.
I turn to the evidence of Dare. In view of the findings I have made I am now concerned with what he said in his introduction to the auction and with his conversation with the Ciccones. I can say at once that I accept his evidence. That includes the evidence that at no time did Mr Ciccone appear not to understand what was happening or comprehend what was being said. He both bid and held his ground in the negotiation after the property had been passed in.
Dare said that he estimated his introduction lasted probably 10 to 15, maybe up to 20 minutes. His evidence is that he referred to the special condition in relation to the bidding, the matters in the particulars of sale, the entire agreement clause, the title, the soil report (the Mitford Engineering report), and the reference to the footing design. Then, when shown the contract, he identified a number of conditions he referred to. He said that on two occasions he stated that there was no cooling off period.
Then, after the auction, when he was negotiating the price with him Mr Ciccone said he would not pay more than $225,000 and that he had the trucks and equipment to deal with the problems. I have referred to this evidence previously. Dare assumed that Mr Ciccone meant the fill. I find that Mr Ciccone both said words to the effect stated by Dare and that he was referring to the fill. This evidence of Dare as to what Mr Ciccone said was not put in issue by Mr Ciccone in his evidence. The evidence is consistent with Mr Ciccone having attended the auction intending to bid with knowledge of the site conditions. I find that to have been the case. I accept as correct Dare’s evidence that Mr Ciccone’s statement indicated to him that he was aware of the site and what building on the site entailed. It is important to note that the Ciccones’ family all speak, read and understand English. They are a close family. At the time their son Anthony and others lived at their home. The likelihood is, and I so find, that the documents left by Lazov had been read and discussed in the home with at least Mr Ciccone if not Mr and Mrs Ciccone.
In cross-examination by counsel for the Ciccones, Dare was asked questions about what he said in his introduction. He said he did not read out the Mitford Engineering report “word for word”, he affirmed he did say there was an engineering report attached to the s.32, but he did agree that he did not read out the section in the report under the heading “Job Description” in which the history of the site is stated and which I quoted earlier. He said he referred to the report as a soil report because that is the language used by builders and people in the area in relation to such a report. He had said it was attached to the s.32, and gave a description of footing layouts and design for the units, and he referred to the filling. A point was made that in his evidence he then said that he had simply said there was a planning permit and attached to it is a soil report. In my view this may, in isolation, be taken as understating Dare’s evidence as a whole and when considered with other evidence such as that given by Nicholas Monteleone, for instance. Yet, to say that the soil report was attached to the planning permit is another way of saying that it is attached to the s.32 statement. I have no hesitation whatsoever in finding that Dare made the latter statement and that he explained that both the permit and the report were attached to the s.32 statement.
Dare did not say that he used the word quarry or tip. I find that he did not. But he clearly identified the presence of fill and referred to the existence of the report which had footing details. It is not to be overlooked that Ciccone Constructions, in which Mr Ciccone worked, conducted business as an earthworks contractor.
Dare went on to disagree that the Ciccones walked away when the property had been passed in. I accept his evidence as to that and as to a negotiation having occurred.
The next critical point is whether Mr Ciccone said anything to Dare about getting a son to read the contract, as it was put to Dare in cross-examination by the Ciccone’s counsel. Counsel suggested to Dare that Mr Ciccone had said to him he had his cheque book but he was not prepared to provide a cheque until one of his sons had approved the contract, to which Dare replied, “No, that’s not the case”. Dare could not recollect any mention of the sons.
Mr Ciccone’s evidence was that after he said to Dare that he had to find one of his sons to come and read the contract he said that he would come to the office. He said he wanted one of the boys to come with him to sign the contract. In its terms this statement, and the earlier evidence to what Mr Ciccone said to Dare at the site, did not extend to a requirement that a son actually approve entry into a contract before it would be signed or binding or a deposit given. It only went to the matter of reading or being present. I do not accept the evidence that Dare was told that the Ciccones could not read or write English. Dare was experienced in dealing with people from a foreign background. If he had been told they did not read or write and had an appreciation that they did not comprehend what they were doing, let alone that Mr Ciccone was imposing a condition on the contract, I find he would have sought to have the sons or a son be immediately available and would not have proceeded to have the Ciccones come to his office to sign the contract and arranged for Monteleone to come down and sign the contract. It is too improbable. I do not accept that anything said to Dare suggested to him the contract was to be conditional on any such matter. Further, the fact is that Anthony was a son who spoke and read English and he was with his parents.
I should for completeness mention that Lazov did not recall what Dare said in his introduction and that he left when the property passed in. Later he spoke to Dare who advised the property had sold and Dare asked him to collect the deposit but later again Dare said he would pick it up.
Broderick said that Dare would have introduced the property as with other auctions. After the auction he went back to the office with the contracts. In cross-examination he amplified his evidence as to what Dare had said in his introduction. He agreed Dare did not say the property had been a disused quarry. He affirmed the subsequent negotiations. He did not hear it said that the Ciccones could not read English, although, he said, he was close enough to hear it if it was said. I find that it was not said.
I turn then to the events at the office. A singular feature of this aspect is that the Ciccones and their son attended. They said that Dare was the only other person present. They were adamant on this. Dare and Broderick said that Broderick was present. Indeed Broderick said he was first back to the office. He had the contracts and he waited for the Ciccones and Dare to arrive. They did arrive and went to Dare’s desk. Broderick said that he too went to the desk and assisted Dare to complete the contracts by hand writing some of the items in the particulars of sale section of the contract. Broderick identified his hand writing in two of the contracts. Dare agreed that Broderick assisted. I accept their evidence and find that Broderick was present in the office while the contracts were got ready for signing and were signed. It is true that after a time Broderick moved to his desk for another matter, but his desk was close by. I reject as false the evidence of the Ciccones and their son.
This finding cannot but affect my assessment of the Ciccone’s evidence of what happened at Dare’s office, and generally. Nevertheless I consider their evidence. Mr Ciccone said that when he got to the office he said that he could not sign the contract because he was not able to find one of his boys. He said that Dare replied “That isn’t necessary, this contract its clean.” He told Dare he did not read or write English to which Dare said “Fine, sign here, nobody, nothing wrong”. Mr Ciccone then said that if his children did not read the contract he cannot give the deposit. Mr Ciccone said he asked for plans and the permit and Dare said to sign and they would bring them to the home when he brought the contract. Dare also said he would collect the deposit. Mr Ciccone said he told Dare his wife did not understand English. They then signed the contract. A little later he said he was given “a full guarantee” by which he meant Dare’s response as to the matter of his children reading the contract. He said he would not have signed the contract if he had known about the quarry or tip. After they had signed Dare said he would come to their home and pick up the cheque and deliver the contract.
Mrs Ciccone gave supportive evidence although, as she said, on the basis of what Anthony told her was said.
Anthony said that his father said he could not sign the contract without his brothers being there and that he could not read or write English and unless his brothers read the contract, no deposit would be given. He said that Dare said “Fine”.
Dare and Broderick gave evidence to a different effect. Dare’s evidence is that Mr Ciccone said that he did not have his cheque book and that Dare agreed to collect the deposit later. That is why the deposit was not paid. He and Broderick took instructions and completed the contract. During this process Anthony used the telephone. He spoke in Italian. While he was on the telephone Anthony asked Dare how much per site the price represented and Dare said about $16,000. Dare went through the particulars of sale with the Ciccones. He asked if they would accept 30 days, to which Mrs Ciccone said no. They then proceeded through to execution of the contracts. Dare said he was not told that the contract had to be approved by the Ciccone’s sons. It was not put to him. Dare said that he said nothing to cause the Ciccones to believe the contract was not binding unless it was perused and approved by their sons. Broderick’s evidence supports Dares account.
I accept the evidence of Dare and Broderick. I do not accept the evidence of the Ciccones and Anthony where it is in conflict. Thus they were not told about not reading and writing English, as to a son having to read or approve, and as to the alleged reason for not paying the deposit. Communication was in English with Mr Ciccone and there was understanding.
In arriving at these conclusions I take account of the probabilities as to what is likely to have happened if Mr Ciccone did say what, according to him and Anthony, he said at the property after the auction and in Dare’s office. Mr Ciccone was not a first home buyer. He was experienced in real estate. I do not accept it as probable that he would have gone on and signed the contract if he truly wanted his sons to read it or approve it before he and his wife were bound by it. Nor in my view was it likely that Dare would have proceeded as he did, as though he had an unconditional sale. He did not so advise the Monteleones when they signed the contract later. It also seems highly improbable that he said “Fine” when Mr Ciccone stipulated his conditions. In substance Dare’s conduct according to the Ciccones would amount to a setting out to deceive Mr and Mrs Ciccone, and that deception extended to not telling his principal the truth. I reject the Ciccones’ case.
I should add that I reject the suggestion of the Ciccones that in the way Dare put the contract before them to sign he sought to prevent them from seeing its contents. Of course, if he had understood they could not read English there would have been no purpose in doing so.
I add that Dare did not take them through each page explaining it, and did not use the words quarry or fill.
I turn then to the events at Mr and Mrs Ciccones’ home later that day when Dare called to collect the deposit and leave a contract executed by the vendor.
Here, again, there is a conflict of evidence. I commence with Dare’s evidence. On Dare entering John came in. He was agitated and said that his parents were not going to buy the property, that they had paid too much and he was not going to allow them to pay that sort of money. Dare sought to calm him down, for he wished to receive the deposit. In discussion John asked if he could see the plans, which Dare did not have. Dare said he would see if he could get them from Mr Monteleone. Dare left the property thinking that if he could get the plans he would receive the deposit.
After he left the house he spoke to Monteleone who said he would provide the plans if the deposit was paid. The next day Dare rang the Ciccones and advised he could not get the plans. According to him he spoke to a daughter-in-law who said that if he could not get the plans (that is, without the deposit being paid) they did not wish to proceed with the sale, they had their cooling off period. Dare said there was no cooling off period and that he could not let them out of the contract. She said that John would take the matter in hand.
Dare further said that it was not until later that he became aware of the contention of a condition precedent that the contract be approved by the Ciccone’s son.
Under cross-examination of Stockdale and Leggo’s counsel, Dare said that John said nothing about his parents not understanding the contract. He said that he had no recollection of John saying anything about the contracts not being binding until he or someone vetted them. He also said that the aspect of a quarry was not raised until the next day. He said that the whole conversation was about the money they had paid and that he (John) felt that at that price he could not build units and make money.
In the course of cross-examination by counsel for the Ciccones, Dare said he thought that Mr and Mrs Ciccone didn’t speak; John did. He may have but Dare did not recall John reading the contract in his presence. He denied that John talked about part of the property being “a quarry, or a tip”, or that John asked him why he had lied to his father, or that he had lied to his father because he had said it was a good block. The conversation was about price.
What did John say? He said he found out about the sale when his father came home and told him he had bought a block in Epping to build units on and the price. He did not have the contract. On prior occasions he had looked at contracts for his father. John said he was “pretty upset” with his father but his father said he had told the agent he could not read or write English and that he would have it read. He said that Dare arrived and handed him the contract to read. He flicked through it to the s.32 which “usually discloses any problems . . . with the blocks”. He read the permit, saw the requirement of a council indemnity and then went on to the site plan which referred to an old quarry. He then went on to say “I determined it was a tip site and that’s as far as I got”. He concluded it was a tip site from the fact it was an old quarry. He said that the relationship between an old quarry and a tip is that an old quarry is filled “with whatever you can get you hands on, and that’s a tip”. He said he was familiar with this as a result of his earthmoving experience.
John said that after he had determined it was an old tip site he asked his father if he knew it was an old tip site, and his father said that was impossible. This was in Calabrese.
John said that his father added that the agent had said there is nothing wrong with the block. After repeating to him it was a tip his father said tell the agent we are not buying it.
John said that he then asked Dare why he had not told his father it was on a fill site to which Dare said it was not his job and he did not “have to tell anybody nothing”. John said Dare started babbling on and he asked him to leave.
Mr and Mrs Ciccones’ evidence is supportive of John’s evidence.
Putting to one side for the moment the resolution of the different versions, it is important to note the emphasis in the Ciccones’ evidence on part of the site having been a tip. The only reference in the contract to the placing of waste was that which I quoted much earlier and which states that inert waste of mainly large basalt pieces, floaters and clay had been used. In particular, it is also stated, no household waste had been known to have been used. Yet John went on as though any old waste had been used as fill. Of course, his evidence indicates that he did not read that part of the documents when Dare was present. His evidence is that he read the reference on the plan to a quarry and concluded it had been a tip and filled with “whatever”. His conclusion was not based on fact but supposition and alarm. But, apart from that, as there was no reference to a tip on what he said he read, his statement that there had been a tip is suggestive that he had read the contract.
As his father had not brought a copy of the contract home, the question would be, when and how could John have read it. The answer, seemingly obvious in my view, is that he had read the documents which Lazov had brought his parents.
Be that as it may, the accounts of Dare and the Ciccones are in conflict, and that conflict requires resolution.
Having regard to all the circumstances I prefer the account given by Dare. On that account the concern was price. The concern was that Mr and Mrs Ciccone had paid too much. The extra costs occasioned by having to build on fill may have been a factor, but that factor, in my view, had been known prior to the auction because it had been dealt with in the documents left by Lazov prior to the auction. In my view the Ciccones attended the auction with that knowledge confident that the site conditions could be dealt with and they purchased at a price which John regarded as excessive in the circumstances. John may well have been right in thinking that the price was too high, but that is not a ground for relief from the contract.
I add that Dare spoke to Monteleone about providing the plans and that he answered as mentioned above. This is supportive of Dare’s evidence and an indication it is correct.
I now turn to the issues which counsel for the Ciccones said were raised for determination.
The second and third of these issues concern the matter of the contract not being binding unless it was read and approved by the Ciccone sons. I do not repeat what I have found in relation to this matter. There was neither a representation nor a condition precedent as counsel submitted I should find. In reaching this conclusion I take account of my rejection of the Ciccone’s evidence, of the fact that the deposit was to be paid later because Mr Ciccone was not then (in the office) able to pay it, and to the fact that Dare had conducted the auction with care, and thought the Ciccones understood what they were doing and signing. I find that Dare thought they were signing a contract by which they would be bound.
This conclusion renders it unnecessary to consider the arguments concerning the general and special conditions 11, s.126 of the Instruments Act, or the plea of estoppel.
I revert to the first issue, that s.52 was breached because there was a failure to disclose that the land had been part of a quarry and filled. I refer to my earlier statement of counsel's submission on this issue. In my view the Ciccones fail on this issue for reasons which are found in the facts as I have concluded they were. I do not repeat the facts but note the following. Lazov gave the Ciccones at least the planning permit and the Mitford Engineering report. The Ciccones inspected the land. The Ciccones were very experienced in dealing with land. Mr Ciccone had experience in earthworks. He determined to buy the site to develop it for retirement purposes. He was aware of the site conditions and that part had been a quarry. He purchased at a price which John thought was too high. Mr Ciccone's spoken English was much better than his wife's, and he had good comprehension and an effective ability to communicate. During the auction Dare adequately referred to the fact that the site contained fill, to the existence of a soil report, to footing plans and the other matters mentioned. Mr Ciccone dealt with an agent (Dare) with experience in dealing with purchasers of his background. To Dare, the Ciccones understood what they were doing. I find that he was justified in that view.
It is important that the fact that part of the site had been a quarry and filled did not mean it could not be built upon. The consequence was in terms of extra cost and that was dealt with in the Mitford Engineering report. That cost was a factor for a purchaser to consider in determining how much to bid for the land. It was part of the cost of development. I conclude that the problem in this case was about this aspect of cost and price, not about the site conditions which were sufficiently before the Ciccones prior to the auction and were sufficiently brought to their notice by Dare at the auction. It is important in considering this case to bear in mind that Dare did not engage in any positively misleading statement. The contention is that he misled by silence on the issue of the quarry and fill in combination with all that he otherwise put forward. The Ciccones had sufficient before them. It is not to be forgotten, as Gibbs CJ said in Parkdale Custom Built Furniture Pty Ltd v. Puxu Pty Ltd (1981-1982) 149 CLR 191 at 199 that:
"The heavy burdens which the section creates cannot have been intended to be imposed for the benefit of persons who fail to take reasonable care of their own interests."
For these reasons the claim based on s.52 fails. The fourth and final way in which counsel put the case was that when they signed the contract Mr and Mrs Ciccone were under a special disability in the respects mentioned earlier, which special disability was known to Stockdale and Leggo (and thereby Ark). It is further submitted that being so aware advantage was taken of Mr and Mrs Ciccone in having them sign a contract and that the conduct of Stockdale and Leggo was unconscionable. In addition to the passage in Amadio at 467 in the judgment of Mason J that counsel relied upon, reference should also be made to the judgment of Deane J in the same case at 474-475 and 480-481. This case does not require a separate examination of the principles upon which equity may relieve a party from a transaction.
In my view, in all the circumstances of this case concerning Mr and Mrs Ciccone generally and in relation to the facts of the case none of which I will repeat, Mr and Mrs Ciccone were not under a disability or, if they or either of them were in any relevant respect (such as Mrs Ciccone's lack of English although, it is noted, she relied upon her husband and he had good communication skills and she had her English speaking son with her) that disability was not apparent to the agents at Stockdale and Leggo who acted reasonably and with experience in dealing with her, and nor was any unconscientious advantage taken advantage of Mr and Mrs Ciccone by the agents. In fact, to mention one aspect, Mr and Mrs Ciccone impressed me as aware, alert and intelligent, experienced in buying land, and not as being mere tokens of any of their children. For instance, Mrs Ciccone knew they had money coming in from other transactions that would cover this purchase. The difficulty here was attributable to a view taken after the auction that they had paid too much. That view prevailed and Mr and Mrs Ciccone elected not to proceed and to pay the vendor no amount at all. Goodness knows what amount has since been expended on legal costs.
For these reasons there will be judgment for Ark in its proceeding and there will be judgment for the defendants in Mr and Mrs Ciccones’ proceeding. I will hear counsel as to the damages to be awarded in Ark's proceeding, and on the costs of the proceedings.
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