Fu v Bondi Junction Prime Pty Ltd (No 2)

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FEDERAL COURT OF AUSTRALIA

Fu v Bondi Junction Prime Pty Ltd (No 2) [2025] FCA 221

Appeal from:

Fu v Bondi Junction Prime Pty Ltd [2024] FedCFamC2G 513

Fu v Bondi Junction Prime Pty Ltd(No 2) [2024] FedCFamC2G 979
File number(s): NSD 1442 of 2024
Judgment of: GOODMAN J
Date of judgment: 20 March 2025
Catchwords: CONSUMER LAW – where primary judge found that: (1) the first respondent represented to the appellant that the apartment it was selling to the appellant would be on the eleventh and uppermost floor of the building to be constructed; (2) the first respondent had reasonable grounds for the making of the representation – where the appellant contends that the primary judge erred in finding that the first respondent had reasonable grounds – primary judge’s reasoning upheld – appeal dismissed  
Legislation:

Australian Securities and Investments Commission Act 2001 (Cth), s 12BB

Competition and Consumer Act 2010 (Cth), sch 2, ss 4, 18

Conveyancing Act1919 (NSW), s 55
Cases cited:

Australian Securities and Investments Commission v Union Standard International Group Pty Ltd (No 4) [2024] FCA 1481

Fu v Bondi Junction Prime Pty Ltd(No 2) [2024] FedCFamC2G 979

Fu v Bondi Junction Prime Pty Ltd [2024] FCA 1222

Fu v Bondi Junction Prime Pty Ltd [2024] FedCFamC2G 513

Girchow Enterprises Pty Ltd v Ultimate Franchising Group Pty Ltd (Final Hearing) [2023] FCA 420

Husseini v Girchow Enterprises Pty Ltd [2024] FCAFC 143
Division: General Division
Registry: New South Wales
National Practice Area: Commercial and Corporations
Sub-area: Regulator and Consumer Protection
Number of paragraphs: 39
Date of hearing: 17 March 2025
Counsel for the Appellant: Mr J M Ireland KC
Solicitor for the Appellant: DC Balog & Associates
Counsel for the First Respondent: Mr D Hand
Solicitor for the First Respondent: StevensVuaran Lawyers
Solicitor for the Second Respondent: No appearance by the second respondent

ORDERS

NSD 1442 of 2024
BETWEEN:

CHAO BIN FU

Appellant
AND:

BONDI JUNCTION PRIME PTY LIMITED

First Respondent

PARK COAST REALTY PTY LIMITED

Second Respondent

ORDER MADE BY:

GOODMAN J

DATE OF ORDER:

20 MARCH 2025

THE COURT ORDERS THAT:

1.The appeal be dismissed.

2.The sum of $56,000 be paid from the Litigants’ Fund to the first respondent.

3.The appellant pay the first respondent’s costs of the appeal, as agreed or taxed.

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


REASONS FOR JUDGMENT

GOODMAN J

A.       INTRODUCTION

  1. The appellant, Mr Chao Bin Fu, appeals from orders made in the Federal Circuit and Family Court of Australia (Division 2) on 6 June 2024 and 2 October 2024. The primary judge’s reasons for the making of those orders are set out in Fu v Bondi Junction Prime Pty Ltd [2024] FedCFamC2G 513, as published on 6 June 2024 and amended on 26 September 2024 (PJ1) and Fu v Bondi Junction Prime Pty Ltd(No 2) [2024] FedCFamC2G 979 (PJ2).

    B.       BACKGROUND

  2. On 3 June 2015, Mr Fu entered…

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Details
Case
[2025] FCA 221
Decision Date

CaseChat Overview and Summary

The appeal in Fu v Bondi Junction Prime Pty Ltd (No 2) concerns the contractual purchase of an apartment by Mr Chao Bin Fu from Bondi Junction Prime Pty Ltd (BJP), with Park Coast Realty Pty Limited acting as the real estate agent. Mr Fu alleges that BJP engaged in misleading or deceptive conduct, in breach of the Australian Consumer Law, when it represented that the apartment he purchased would be on the eleventh floor of the building, which was the top floor at the time of the contract. Mr Fu sought to set aside the contract and reclaim his deposit. The primary judge dismissed Mr Fu's claim and upheld BJP's cross-claim for the retention of the deposit. The central issue before the court was whether BJP had reasonable grounds to make the representation about the building's floor count at the time of the contract.

The court had to determine if BJP's representation about the apartment's location on the eleventh floor was misleading or deceptive conduct under the Australian Consumer Law. The key legal issue was whether BJP had reasonable grounds to make this representation when the contract was signed. The court examined Mr Felix Milgrom's evidence, who testified that promotional materials prepared for the VIP launch depicted unit 1103 as being on the top floor and that BJP had approval for a building with 11 residential floors at the time of the contract. Mr Milgrom also testified that BJP later obtained approval for a twelfth floor, which was not relevant to the date of the contract. The court found that BJP's representation was not misleading or deceptive because it had reasonable grounds to represent the apartment as being on the eleventh floor.

The court upheld the primary judge's reasoning and found that BJP had reasonable grounds to make the representation at the time of the contract. The evidence demonstrated that BJP had approval for a building with 11 floors and that the promotional materials were accurate at the time of the contract. The subsequent approval for a twelfth floor did not affect the reasonableness of the representation made at the time of the contract. Consequently, the court dismissed Mr Fu's appeal. The appeal's stay was lifted, and the sum of $56,000 paid into the Litigants’ Fund was ordered to be released to BJP. Mr Fu was also ordered to pay BJP's costs of the appeal.

Orders

Orders of the court

1. The appeal be dismissed.

2. The sum of $56,000 be paid from the Litigants’ Fund to the first respondent.

3. The appellant pay the first respondent’s costs of the appeal, as agreed or taxed.

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

Background

Background to the litigation

The appellant, Mr Chao Bin Fu, appeals from orders made in the Federal Circuit and Family Court of Australia (Division 2) on 6 June 2024 and 2 October 2024. The primary judge’s reasons for the making of those orders are set out in Fu v Bondi Junction Prime Pty Ltd [2024] FedCFamC2G 513, as published on 6 June 2024 and amended on 26 September 2024 (PJ1) and Fu v Bondi Junction Prime Pty Ltd(No 2) [2024] FedCFamC2G 979 (PJ2). B. BACKGROUND On 3 June 2015, Mr Fu entered into a contract with the first respondent (BJP) – a company developing land in Bondi Junction that was to include an apartment building – for the purchase of an apartment, to be numbered 1103, in that building at a price of $1.6 million. Mr Fu entered into the contract at an event hosted by BJP referred to as the VIP launch. Representatives of BJP and of the second respondent – Park Coast Realty Pty Limited, a real estate agent engaged by BJP for the marketing and sale of the apartments in the proposed apartment building – were present, including Mr Felix Milgrom, one of two directors of BJP. Upon entry into the contract and in accordance with its terms, Mr Fu paid a deposit of $160,000, representing 10 per cent of the purchase price, which was placed into an interest bearing account operated by BJP’s then solicitors. A date for settlement of the purchase was ultimately set as 19 November 2018. Mr Fu declined to proceed with the purchase and failed to comply with a notice to complete, instead commencing the proceeding below. On 6 September 2019, BJP terminated the contract. On 11 November 2019, the apartment was resold for $1,490,000, being $110,000 less than the purchase price in the contract. In the proceeding before the primary judge, Mr Fu sought orders for the setting aside of the contract and for the return of the deposit on the basis that his entry into the contract was the product of misleading or deceptive conduct by the respondents, in contravention of s 18 of the Australian Consumer Law (ACL), being schedule 2 to the Competition and Consumer Act 2010 (Cth). Alternative relief was sought pursuant to s 55(2A) of the Conveyancing Act1919 (NSW). BJP brought a cross-claim pursuant to which it sought relief based upon the contract, including for the retention of the deposit, and for losses caused by Mr Fu’s failure to complete the contract. The primary judge dismissed Mr Fu’s claim and upheld BJP’s cross-claim.C. THE SALIENT EVIDENCE BEFORE THE PRIMARY JUDGE As will be seen, the central issue on this appeal is whether BJP had reasonable grounds as at 3 June 2025 for making a representation that the apartment building when constructed would comprise 11 floors of apartments (11 floors representation). The evidence of Mr Milgrom on that issue is as follows. Mr Milgrom’s evidence in chief was that he was a director of BJP with personal knowledge of the matters the subject of his affidavit and that:(1)promotional materials were prepared for the purposes of the VIP launch, which showed unit 1103 “as one of the units of what was then proposed to be the top floor” of the development;(2)as at 3 June 2015, BJP had approval for the construction of a building with 11 residential floors, and accordingly the promotional materials prepared for the purposes of the VIP launch and provided to prospective purchasers were “true and correct”; and(3)subsequently, on 30 June 2017, the construction approval was varied to permit the construction of a twelfth floor. That construction commenced in or about December 2017.

Evidence

Evidence Before The Court

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Decision

Reasons for decision

Ground 6 is expressly premised upon the establishment of errors in accordance with grounds 1 to 5. As Mr Fu has failed on grounds 1 to 5, it follows that ground 6 must also be dismissed. It is unnecessary to consider the further reasons put forward on behalf of BJP as to why the discretion under s 55(2A) of the Conveyancing Act ought not be exercised favourably to Mr Fu.F. CONCLUSION For the reasons set out above, the appeal should be dismissed. The stay will cease to be operative by dint of the dismissal of the appeal. The sum of $56,000 paid into the Litigants’ Fund should be released to BJP. I will make orders accordingly.

Ratio Decidendi

Legal Principle Established

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