Galloway, K.A. v Mapmakers Pty Ltd

[1985] FCA 464

NOT GONSIDERED SUITABLE FOR DISTRIBUTION

IN THE FEDEHAL COURT OF AUSTRALIA

O~4SLfu~D DISTRICT REGISTRY	No. G.33 of 1985
GEl~ DIVISION

BETWEEN:

KEVIN ALBERT G;'LLOWA Y

Applicant

AND:

MAPMAKERS PTY.LIMlTED

Respondent

MINUTE OF ORDER OF THE COURT

Judge Making Orders:	Burchett J.
Date of Orders:	5 September, 1985
Where made:	Brisbane
THE COURT DECLARES THAT:

The contract referred to in the Statement of Claim and

Application is void ab initio AND ORDERS THAT:

(1)	The respondent refund to the applicant the sum of $1295,
together with interest in the sum of $60.
(2)	The respondent pay the costs, including reserved costs. It
is noted that costs, upon directions hearings other than
the one "where costs were reserved, were ordered to be costs in the proceedings, and accordingly will fall within this costs order. If the costs are not agreed, they are to be
taxed.

NOTE: Settlement and entry of orders is dealt with in Order 36 of

the Federal Court Rules.

,.

IN Ir:~ FEDEHAL COURT OF AUSTRALLa.

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GENER .. A.L DIVISION

BETT~"EEN:

KEVIN ALBERT GALLO~;Y

Applicant

t1F-.PM.1<.YERS PTY. LIMITED

Respondent

REASONS FOR JUDG~~

BURCHEIT J.

The applicant, Mr. Galloway, signed a contract to

purchase an area of 7.7 hectares of vacant land at Millmerran,

which I am informed is some three hours drive from Brisbane out

past Toowoomba. Subsequently, his solicitors asserted that the

contract was rescinded, and he claims a declaration that the contract was void ab initio, and a return of his deposit of $1295

plus interest. It is agreed that, if I were to make these orders

and to award interest, it would be appropriate to allow a sum of

$60.

The claim is made on the basis that the respondent,

through its salesman, a Mr. Smart, made certain representations

which are set out in paragraph 3 of the Statement of Claim. Of

2.

these, the fi!'st, relat.ing to a telephone servi:c-, ne-Ed. f···~

conCE't'n me further. having cega!::d to evidence which SUS"?,f::-; t..=:

that, if it was made, it ~as not misleading.

But further representations are alleged to have been

made, to the effect that it was intended that an electricity

service be connected tc the land without cost to a purchaser thereof, that the land abutted a declared road, and that the

Mi1lmerran Shire Council then intended to fix up the roadway to which the land abutted.

There is an additional claim in respect of a finance

clause, but primary reliance is placed on sections 52 and 53A of

the Trade Practices Act, 1974 and furthermore it is said that the

representations were fraudulent.

There is a conflict of evidence between Mr. Galloway,

supported to some extent by his wife and son, and the

respondent's salesman, Mr. Smart.

I should say at once that Mr. Smart appeared to me to

display in the witness box an eagerness to justify himself, which

seemed to me to outrun adherence to the facts. As against Mr.

Galloway, it is apparent that his wife was opposed to the

purchase from the start, and he may well have been looking for a

way out. He said he understood, at the time he signed the

documents, that he had a cooling-off period under the law, and he

3.

also said that he was suspiciou3 of the sal-::s:ttan.

I thir.ic C'~~. Ga':_l·.)way 1)0./; g':)cd rea":,);1 :.:: :.;.:. ';;'..1;;;:.;.2icus.

even if .he j(..new nothing about the Fower- .3 i ':.t~3 t i,):;, :5 in..:€' the

advertisement~ which led to his interest in the land in the first

place, was distinctly misleading, not only i~ respect of the

power situation, but also insofar as it is s'..lgge3ted that there was a house on the land being advertised, though it m·~y:Je said

in its defence that it perhaps did I10t ':ategorically asser.t this.

Mr. Smart himself finally conce·jed that the advert:sement did not

tell the whole truth of the matter. TIle advertisement tends to

confirm that a significant misrepresentation may have been involved in the conversations, since it was certainly involved in

that part of the advertisement which said, "Power OK". In fact,

there was no significant prospect of obtaining power, except at substantial expense, and even so, by persuading the supply authority to incur large sums in the exercise of discretionary

powers.

I am affirmatively satisfied that the respondent,

through its salesman, confirmed the representation already contained in its advertisement, to the effect that the land had

electricity available, and that it would be connected to the land

without cost, apart, as I understand it, from such normal costs

of connection as any other ordinary customer might incur.

4.

I have also concluded, on the balance of probabilities,

that generally the evidence of Mr. Galloway is to be pref~rred to

that of Mr. Smart. and in reaching that view I am influenced

by what I regard as the probabilities, having in mind

particularly the terms of the advertisement, and also by my

impression of those witnesses, and in addition, by the fact that

the evidence of Mr. Galloway did receive some support from	his
wife and son, whom I found no reason at all to disbelieve.

I find the misrepresentations alleged, in respect of

both power and the road, established on the evidence. Indeed, twice in his own evidence, Mr. Smart acknowledged giving some advice suggesting that power could or would be obtained at a very

low or a cheap cost.

But it is submitted on behalf of the respondent that

there was no reliance on the misrepresentations, since Mr.

Galloway himself says he was suspicious.

It does not follow, in my opinion, from a degree of suspicion, that the representations had no effect. The fact is,

after all, that he signed the documents, despite his suspicion;

so clearly there were limits to it. Furthermore, the authorities

indicate that a court is entitled to place some weight on the fact that the representations were calculated to influence the recipient of them.

" 5.

I t:hink, 3.S a matter of fa.~t, that they did influence

Mr. Galloway's entry into the contr-ac:. Then reliance is placed

~n a documer.t ac~nc~~2~ging in wrirl~q that no r-epr~sentations

The d":":" .. lrrlent is 5i'~ned Hi two places by Hr.

Galloway. It is addressed to the Boani of Directors, i'-lapmaker-s

Pty. Limited, and it says. omitting immater-ial par-ts: "I the

under-signed do hereby certify t~At neither- the salesman nor- any

other person has made any representation to me in relation to the land, roads, or the availability of power, water or telephone to the land, or the agreement si;'ned by me" - I omit a further portion of the document wh.ich re':ers to finance and it

concludes: "And I request that you accept my offer to purchase the land in reliance upon this certificate." There follows the

signature of Mr. Galloway, after which there is a line that reads: "I/We certify that we have read the above certificate",

which is again followed by the signature of Mr. Galloway, and the

date, 22 March 1985.

Apart from the signatures, the date, and the name

Mapmakers Pty. Limited, the document appears to be a roneoed

document, with provision for the deletion of singular or plural

pronouns, but no deletions at all have in fact been made.

This statement seems to me quite clearly to be false,

since both sides agree that a number of representations in

respect of the matters referred to in the documents were in fact

made. I agree with Wilcox J. in a recent unrepor-ted judgment of

6.

his, that ~uch an acknowledgment cannot take a case of misleading

conduct out of the Act, but in this particular case I accept Mr.

Gdlloway's evidence that he did not read the document, having

been told it merely related to finance.

Upon ordinary principles of contract law, which I think

should be applied, at least by analogy, to a document of	this
kind, he would then not be bound.

The contract is expressed to be subject to finance. I

do not find it necessary to reach a view on the effect of this,

but I should state that I accept the evidence of Mr. Galloway

that he did not read the application before he signed it. Having

regard to the equivocal nature of the offer of finance, and the high rate of interest, I think it was in fact quite reasonable

for him not to be satisfied with the offer in respect of finance.

Having regard to the findings which I have made, I think

it is appropriate that I make the orders sought, and I declare

that the contract referred to in the Statement of Claim and

Application is void ab initio, and I make an order directing the respondent to refund to the applicant the sum of $1295, together with interest in the sum of $60, and I order that the respondent

pay the costs, including reserved costs.

I note that costs, upon directions hearings other than

the one where costs were reserved, were ordered to be costs in

7.

the proceedir:l'~'s" and accordingly will fa::": within this costs

order. If the cc~sts are not agreed, I order that they be taxed.

I certify thr_t this and the

six (6) p::-eced.:'ng pages are a

tcue COP7::lE the Reasons for

Judgment herein of his Honour

Mr. Justice Burchett.

~.~

Associate CCJ..;..~=~~

Dated: 5 September 1985.