Gentry Brothers Pty Ltd v Wilson Brown & Associates Pty Ltd
[1995] FCA 920
•16 NOVEMBER 1995
CATCHWORDS
TRADE PRACTICES - representations - misleading and deceptive conduct - two properties exchanged by contract - representations as to value and future profits - neither property worth represented value - representations by owners and real estate agent - claim by real estate agent for indemnity and commission - causation - occurrence of loss and damage - measure of damages in tort - advance of monies by directors to company to effect purchase - whether loss suffered when advance made - whether demand for debt necessary - when loss "reasonably ascertainable"
Trade Practices Act1974 s 52, 82(1), 82(2)
Evidence Act 1905 s 7B, 7B(1), 7F
Evidence (Transitional Provisions and Consequential Amendments) Act 1995 s 4(1)
Wardley Australia Limited v Western Australia (1992) 175 CLR 514 Cons
March v E & M H Stramere Pty Limited (1990) 171 CLR 506 Refd
Gould v Vaggelas (1985) 157 CLR 215 Cons
Medlin v State Government Insurance Commission (1995) 127 ALR 180 Refd
Re: La Rosa; ex parte Norgard v Rodpat Nominees Pty Ltd (1991) 31 FCR 83 Refd
Trade Practices Commission v Manfal Pty Ltd (No 3) (1991) 33 FCR 382 Refd
Argy v Blunts & Lane Cove Real Estate Pty Limited (1990) 26 FCR 112 Refd
Neilsen v Hempston Holdings Pty Ltd (1986) 65 ALR 302 Refd
Henjo Investments Pty Ltd v Collins Marrickville Pty Ltd (1988) 79 ALR 83 Refd
Gates v City Mutual Life Assurance Society Limited (1986) 160 CLR 1 Refd
Toteff v Antonas (1952) 87 CLR 647 Cons
Norton v Ellam (1837) 2 M&W 461 Refd
Karedis Enterprises Pty Limited & Anor v Antoniou & Anor (1995) ATPR ¶41-427 Refd
Leichhardt Municipal Council v Seatainer Terminals Pty Ltd (1981) 48 LGRA 409 Refd
Secretary of State for Foreign Affairs v Charlesworth Pilling & Co [1901] AC 373 Refd
Spencer v The Commonwealth (1907) 5 CLR 418 Refd
Dorrough v Bank of Melbourne Limited, unreported decision of Cooper J., 27 September 1995 Refd
Gentry Brothers Pty Ltd v Wilson Brown & Associates Pty Ltd, Bruce James Brown, Anscape Pty Limited, Brian John Clarke
No QG 93 of 1992
Kiefel J Brisbane 16 November 1995
IN THE FEDERAL COURT OF AUSTRALIA
QUEENSLAND DISTRICT REGISTRY
GENERAL DIVISION No. QG93 of 1992
BETWEEN:
GENTRY BROTHERS PTY LTD
Applicant
AND:
WILSON BROWN & ASSOCIATES PTY LTD
First Respondent
AND:
BRUCE JAMES BROWN
Second Respondent
AND:
ANSCAPE PTY LIMITED
Third Respondent
AND:
BRIAN JOHN CLARKE
Fourth Respondent
AND:
ANSCAPE PTY LIMITED
First Cross Claimant
AND:
BRIAN JOHN CLARKE
Second Cross Claimant
AND:
GENTRY BROTHERS PTY LTD
First Cross Respondent
AND:
JAMES GENTRY
Second Cross Respondent
AND:
CIARAN GENTRY
Third Cross Respondent
AND:
WILSON BROWN & ASSOCIATES PTY LTD
Fourth Cross Respondent
AND:
BRUCE JAMES BROWN
Fifth Cross Respondent
JUDGE MAKING ORDER: Kiefel J.
DATE OF ORDER: 16 November 1995
WHERE MADE: Brisbane
MINUTES OF ORDERS
THE COURT ORDERS THAT:
The first cross-claimant Anscape Pty Limited have judgment against the first, second, third, fourth and fifth cross-respondents in the sum of $419,408.47.
The first, second cross-claimant, Wilson Brown & Associates Pty Ltd have judgment against the first cross-respondent Gentry Brothers Pty Ltd in the sum of $32,500.
The first second and second second cross claimants claim against the first second, second second and second third cross respondents be dismissed.
Gentry Brothers Pty Ltd pay the costs of the first, second and third respondents to its application in defending that application.
The first, second, third, fourth and fifth cross respondents pay seventy five percent (75%) of the costs of Anscape Pty Limited on its cross-claim.
NOTE:Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
IN THE FEDERAL COURT OF AUSTRALIA
QUEENSLAND DISTRICT REGISTRY
GENERAL DIVISION No. QG93 of 1992
BETWEEN:
GENTRY BROTHERS PTY LTD
Applicant
AND:
WILSON BROWN & ASSOCIATES PTY LTD
First Respondent
AND:
BRUCE JAMES BROWN
Second Respondent
AND:
ANSCAPE PTY LIMITED
Third Respondent
AND:
BRIAN JOHN CLARKE
Fourth Respondent
AND:
ANSCAPE PTY LIMITED
First Cross Claimant
AND:
BRIAN JOHN CLARKE
Second Cross Claimant
AND:
GENTRY BROTHERS PTY LTD
First Cross Respondent
AND:
JAMES GENTRY
Second Cross Respondent
AND:
CIARAN GENTRY
Third Cross Respondent
AND:
WILSON BROWN & ASSOCIATES PTY LTD
Fourth Cross Respondent
AND:
BRUCE JAMES BROWN
Fifth Cross Respondent
CORAM:Kiefel J.
DATE:16 November 1995
PLACE:Brisbane
REASONS FOR JUDGMENT
By a contract dated 14 August 1991 the applicant Gentry Bros Pty Ltd ("Gentry Bros") agreed to sell its interest in an island named Rosewood to Anscape Pty Limited ("Anscape") for $1.3M. By a contract of the same day the fourth respondent Mr Clarke, a director of Anscape, agreed to sell his house property at Carrara on the Gold Coast to Gentry Bros for $1.3M. Settlement of the two transactions was effected on 12 September 1991. Neither property had such a value and each of Gentry Bros and Anscape claimed that the other had misled it.
The applicant, Gentry Bros sought relief founded upon representations said to have been made by Mr Clarke. Anscape and Mr Clarke cross-claimed against each of the company Gentry Bros, James and Ciaran Gentry ("the Messrs Gentry") and their real estate agent for damages said to have been suffered by them acting on representations made by the Messrs Gentry and the agent Mr Brown, for breaches of contract or of warranties, which relate to deficiencies in stock and machinery the subject of the sale of the island and for damages for negligence against the agent Mr Brown and the company of which he was a director, Wilson Brown & Associates Pty Ltd (referred to in the proceedings and in these Reasons as "Elders Commercial"). That company and Mr Brown in turn claimed an indemnity from Gentry Bros and the Messrs Gentry and the company claimed its commission on the sale of the island. The Messrs Gentry further cross-claimed against Mr Brown and Elders Commercial for indemnity or contribution
with respect to representations attributed to Mr Brown but for which they might be held liable.
On the first day of the hearing there was no appearance for Gentry Bros or for James and Ciaran Gentry. After enquiry and being satisfied that they were aware of the dates for hearing I ordered that the applicant's claim and the cross-claim of the Messrs Gentry be dismissed with costs. The following contest between Anscape and Mr Clarke on the one hand and Elders Commercial and Mr Brown on the other, as to what occurred prior to entry into the contracts, had the added difficulty that the Messrs Gentry, who were alleged to have been parties to some of the conversations between Mr Clarke and Mr Brown, were not called as witnesses and examined. I say "added", because a difficulty was already presented by the evidence of each of Mr Brown and Mr Clarke, neither of whom I considered to be completely forthright or reliable. Mr Clarke, a businessman of some considerable experience with respect to property and development, though not rural property, presented himself as naive and trusting to an extent I found not to be credible. By the time of the hearing and given non-compliance by Gentry Bros with an order for security for costs it could reasonably be concluded that the Messrs Gentry and their company were in financial difficulties and that there was then a need for Anscape and Mr Clarke to impress the importance of reliance upon Mr Brown. The absence of the Messrs Gentry added to the focus upon Mr Brown as principal representor. Mr Brown who was at the time of negotiations a real estate agent dealing with commercial properties, had a background in rural property and livestock and Mr Clarke knew of this. Mr Brown knew of the Gentry family, who were quite well known as cattle producers in their area. He
was able to speak with some knowledge of cattle properties, which was how Rosewood Island was marketed. Mr Brown was on occasions prepared to overstate and even invent features of the property or its potential and appears to have regarded such an approach as part of his duties as a property agent. A naturally talkative person, the likelihood that he would make the most of any opportunity to persuade Mr Clarke, and in a timely way, was I consider real. By the time that an exchange of properties seemed the option most likely to secure a sale of Rosewood Island, he considered that his role was to convince the parties that they were to receive "like for like" and he was becoming frustrated at his attempts to bring the transactions to a conclusion. Whilst in some respects he was relatively forthright about these factors, they would have influenced decisions on his part to concur in what the Messrs Gentry had stated, to assure Mr Clarke that all was in order and as to whether he ought make available information which might influence Mr Clarke and his company not to purchase the island. With respect to these two witnesses I have therefore approached the question as to what was most likely said and what influence that had by considering their circumstances at the time.
The evidence of these two witnesses accorded in one respect. Both gave evidence of the trust and reliance they felt they could place in the Messrs Gentry. Whilst this is, I consider, likely to have been overstated to an extent, I accept that it did operate as a factor in what occurred.
The Background to the Contracts
Mr Brown had met the Messrs Gentry in March 1991 and discussed the marketing of Rosewood Island. This island, which lies off the central coast of Queensland, north of Rockhampton, had been used by them to graze cattle. Their family had cattle properties elsewhere. It had dams, yards and fences, sheds and equipment, a modest residence and an airstrip. Mr Brown was told by them that it carried 550 breeding cattle and had the potential, with improvements of the pasture, to carry 1000 head. It comprised an area of 20,000 acres of which 10,368 were rateable. These facts were also contained in typed sheets given to him by the Messrs Gentry. They also contained what appeared to be a fairly extensive list of equipment. At a fairly early stage in their discussions Mr Brown says he calculated an asking price of $1.6M by allowing $5-600,000 for the cattle present on the island and the same for the machinery, with the balance representing the island or its potential and that attempts by him at that time to obtain a valuation were unsuccessful. I do not consider he had any belief that the figure of $1.6M represented its real value. He had no information to suggest this might be the case and no sales of anything comparable to assist. An enquiry of his clients or the Valuer-General's Department would have revealed that Gentry Bros purchased it in 1989 for $750,000. The price chosen to market the island was about as high as the vendors could place it and no doubt he was prepared to offer some basis for it, his calculations. It was then proposed simply to test the market.
Mr Brown and his company, which traded under the name Elders Commercial, had previously acted for Mr Clarke on a development project and he regarded Mr Clarke as a client. On 13 May 1991 he had arranged to meet with Mr Clarke at his offices to discuss some business. The Messrs Gentry were still in his office when Mr Clarke arrived. There is no dispute that he showed Mr Clarke a video of Rosewood Island and that he said that the Messrs Gentry were asking $1.6M for it. He may have explained that it comprised an area of 20,000 acres, 10,368 of which was rateable. Mr Brown had inspected the island before this meeting but otherwise most of his information at this point had come from the Messrs Gentry. It is also likely that Mr Brown told Mr Clarke it was used for breeding cattle, by way of description. Mr Brown denied that a conversation took place with Mr Clarke in the presence of the Messrs Gentry during which Mr Clarke was told that it presently made a profit of $100,000 a year and that this could be improved upon or that the question of transport of cattle to and from the island was raised. The statement about the profit made was attributed, both in pleadings and in evidence, to Mr Brown. If he had been so advised by the Messrs Gentry it is quite likely, I consider, that he would have mentioned such a positive feature. Mr Clarke was a man of some substance and it is difficult to accept that Mr Brown would have overlooked any opportunity to interest him. On one view of it he may not have needed to ask about income and could have estimated cattle sales himself. On the other hand it is possible that the asking price was calculated also by reference to income and projected income figures. In any event it is not difficult to accept that would be one of the first topics which would interest an investor and it is then likely that it arose in some way at the meeting and that the information was provided. However it was not established that it was Mr Brown, and not the Messrs Gentry who provided the advices. The allegation that one of the Messrs Gentry or Mr Brown made representations at this time as to a right of access to and from the mainland, which would enable cattle to be barged across the channel and trucked to the highway was not made out. In his evidence Mr Clarke said that one of them, being unable to identify who, told him that the cattle were barged across. As far as it went that was a correct statement. Other representations as to the possible uses to which the island could be put, and said to have been discussed at this meeting, were raised in evidence for the first time and I do not accept they were made on this first occasion.
Mr Clarke then says that Mr Brown telephoned him a few days after the initial meeting. Mr Brown had suggested at the meeting that a friend of Mr Clarke's, known to him, might be interested in the island. Mr Clarke then informed him that his friend had no interest in it. In the course of the telephone conversation Mr Clarke alleges Mr Brown said that it was a pity neither of them were interested, since it was a good deal at $1.6M. He then went on to add that Mr Brown reiterated the same information about the potential to run 1,000 cattle but this was not pleaded and I consider it to be an example of an attempt to reinforce Mr Brown's involvement. Mr Brown recalled some conversation to the effect that it was a pity because it was a good deal, although he placed this at a later time.
The next conversation of substance likely occurred on 18 July 1991 which accords with a note kept by Mr Brown. A remark made by Mr Clarke either then or on an earlier occasion, that he could not afford to buy the island, prompted a discussion of the possibility of exchanges of property. Mr Clarke owned a number of residential properties, but the focus of the discussions appears to have been his own residence at
Carrara. He had previously had an offer of $1.6M from a developer which had been contingent on the developer securing neighbouring properties and this was not achieved. Whether Mr Clarke asserted that its present value was $1.3M and then inquired of Mr Brown whether the island was worth at least that; or whether Mr Brown volunteered the island's worth at that figure does not require resolution. On one view of his final answer in evidence and after initial denials, Mr Brown conceded that he did say that he felt it should be worth at least $1.3M and could carry 1,000 head if it were improved, although he says this took place later. This is consistent with submissions made on his behalf. If his affirmative answer to the question was not truly referrable to this representation, but limited to the potential number of cattle the island could carry, there are other features of his evidence which made it probable that he did say that the island was worth at least the sum Mr Clarke attributed to his house. Mr Brown conceded that he had, at some point, discussed effecting improvements to the property and it would seem in the context of Mr Clarke re-selling it. He was clearly concerned at all times to persuade the parties that they were getting like for like and said as much with respect to Mr Clarke. It is likely that this conversation about values and resale figures did take place when the prospect of a swap arose. Mr Clarke's version of this statement takes the matter even further. Mr Brown, he says, in response to his enquiry, said that "he felt it would be worth at least $1.3M because the Gentrys had it for sale for $1.6M and he thought it was a good deal at $1.6(M)". Then he says, and it is denied, that Mr Brown said that he felt he should be able to get at least that on resale, and more if he fixed it up and that it would be "readily saleable at $1.6M if I did all those improvements", which however is to be compared with the statement pleaded which had the qualification that such a sale may take some time. The interest in a re-sale figure is understandable and is supported by the attendance, after the contracts were signed, at the auction of another island, when Mr Brown and Mr Clarke looked for possible purchasers and the receipt of a quick profit. Mr Clarke was a businessman and this sort of information about an investment would have been of real interest to him. The extent of his reliance upon these statements is another matter and not one with which I am presently concerned. Mr Brown's denial of a statement as to the amount which might be achieved on resale, following an admission that he was prepared to give an opinion as to present value and as to what improvements might be effected, does not impress me. It is likely, I consider, that he did say a sale of $1.6M might be achieved given improvements and given time.
Sometime prior to Mr and Mrs Clarke's inspection of the property on 28 July, Mr Brown forwarded a brochure containing photographs and information and enclosing a document said to have been prepared by him entitled "Investment Report for Rosewood Island...". The brochure contained reference to the island as "Prominent Grazing Property" "already carrying 450 Brahman breeders plus progeny with carrying capacity for approx. 1000 head. The abundant natural water supply and lush grazing lands, include facilities such as stockyards, drafting crush, branding cradle and loading ramp to maintain the existing grazing operation." and it went on to describe its other potential sources of income as follows:
"Aqua Farming
A very profitable and ideal location to farm Australian Seafood, Prawns, Crayfish, Lobster and selected fish etc. the 1200 acres of natural tidal plains are a perfect location for the astute investor
who is looking towards either the local market or to export fresh Australian seafood overseas.
Reef & Resort
Geographically placed in the best climate in the world within close proximity to the Great Barrier Reef. Rosewood Island is an unspoilt paradise of approx 20,000 acres. With marlin & big game fishing and the underwater diving wonders of the Great Barrier Reef only a short trip away, this tranquil island setting could be transformed into a world class tourist resort.
Crocodile Farming
Once only thought of in terms of handbags and belts, the humble crocodile is now venturing forth into exclusive restaurant menus, and Australian crocodile meat is well sort [sic] overseas. This Central Queensland Reptile is well at home in this climate and environment and would thrive in the many waterways of Rosewood Island."
The total land area was again described as 20,000 acres "of which 10,368 are rateable" and the tenure, a combination of Pastoral Holding and Occupation Licence was set out. The other descriptions contained in the document which are taken up in Anscape's cross-claim were to the effect that the island had an abundant supply of water. These are said to be representations by Mr Brown or Elders Commercial, to which Mr Brown says that the Messrs Gentry provided the information with respect to grazing potential, acqufarming and crocodile farming but that he added the part headed "Reef and Resort" "to beef up the brochure".
Mr and Mrs Clarke were shown the island on 28 July 1991 by James and Ciaran Gentry. Mr Brown was not present. By this time the number of cattle to be sold with the property had reduced from 550 to 450, as referred to in the brochure, to a present guarantee of 350 head, as advised by Mr Brown. The drop in numbers does not seem to have overly concerned anyone save to the extent that provision was later made with respect to it in the contract. Mr Clarke was advised by the Messrs Gentry at the inspection that one could expect $300 per head profit with respect to grown cattle and that after building the herd, over 18 months or two years, he would have 1000 head of cattle and in the context of the conversation which followed it seems that the parties were referring to 1000 adult cows. To Mr Clarke's enquiry as to the number of calves which could be expected each year, the Messrs Gentry told him eighty percent. With 800 head eventually being available for sale each year he and the Messrs Gentry calculated the receipt of $240,000 each year. Although the enquiry as to "profit you'd make" might suggest an interest in net profit, the answer clearly referred to a profit on cattle sales and before expenses. Mr Clarke seems to have been quite excited by these figures and said to the Messrs Gentry that the island would then be worth about $2M and they agreed, although he then attempted to turn it around to their having suggested the figure and his agreeing with it. Although it was not gone into in evidence one may infer that Mr Clarke had his own view as to a rate for assessing value by capitalisation of profits. What was never clear was whether he even enquired as to the cost of running the property. The calculations as to profit in the future were carried out by the Messrs Gentry and Mr Clarke together. The importance of this conversation cannot, it seems to me, be underestimated. It did, as Mr Clarke later said, "pretty much...clinch the deal".
The Messrs Gentry discussed with Mr Clarke how one yarded the cattle and then barged them across to the mainland. They showed him a sketch depicting the path and points on the mainland and the access to the main highway. The next day he followed the detailed directions given, following a road and then a track from the highway, turning right at a house owned by a Mr Jack Lynch and following it beyond to stockyards on the channel. Noting that the track went through Mr Lynch's property a question was raised by him. The Messrs Gentry advised him that the access over the property was "an as of right use" . He said he later asked Mr Brown about it and Mr Brown confirmed that this was so, likening it to the position which sometimes pertains in the country where properties are landlocked in which circumstance, he said, one had access across a neighbouring property "as of right". Mr Brown, it seems, knew something of the arrangement for he knew the identity of the property owner, Mr Lynch. He had attended at the island twice and it would have been unnatural for him not to enquire. The brochure he prepared made reference to the two barge points. This reference in the brochure is also relied upon by Anscape as amounting to a representation of itself or confirming those made by the Messrs Gentry and Mr Brown.
Mr Brown maintained that whilst he referred to barging and the barge landing on the mainland, he made no reference to any right to access across the land owned by Mr Lynch. The resolution of this conflict in evidence presents some difficulty. The story about "land locked" properties equating to the position of an island is unusual enough to suggest it is not Mr Clarke's invention. That Mr Brown, who had observed these things, had not come to know how the cattle were transported from the barge point to the roadway seems odd. Amendments to plead these representations were made late because it was only in more recent times that it was discovered there was no right of way save by the permission of Mr Lynch. Whilst that explains the delay, it must also be noted that they were made at a time when, as I have said, the possibility that the Messrs Gentry were in financial difficulties was real. A judgment might then only be satisfied by Mr Brown or his insurers. Why Mr Clarke would ask an agent such a question and not his solicitor, who usually acted for him, is also unclear although, as I shall later refer, this may be explained by Mr Clarke being convinced that he would be acquiring a property of greater value than his own and with income and taxation benefits and that his enthusiasm by this time inclined him to be less careful than he might otherwise have been with respect to matters of detail. It was at no time shown by evidence that Mr Clarke had made any enquiries. As far as it goes his conduct in entering into this contract suggests he did not. In the end I have concluded that the agent most likely did say something to convey that access was a matter of a right. In this respect I was influenced in particular by the analogy to rural situations of which Mr Clarke may have known little but which may well have occurred to a person of Mr Brown's background.
The period between the end of July and 14 August 1991, the date when the contracts were executed, was taken up principally with inspections and valuations. An issue which arises is whether, as Mr Brown contends, Mr Clarke was provided with the valuations of each of the properties to be sold, and in particular that with respect to Rosewood Island. The failure to provide it, in the background of other assertions as to value by the Messrs Gentry and Mr Brown, is relied upon by Mr Clarke as conduct contravening s.52 Trade Practices Act but not as a breach of the duty the agent owed to him as principal with respect to the sale of his Carrara property. It is relevant here to
note that the evidence does not suggest that Mr Brown later came to know what the Messrs Gentry had told Mr Clarke and what they had discussed about the value of the island.
Mr Brown said he would have received the Hellmrich valuation of Rosewood Island prepared for the Messrs Gentry initially around 27 July 1991 when Mr and Mrs Clarke inspected the island. It was later bound and dated 31 July 1991. The document was not tendered in evidence and that valuer was not called. It was common ground that the document contained an opinion that the island was worth $750,000. Mr Brown says he told Mr Clarke of this a few days after 2 August 1991, the date when Mr Clarke's Carrara house was being inspected. It occurred, he says, when he and the Messrs Gentry were explaining that the island was subject to a mortgage which had to be paid out on settlement. He says Mr Clarke did not appear concerned. There does not appear to me to be any reason why Mr Clarke would not react to such a valuation. As I will refer, when discussing the subject of reliance, the matters likely in the forefront of Mr Clarke's mind were present and future profits which affected the value of the island as a realisable asset.
It is however likely that Mr Clarke was told of the valuation undertaken by Herron Todd White of his property at $750,000. He eventually conceded he may have been. The fact that he was not overly surprised, and concerned only that it may affect the Messrs Gentry desire to conclude a contract, is consistent with a view, which I consider he held, that his property was worth less than $1.3M and tends to confirm the possibility
that he still believed the island was worth more. On the other hand the Messrs Gentry themselves were not apparently concerned at the lower valuation of the Carrara house. But the valuation of Rosewood Island at $750,000 would hardly have shocked them. They had purchased it only two years before for that same sum. It had a limited carrying capacity and had been subject to some effects of drought for some years by 1991, and they had been running it at a loss.
As I have earlier mentioned, following entry into the contracts, but prior to settlement, Mr Clarke and Mr Brown attended an auction in Brisbane of an island called Long Island. It received bids of $1.8M. It is not clear whether the two believed it was truly comparable to Rosewood Island and other evidence shows it was not. The purpose of their attendance was to seek out any unsuccessful bidders, who might then be purchasers of Rosewood Island at a profit. It serves to confirm that Mr Clarke believed that Rosewood Island could be worth more than $1.3M and that Mr Brown was not only not dissuading him but encouraging him in this view.
The True Position
The island was not worth anything like $1.3M nor could it, in August 1991, likely have achieved such a price on resale even if time were taken and some improvements made. The area the subject of the Pastoral lease and Occupational Licence could not, even with pasture improvement, carry 1,000 head of cattle. As at August 1989, the time of purchase by Gentry Bros, there were some 306 cattle and calves on the island. There is nothing to indicate how the potential referred to by the Messrs Gentry
could be achieved and the evidence of the valuer, Mr Evans, suggests that this may have been about the maximum carrying capacity of the island. He estimated it at 200 "adult equivalent" cattle, a calculation arrived at by allowing for weaners at 0.6 and calves at 0.4 of an adult animal. The Messrs Gentry had represented its real potential at almost five times that if, as Mr Clarke said, they were talking of 1000 breeding cattle. Although it is a little unclear whether that figure, if expressed as a maximum for all cattle, must include some weaners it is tolerably clear that it was not remotely achievable.
The valuer Mr Compton was of the view that in the past stock numbers may have been as high as 700, about 485 adult equivalent, and that the island could carry between 350 to 500 adult equivalent cattle in an average season. In this respect he appears to have placed some reliance on the opinion of another valuer in his firm, who was not called. Mr Evans, whose evidence on this topic I prefer, considered the property to have been overstocked and to be showing signs of it and he therefore placed no reliance on historical figures. Mr Evans had considerable knowledge of stocking rates and land types. He undertook a detailed analysis of the various types of country on the holdings and numbers of cattle each could carry, and checked them against those of the Department of Lands. Neither valuer suggested the island could carry 1,000 head of adult cattle. Although they differed as to the number it could in fact carry they were agreed that it could not sustain a commercial cattle operation and that its highest and best use was as a hobby farm with added features such as fishing. The only importance of Mr Compton's assessment was that, on his view, a purchaser could at least cover the costs of a cattle operation but how this was to be achieved was not gone into. It does not appear to have been the experience prior to or after Anscape's purchase and it was not suggested to Mr Clarke or Anscape's accountant that Anscape's running of the island somehow contributed to the losses it suffered.
Whilst the water supply may have been adequate in a normal season, it could not be regarded as plentiful. There was no access over Mr Lynch's property as a matter of right. The arrangement between Mr Lynch and the Gentry Bros was by way of licence only and whilst he was prepared to extend some assistance to Mr Clarke he was unwilling to commit himself to a promise for the benefit of any future purchasers. The closest point at which access could be obtained by a member of the public was at St. Lawrence, which required cartage on the open sea and the construction of a larger barge and of facilities at St. Lawrence. The establishment of a crocodile farm or the undertaking of aqua culture was simply not feasible. The island had little to offer as a resort, as should have been obvious, and in any event such a use would require special approvals which might not be forthcoming.
The Island's Value
Mr Evans and Mr Compton attributed a similar value for the land contained in the Pastoral Lease and Occupation Licence but differed markedly as to the values of the structures on the land and the plant and equipment sold as part of the cattle operation. The latest report of Mr Evans valued the land at $200,000 and Mr Compton considered a figure of $209,800 derived by applying $50.00 per hectare, was appropriate. The figures are not suggested to be exact and in the circumstances I shall adopt that of $200,000.
With respect to the structures making up the improvements on the island the valuers differed to the extent of some $57,590. The improvements consisted principally of a homestead built about seven years prior to the date of valuation, an aircraft hangar which was also used as a machinery shed, living quarters, other sheds for machinery lighting and hay, out buildings and stockyards. Mr Evans' approach was to firstly assess replacement cost at August 1991 by reference to the publication "Cordells". It is used in the building industry as a guide to building costs. Neither the accuracy of its basic estimates and increments, to reflect particular conditions, were the subject of evidence. In particular I was left unsure as to the extent to which particular features of this area, including associated extra costs such as transport, were taken into account. But in any event I understand it to be useful as a guide only and I considered direct evidence of actual local costs to be preferable. Mr Compton had knowledge of local building costs and of extra costs associated with building in a location such as this and applied them.
In the second stage of the valuation process with respect to structures the valuers also differed. Mr Evans applied depreciation to the assessed replacement cost at August 1991 at varying rates - 33 percent with respect to the homestead, 25 percent to the aircraft hanger, 66 percent for some of the other buildings (although in some cases 25 percent) from 0-50 percent to the cattle yards. Whilst there was no dispute about the method, Mr Compton applied a rate of only about 20 percent for the homestead and much less than Mr Evans and for the other structures. The reason for his approach was that, given the basic sound condition of these improvements, their method of construction and their age and the fact that they were essential to any use of the island, they must be
valued as assets and not depreciated to the point where they had, in effect, no value. As I understand it, such an approach is to be taken because the limited value to be attributed to the property, because of restrictions upon the uses to which it can be put, had already been taken account of. Mr Evans conceded the rates chosen by him were arbitrary and, more importantly, he gave no explanation as to why he depreciated so heavily. Mr Compton's valuation of $156,500 is in my view to be preferred.
The difference in the values attributed to plant and machinery totalling some $17,500 results principally from a difference of opinion with respect to the barge or "lighter". Mr Compton valued it by making enquiries as to its replacement cost and by reference to a marine consultant. In the case of both valuers the basis for the estimates of their sources is not fully disclosed. Mr Evans' approach was to ascertain the price likely realised on disposal. In general terms one would think that replacement cost would be an appropriate guide, if the barge was to be utilised by a purchaser as part of the use to which the island was to be put, even if it were a small scale property. However the evidence also shows that without Mr Lynch's permission the barge was not likely to be utilised and it would likely have to be sold and a larger barge obtained. I have therefore allowed plant and machinery at $75,000.
The value of the land, improvements and plant and equipment on the island at the time of sale was then, $431,500 to which must be added a figure for the cattle which formed part of the property sold as a going concern. Mr Evans valued the cattle found to be present on the island after settlement and following a muster. The 282 Brahman cross cows, 120 weaners and 9 bulls found (as compared with the 350 cows and 100 weaners warranted as a minimum by the contract and the subject of a separate claim for damages) were valued by him by reference to actual sales in November 1992 at Rockhampton. Mr Compton, provided a Schedule of Livestock but I was not assisted by an explanation of the value he attributed to them. In Mr Evans' opinion, which I accept, the cattle present were worth about $81,150.
Rosewood Island at the time of sale, was then worth $512,650.
Causation/Inducement
Common law concepts of causation are applicable to the Trade Practices Act 1974 because s.82 requires that the loss or damage suffered be occasioned "by" the offending conduct: Wardley Australia Limited v. Western Australia(1992) 175 CLR 514. In some cases it is appropriate to determine whether the particular conduct was such that it offended s.52 Trade Practices Act and then to conclude whether it operated as a cause in the sense required by law. Here, given the possibility that there would be a number of instances of such conduct contravening s.52, but not necessarily having any effect upon Mr Clarke and therefore Anscape, it is convenient to first determine what, if any, conduct was relied upon by him and which operated as an inducement to enter into contractual relations. It may also be observed that the same factors would have operated to cause Mr Clarke to transfer his property as part of the overall transaction. I shall later deal with who in fact suffered loss as a result of the conduct and whether such a claim is open on the pleadings.
The common law concept is said to require the application of common sense, and not narrower tests which have been applied in the past: March v. E & M H Stramere Pty Limited (1990) 171 CLR 506, 516, 522, 524 and this necessarily involves the application of value judgments and sometimes considerations of policy. A representation need not be the sole inducement, so long as it plays a material part in contributing to entry into the transactions in question: Gould v. Vaggelas(1985) 157 CLR 215, 236 and Medlin v. State Government Insurance Commission (1995) 127 ALR 180, 183-4. Although it is to be observed that the ability of the Court to apportion responsibility, which is said to underlie the departure from the need for a sole or "effective" cause (March v. Stramere per Mason CJ, 512), is not available under the Trade Practices Act. (Re La Rosa; ex parte Norgard v. Rodpat Nominees Pty Ltd(1991) 31 FCR 83; Trade Practices Commission v. Manfal Pty Ltd (No. 3)(1991) 33 FCR 382), although resort may be had in cases of co-ordinate liability to the general law or equity.
It may be readily inferred that what had earlier been said to Mr Clarke had produced a sufficient level of interest to take him to the island. The conversation which took place there however was highly influential in his decision to cause Anscape to purchase the island, and it is necessary to consider what he was then told that he had not been told before. The brochure had already asserted that the island had a carrying capacity for approximately 1,000 head. He had not however been told of the birthrate and the numbers he could expect to be able to sell each year. When he received that information he was able to calculate, for the first time it would seem, an annual income
for the island when applied to the selling rate of $300 per animal (which also appears to have been high having regard to other evidence but no complaint was made as to its accuracy in the pleadings). That exercise allowed him to postulate a value which would return him a handsome profit on re-sale. It is difficult to be certain about it of course, but the strong impression one has is that it was this feature which created such a level of interest that he was convinced, for the first time, that it would be to his and Anscape's advantage to secure a purchase. That impression is reinforced by the lack of evidence as to his level of interest prior to this trip. It may, for instance, have been the case that he was, as persons in his line of business might do, simply checking an interesting possibility.
What then of the earlier representations and the part they played? I have difficulty in accepting that Mr Clarke paid much heed to the agent's statements about its present value. The agent, it seems, never advised him how he came to this figure and was never asked by Mr Clarke how he had. Mr Clarke did not suggest that he, for example, took the agent to be offering an opinion based on capitalising the income of the property. He was experienced in buying and selling property. It was when the Messrs Gentry, who appeared knowledgeable and reliable, advised him of the capacity, birth rate and sale rates that an influence operated. Which is then to say that if, as is likely, he believed that the island was worth at least $1.3M when he purchased it he only felt comfort about that because he had then been given the necessary information by the Messrs Gentry, who themselves were persuasive.
The same may be said of the earlier assertion that the property made a profit and earned some $100,000 each year. Mr Clarke was told variously that the cattle numbers on the island were 500, 450, 350 but there was no evidence that anyone discussed cattle sale figures or explained to him how that figure was then earned. There is not even a suggestion that he asked to view the accounts of Gentry Bros and he probably did not, given what they could have disclosed to him. In these circumstances it is difficult to conclude that, of itself, the representation had much effect. Again, however, once given the important information by the Messrs Gentry he may have then had a level of comfort about it.
The representations as to other uses referred to in the brochure: aquaculture, crocodile farming and as a resort, were not I consider, taken seriously by Mr Clarke. At the highest they were matters which might be interesting if they were possible but they did not in any real way affect the view he formed of the island's potential which made it worthwhile to purchase. He made no enquiry about these possibilities. At least with respect to the resort, his experience in land development would have told him that it was not an island with such natural beauty that might suggest that such a case was viable and, if it could be sufficiently improved, he would require permits and approvals. He had not looked into these at all. For the purpose of a purchase and later re-sale he was only interested in a viable cattle operation. The representation of the Messrs Gentry, and of Gentry Bros for whom they acted, as to the carrying capacity of the island was relied upon by Mr Clarke for what it said about future profits and capital value and it also served to make credible the earlier representations as to present profit. That conduct was misleading and deceptive and there is no evidence of any grounds for their believing the cattle numbers could be achieved.
It is not alleged that the agent was knowingly concerned in the Messrs Gentrys' conduct viewed as a whole, perhaps because it could not be said he knew all of what they had imparted. He had however, at the first meeting, communicated the present profit made on the island. It is not suggested he made any enquiry as to its accuracy. By itself however the representation did not operate as a cause. Any reliance later placed upon it was brought about by the Messrs Gentrys' conduct and not that of the agents.
It is also alleged that, independently of the Messrs Gentry, Mr Brown confirmed that access to roads was available, as a matter of right, over Mr Lynch's property. Whatever the agent's understanding of such matters in the country, but about which he did not give evidence since he maintained his denial of the conversation, there does not seem to have been any basis for supposing that it could translate to the situation of the island vis a vis Mr Lynch's property. The importance of this was to assist in removing some concern Mr Clarke had and affected the level of certainty he had about the property functioning as a viable cattle property, and then to divert him from a train of enquiry. Had he been told of the licence he almost certainly would have had to consult his solicitor. So viewed, it contributed in a real way to Anscape purchasing the property. Reference was made to the representations in the brochure as to barge points and loading ramps but it was only when they were combined with the later statements to Mr Clarke that they conveyed in a real sense that access was in order. The agent was also guilty of misleading and deceptive conduct in advising as to a right of access, when there was none.
Given my findings of contraventions of s.52 Trade Practices Act it is not necessary to deal with the alternative claim in negligence. The duty owed to Anscape was said to have arisen after the first meeting and when the question of a "swap" arose but, in any event, the advices pleaded as negligent have not been found by me to have been acted upon.
Negligence of Anscape
It is the lack of enquiry by Mr Clarke which Mr Brown and Elders Commercial rely upon as establishing a failure on the part of Anscape to protect its own interests. It is alleged that the representations by Mr Brown as to access (including that in the brochure) did not operate as an inducement to its entering into the contract. As pleaded the question posed, that of causation, is the proper one: Argy v. Blunts & Lane Cove Real Estate Pty Limited(1990) 26 FCR 112, 137-8 and the cases there referred to. An applicant does not have to establish that reasonable care has been taken as a necessary foundation of the right to relief: Neilsen v. Hempston Holdings Pty Ltd (1986) 65 ALR 302, 309. This does not however preclude an argument, in appropriate cases, that the lack of enquiry shows that so little reliance was placed on the information as to remove it as an effect. Mr Clarke failed to check the accuracy of what was, I accept, an important representation as to a legal right with his solicitor. In a sense it played a part in him causing Anscape to purchase the island. But, whilst that may assist a finding of contribution at law or in equity, it does not follow that there was not actual reliance on the representation, upon which recovery under s.52 is founded: Henjo Investments Pty Ltd v. Collins Marrickville Pty Ltd (1988) 79 ALR 83, 96. To prevent recovery, the conduct of an applicant must be such as to prevent a finding of reliance and that what was undertaken by the applicant was not caused by the representation.That has not here been shown.
Loss and Damage suffered
The contract for the sale of Rosewood Island provided that Anscape was to pay $1.3M. The contract with respect to Mr Clarke's Carrara property provided that $900,000 was to be paid on completion and $400,000 on a later date. What in fact occurred was that Rosewood Island was transferred to Anscape, the Carrara property was transferred to Gentry Bros and Anscape paid $400,000 to effect a release of the mortgage over the island and received a security, which in turn was released on payment in August 1992.
It was submitted for Anscape that its principal loss should be assessed at $1.3M less the value of Rosewood Island. It would then recover $787,350 together with other consequential losses I shall later deal with. One is said to arrive at that point by treating the transaction as having occurred as the contracts provided, so that Gentry Bros is to be taken as having given a cheque for $1.3M to Mr Clarke, who loans those monies to Anscape which then pays Gentry Bros. In this respect reliance was also placed upon an entry in Anscape's journal for 12 September 1991 (although posted much later) of an amount of $1,299,683.77 received as "Private Funds introduced - B Clarke & S Clarke". Anscape submitted that it ought be accepted as evidence of the fact of payment since the journal entry qualified as a business record under s.7B Evidence Act 1905, which continues to apply to these proceedings, the hearing of which began before the commencement of the new Act: see s.4(1) Evidence (Transitional Provisions and Consequential Amendments) Act 1995. It appears that it does so qualify since Anscape may be said to carry on a business of trustee and investor; the entry and journal are documents; and they were derived by the accountant's office from Mr Wright, Mr Clarke's solicitor who can be taken to have acted on instructions and who was also a director of Anscape with knowledge of the facts. The knowledge that he and Mr Clarke would have had however was that no such sum was paid. Which is to say, that whilst the entry satisfies the requirements of s.7B(1) as to admissibility, no weight in my view can be given to it, (see s.7F).
It was submitted for Anscape that it suffered loss immediately it entered into the contract to purchase the property which was less valuable than it would have been if the representations had been true. Such an approach may be relevant if one were measuring damages in contract, as the majority in Wardley 526, 531 pointed out. Here however damages are awarded under s.82(1) Trade Practices Act and this involves an assessment of the loss or damage occasioned by the conduct of the respondents in contravention of s.52. Whilst the measure of those damages is then obtained by having regard to the conduct which contravenes s.52 (Wardley, 526) where, as here, the misleading and deceptive conduct is constituted by misrepresentations, the measure in tort has been accepted as furnishing the appropriate guide: Gates v. City Mutual Life Assurance Society Limited(1986) 160 CLR 1; Wardley526. The object in tort is to place an applicant in the position in which he or she would have been had the tort not been committed and this involves the question as to "how much worse off the plaintiff is as a result of entering into the transaction which the representation induced him to enter than he would have been had the transaction not taken place": Gates, 12. It also entitles the plaintiff to any consequential loss flowing directly from reliance upon the representation. A reconstruction of the transaction does not answer this enquiry and fails to have regard to the loss or detriment actually suffered. If one considers the position of Anscape prior to entry into the transaction, it had some $400,843 (the amount actually paid at the settlement after some adjustments) but this does not form part of its loss as it was later repaid. More importantly the company did not have any liability either to Mr and Mrs Clarke, or to Mr Clarke alone. Mr Clarke, on whose behalf a claim was first raised in an amended reply and answer and which claim was not pursued until the conclusion of submissions, had a house property at Carrara which I consider, for reasons I shall advert to later, had a value of about $700,000.
The usual measure of damages in the case of a purchase resulting from misleading or deceptive conduct is said to be the difference, at the time of purchase, between the real value of what is sold and the price paid. Toteff v. Antonas(1952) 87 CLR 647, 650-1, 654; Gould v. Vaggelas, 220; Gates12. But this cannot be applied to all cases and the "true" measure then to be applied is that referred to in the proposition enunciated by Dixon J. in Toteff650, that a plaintiff is entitled to recover as damages a sum representing the prejudice or disadvantage suffered in consequence of altering his or her position under the inducement of the fraudulent representation: Gates12. That was the approach adopted in Gould v. Vaggelas, the facts of which may be thought to bear some similarity to those of this case. The Goulds had, as part of an overall transaction, transferred their property to meet some of the consideration for a purchase by a company which they were to form. The company was not joined as a party to the proceedings and the Court was there concerned to assess the damages suffered by the Goulds. Conversely in this case it was the company only who originally sought damages and for the most part it must be said damage, if any, suffered by Mr Clarke was disavowed. As here, the causes of action which accrued to the company on the one hand, and the Goulds on the other, were regarded as distinct: Gould219, 231, 257, 259. The loss suffered by the Goulds was found to arise by their making their property available to the company (Wilson J., 246) or, as the transaction was characterised by Gibbs CJ, (255-6) by loaning the company an amount equivalent to the value of the property transferred. Whilst Mr and Mrs Clarke did not in fact advance $1.3M to Anscape, as was sought to be made out by reference to the book entry, I accept that Mr Clarke may be taken as having loaned the company an amount equivalent to the value of his property transferred to Gentry Bros as the consideration to be paid by Anscape. In turn, Anscape became subject to an obligation to repay those monies to him. Another reason for rejecting the loan of $1.3M as the starting point for an assessment of damages is that it could not, in my view, have been said that the conduct of the Messrs Gentry and Mr Brown caused Anscape to acquire an obligation to repay Mr Clarke an amount well in excess of the value of the property transferred by him.
The measure of Anscape's detriment is then the sum which it is liable to repay Mr Clarke, less the value of the property acquired in the same transaction. Anscape has not repaid Mr Clarke but there is no suggestion that it will not do so, or that Mr Clarke would not require it. The inference one can at least draw from the book entry is that Mr Clarke desired to record the fact of an advance. Mr Clarke's reference during his evidence to having no intention to wind the company up should not, I consider, be taken to mean that he would not require or obtain repayment from it in due course. It follows from earlier findings that it was intended that the island be later sold at a profit. That would have placed Anscape in a position to repay Mr Clarke. No demand has been made by Mr Clarke for repayment of the monies but one cannot infer from the circumstances of the transaction between Anscape and him that the loan was to be repayable only upon demand. In the absence of such a pre-condition to the debt becoming due, the monies are to be regarded as presently payable: Norton v. Ellam (1837) 2 M&W 461; 150 ER 839. Although it is not necessary to add, it seems to me that even if a demand were necessary before recovery could be had by Mr Clarke, that would not prevent an assessment of the detriment suffered by Anscape as being the amount for which it was legally liable. In this respect Wardley did not hold that in every case where a liability is postponed that a plaintiff is to be regarded as not having sustained loss and it is of interest in particular to note that the majority (532) did not deal with the question of deferred liability. The Full Court of this Court in Karedis Enterprises Pty Limited & Anor v. Antoniou & Anor(1995) ATPR ¶41-427, 40,814-5 and 40,818 considered that a detailed analysis of the judgments in Wardley discloses that the question, which is always one of fact, as to when loss is suffered is as to loss which is "reasonably ascertainable". The difference between the amount owing by Anscape to Mr Clarke and the value of the island, the measure of its loss, is $187,350.
There are further claims made by Anscape for loss which may be recovered. The shortfall of stock the subject of warranty as to a minimum was 64 cows. Applying Mr Evans' values, a loss of $14,400 is reflected and whilst there were 20 more weaners than expected, no adjustment is necessary given the terms of the warranty. The machinery was not, as was warranted, in good working order and condition. No attack was made upon the amounts said to have been paid to rectify the faults, some $25,000. Anscape may also recover the costs paid on the conveyance of $8,181.50 and stamp duty, which I take to have been paid by it as purchaser of $45,975. It also claimed operating losses of $104,334.68 and $34,167.29 for the year ended 30.6.92 and the period 1 July 1992 to 15 September 1992 respectively. Claims for losses beyond those periods were sought by late amendment at the commencement of the hearing and disallowed by me. Whilst the sums claimed for the two periods contain items such as depreciation they were not the subject of any attack as to their accuracy and there was no issue as to Anscape's ability to claim losses sustained in the continued operation of the property whilst it made efforts to sell it.
Anscape's total loss, which may be recovered against the respondents, is $419,408.47. It is not necessary to determine whether Mr Clarke may recover any loss he suffered. Indeed it would not have been possible for me to do so, given the state of the evidence and to the need for further argument. The claim was made in an amended
Reply and Answer. It was not a response to the further defence and cross-claim and leave would be required to properly plead the matter as a claim. In that connection it could hardly be said that the claim was pursued with any vigour. Indeed until the concluding moments of submissions it appeared that only losses suffered by Anscape were being pursued, and then on a basis different from that upon which I have finally assessed them. Elders Commercial and Mr Brown also foreshadowed argument as to whether leave should be granted given that the claim was not brought within the time limited by s.82(2) Trade Practices Act. These matters may have been resolved by further argument. If they had been resolved in Mr Clarke's favour, the evidence as it stands, would not have permitted a proper conclusion as to the loss suffered, since the question of whether Anscape was in a position to pay him the full amount of what he had in effect loaned to it was not dealt with by any witness (see Gould, 255-6). In view of the conduct of the matter I would have been disinclined to permit further evidence to be led.
The Value of the Carrara Property
I have, as with the assessment of the value of the island, determined the value of the Carrara property in light of the evidence including that of the valuers: per Hope JA, Leichhardt Municipal Council v. Seatainer Terminals Pty Ltd (1981) 48 LGRA 409, and conscious of the reality that such an inquiry is full of uncertainties and that the opinion of the experts is necessarily the result of a set of conjectures depending upon personal experience: Secretary of State for Foreign Affairs v. Charlesworth Pilling & Co[1901] AC 373 (391) and referred to with approval in Spencer v. The Commonwealth (1907) 5 CLR 418, 442. Curiously the valuer who did carry out a valuation prior to the contract being entered into by Mr Clarke and Gentry Bros was not called. Nothing follows from this save an observation that a valuation closer to the time of the contract may have furnished a useful guide, but neither party apparently wished to contend for the figure disclosed. With respect to Mr Kennedy, who generally impressed me with the thoroughness of his approach, difficulty lay in his acceptance of a nearby sale at $590,000 in October 1991 as indicating the "area" in which the subject property should be valued. It appeared in particular on questioning, that the improvements on it were substantially inferior to those of the subject property. Then, whilst one might conclude the property was likely worth more than $600,000, Mr Dobelis placed reliance on a sale in April 1991 at $950,000 but of a residence which was described as of "luxury" standard, whilst the subject property was not suggested to achieve this. The other residence was also of a wholly different style, such that it might be considered to have a different market than Mr Clarke's property, in the sense that it would attract a different group of purchasers, largely because, I infer, it would command a higher price. It had extensive ground improvements and a different aspect which, however, was said to be inferior. With all these differences it is hard to accept that the property was truly comparable at all and it was not explained to me how the significant differences somehow balanced themselves out.
The property which Mr Kennedy referred to as providing a true comparison was situate adjacent to the Clarke's residence. The potential for a comparison given similar land characteristics and river aspect, was present. The residence on it was not of such a high standard as Mr Clarke's and it was sited such that little further extension or
development could be effected. These features combined to depress the price on what was otherwise a block almost twice the size of Mr Clarke's. Some doubt was also cast upon the reliability of its sale in July 1991 for $737,000 as it may not have resulted from an arms' length transaction, although such an inference is difficult to draw from the bare facts presented. There were other factors which may have lowered the sale price, in particular since some demolition had been commenced but had been unfinished at the time of the sale. In February 1994 the property was again sold, however this time for $727,000 which might be thought to support the reliability of the sale in 1991. It was the general view of Mr Kennedy that the market was however improving at this time, but it seems to me that retrospective analyses of when markets altered direction are fraught with difficulty and the purchase price probably stands as the best evidence of the market. One might then conclude that the value of the Carrara property may not be as much as $730,000. How much less depended upon how "superior" the adjacent property was. Whilst it was twice the land size it was not suggested that one would expect it to be worth twice as much. Nevertheless given the values attributed to land in this area it is likely to have been worth something more than Mr Clarke's. A figure of $700,000 therefore seemed appropriate to me. I was not assisted by the summation method employed by the valuers, the bases for which were not sufficiently explained in evidence save that the fixtures arrived at by Mr Dobelis were based upon very high rates for improvements. In any event, as I understand it, the method was used only as a check upon the figure otherwise arrived at and should be discounted for that reason.
Elders Commercial's Cross-claim against Gentry Bros. Pty Ltd and C & J Gentry
Elders Commercial established that it was authorised by Gentry Bros to sell Rosewood Island and by the terms of that authority it was agreed that the agent receive a sum calculated at 2.5 percent of the total sale price: $32,500 and that this has not been paid. Both Elders Commercial and Mr Brown also sought damages by way of indemnity against Gentry Bros and against the Messrs Gentry to the extent of the former's liability arising out of their supply of the brochure. The Trade Practices Act does not provide for apportionment between several persons who have engaged in the conduct constituting a contravention of its provisions. A claim for contribution at law or in equity might however be entertained where there was co-ordinate liability: Trade Practices Commission v Manfal Pty Ltd, 382 and see also the discussion by Cooper J. in Dorrough v. Bank of Melbourne Limited, unreported, 28 September 1995 pages 37-38. However, the conduct of the agent which I find contravened s.52 of the Trade Practices Act, and upon which reliance was placed, was not the supply of the information contained in the brochure.
I certify that this and the preceding thirty four pages are a true copy of the reasons for judgment herein of the Honourable Justice Kiefel.
Associate
Date:16 November 1995
Counsel for the first and
second cross-claimant: Mr J W Lee
Solicitors for the first and
second cross-claimant : Ffrench Wright & Dennett
Counsel for the fourth and fifth
cross respondents: Mr D G Ryan
Solicitors for fourth and fifth
cross respondents: Thynne & Macartney
Date of Hearing: 13, 14, 16, 17, 20 to 24 February 1995
Place of Hearing: Brisbane
Date of Judgment: 16 November 1995
0
15
0