Haack v Cardwell Shire Council
[2001] QDC 219
•22/05/2001
DISTRICT COURT OF QUEENSLAND
CITATION: Haack v Cardwell Shire Council & Ors [2001] QDC 219 PARTIES: DOUGLAS W. HAACK and LAUREN L. HAACK
(Plaintiffs)
COUNCIL OF THE SHIRE OF CARDWELL
(First defendant)
RODNEY MILNE
(Second defendant)
STARDELL PTY LTD.
(Third Defendant)
RALPH JENSEN
(Fourth Defendant)
SHIRLEY ANNE FRENCH, MARGARET ROSE
STEELE and EILEEN MARY PEARCE
(Fifth defendant)
BRIAN BARRY and DOREEN JANE BARRY
(Sixth defendant)
ROYCE FITZGERALD
(Seventh defendant)FILE NO/S: 135 of 2000 DIVISION: Trial PROCEEDING: ORIGINATING Cairns COURT: DELIVERED ON: 22/5/01 DELIVERED AT: Cairns HEARING DATE: 16/2/2001 JUDGE: White DCJ ORDER:
(a) That the word “misrepresentation” be struck out in paragraph (b) of the Notice of Claim and paragraph (b) in the prayer for relief in the Statement of Claim. (b) That paragraph 22 of the Statement of Claim be struck out. (c) That the plaintiffs file an amended Notice of Claim and Statement of Claim within 30 days of the making of this order. (d) That the plaintiffs and the fifth defendants have liberty to apply in respect of this application upon two days written notice to the solicitor for the other party to this application. CATCHWORDS: COUNSEL: Mr. Forde for the plaintiffs
Mr. Philp for the fifth defendantsSOLICITORS: Quinn & Scattini for the plaintiffs
Mr. Jonsson, MacDonnells for First defendant
Vandeleur & Todd for the Fifth defendants
This is an application by the fifth defendants for judgment against the plaintiffs pursuant to r.293 of the Uniform Civil Procedure Rules or alternatively to strike out certain parts of the plaintiffs’ Statement of Claim, so far as they relate to the fifth defendants.
The fifth defendants were the registered proprietors of a residence located at 11 Trower Street, Tully. They appointed the third defendant, which traded as L.J. Hooker Tully, to act as their real estate agent for the purposes of effecting a sale of the property. The plaintiffs subsequently purchased the property with the third defendant acting as agent for the fifth defendant. The Statement of Claim alleges that the fourth defendant was a real estate sales person in the employ of the third defendant. The Statement of Claim goes on as follows:-
7. In or about February 1997 the plaintiffs orally informed the third defendant, fourth defendant….that the plaintiffs were interested in purchasing one or more houses within the Tully area for the purposes of renting them out to itinerant workers to share kitchen and bathroom facilities in backpacker style accommodation.
8. In or about early 1997 the plaintiffs attended a meeting with the fourth defendant, particulars of which are as follows:-
(b) the plaintiffs told the fourth defendant that they, the plaintiffs, wanted to purchase a house to rent to itinerant workers who would share the kitchen and bathroom facilities in backpacker style accommodation. (c) The fourth defendant told the plaintiff –
(i) that a property situated at 11 Trower Street, Tully was for sale; and (ii) the Trower Street property was a suitable property to rent to itinerant workers in backpacker style accommodation. 9. In the premises the fourth defendant and third defendant represented to the plaintiff that the Trower Street property was a property which the plaintiff could let to itinerant workers in backpacker style accommodation.
The Notice of Claim in relation to all defendants limits the claim to one for damages. In relation specifically to the fifth defendants it claims damages for –
(i) misrepresentation;
(ii) negligence mis-statement;
(iii) misleading and deceptive conduct pursuant to s.75B, 82 and/or 87 of the Trade Practices Act 1974.
There are identical claims against the third and fourth defendants, although the amount is greater because they are claimed against in relation to a second property which does not concern the fifth defendants.
[4] My tentative view is that there is no cause of action for damages for “misrepresentation”. However in the course of argument it became tolerably clear that the cause of action which is described as misrepresentation in the Notice of Claim and the Statement of claim is in reality an action for “deceit” or “fraudulent misrepresentation”. So far as the fifth defendants are concerned the Statement of Claim goes on to allege in paragraph 12 that, relying on the statement made to them alleged in paragraph 8, the plaintiffs entered into a contract and completed the purchase of the fifth defendants’ property at Trower Street. Paragraph 17 of the Statement of Claim alleges that the use of the premises at Trower Street for rental to itinerant workers in backpacker style accommodation was a prohibited use under the local authority’s planning scheme. Paragraphs 19 and 20 allege inter alia that the representations referred to in paragraphs 8 and 9 were false and that the plaintiffs would not have purchased the Trower Street property if such representations had not been made.
There is no allegation in the Statement of Claim that the fifth defendants or any one of them personally made the allegedly offending representation. The claims against the third and fourth defendants are advanced and the claim against the fifth defendants is introduced in the following paragraphs of the Statement of Claim:-
22. The representations referred to in paragraphs 8 and 9 above –
(a) were made by the third defendant, fourth defendant and fifth defendant when the third defendant and/or fourth defendant and/or fifth defendant knew or ought to have known they were false or alternatively, (b) were made with reckless disregard as to whether the representations were true or not; (c) constituted misleading and deceptive conduct in breach of s.52 of the Trade Practices Act 1974. 23. The representations referred to in paragraphs 8, 9 …….above were made to induce the plaintiffs to purchase the respective properties.
The Statement of Claim goes onto allege that the plaintiffs were not able to use the Trower Street property as intended and as a result they suffered various losses. I am not at this stage concerned about the adequacy of the pleadings so far as the third and fourth defendants are concerned. However, it is clear that in the absence of any relevant representation made by any of the fifth defendants themselves, it will be necessary for the plaintiffs, in order to succeed against the fifth defendants, to demonstrate how they are legally liable for the conduct of the third/fourth defendants. In my view it is not sufficient to simply say that they were acting as the appointed real estate agents of the fifth defendants at the time they made the allegedly false representation. There are various ways in which the fifth defendants could be liable. It is no part of my function on this hearing to enumerate the ways in which that might be so. However, one way in which they would probably be liable is if they specifically instructed the third and fourth defendants as to the fact of the representation and expressly authorised them to make such representation to the plaintiffs when the fifth defendants knew that the representation was false. It may be possible that the plaintiffs could succeed against the fifth defendants if they were able to establish circumstances giving rise to a vicarious liability for the conduct of the third and fourth defendants even though the fifth defendants had no knowledge of that conduct. Whatever the case might be in my view the plaintiffs are obliged to plead with a degree of particularity, each of the factual stages which link the fifth defendants to the allegedly false misrepresentations made by the third and fourth defendants.
Similar criticisms of the Statement of Claim apply to the way in which it attempts to link the fifth defendants with the alleged “negligent mis-statement” by the third and fourth defendants. Similar criticism applies in respect to the action for deceptive and misleading conduct pursuant to the Trade Practices Act, although the defects in the pleading are somewhat different. The action for misleading and deceptive conduct is a statutory one. The primary action lies against a corporation. If a cause of action is to lie against a natural person it is necessary to demonstrate that that person fits within one of the four categories contained in subsection 75B(1) of the Trade Practices Act. There is no pleading that the fifth defendants, or any of them come within any of those categories and nor are there any factual matters pleaded from which it could be concluded that the fifth defendants or any of them come within any of those categories.
| [7] | I am satisfied therefore that the Statement of Claim does not disclose a cause of action against the fifth defendants in respect of any of the claims made. |
It is convenient now to turn to the application to enter judgment for the fifth defendants against the plaintiffs. The fifth defendants rely upon their affidavits in which they swear that they did not have any connection at all with any representation as alleged in the Statement of Claim and relied on by the plaintiffs. It is pointed out that there is no evidence to the contrary. I accept that that is so at the moment, but I am not satisfied that it should be concluded on an application of this type that such assertions cannot be challenged in any way. It may be that at trial the third and fourth defendants may challenge and give evidence contrary to the fifth defendants assertions. In addition I do not accept that the case of Armstrong & Anor v Strain & Ors 1952 1KB 232 relied on by counsel for the fifth defendants necessarily has application in this case. In that case the agent made a representation which was false but it was not found by the trial judge that he knew his representation was false. The owner of the property had information that the representation would have been false but was not found to have had any knowledge of the representation. I accept that in those circumstances the owner could not be found liable for the fraudulent misrepresentation of the agent. Obviously the agent in those circumstances did not act fraudulently. However, as I have indicated I am not satisfied that there is no cause of action against a principal when the agent has made a fraudulent representation within the scope of the agent’s apparent authority, even though the principal is entirely ignorant of the matter. In other words I am not satisfied that a principal cannot be vicariously liable for the fraud of the agent. I therefore decline to give judgment for the first defendants.
The result is that the claim against the fifth defendants still stands, at least for the moment. However, the Statement of Claim as it stands does not disclose, in my view, any cause of action against the fifth defendants. I am of the view that the plaintiffs should have the opportunity to re-plead the Statement of Claim. The Notice of Claim and the Statement of Claim should be amended by deleting the word “misrepresentation” where it appears and inserting the word “deceit” or the word “fraud”. Further, the facts relied on to prove the claim must be amended so as to properly allege all of the material facts which it will be necessary for the plaintiffs to prove in order to make the fifth defendants liable in respect of any of the causes of actions raised. In respect of any of the cause of action raised, if the plaintiffs propose to rely on alternative series of facts then each alternative series must be clearly and separately identified. Primarily the Statement of Claim is deficient in what it does not plead rather than what is already contained in it. However, it is appropriate that paragraph 22 be struck out so as to force the plaintiffs to either amend the Statement of Claim to properly plead a cause of action against the fifth defendants or run the risk of having judgment entered for the fifth defendants against them by reason that the Statement of Claim fails to disclose a reasonable cause of action. I therefore propose to make the following orders:-
(a) That the word “misrepresentation” be struck out in paragraph (b) of the Notice of Claim and paragraph (b) in the prayer for relief in the Statement of Claim. (b) That paragraph 22 of the Statement of Claim be struck out. (c) That the plaintiffs file an amended Notice of Claim and Statement of Claim within 30 days of the making of this order. (d) That the plaintiffs and the fifth defendants have liberty to apply in respect of this application upon two days written notice to the solicitor for the other party to this application.
This will give the fifth defendants the opportunity to revive the application to enter judgment against the plaintiffs for the fifth defendants if the plaintiffs either fail to file and serve a satisfactory Notice of Claim and Statement of Claim properly pleading its supposed causes of action against the fifth defendants, or to challenge the validity otherwise of any amended Notice of Claim and Statement of Claim. It would also give the parties the opportunity to bring the matter back before me to determine the question of costs. My preliminary view is that the fifth defendants have sufficiently succeeded on this application to have their costs, even if the plaintiffs are able to come up with a satisfactory amended Notice of Claim and Statement of Claim, however I will give the parties the opportunity to make submissions before making a final decision.
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