Harkins v Butcher

Case [2002] NSWCA 237


Reported Decision:

(2002) 55 NSWLR 558
(2002) ATPR (Digest) 46-225

New South Wales


Court of Appeal

CITATION: Butcher & Anor v Lachlan Elder Realty; Harkins v Butcher & Anor [2002] NSWCA 237 revised - 28/08/2002
FILE NUMBER(S): CA 40398/01; 40432/01
HEARING DATE(S): 27, 28 March 2002
JUDGMENT DATE:
28 August 2002

PARTIES :


Jeffrey Gordon Butcher and Judith Kay Radford v Lachlan Elder Realty Pty Limited (ACN 002 332 247)
Robert Edward Harkins v Jeffrey Gordon Butcher and Judith Kay Radford
JUDGMENT OF: Handley JA at 1; Beazley JA at 98; Hodgson JA at 99
LOWER COURT JURISDICTION : Supreme Court - Equity Division
LOWER COURT
FILE NUMBER(S) :
ED 2733/98; ED 2580/97
LOWER COURT
JUDICIAL OFFICER :
Austin J
COUNSEL: Butcher & Radford - G A Moore
Harkins - J M Ireland QC/W G Hodgekiss
Lachlan Elder - L G Foster SC/J V Gooley
SOLICITORS: Butcher & Radford - Williams Woolf & Zuur
Harkins - Roman A Dechnicz & Associates
Lachlan Elder - Murray Stewart & Fogarty
CATCHWORDS: AGENCY - hearsay representation by agent - not representation as to truth of statement - estate agents incorporate copy of incorrect survey diagram in brochure - COSTS - unnecessary charge of fraud which fails - plaintiff to pay costs of issue of fraud - MISREPRESENTATION - hearsay representation by agent - not representation of truth of statement - SPECIFIC PERFORMANCE - defence of innocent misrepresentation - purchasers' failure to rescind no bar - TRADE PRACTICES ACT - s 51A - s 52 - misleading and deceptive conduct - hearsay representation by agents on behalf of principal - representation by principal - not representation by agents - VENDOR & PURCHASER - Conveyancing Act s 55 (2A) - repayment of deposit - loss of right to rescind for innocent misrepresentation no bar to order - discretion
LEGISLATION CITED: Trade Practices Act 1974 (Cth)
Conveyancing Act 1919 (NSW)
Real Property Act 1900 (NSW)
Evidence Act 1995 (NSW)
Misrepresentation Act 1967 (UK)
Law of Property Act 1925 (England)
Law of Property Act 1928 (Vic)
CASES CITED:
Verrall v Nott (1939) 39 SR (NSW) 89
Attorney General of Southern Nigeria v Holt [1915] AC 599
Falcon v Famous Players Film Co [1926] 2 KB 474 CA 488
Jones v Sutherland SC [1979] 2 NSWLR 206
Taco Co of Australia Inc v Taco Bell (1982) 42 ALR 177
Global Sportsman Pty Limited v Mirror Newspapers (1984) 2 FCR 82
Argy v Blunts & Lane Cove Real Estate Pty Limited (1990) 26 FCR 112
Yorke v Lucas (1985) 158 CLR 661
Barwick v English Joint Stock Bank (1867) LR 2 Ex 259
In re Reese River Silver Mining Company (Smith's case) (1867) LR 2 Ch App 604
Moens v Heyworth (1842) 10 M & W 147 [152 ER 418]
Craig v Phillips (1876) 3 Ch D 722
Resolute Maritime Inc v Nippon Jaiji Kyokai [1983] 1 WLR 857
Hedley Byrne & Co Ltd v Heller & Partners Ltd [1964] AC 465
Derry v Peek (1889)…

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AGLC
Harkins v Butcher [2002] NSWCA 237
Case
[2002] NSWCA 237
Decision Date

CaseChat Overview and Summary

In *Harkins v Butcher*, the New South Wales Court of Appeal considered a dispute arising from the sale of a property. The purchasers, Mr. and Mrs. Butcher, alleged that the vendor, Mr. Harkins, had made misleading and deceptive representations concerning the property's dimensions. Specifically, an incorrect survey diagram was incorporated into a brochure provided by the vendor's estate agents. The purchasers sought specific performance of the contract, or alternatively, repayment of their deposit and damages.

The Court was required to determine several key legal issues. These included whether the representation made by the estate agents, by incorporating the incorrect survey diagram, constituted misleading or deceptive conduct under the *Trade Practices Act 1974* (Cth) (now the *Competition and Consumer Act 2010* (Cth)). Further, the Court had to consider whether the purchasers' failure to rescind the contract for innocent misrepresentation barred them from seeking relief under section 55(2A) of the *Conveyancing Act 1919* (NSW) or under the *Trade Practices Act*. The Court also had to address the purchasers' claim for fraud and the implications for costs.

The Court held that the representation made by the estate agents, by incorporating the survey diagram, was not a representation as to the truth of the statement contained within it, but rather a representation that the agents believed it to be accurate. Consequently, it did not amount to misleading or deceptive conduct by the vendor under section 52 of the *Trade Practices Act*. However, the Court found that the purchasers were entitled to relief under section 55(2A) of the *Conveyancing Act*, which allows for the repayment of a deposit where a contract is rescinded due to innocent misrepresentation, even if the right to rescind has been lost. The Court also found that the purchasers' unsuccessful fraud claim meant they were liable for the costs associated with that issue.

In *Harkins v Butcher*, the appeal by the purchasers was allowed in part, with orders made regarding the repayment of the deposit. The vendor's appeal was dismissed with costs.

Orders

Orders of the court

Butcher & Anor v Lachlan Elder CA 40398/01 - Appeal dismissed with costs. Orders made; Harkins v Butcher & Anor CA 40432/01 - Appeal allowed in part. Orders made

Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

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