Hinton v Commissioner for Fair Trading

No judgment structure available for this case.

CITATION: Hinton & Ors v Commissioner for Fair Trading [2006] NSWADT 257

DIVISION: General Division

PARTIES: APPLICANTS
Peter Leslie Hinton
Mahevi Pty Ltd
Ereca Louise Hinton
RESPONDENT
Commissioner for Fair Trading, Office of Fair Trading

FILE NUMBER: 053055-053057

HEARING DATES: 9 & 10/08/2005, 1/11/2005, 6 & 8/2/2006

SUBMISSIONS CLOSED: 04/11/2006

DATE OF DECISION:
09/01/2006

BEFORE: Molony P - Judicial Member

CATCHWORDS: Property, Stock and Business Agents Act - Real Estate Agent - disciplinary determination - Real Estate Agent - disciplinary determination

MATTER FOR DECISION: Principal matter

LEGISLATION CITED: Administrative Decisions Tribunal Act 1997
Fair Trading Act 1987
Hire Purchase Act 1960
Limitation of Actions Act 1936 (SA)
Limitation of Actions Act 1969
Property, Stock and Business Agents Act 2002
Property, Stock and Business Agents Regulation 2003
Trade Practices Act 1974 (Cth)

CASES CITED: Arbest Pty Ltd v State Bank of NSW (1996) ATPR 41-481
Baker v. Sheridan [2005] NSWSC 121
Barclay Holdings (Australia) Pty Limited v British National Insurance Co Ltd (1987) 8 NSWLR 514
Briginshaw v Briginshaw [1938] HCA 34; (1938) 60 CLR 336
Brunninghausen v. Glavanics [1999] NSWCA 199
Clark v Esanda [1984] 3 NSWLR 1
Commonwealth Bank of Australia v Mehta (1991) 23 NSWLR 84
Demagogue Pty Ltd v Ramensky (1992) 39 FCR 31
Do Carmo v Ford Excavations Pty Ltd (1983-4) 154 CLR 234
Drake v Minister for Immigration and Ethnic Affairs (1979) 46 FLR 409
Fraser v NRMA Holdings Limited (1995) 55 FCR 452
Henjo Investments Pty Ltd v Collins Marrickville Pty Ltd (1988) 79 ALR 83
Karina Fisheries Pty Ltd v Mitson [1990] 26 FCR 476
Kimberley NZI Finance Ltd v Torero Pty Ltd [1989] ATPR (Digest) 53
Lam v Ausintel Investments Australia Pty Ltd (1989) 97 FLR 458
Mayne Nickless Ltd v Pegler [1974] 1 NSWLR 228
Metalcorp Recyclers Pty Limited v Metal Manufactures Limited [2003] NSWCA 213
Minister for Aboriginal Affairs v Peko-Wallsend Ltd (1986) 162 CLR 24
Permanent Trustee Australia Pty Ltd v FAI General Insurance Company Limited [2001] NSWCA 20, 50 NSWLR 679
R v Curran [1983] 2 VR 133
Reed v. King (1983) 145 Cal.App.3d 261, 193 Cal. Rptr.130
Rhone Poulenc Agrochimie SA v UIM Chemicals Services Pty Ltd (1986) 12 FCR 477
Smoker v Pharmacy Restructuring Authority (1994) 125 ALR 157
Sola Optical Aust Pty Ltd v. Mills (1987) 163 CLR 628
Warner v Elders Rural Finance Limited (1993) 41 FCR 399
Winterton Constructions Pty Ltd v Hambros Australia Limited (1992) 39 FCR 97 at 114

REPRESENTATION:
APPLICANT
R Sheldon instructed by T Murray, Solicitor of Tress Cox
RESPONDENT
P I Lakatos SC instructed by J Coss, Legal Officer, Office of Fair Trading

ORDERS: 1. The Tribunal finds that Mahevi Pty Ltd as licensee: i. concealed a material fact, namely the murders which occurred on the property at 6 Collins Street, and thereby induced the purchasers to enter into a contract to purchase the property, contrary to s.52(1) of the Property Stock and Business Agents Act 2002; ii. engaged in misleading or deceptive conduct, namely the non-disclosure of murders which occurred on the property, in breach of s.42 of the Fair Trading Act 1987; and iii. failed to act honestly, fairly and professionally on breach of rule 3(1) of the Rules of Conduct; 2 The Tribunal finds that Mr Peter Hinton as a Director and Licensee in charge of Mahevi Pty Ltd: i. concealed a material fact, namely the murders which occurred on the property at 6 Collin Street, and thereby induced the purchasers to enter into a contract to purchase the property, contrary to s.52(1) of the Property Stock and Business Agents Act 2002 ii. engaged in misleading or deceptive conduct, namely the non-disclosure of murders which occurred on the property, in breach of s.42 of the Fair Trading Act 1987; and iii. failed to act honestly, fairly and professionally in breach of rule 3(1) of the Rules of Conduct iv. misled or deceived a party to a transaction in breach of rule 3(2) Rules of Conduct; and v. failed to supervise the business of the corporation in breach s.32 of the Property Stock and Business Agents Act 2002; 3. The Tribunal finds that Ms Ereca Hinton as a licensee: i. concealed a material fact, namely the murders which occurred on the property at 6 Collin Street, and thereby induced the purchasers to enter into a contract to purchase the property, contrary to s.52(1) of the Property Stock and Business Agents Act 2002; ii. engaged in misleading or deceptive conduct, namely the non-disclosure of murders which occurred on the property, in breach of s.42 of the Fair Trading Act 1987; iii. failed to act honestly, fairly and professionally in breach of rule 3(1) of the Rules of Conduct; and iv. misled or deceived a party to a transaction in breach of rule 3(2) Rules of Conduct; 4. This application is listed for a directions hearing on 27 September 2006 at 9:30am to determine whether a further hearing is required on the issue of disciplinary action, and to consider reserved costs

Introduction

1 Mr Peter Hinton is the licensee in charge of L J Hooker North Ryde, a licensed real estate agency conducted by Mahevi Pty Ltd of which Mr Hinton is the sole director. Ms Ereca Hinton, Mr Hinton’s daughter, is a licenced real estate agent and a member of the sales staff of the agency.

2 In late May or early June 2004, Mrs Amelita Claridades consulted Mr Hinton regarding the proposed sale of a residential property at 6 Collins Street, North Ryde. Mrs Claridades is the executrix of the estate of the late Mary and Teddy Gonzales deceased. Mary and Teddy Gonzales had lived in the home at 6 Collins Street together with their children Sef and Clodine. Mary, Teddy and Clodine Gonzales were murdered in the home on 10 July 2001.

3 Their son, Sef Gonzales, was charged with their murders and was subsequently convicted at his trial on 20 May 2004. The murders and subsequent trial were the subject of considerable press attention and feature amongst the more notorious crimes committed in Sydney in the last decade.

4 Mr Hinton says that in his preliminary discussions with Mrs Claridades they discussed whether the crimes would affect the saleability of the house. Her initial thinking was to wait till after Sef Gonzales had been sentenced, before placing the property on the market.

5 Mr Hinton inspected the property with Mrs Claridades on 6 June 2004. He found it to be poorly maintained and unclean. There were still items of personal property and furniture scattered throughout the house. Mrs Claridades was not prepared to expend funds on cleaning or marketing the property.

6 On 7 June 2004 Mahevi Pty Ltd entered into an exclusive agency agreement with Mrs Claridades authorising Mahevi Pty Ltd to sell the home by private treaty for $850,000. The document records that Mr Hinton estimated the value at between $820,000 and $850,000. At that time Mr Hinton says that Mrs Claridades had not yet made a decision to place the property on the market, although it was listed with Mahevi Pty Ltd.

7 On 28 June 2004 Mr Hinton went on an overseas holiday. He had been ill and needed time to recuperate. Before he left he gave instructions to his staff regarding how the property was to be marketed if Mrs Claridades made a decision to place it on the market. He told the Commissioner’s investigators when interviewed that:

“My instruction to my staff were to tell all prospective purchasers that the property was a deceased estate, it had been vacant for three years … and the beneficiaries that lived in the Philippines no longer required the property”

8 In response the questions as to whether he had received any legal advice as to how he should comply with his ethical and legal obligations in respect of the sale of the house, Mr Hinton said that he had spoken to the vendor’s solicitor who told him there was no obligation to disclose that the house was the scene of the Gonzales murders. He had not sought independent legal advice with respect to his own obligations as agent, rather than the vendor’s obligations. He thought marketing the property as a deceased estate was, “the way I saw best to market the property in the absence of any other indication.” He conceded that the nomination of the property as a deceased estate conveyed an explanation for the state the property was in.

9 Mr Hinton remained overseas until 5 or 6 August 2004.

10 At some time in early to mid July, Mrs Claridades instructed L J Hooker North Ryde to place the property on the market. It is not clear from the evidence precisely when or how this occurred, but nothing turns on it. In any event, there is no doubt that by mid-July the property at 6 Collins Street was on the market for private sale.

11 There was no advertising budget for the sale. Mrs Claridades would not expend funds on tidying the property up. The advertising was therefore restricted to web-sites, the agency window, flyers and general agency advertising, rather than specific advertisements in the press. There was no for sale sign at the property. A printed sheet of properties (an open house trail) in the name of L J Hooker North Ryde, advising of properties that would be open for inspection on Saturday 17 July 2004, showed a picture of the two storey house, beside which the following appeared:

Saturday 12 30 to 1 00pm Ereca Hinton 0407 888 686

Desirably set in elevated position, this five year old Clarendon brick veneer home offers an easy, low maintenance lifestyle, and boasts generous light filled proportions, with multiple separate living and entertainment rooms.

- Four large bedrooms, built in robes

- Walk through robe and ensuite to master bedroom

- Excellent location, walking distance to shops, schools, and future rail link”

12 According to both Mr Hinton and Ms Hinton it is the policy of the agency not to advertise properties which are deceased estates as such in their advertising material, web pages, or on for sale signs. Prospective purchasers are advised that properties are “deceased estates” during negotiations and/or inspections.

13 A series of open house inspections for interested persons were held. The house was inspected by a number of possible purchasers, and other interested persons. There is no dispute that the house was not prepared for sale and was presented in an untidy condition. Items of furniture and personal property were still in various rooms of the house. The house was not cleaned or the grounds maintained. Finger print dust was evident on some surfaces.

14 Among those who inspected the property were:

Mr Benny Cheung who was looking for a property. His son found the property among those open for inspections on the Domain web site. He attended and inspected the property with his wife. A female agent was there. He said that while there was some furniture in the house he had the feeling it had been empty for some time.

Mr Wei Lian Jiang a 74 year old man who lives with his son. He does not own any property. In August 2004 he inspected the house at 6 Collins Street during an open house, which he said he saw advertised in the Northern District Times. He looked at the house for his son and daughter-in-law. After inspecting it he had thought it too small and too expensive. In his statement he said the agent had told him the house would cost around $805,000. In cross-examination he first indicated that he was unsure whether the asking price given him by the female real estate agent was $850,000 or $805,000. Later he said that his statement was made following an interview with an investigating officer. He said he told that officer that the price asked was $800,000 or a little bit more.

Mr Tajaswi Kali Nimmigadda, a solicitor, who inspected the property by appointment with his parents on or about 17 July 2004. Ms Hinton represented L J Hooker North Ryde at this inspection. In the course of that inspection Mr Nimmigadda’s mother picked up a photograph, which had been lying face down, that he recognised as the Gonzales family. He later made inquiries which satisfied him that the house was the scene of the murders.

Ms Ellen Lin who inspected the property on 17 July 2004. She then inspected the property again, this time with her husband Derek Kwok, their four year old son, and her parents Yuan-Yuan Lin and Chang-Chin-Pao Lin, on 4 August 2004. Ms Hinton conducted these inspections. Ms Lin had seen the house on the L J Hooker North Ryde web site. Ms Lin obtained a copy of the proposed contract after the second inspection.

15 On 12 August 2004 Ellen Lin made an offer to purchase the property on behalf of her parents for $785,000 which was subsequently increased to $800,000. Ms Lin told the Tribunal that they were looking for a house in which she and her family could live, and at which he parents could stay when visiting from Taiwan. The offer was accepted.

16 On 13 August Ellen Lin, her husband Derek Kwok, their son, and Ms Lin's parents again inspected the property by arrangement. Mr Hinton conducted this inspection. 13 August 2004 was a Friday.

17 On 31 August 2004 contracts were exchanged and a deposit of $80,000 was paid. The sale was expected to settle on 12 October 2004. The contract shows the vendor as Mrs Claridades: it contains no indication that she was acting as executor or trustee of the estate. The copy of the Torrens title attached to the contract shows that Mrs Claridades is registered as sole proprietor of the property. The title was issued on 21 May 2004 and gives no indication who the previous registered proprietors were.

18 Ellen Lin and Derek Kwok say that they, and her parents, were not aware that the Gonzales family had been murdered at the house, and were not told of this by the selling agent. They did not ask the selling agent whether the house was the scene of the murders. They say that they would not have contemplated purchasing the house if they had known it was the scene of the murders. They did not instruct their solicitor to make inquiries as to whether the house was the scene of murders, because it did not occur to them. They did instruct the solicitor to make the usual inquiries which included obtaining a building inspection report.

19 On 17 September 2004 Sef Gonzales was sentenced to life imprisonment for the three murders.

20 On 22 September 2004, as a result of publicity attendant upon the sentencing, the purchasers say they became aware that the house was the scene of the murders. They immediately sought to be released from the contract. They maintain that they would not have offered to purchase the property if they had been aware the murders had occurred there. At some stage, which is not clear, Derek Kwok on behalf of his father-in-law, offered to forego half the deposit paid in order to be released from the contract. This was not accepted.

21 The press became aware of the issue and the sale itself became a focus of publicity. Mr Kwok and Ms Lin were interviewed about the circumstances of the sale on Today Tonight. There were a number of articles in the press concerning the sale.

22 On 27 October 2004 Ms Lin, Mr Kwok, and her parents reached a settlement in respect the purchase with Mahevi Pty Ltd, Mr Hinton, Ms Hinton and others, the terms of which were incorporated in a deed. As a consequence of that deed, the contract to purchase the property came to an end, and an amount equivalent to the deposit paid was repaid.

23 Subsequently, the Commissioner commenced an investigation into the events surrounding the sale, under the direction of Sebastian Mignacca, a senior investigator with the Office of Fair Trading. Documents relating to the sale were obtained from the agency’s offices and from others involved. Statements were obtained form persons who had inspected the property. Mr Hinton and Ms Hinton were interviewed by investigators.

24 On 24 November 2004 the Commissioner issued show cause notices under s.195 of the Property Stock and Business Agents Act 2002 directed to Mahevi Pty Ltd, Mr Hinton and Ms Hinton, calling on them to show cause why disciplinary action should not be taken against them under the Act with respect to a number of matters which the Commissioner considered constituted grounds for taking disciplinary action.

25 With respect to Mahevi Pty Ltd those grounds were that Mahevi Pty Ltd:

Property Stock and Business Agents Act

ii. engaging in misleading or deceptive conduct namely the non-disclosure of murders which occurred on the property - s.42 of the Fair Trading Act 1987; and

iii. failed to act honestly, fairly and professionally — r.3(1) Rules of Conduct (s.37 of the Property Stock and Business Agents Act 2002 Act and c1.11 of the Property Stock and Business Agents Regulation 2003).

26 The grounds alleged against Mr Hinton were that he as a Director and Licensee in charge of Mahevi Pty Ltd:

Property Stock and Business Agents Act

ii. misleading or deceptive conduct namely the non-disclosure of murders which occurred on the property - s.42 of the FairTradingAct 1987;

iii. failed to act honestly, fairly and professionally – r.3(1) Rules of Conduct;

iv. misled or deceived a party to a transaction – r.3(2) Rules of Conduct; and

v. failure to supervise the business of the corporation – s.32 of the Property Stock and Business Agents Act 2002.

27 As against Ms Hinton the grounds were that she:

Property Stock and Business Agents Act

ii. misleading or deceptive conduct namely the non-disclosure of murders which occurred on the property - s.42 of the Fair Trading Act 1987;

iii. failed to act honestly, fairly and professionally – r.3(1) Rules of Conduct; and

iv. misled or deceived a party to a transaction – r.3(2) Rules of Conduct.

28 On 16 December 2004 a delegate of the Commissioner, having considered submissions from the Applicants, found that the grounds alleged against Mahevi Pty Ltd, Mr Hinton and Ms Hinton were made out, and made disciplinary determinations against them. Mahevi Pty Ltd was required to pay a monetary penalty of $13,200 and prepare a compliance manual. Mr Hinton and Ms Hinton were penalised $5,500 and $2,200 respectively.

29 Internal reviews of those decisions were sought. On 20 January 2005 the decisions were confirmed on internal review.

30 Mahevi Pty Ltd, Mr Hinton and Ms Hinton then filed applications in this Tribunal seeking a review of those decisions. Those applications were heard together over five days of hearing between August 2005 and February 2006, following which the parties made detailed submissions in writing.

31 Put simply, Mr Hinton and Ms Hinton deny that they were under any legal or ethical obligation to disclose the fact that the house was the scene of the Gonzales murders. They see what they were doing as selling bricks and mortar, and consider what happened to previous owners to be immaterial to the sale.

32 The determination of the application involves complex and novel issues. Much of the factual background relating to the marketing and sale of the property at 6 Collins Street is not in issue, although there remain some substantial differences between the Applicants and the Commissioner on some issues of fact, with differences of perspective and emphasis on others. Before turning to consider the facts further it is desirable to consider the legislative context in which the factual assessment is being undertaken.

The Legislation

33 The Property Stock and Business Agents Act 2002, amongst other things, makes provision for the licencing, professional regulation and discipline of real estate agents. The licencing regime requires individuals and corporations who conduct business as agents to be licenced (s.8 and 9) and for salespersons, who are not licenced, to hold a certificate of registration (s.10). The Act contains provisions regulating who will be eligible to hold a licence or certificate, and prescribing necessary qualifications. The Act regulates the conduct of real estate agents.

34 A corporate licensee, such as Mahevi Pty Ltd, is required to employ at each office from which it operates a licenced person as licensee in charge (s.32(2)). Section 32 sets out the duties of a licensee in charge:

(2) A licensee employed by another licensee (the principal licensee) as the person in charge of business at a place of business of the principal licensee must properly supervise the business of the principal licensee carried on at that place.

(3) The requirement to properly supervise the conduct of business includes the following requirements:

(b) a requirement to establish procedures designed to ensure that the provisions of this Act and any other laws relevant to the conduct of that business are complied with,

(c) a requirement to monitor the conduct of business in a manner that will ensure as far as practicable that those procedures are complied with.

…”

35 There are numerous provisions in the Act regulating the conduct by licensees and certificate holders in the course of their business. Of particular relevance in the present circumstances are those contained in s.52 of the Act, and the Rules of Conduct prescribed in Property Stock and Business Agents Regulation 2003. Section 52 provides:

Maximum penalty: 200 penalty units.

(2) Without limiting the generality of subsection (1), a statement, representation or promise is taken to be false, misleading or deceptive if it is of such a nature that it would reasonably tend to lead to a belief in the existence of a state of affairs that does not in fact exist, whether or not the statement, representation or promise indicates that the state of affairs does exist.

(3) It is a sufficient defence to a prosecution for an offence under this section if the defendant proves that the defendant did not know, and had no reasonable cause to suspect, that the statement, representation or promise was false, misleading or deceptive.”

36 Rules of Conduct are prescribed by clause 11 of the Regulation for the purpose of s.37 of the Act. Relevant, for the present purposes, is rule 3 which is found in Schedule 1 to the Regulation. It provides:

(2) An agent must not mislead or deceive any parties in negotiations or a transaction.”

37 Part 12 of the Act deals with complaints and disciplinary action. The Commissioner may take disciplinary action against a licensee or certificate holder, irrespective of whether a complaint has been made (s.194). The grounds upon which disciplinary action can be taken are set out in s.191, which relevantly provides:

(a) the person has contravened a provision of this Act or any other Act administered by the Minister, or the regulations under any such Act, whether or not the person has been prosecuted or convicted of an offence in respect of the contravention,

(b) …

(c) the person has, in the course of carrying on business or exercising functions under the licence or certificate of registration, acted unlawfully, improperly, unfairly or incompetently,

(d) …

(e) the person is not a fit and proper person to be involved in the direction, management or conduct of the business of a licensee,

(f) …”

38 A legislative provision made relevant for the present purposes, because its alleged contravention satisfies the requirements set out in ground (a) above, is s.42 of the Fair Trading Act 1987 (an Act administered by the Minister for Fair Trading), which provides:

(2) Nothing in this Part shall be taken as limiting by implication the generality of subsection (1).”

Trade Practices Act

Fair Trading Act

(a) a reference to conduct is a reference to an act or a refusal to act, including in either case an act that constitutes, or would but for the refusal constitute, making or giving effect to a provision of a contract or arrangement, arriving at or giving effect to a provision of an understanding, or requiring or entering into a covenant,

(b) a reference to refusing to do an act includes:

(ii) a reference to making it known that the act will not be done, and

39 When the Commissioner considers that there are grounds for taking disciplinary action the Commissioner may issue a show cause notice (s.195(1)) requiring the licensee or certificate holder to show cause why disciplinary action should not be taken. The Commissioner is required to consider any submissions made in response to the show cause notice (s.195(3)), and has power to investigate matters to which the show cause relates (s.197).

40 The disciplinary action which may be taken by the Commissioner is set out in s.192 which provides:

(b) give a direction to the person requiring the person to give a specified undertaking to the Director-General as to the manner in which the person will conduct business or exercise functions under a licence or certificate of registration held by the person,

(c) give a direction to the person requiring the person to take specified action within a specified time in connection with the conduct of business or the exercise of functions under a licence or certificate of registration,

(d) impose a monetary penalty on the person of an amount not exceeding 100 penalty units in the case of an individual or 200 penalty units in the case of a corporation,

(e) impose a condition on the person's licence or certificate of registration,

(f) suspend the person's licence or certificate of registration for a period that does not exceed the unexpired term of the licence or certificate of registration,

(g) cancel the person's licence or certificate of registration,

(h) declare the person to be a disqualified person for the purposes of this Act, either permanently or for a specified period,

(i) disqualify the person from being involved in the direction, management or conduct of the business of a licensee.

(3) When a licence or certificate of registration is suspended, it is taken not to be in force except for such provisions of this Act or the regulations as the regulations may prescribe as provisions that remain applicable to a suspended licence or certificate of registration.”

41 Section 200 gives persons against whom disciplinary action is taken a right to seek a review of the decision in this Tribunal. When read with s.48 of the Administrative Decision Tribunal Act 1997, section 200 confers jurisdiction on this Tribunal to review the Commissioner’s decisions to take disciplinary action.

42 Section 63 of the Administrative Decision Tribunal Act 1997 says that in determining an application for review the Tribunal is to make the correct and preferable decision having regard to the material before it, and any applicable written or unwritten law. It is well established that in considering an application for review the Tribunal is not constrained to have regard only to the material that was before the Commissioner, but may have regard to any relevant material before it at the time of the review: Drake v Minister for Immigration and Ethnic Affairs (1979) 46 FLR 409.

Factual issues in dispute

43 In considering the evidence before the Tribunal I do not intend to traverse in great detail the extensive evidence given over five days of hearing, and embodied in close to 1,000 pages of statements and material. Rather, I shall endeavour to summarise the pertinent evidence as I understand it, to focus on the differences between the parties as to that evidence, and my reasons for reaching the conclusion I do, applying the Briginshaw v Briginshaw [1938] HCA 34, (1938) 60 CLR 336 standard. Those differences relate to:

Whether there was in the presentation of the property factors which should have led them to conclude that the house was the scene of a crime, and more specifically the scene of the murders.

Whether Mr Kwok and Ms Lin were aware at the time the house was purchased by Ms Lin’s parents that the house was the scene of the murders. In particular, this requires a consideration of whether Mr Kwok and Ms Lin were parties to a conversation amongst a number of observers of the house during the course of one of their visits, which alerted them to the fact that the house was the scene of the murders.

Whether the fact that the murders had been committed at the house affected its market value.

44 What were the Purchasers and others told by the Agents? Ms Hinton was the agent responsible for attending and managing open house inspections at 6 Collins Street. Apart from the final inspection by Ms Lin and her family on 13 August 2004 which was conducted by Mr Hinton, and an inspection by Ms Michaelian in early June which was conducted by Sturt Hinton (Ms Hinton’s borther), Ms Hinton had the carriage of inspections of the property.

45 Ms Hinton told the Tribunal that she had a standard greeting which she used with each person who attended the house. It was in four parts. First, she would welcome them and thank them for coming. Secondly, she would apologise for state of property which she said was very messy and poorly presented. Thirdly, she would explain the property had been vacant for a considerable time. Finally, she would tell them it was a deceased estate. If she were asked whether the property was the Gonzales home, she answered the question honestly. This had occurred with three of the people who had inspected the property: the Nimmigadda’s, Benny Cheung, and a lady by the name of Francis Katchouli. In cross-examination Ms Hinton denied that she had said to those who inspected the property words to the effect that the owners were in the process of moving out.

46 The evidence of those who inspected the property is at odds with this. Ms Chew says she asked Ms Hinton why the house was empty and was told, words to the effect that “the owners are in a rush moving out.” Ms Chew says Ms Hinton did not tell her the property was a deceased estate. In his statement Mr Cheung said he asked the agent why the owners were selling. He was told something to the effect that the owners had already moved out. He was not told the property was a deceased estate. In evidence Mr Cheung said he was told the owners had moved overseas.

47 Mr Jiang said, in his statement, that in his conversation with the female agent he was not told that the house was a deceased estate. He denied that he had realised that the house was the Gonzales home, or that he had raised the issue with Ms Hinton. Mr Nimmigadda said that during his inspection he was told by Ms Hinton, in response to his query as to why the owners were selling, words to the effect that, “The owners are overseas and they don’t need it any more.” He could not recall her mentioning that it was a deceased estate: he believed he would have remembered this if it had been mentioned as it is important to him.

48 Ms Hinton relied on notes she had made, beside Mr Nimmigadda Snr’s and Mr Cheung’s names on a property inspection sheet, to the effect that they were “superstitious” to support her contention that they were both aware that the property was the Gonzales home.

49 Mr Jiang in his statement said that the agent he spoke to when he inspected the house (who Ms Hinton told investigators was her) made no mention of the house being a deceased estate. Unlike everyone else who inspected the property Mr Jiang’s recollection was that the house was in a “proper condition”, which he explained meant clean and tidy. In this evidence he was at odds with all the other evidence relating to the condition of the property. He denied suggestions that he was aware that the house was the scene of the murders, and that Ms Hinton had told him it was a deceased estate.

50 Ms Lin said that when she first inspected the property Ms Hinton apologised for the condition of the house and said words to the effect of, “Sorry about the condition of the house the owners are in the process of moving out.” On the second inspection, attended by Ms Lin, Mr Kwok, their four year old son and Ms Lin’s parent's, Ms Hinton told investigators that they, without specifying whom, had asked why are the owners were selling. She replied:

“The property has been inherited, you know, it’s a deceased estate, the property has been inherited, they don’t require the property, you know, the beneficiaries do not require the property, that’s why they are selling.”

51 Mr Hinton said that when he conducted the inspection by Ms Lin, Mr Kwok, their son and her parents, on 13 August 2004, he allowed them to view the house at their leisure. He had only a limited discussion with them. Both Ms Lin and Mr Hinton agree that they had a conversation about the remote control for the garage door. Mr Hinton added to this that he had said that the beneficiaries would be coming to sort the furniture out. Once again this is denied by Ms Lin and Mr Kwok.

52 When, on her evidence, Ms Lin discovered that the house her parents had just contracted to purchase was the scene of the Gonzales murders, she rang Mr Hinton and asked him why he had not told her this. He replied that he thought she knew. When asked about this conversation by investigators Mr Hinton said:

“I said, “Ereca told you it was a deceased estate when the time when we were at the property, that on the - on 13 August I referred to the beneficiaries coming from the Philippines, right, considering that the condition of the property was - was in total disarray. There were fingerprints - dust all over the property and that the price was - was low. I assumed from your - I certainly assumed from your behaviour that - that you were aware of the history of the property””

53 It is clear that there are major differences between the recollections of Ms Hinton and Mr Hinton and those of the purchasers and other people who inspected the property.

54 With respect to what Ms Hinton told the purchasers and those inspecting the property the differences are stark. They all agree that she did not tell them that the property was a deceased estate. Ms Chew and Ms Lin have Ms Hinton saying words to the effect that the owners were in the process of moving out. Mr Nimmigadda says Ms Hinton told him the owners were overseas and did not need the property anymore. Mr Jiang and Mr Cheung were also firm in their evidence that Ms Hinton did not tell them the property was a deceased estate. I have some reservations in regard to Mr Cheung’s evidence because of the apparently contemporaneous note made by Ms Hinton that he was superstitious, which goes to verify her evidence that he knew about the murders. I also have some concerns as to the accuracy of Mr Jiang’s memory of these events, given that his recollection of the state of the house is at odds with all the other evidence. Both Ms Chew and Mr Nimmigadda, however, impressed me as having as clear a recollection of the events as one could expect given the time that has elapsed. They were both firm in their evidence that Ms Hinton did not tell them the property was a deceased estate. Mr Nimmigadda says he would have remembered that if it had been said: given his profession I think that is likely, especially given his suspicion that the house was the Gonzales’ home. The recollections of Ms Chew and Mr Nimmigadda in respect to this correspond with those of Ms Lin, Mr Kwok, Mr Cheung and Mr Jiang. The odd man out is Ms Hinton who has a clear interest in her version of these events being accepted.

55 The weight of the evidence is such that I am comfortably satisfied that Ms Hinton did not tell the purchasers, or any the person who inspected the property and gave evidence, during their inspections of the property that the house was a deceased estate. In reaching that conclusion, I wish to make it clear that I accept, and the evidence confirms, that when Ms Hinton was asked if the property was the Gonzales home she answered the question openly and honestly.

56 I reach a similar conclusion with respect to Ms Hinton’s insistence that she had said, during the course of the inspection on 4 August, word to the effect that:

“[T]he property has been inherited, you know, it’s a deceased estate, the property has been inherited, they don’t require the property, you know, the beneficiaries do not require the property, that’s why they are selling.”

57 Mr Hinton’s evidence is that he told Ms Lin during the inspection on 13 August 2004 that the beneficiaries would be coming to sort out the furniture. Ms Lin denies this and is supported by Mr Kwok. I have no reason to doubt the credibility of any of the witnesses on this issue and am not prepared, on the evidence, to make an adverse finding against Mr Hinton in this regard. I would add that I am not convinced, given Ms Lin’s and Mr Kwok’s limited English, that a statement to the effect that the beneficiaries would be coming to sort out the furniture would necessarily alert them to the fact that they were purchasing a deceased estate. When combined with the fact that by then they had a copy of the contract which showed Mrs Claridades as vendor (not in her capacity as executor or trustee), I am comfortably satisfied that irrespective of what was said by Mr Hinton on 13 August 2004, Ms Lin and Mr Kwok remained unaware that they were purchasing a deceased estate.

58 Should the Purchasers have been alerted by the state of the house? Aside from Mr Jiang, there is universal agreement among all those who attended the house that it was obvious that the house had not been properly maintained or cleaned.

59 There are a plethora of photographs in evidence which show that the gardens and lawns were weed infested and not cared for. The exterior pathways and concrete areas were unswept and dirty. There were cardboard boxes perishing under the porch, and outside furniture left exposed to the elements had an uncared for appearance. There was a dark dust evident on some outside windows, doorframes and around light switches. The inside of the house had the appearance of being partially packed. Some rooms were cleared out, while others still contained furniture, some with boxes packed. Other rooms contained unpacked clothes, toiletries and other belongings. There was personal memorabilia, both packed and unpacked, scattered among the various rooms of the house. From the table in the lounge room Mr Nimmigadda’s mother picked up a photograph, which had been lying face down, which he recognised as the Gonzales family. Staining of the ceiling in one room pointed to a water leak. The property was obviously not well presented for sale

60 The photographs in evidence were taken on 7 October 2004 by Mr Mignacca, a Senior Investigator with the Department of Fair Trading, and on 8 and 10 October 2004 by Ms Amanda White, at the request of one of Mr Hinton’s son, Shannon Hinton. Ms White shares a house with Mr Hinton’s ex-wife and was asked by Shannon to take the photos, because she has a camera which inserts a date in photographs. Shannon in turn was asked by Mr Hinton to get some photographs of the house when he became aware that Mr Mignacca had gone to the house with Ms Hinton and another investigator to take photographs. Ms White’s photographs only came to light for the first time during the hearing. There are some differences between the photographs which led to the proceedings being adjourned, and a body of evidence then being taken regarding whether, first, items were moved between the sets photographs being taken, and, secondly, whether items shown in the photographs taken by Ms White were seen by the purchasers and others inspecting the property. The importance of these items was that they might alert an observer to a connection between the house and the Gonzales family.

61 It needs to be understood that both sets of photographs were taken some months after the house was open for inspection. They were taken at a time when the brouhaha about the sale had erupted in the press: the circumstances of the sale were the subject of public controversy and an investigation by the Commissioner. Ms White denied that she was directed as to what to photographs she should take, and says she just took photographs to represent what she saw. She agreed that she was aware of the storm of controversy surrounding the sale when she took the photographs. While I accept that she was not directed as to what to photograph I am satisfied from the photographs that she took, some of which focus very precisely on items connecting the house to the Gonzales family, that her knowledge of that controversy played a role in determining what she took pictures of.

62 It also needs to be understood that the evidence, especially that of Mr Hinton (unfortunately given after issues relating to the photographs had resulted in an adjournment of the proceedings and in the admission of further evidence), points to the house being cleaned, presumably by relatives, between his attendance at the house on 13 August 2004 and the time the photographs were taken. For this reason alone I consider that it is not open to me to conclude that either set of photographs represents an accurate picture of the state of the house between 17 July 2004 and 13 August 2004.

63 Because of that conclusion I do not intend to attempt to resolve the often small differences between the photographs taken by Mr Mignacca and those taken by Ms White. These were the subject of a statement and close comparison by Mr Mignacca in an effort to suggest that items in the house had been moved between his photographs being taken and Ms White’s. While I accept that there is some evidence of this, for example a blind that was closed in one set of photographs is half open in another, I am not persuaded as to a number of the other differences pointed out by Mr Mignacca. As I do not accept that either set of photographs represents an accurate picture of the state of the house from 17 July 2004 to 13 August 2004, I do not think it necessary to resolve those differences.

64 It is however necessary to deal with a photograph taken by Ms White in the study of the house. This shows a framed certificate of achievement in the name of Sef Gonzales lying face-up on top of a box. Anybody looking at the frame could not help but see the name Sef Gonzales. The box and the framed certificate can be seen in photographs taken by Mr Mignacca, but it is not possible to determine what is in the frame, or whether it is lying face-up. It was principally this photograph that led to the proceeding being adjourned and a number of witnesses being recalled to give evidence with respect to Ms White’s photographs. In his statement, filed subsequently, Mr Mignacca said that on reflection he realised that when he photographed the study, he had picked up the frame which was lying face-down and looked at it. He made a comment to the effect that, “He could not have been doing too badly a school” and replaced the frame face-up. He then took a photograph of the study.

65 Mr Mignacca was rigorously cross-examined about this. The Applicants submit that I should approach his evidence with a high degree of scepticism. They ask why a highly experienced investigator such as Mr Mignacca, who had known that the agents relied on “the presence of information in the house which betrayed the identity of its former inhabitants as negativing any concealment on their part,” would leave the certificate in an incorrect position, and why he had not disclosed this fact earlier. Why would he tamper with the scene? They urged me to reject Mr Mignacca’s evidence.

66 It is important to note that each person who inspected the house and was shown Ms White’s photographs of the certificate could not recall seeing it.

67 Having given the matter considerable thought I have reached the conclusion that I should accept Mr Mignacca’s explanation. I listened to Mr Mignacca’s evidence with great care. He impressed as both contrite and embarrassed by his actions, which, however inadvertent, are unprofessional for a man of his position and experience. That his evidence is consistent with the observations of the persons who inspected the house reinforces the veracity of his admission. That he did not raise the issue earlier is consistent with the fact that Ms White’s photographs, bringing the issue to attention, had not surfaced until they were put to Ms Hinton during her evidence. That he made the mistake he has admitted to, impresses me as a far more likely and probable explanation than that he deliberately set out to mislead the Tribunal as to the true position of the certificate, in order to bolster the Commissioner’s case.

68 Finally, with respect to Ms White’s photographs, I have evidence from Ms Lyn, Mr Kwok, Mr Cheung, that they do not recall seeing various items photographed by Ms White, in close up, which may potentially have led a person the connect the house to the Gonzales family. I have no reasons to doubt that evidence.

69 At the same time I accept that there were about the house a number of items such as opened letters, photographs, the certificate, and other family memorabilia, which may have enabled a person inspecting the house who took the trouble to look at those personal items, and who was aware of the Gonzales murders, to make the connection between the house and the murders. This clearly happened in the case of Mr Nimmigadda. In submissions, the Commissioner argued that in considering the evidence with respect to these photographs I should consider them from the point of view of a prospective purchaser of real estate, rather than a person searching for signs of ownership. I accept this. I agree that the items of personal and family memorabilia shown in the photographs would not, as a matter of course, have led a prospective purchaser to the realisation that the house was the scene of the Gonzales murders. That it had the potential to do so is illustrated by Mr Nimmigadda.

70 With respect to the state of the house itself, both Mr Hinton and Ms Hinton were of the view that it was obvious that that the house had been a crime scene. Both had been aware since the day the murders were committed that the house was the site of the murders. The house itself is only a short walk from the offices of L J Hooker North Ryde. The murders have been a focus of local interest. Ms Hinton told investigators that Police had attended the offices early in the investigation to see if staff had observed anything suspicious. Ms Hinton said that during the inspections the presence of fingerprint dust was obvious. It could be clearly seen by those inspecting the property. Ms Hinton was asked during her record of interview how she knew it was fingerprint dust: she explained that she had seen finger print dust before, on a car. Mr Hinton also referred to the presence of fingerprint dust. The evidence of Ms Lin, Mr Kwok and those who inspected the house, however, is that while they observed the dirty dust they did not draw the connection to a crime scene so readily drawn by Ms Hinton. I accept that was the case.

71 There is a statement in evidence from Mr Lambert a director of L J Hooker Pty Ltd who inspected the house after the pubic controversy concerning the sale had broken. He says in his statement that the house was:

“… presented in an abnormal way which in my experience would have given rise to questions being asked by an intending purchaser.”

72 The interior of the house clearly showed it was not being lived in. It had the appearance of being half packed up, consistent with owners in the process of moving out. In his record of interview Mr Hinton was asked whether there were, “… any visible signs at that time internally in respect to the murders” when he inspected the house with Mrs Claridades in early June? He answered, “No”. I accept that was the case then and subsequently.

73 Were the Purchasers and their family aware the murders had been committed at the house? The evidence calls for this question to be determined from two aspects. First, whether Mr Kwok, Ms Lin or her parents were aware as a matter of their own knowledge that the house was the scene of the Gonzales murders. Secondly, whether Mr Kwok and Ms Lin were alerted to the fact by conversations, which it is alleged they overheard, among people observing the house during one of their inspections of the house.

74 With respect to the former, the evidence of Ms Lin and Mr Kwok is that they were unaware that the house was the scene of the murders until they were alerted to the fact by Ms Lin’s sister, Ms Leona Lin, who was visiting from Taiwan. In her statement Ms Leona Lin says that she was staying in the family home at Carlingford on 22 September 2004 when she had occasion to read “The Northern Times.” In that newspaper was an article relating to the sale of the Gonzales home, which contained a picture of the house her parents had purchased, which Ms Leona Lin recognised. She immediately alerted her family. It seems that the article Ms Leona Lin is referring to appeared in The North Shore Times on that day, and was written by Kim Christian. There is a statement by Kim Christian in evidence which explains how knowledge of the sale came to her attention. It suffices to say that it had nothing to do with the purchasers. In his statement Mr Yuan Yuan Lin, Ms Lin’s father, confirms that this was his first knowledge of the murders.

75 Both Mr Kwok and Ms Lin were cross-examined about their knowledge of the murders. Mr Kwok acknowledged following the murders and trial of Sef Gonzales in the press, principally the Chinese press. He agreed that he knew the murders had occurred in Ryde, but said he did not know where in Ryde. He said that he passed Collins Street regularly while travelling along Epping Road over the years, but did not go there, and did not associate it with the Gonzales murders. Ms Lin’s knowledge of the murders was not as extensive as that of her husband. She told the Tribunal that she is not a reader of newspapers and does not watch a lot of TV. What she could recall of the murders mainly came from discussion of the news with her husband. Like her husband, she agreed that she had passed Collins Street regularly but had not gone there. She recalled regularly going to a restaurant in the vicinity some years ago. She was insistent that she did not know the house was the scene of the murders.

76 It was put to Mr Kwok and Ms Lin, by the Applicants’ counsel, that the house was a something of a bargain because of its history, and that they knew this, but concealed it from Ms Lin’s parents in the hope that they, as comparative strangers to the country, would never know about it. This hope, it was suggested, was frustrated when Ms Lin’s parents were alerted to the fact that it was the Gonzales house. Both Ms Lin and Mr Kwok denied this.

77 There was nothing in the evidence which persuades me that because of the notoriety of the murders Mr Kwok and Ms Lin must have been aware of the location of the murders. The Applicants’ case proceeded on the basis that the murders were so notorious that persons such as Mr Kwok and Ms Lin must have known the precise location of the murders. Mr Hinton said of the house, “The property was next to Sydney Harbour, it was the biggest attraction in town.” Evidence was led that newspaper articles referred to the scene of the murder with some particularity. That does not persuade me that precise details of the murder location would be taken in and retained by ordinary readers. Mr Kwok’s statement that he knew that the murders occurred in Ryde impresses me as the sort of detail an interested reader of the press might retain. There was nothing in the evidence which would lead me to conclude that Mr Kwok and Ms Lin were aware, because of the notoriety of the murders, of the precise location of the murder scene. Similarly, their marginal familiarity with the local environs does not persuade me that they, like Mr Hinton and Ms Hinton, who worked in the area, were aware of the house and its sad history.

78 The second aspect of the evidence which needs to be considered in regard to Mr Kwok and Ms Lin’s knowledge, concerns evidence that during one of their inspections or visits they overheard discussions between persons observing the house, which should have alerted them to the fact that people had died in the house. This evidence comes from Mr Markerian and Ms Kalejian whose statements were in evidence and who were both cross examined about their evidence.

79 Put shortly, Mr Markerian and Ms Kalejian are friends. On an evening in August 2004 Ms Kalejian’s two primary school children were discussing the Gonzales murders, which were an item of discussion at school. The boy, George, expressed a desire to see the house. After some discussion Ms Kalejian and Mr Markerian agree to take them to see the house in the hope it would put an end to what they considered a poor topic of interest for primary school children. The next Saturday they took the children to look at the house. Mr Markerian from recollection believed this occurred a fortnight before his brother’s birthday, making 14 August 2005 the most likely date.

80 They say that when they arrived at the property there were a group of people on the footpath outside the house: Mr Markerian says five or six people; Ms Kalejian says six or seven. In her statement, which is dated 26 January 2005, Ms Kalejian said:

“I saw a young Asian man and a young Asian woman and a small child about 4 years of age and the child was playing on the sidewalk. I also saw an older Asian man and woman standing nearby. I also saw two elderly Australian women who were in conversation with the younger Asian man and the younger Asian woman. Standing nearby was another couple who were a man and a woman, each of whom appeared to be around 50 years of age.”

“I saw a young Asian man and a young Asian woman and a small child around maybe 4 years of age. The child was running around the footpath at the front of the house. I also saw that there was an older Asian man and an older Asian woman around 60 to 65 years of age. It appeared that the older Asian man and woman were together with the younger Asian man and Asian woman with the small child. Standing nearby was one couple who were a man and woman who appeared to be about 50 years of age. Also standing on the footpath in front of 6 Collins Street were two elderly Australian ladies.”

81 Both Ms Kalejian and Mr Markerian identified Mr Kwok and Ms Lin as the young Asian couple by reference to a photograph of them which appeared in The Daily Telegraph.

82 Mr Markerian’s statement continued:

“I noticed that the young Asian woman was talking to one of the elderly Australian ladies. I heard one of the elderly Australian ladies say in the hearing of all of us who were standing nearby whilst speaking to the young Asian lady who was engaged in conversation with this elderly Australian lady, words to the effect: "Oh God, it was so awful, so awful that he was - capable of doing that." These words from the elderly Australian lady were said directly to the young Asian woman. The second elderly Australian lady was also talking to the other elderly Australian lady at the same time that the first elderly Australia lady was talking to the young Asian woman. I said to my friend Seta (speaking in Armenian) words to the effect: "That lady (indicating the first elderly Australian lady) is the area parrot." The reason I made this comment was mainly because the first elderly Australian lady was loud and came across as the local news reporter. It seemed to me this elderly Australian lady was "the local gossip".

Tony Markerian who was standing next to me then said to me (speaking in Armenian) and referring to the first elderly Australian lady: "That lady is the area parrot.”

83 In cross-examination Mr Markerian said he and Ms Kalejian were approximately three metres from the parties to this conversation. Ms Kalejian put the distance at 20 to 30 metres. Mr Markerian said that one Australian lady was taller than the other, but could not say what she was wearing or recall the colour of any item of clothing. Mr Markerian said that the young Asian woman had not said anything but later added that he may have heard the young Asian woman say “Yes.” He said she he saw her agreeing or nodding. Ms Kalejian agreed about the distinction in height and thought the shorter woman had “blondish hair.” She could not describe what they were wearing or recall any other distinguishing features. Ms Kalejian said she could hear distinctly what was being said because the Australian lady was so loud. She recalled the Australian lady saying it was horrible or words to that effect. She said that the young Asian woman had not said anything, just listened. She thought the conversation she overheard may have taken five to six minutes. Despite having a “very good memory”, she could not recall any other conversation in that period. Ms Kalejian agreed that there had been no mention of the fact of the murders, and agreed that to comprehend what was being said by the Australian woman one had to know about the murders. Mr Markerian agreed that he didn’t “know one hundred per cent” that the murders were the topic of conversation. He believed that was the case.

84 Mr Markerian’s statement went on to the effect that he had then spoken with George.

As I turned around, I saw the young Asian man was virtually almost beside me. It seemed like he had some interest in my conversation with George. As I did not appreciate the young Asian man standing so close to me and listening to my conversation with George, I turned directly to the young Asian man and said to him in a mocking, sing-song accent (in English) words to the effect: "That is the house. I don't know how many people die there." I did this as I wasn't impressed with him eavesdropping into my conversation earlier.

85 Ms Kalejian in her statement confirms that Mr Markerian started speaking with George.

I then saw Tony, George and Sarah were together and engaged in a conversation and I also saw that the younger Asian man was by then standing next to Tony Markerian.

I do recall Tony then speaking slowly and deliberately to the younger Asian man (in English and with an accent) and saying to the younger Asian man words to the effect: "That is the house. I don't know how many people die there." When Tony said this, he had his right hand palm pointing towards the house at 6 Collins Street, North Ryde and the younger Asian man was looking at Tony as Tony said this to him.

Tony Markerian then moved towards me. The younger Asian man didn't say anything. I was laughing after Tony said this to the younger Asian man. Tony then said to me (speaking in Armenian): "Don't laugh. She might think we're joking." At that point, I noticed that the younger Asian woman was near me and was also near the younger Asian man. I looked towards my right as the younger Asian woman was in a conversation with the younger Asian man. The younger Asian man started saying something to the younger Asian woman in a foreign language which I did not understand. The younger Asian woman was looking at me. I don't know what was being said as the conversation was in a foreign language. When the younger Asian man and the younger Asian woman stopped talking, I do recall the younger Asian woman walking towards me and I then said to her words to the effect: "Yes, this is the house where the boy killed his family." I also said: "He lied to the police for a long time but he got caught so he's going to gaol."

86 Mr Markerian’s statement explained that in October 2004 he had seen a program on Channel 7 in which the young Asian man and woman had denied knowing that the house was the scene of the murders. He had telephoned Channel 7 and been connected with the newsroom. He had told the woman he spoke with that he had told the Asian couple “about the murders on the driveway at 6 Collins Street.” She had taken his name and number and said she would let the producer know.

87 In his statement Mr Lloyd Jones, the Chief of Staff of the Channel 7 newsroom, explains that there are no set procedures for dealing with calls to the newsroom: each call is assessed and dealt with on the spot. “No messages are taken for anyone to call back.” Genuine leads are referred to him for assessment. Mr Lloyd Jones said that he had been advised of details of the phone call Mr Markerian says he made to the newsroom, but had no knowledge of such a call. His statement continued:

“… I have checked with the staff most likely to have received any such leads from the public. None of the staff recalls receiving such a message. If we had been given along these lines from someone who sounded credible we would probably have checked with the Lins. I would have made these calls myself or assigned a reporter to deal with it. I would certainly have been told about the lead to determine if further action was warranted. My own assessment of this claim is that such a call was probably never made.”

88 Both Mr Markerian and Ms Kalejian were asked about whether they had discussions with each other concerning their statements and evidence. Mr Markerian said he had not seen Ms Kalejian’s statement. When asked whether he had discussed the events with Ms Kalejian before their statements were made Mr Markerian he said he was “not sure”. Despite being pressed on this issue he remained unsure. When his attention was drawn to the similarities between his statement and that of Ms Kalejian, especially with respect to quoted conversations, he agreed that the words were the same. When he was asked if this was a coincidence, he said it was what had been said.

89 Ms Kalejian said that her statement was made after Mr Markerian’s because she had been overseas at the time his statement was made. She said Mr Markerian had not shown her a copy of his statement, or talked to her about what had been put in his statement. Ms Kalejian said she had written her statement herself. When asked whether she had compared notes with Mr Markerian before making her statement she replied:

“No, I didn’t. I probably wrote but I gave it to Tony to have a look and see if there’s any, you know, things that need to be fixed but other than that I wrote it and that was it.”

A. Well, as I said before my English it's not as good as Tony. I wrote my statement. I gave it to him so he can correct it.

Q. So if I've just got this right. You wrote a statement and before it was corrected did you sign it or not?

A. No, I didn't sign it.

Q. So you wrote a statement then you gave it to Tony?

A. Yes.

Q. And Tony corrected it, did he?

A. That's right if there was any correction not the whole statement.

Q. What did he correct?

A. I can't remember.

Q. Well, do your best please. Have a look at your statement and tell us now what suggestions for change did he make?

A. Well, as I said I can't remember. I can't even remember what I ate yesterday so how am I supposed to remember a year before?

Q. In January 2005 apparently you had no trouble remembering what you heard in August 2004. You agree?

A. Yeah.

Q. But you can't remember what you ate yesterday?

A. No.

Q. It's a matter of choice as to how good your memory is, isn't it?

A. Well, it depends.

Q. Is that a yes or a no or I don't know?

A. Well, I don't know. I did write my statement. I gave it to Tony and if there was any correction he did it. Other than that that was it.”

90 Both Mr Markerian and Ms Kalejian were firm in their insistence that the conversations outside the property at Collins Street had occurred as they stated on a Saturday.

91 Both Mr Kwok and Ms Lin were equally firm in their denials that they had. They denied seeing any of the people described by Mr Markerian and Ms Kalejian, including Mr Markerian, Ms Kalejian or the children during any of their visits to the property. They agreed that they had been to the address on occasions other than the inspections with the agents.

92 I have set out the evidence from Mr Markerian and Ms Kalejian in considerable detail in order to explain why I have formed the view that it is unreliable and should be rejected.

93 Turning first to Ms Kalejian, I am not persuaded that the evidence she has given represents her own recollection of the events. Her statement was on her own evidence submitted after being corrected by Mr Markerian. She could not recall what he had corrected, or indicate which parts of her statement were original. Her independent recollection of the events, when tested, was so sparse that I was left with the distinct impression that she had little or no independent recollection of the events, and was reliant on what is contained in her statement. As it is impossible to determine what, if any, parts of her statement represent her own recollection I consider it would be unsafe to rely on her evidence.

94 With respect to Mr Markerian, he also had a sparse recollection outside the details contained in his statement. In addition, however, I have concluded that he was not truthful in giving evidence to the Tribunal. He denied having seen Ms Kalejian’s statement, and was evasive when asked about discussing the evidence with her. Ms Kalejian’s evidence that Mr Markerian corrected her statement points to the falsity. His lack of candour about this raises real concerns in my mind about the veracity of his statement as a whole. Added to this is the evidence from Mr Jones which outlines the processes adopted by Channel 7 in dealing with calls to the newsroom, such as that which Mr Markerian claims he made. This evidence is at odds with Mr Markerian’s statement. Like Mr Jones I am not persuaded that Mr Markerian actually made the call as claimed. It strikes me as improbable that a call such as Mr Markerian says he made to Channel 7, providing a fresh and contentious angle to an item of current news, would be dealt with other than in accordance with the newsrooms normal procedures and then ignored. I conclude that Mr Markerian’s evidence is unreliable. When weighed against the evidence of Mr Kwok and Mr Lin, which I found to be consistent and credible, I prefer their evidence over that of Mr Markerian and Ms Kalejian.

95 Finally, it should be observed that apart from the evidence of Mr Markerian and Ms Kalejian there is no evidence before me showing that Ms Lin, Mr Kwok, their son, and her parents attended the premises at 6 Collins Street on a Saturday in August. It is no more than a possibility. Certainly there is no dispute that their inspections of the property occurred on Wednesday 4 August 2004 and Friday 13 August 2004.

96 I therefore reject the contention that Mr Kwok and Ms Lin were aware that the house at 6 Collins Street was the scene of the Gonzales murders prior to being alerted to that fact by Ms Leona Lin, on 22 September 2004. I would add that even if I accepted Mr Markerian’s evidence it would not be sufficient to persuade me that in the course of those conversations Mr Kwok and Mr Lin were told that the house at 6 Collins Street was the scene of the Gonzales murders. This was not said on Mr Markerian’s evidence.

97 Did the murders impact on the market value of the house? There is abundant evidence from those who inspected the Gonzales property that they would not have contemplated purchasing the house if they knew that the murders had been committed there. Ms Chew said had she been aware that the house was the scene of the murders she would not have looked at it or made an offer to purchase. Mr Jiang in his statement said he would, “never buy a house if there is a murder,” however he thought that a person dying in a house is normal. Mr Nimmigadda Snr told Ms Hinton that when he knew of the house’s history that he was “superstitious”. On Miss Hinton’s evidence Mr Cheung was of the same mind.

98 Mr Hinton and Ms Hinton however questioned whether any of the persons who inspected the house, aside from the ultimate purchasers, were really prospective buyers for the house.

99 Mr Hinton has been practicing as an estate agent in the Ryde area for some 25 years. He has considerable experience in the valuation and sale of properties in the area and knows the market. He said he did not know how the asking price of $780,000 to $800,000 in the advertising material for the house was arrived at. When he was interviewed by investigators in November 2004 he expressed the view that advising purchasers that the house was the scene of the Gonzales murders would not have diminished the value of the house. He considered that there was no obligation on him to disclose that fact to potential purchasers, and considered that if he had done so he would have been in breach of his duty to his vendor. He said in evidence that Mrs Claridades could have taken action against him. He also said that by not disclosing that the house was the scene of the murders he was protecting Mrs Claridades’ privacy: she was an elderly woman who had been hounded by the press as a result of the murders.

100 In cross-examination Mr Hinton was questioned at some length about his opinion that the fact that the house was the scene of the murders would not impact on its market value. He conceded that before he listed the property he was aware that the fact of deaths occurring in the house might affect the decision of some purchasers and could be seen as a negative. As such, he agreed that prospective purchasers with knowledge of the deaths might have used that knowledge as a bargaining point. He considered this a “point of negotiation,” and was of the view that it would only affect the price “if the vendor were prepared to sell it at a lower price.” He denied that the murders were a material fact because they did not inhibit or affect the use of the property.

101 Mr Hinton gave evidence in respect of efforts leading to the ultimate sale of the property at 6 Collins Street following the events which are the subject of this proceeding. It is agreed that there have been substantial changes in the residential property market since then. I find this evidence of little assistance.

102 Ms Hinton has considerably less experience in the real estate industry than her father: she has only been involved in sales for two years. When she was interviewed by investigators she explained that her job was to sell “bricks and mortar.” She said that, “The previous occupants of the property are of no consequence to the new occupants.” Her job was to negotiate the best price for her vendor, not to “conduct murder house tours.” She considered she had no ethical obligation to disclose the fact of the murders: “… I think it’s irrelevant. I don’t think the previous owner’s history has got anything to do with the new owner.”

103 In cross examination Ms Hinton agreed that the fact that the house was the scene of the murders was not an observable feature of the house. She denied that potential purchasers would have been put off by the fact. When asked whether the possibility had occurred to her she said:

“I thought that potentially it could make the property more – I thought potentially buyers might perceive it as being a bargain and make it more saleable.”

“Well perhaps they wouldn’t want to purchase it at $800,000 but they might consider it at $100,000, everything’s, you know, saleable at a price.”

104 The Commissioner relied on an affidavit and valuation report dated February 2005 from Mr Bernard Galletti, a registered valuer. In his report Mr Galletti ascribed the following values to the property:

an 'as is', retrospective value of the subject property, as at 31 August 2004, i.e. taking into account the effect on value, if any, due to the murders of the Gonzales family taking place - $800,000;

.

Hire Purchase Act

121 I have substantial difficulty in accepting this submission. Section 52(1) is, in my view, drafted so as to avoid the consequences which would follow if the word “concealment” were interpreted in accordance with the decision on Clark v Esanda. The words “(whether intended or not)” in s.52 qualify the act of concealment, so that the section applies to “any concealment of a material fact (whether intended or not).” To follow the interpretation of the word “concealment” in Clark v Esanda and find that there must be a deliberate and conscious withholding of a material fact, would make a nonsense of the plain and ordinary words of the section. The section plainly contemplates that the concealment may be unintended.

122 What then is required to establish concealment of a material fact for the purposes of s.52? The Applicants referred me to the Macquarie Dictionary which defines concealment to be the act of concealing and defines conceal as follows:

To forbear to disclose or divulge.”

123 In Smoker v Pharmacy Restructuring Authority (1994) 125 ALR 157 the Full Court of the Federal Court had occasion to consider a situation in which the provisions of the National Health Act 1953 (Cth) displayed an intention that the word “guideline” be given a meaning other than its accepted meaning. The Court determined that, read in the context of the Act and having regard to its legislative history; the guidelines were intended to be binding, contrary to the ordinary meaning of the word. In the context Hill J concluded at p25:

“It follows, in my mind, in these circumstances that the legislative history as well as the context in the present case points to an intention on the part of the legislature to authorise what are referred to as “guidelines” but what more properly should be described as rules which in fact circumscribe the discretion which the Authority has.”

124 Given that a “concealment” to which s.52 applies may be “intentional or not” I conclude that it was not the intention of the legislature that the word “concealment” be interpreted in accordance with its plain and ordinary meaning, because the qualifying words “whether intended or not” show that the elements of volition and intention, which are ordinarily understood as elements of concealment, are not required. Rather, to give effect to the intention of the legislature as expressed in s.52, “concealment” for the purposes of the section should to be read in the sense of a failure, rather than a forbearance, to disclose or divulge a material fact, whether intended or not.

125 Is an independent duty to disclose required? The Respondent submitted that as offence under s.52.

“… can be committed by commission or by omission. An offence by omission does not require proof that some independent duty to disclose material facts existed.”

126 Conclusion In this case I am satisfied that the fact that the property was the scene of the Gonzales murders was a matter of high significance to the purchasers and their family. The murders were notorious and were still the focus of public attention: Sef Gonzales was yet to be sentenced. The evidence is clear that the purchasers would not have entered into the contract had they known that the property was the scene of the murders. I accept that is the case. I am satisfied that the fact that the property was the scene of the Gonzales murders was a matter of both relevance and significance to the purchasers. It was of similar significance to the other prospective purchasers who I heard evidence from: a matter concerning which, at least in the case of the Nimmigadda’s, Mr Hinton and Ms Hinton were aware.

127 I accept that matters of personal belief underlie that materiality to the purchasers: those beliefs may also have a cultural genesis. They did not want to live in a home in which murders had occurred, and expressed real apprehension as to the home being a suitable environment. This is the psychological impact referred to in the discussion of the topic in the United States. The purchaser’s reservations, however, were not peculiar to them. They were reservations which, given the notoriety of the murders that were still a focus of public attention, I accept a significant portion of the population would share. They were reservations which Mr Hinton and Mrs Claridades had contemplated when first discussing putting the property on the market. I accept that the purchasers concerns were genuine and very real to them. They were concerns anticipated by Mr Hinton.

128 Further, I am satisfied on the evidence of Mr Galletti, Mr Hinton and Ms Hinton, that the fact that the property was the scene of the murders adversely affected the price the property could fetch on the market. This was known to both Mr Hinton and Ms Hinton.

129 I am satisfied, on both accounts, that the fact that the property was the scene of the Gonzales murders was a material fact. Knowledge of that fact was likely to have a significant effect on the minds of potential purchasers in making a decision to enter into a contract to purchase the property and as to the price they would pay.

130 For the Applicants it was argued that the purchaser’s reservations about the property were not rational, and therefore could not be objectively seen as material to the purchase of the property. Whether rational or not, they were real concerns: real concerns which were also held by the body of people who inspected the property, and real concerns which Mr Hinton foresaw. In her evidence Ms Hinton, on a number of occasions compared them to a concern that a house for sale might have bad feng shui. Assuming for the purposes of discussion only that this is a valid comparison (which I do not accept), the reality is that a purchaser to whom the feng shui of a property is a major concern is able to look at a property and come to their own conclusion as to whether the feng shui is bad or good. This is not the case here.

131 Mr Sheldon referred me various excerpts from the transcript in which Mr Kwok and Ms Lin and others, gave evidence to the effect that they would not take the word of an estate agent as sacrosanct, and would rely on their own inquiries and those of their solicitors. On this basis he submitted that I could not be satisfied that the purchasers had been induced to enter the contract by virtue of the concealment of a material fact. I do not accept that argument. What is in issue here is the concealment of a material fact, which the usual searches and inquiries which go with the purchase of a property would not disclose. In Reed v. King (1983) 145 Cal.App.3d 261, 193 Cal. Rptr.130 (a decision of the California Court of Appeal dealing with a different question of law, but with somewhat similar facts) Associate Justice Blease observed:

“The murder of innocents is highly unusual in its potential for so disturbing buyers they may be unable to reside in a home where it has occurred. This fact may foreseeably deprive a buyer of the intended use of the purchase. Murder is not such a common occurrence that buyers should be charged with anticipating and discovering this disquieting possibility. Accordingly the fact is not one for which a duty of inquiry and discovery can sensibly be imposed upon the buyer.”

132 I am satisfied that, if the purchasers had been aware that the property was the scene of the Gonzales murders, they would not have entered into the contract to purchase it. I am satisfied that their ignorance of the fact induced them to enter into the contract.

133 Both Mr Hinton and Ms Hinton were acting in their capacity as licenced agents under the Act. Both failed to disclose to the purchasers and their family a material fact.

134 Mr Hinton devised a sales strategy whereby prospective purchasers were to be told that the property was a deceased estate, had been vacant for three years, and that the beneficiaries who lived in the Philippines no longer required the property. Mr Hinton did not have occasions to act on his sales strategy himself, but expected his staff to do so.

135 On his own evidence Mr Hinton did not disclose to the purchasers or their family that the house was the scene of the Gonzales murder. In so doing I am comfortably satisfied that Mr Hinton, acting as a licensee, concealed a material fact and thereby induced the purchasers to enter into the contact to purchase the property from Mrs Claridades in breach of s.52. Mr Hinton had an opportunity to disclose the material fact to the purchasers during the open house inspection on 13 August 2004. In reaching this conclusion I find that Mr Hinton chose not to disclose the material fact.

136 With respect to Ms Hinton, she agreed that she had not disclosed the fact of the murders to the purchasers. I am comfortably satisfied that Ms Hinton, acting as a licensee, concealed a material fact and thereby induced the purchasers to enter into the contact to purchase the property from Mrs Claridades in breach of s.52. I would add that I am satisfied that Ms Hinton did not follow Mr Hinton’s instructions to his staff with respect to what purchasers should be told about the previous owners. She did not tell the purchasers the property was a deceased estate.

137 In respect of Mahevi Pty Ltd, the corporate licensee, I am comfortably satisfied that it, acting as a licensee, concealed a material fact and thereby induced the purchasers to enter into the contact to purchase the property from Mrs Claridades in breach of s.52. That finding is a consequence of Mr Hinton and Ms Hinton’s conduct while in its employment and in the course of their duties.

Section 42 Fair Trading Act 1987

138 The Commissioner’s case is that the Applicants breached s.42 of the Fair Trading Act 1987 (set out in paragraph 38). It is submitted that they each in trade or commerce engaged in conduct that is misleading or deceptive or that is likely to mislead of deceive.

139 The Commissioner submits that the Applicants’ silence as to the fact that the property was the scene of the Gonzales murders was misleading and deceptive, and is therefore caught by s.42(1). The Commissioner’s case is that silence may be misleading and deceptive, “in circumstances where there is a ‘reasonable expectation’ that a person will disclose.” The Applicant’s take issue with this formulation, asserting that there must be a “legal obligation to divulge” before silence can constitute conduct that is misleading or deceptive.

140 Section 42 mirrors the provisions of s.52 of the Trade Practices Act 1974 (Cth): the numerous decisions on s.52 of that Act are applicable to a consideration of s.42 of the Fair Trading Act 1987: Arbest Pty Ltd v State Bank of NSW (1996) ATPR 41-481.

141 Duty to Disclose or Reasonable Expectation of Disclosure Rhone Poulenc Agrochimie SA v UIM Chemicals Services Pty Ltd (1986) 12 FCR 477 was a case in which the question was whether a vendor of fungicide, who had been silent as to the fact that it was unregistered, was in breach of s.52 of the Trade Practices Act 1974 (Cth) because that silence implied that the fungicide was registered and therefore legal to sell. Bowen CJ said at 489-490:

Trade Practices Act 1974

Dealing with the question of misrepresentation constituted by silence, there are cases which show, for example, that an omission to mention a qualification, in the absence of which some absolute statement made is rendered misleading, is conduct which should be regarded as misleading. So too is the omission to mention a subsequent change which has occurred after some statement which is correct at the time has been made where the result of the change is to render the statement incorrect so that thereafter it becomes misleading. This also may be regarded as constituting misleading conduct. However, the general position between contracting parties has been expressed in the following way: 'The general rule, both of law and equity, in respect to concealment, is that mere silence with regard to a material fact, which there is no legal obligation to divulge, will not avoid a contract, although it operates as an injury to the party from whom it is concealed.'(Smith v Hughes (1871) LR 6 QB 597 at 604; and see Ward v Hobbs (1878) 4 App Cas 13; W Scott, Fell & Co Ltd v Lloyd (1906) 4 CLR 572; cf Chadwick v Manning [1896] AC 231 at 238). Under the general law it is important to consider whether there is a legal obligation to divulge. There are particular relationships which have been held to raise an obligation of disclosure. Contracts uberrimae fidei come to mind as examples of this type of relationship. Indeed, there are many particular relationships which raise duties of disclosure. These include trustee and beneficiary, solicitor and client, principal and agent and guardian and ward. Where an obligation to disclose arises an omission to inform the person to whom the obligation is owed may, perhaps on the basis that that person is entitled to assume some fact or circumstance which does not exist, constitute or be an ingredient in misleading conduct.

The notion of relationships giving rise to an obligation to make disclosure is one which may well prove useful in determining some of the cases which may arise under s 52 of the Trade Practices Act 1974. However, the court will not be restricted to cases where such a relationship has already been held to exist at common law or in equity. The court is likely to be faced with situations under s 52 between particular parties, where it will feel bound to hold that such an obligation to disclose arises from the circumstances.

Vendors and purchasers have not generally been regarded as being, without more, this type of relationship. There are occasions when a particular enactment or even the terms of a particular contract will impose an obligation upon a vendor which will place the parties in a relationship of this type involving an obligation to make disclosure. However, in the present case I do not discern any relationship between the respondents and their customers which would give rise to any particular obligation to make disclosure or which would lead the court to hold that a duty of disclosure should be held to arise. When one analyses what it is said that the respondents should have disclosed to customers it does not appear to amount to very much more than a statement of what the customers local State law is … and a statement that the law has not been complied with by the respondents.

The conduct dealt with by s 52 is conduct which leads or is likely to lead a person or persons into error. In the present case there is no conduct of the respondents which it is shown would lead a person or persons into error as to what the law of their State was or lead them into error as to whether or not the respondents had complied with that law. The conduct of the respondents at the relevant time was silent on these points.”

142 In Winterton Constructions Pty Ltd v HambrosAustralia Limited (1992) 39 FCR 97 at 114, Hill J said:

Whether such a duty exists will clearly depend upon all the circumstances of the case.”

143 Lam v Ausintel Investments Australia Pty Ltd (1989) 97 FLR 458 was a case involving complex commercial dealings between a minority shareholder of a company which owned a Sydney Hotel, the majority shareholders and financiers. The minority shareholder (a merchant banker) claimed that he had entered into a subordination agreement in circumstances where he had not been told that agents had been authorised to find a buyer for the hotel at a price which would have left him substantially better off without the subordination agreement. Gleeson CJ, with whom Samuels AJA and Meagher JA agreed, quoted (at 475) Bowen CJ’s discussion of the principles in Rhone Poulenc Agrochimie SA v UIM Chemicals Services Pty Ltd, above. Gleeson CJ concluded:

“Mr Lam was an experienced and intelligent banker and businessman with his own ideas about, and his own acute interest in, the future of the business of the Regent Hotel and possible sale of the hotel. The advocacy in which the respondents engaged in the letter of 9 May 1986 and subsequently as to why it was in his best interests to agree to the subordination arrangements did not, in my view, impose upon them an obligation to disclose to him new facts which might improve his bargaining position at their expense. The new facts just mentioned did not render false the representations that had been made to him.”

144 Demagogue Pty Ltd v Ramensky (1992) 39 FCR 31 was a case involving the sale of an off the plan residential unit. The contract was silent about vehicular access. The agent told the purchasers that the developer would build a driveway to the road. In fact the driveway would go over crown land and a licence was required for the driveway under the Land Act, which would bind each unit holder. Nothing on the plans indicated it was not private land. This was not a defect in title. In proceedings under s.52 of the Trade Practices Act 1974, Spender J found that there had been both a positive representation as to the construction of the driveway, and a misrepresentation conveyed by a failure to say anything about the road licence. On appeal, Black CJ said at 32:

Silence is to be assessed as a circumstance like any other. To say this is certainly not to impose any general duty of disclosure; the question is simply whether, having regard to all the relevant circumstances, there has been conduct that is misleading or deceptive or that is likely to mislead or deceive. To speak of "mere silence" or of a duty of disclosure can divert attention from that primary question. Although "mere silence" is a convenient way of describing some fact situations, there is in truth no such thing as "mere silence" because the significance of silence always falls to be considered in the context in which it occurs. That context may or may not include facts giving rise to a reasonable expectation, in the circumstances of the case, that if particular matters exist they will be disclosed.”

Henjo Investrnents Pty Ltd v Collins Manickville Pty Ltd

is

The use of the term "duty" is apt to suggest a necessary connection with the general law, which does not exist and is not required by the statute: cf Lam v Ausintel Investments Australia Pty Ltd [1990] ATPR 50,866 at 50,880 - 50,881. I agree with what was said by Samuels JA in Commonwealth Bank of Australia v Mehta (1991) 23 NSWLR 84 at 88:

"[S]ilence is not misleading only where there is a duty to disclose at common law or in equity. It may simply be the element in all the circumstances of a case which renders the conduct in question misleading or deceptive."

Henjo

Essays on Torts

Kimberley NZI Finance Ltd v Torero Pty Ltd

The cases in which silence may be so characterised are no doubt many and various and it would be dangerous to essay any principle by which they might be exhaustively defined. However, unless the circumstances are such as to give rise to the reasonable expectation that if some relevant fact exists it would be disclosed, it is difficult to see how mere silence could support the inference that the fact does not exist."

Warner v Elders Rural Finance Limited

145 In Arbest Pty Ltd v State Bank of NSW (1996) ATPR 41-481, a case relying on s.42 of the Fair Trading Act 1987 Kirby ACJ said, at 14:

duty

Fair Trading Act,

… The test by which this Court should assess that failure to disclose information has been formulated in differing but basically similar ways in the Federal Court on several occasions. Thus, Hill J in Warner, at 404, said that misleading conduct would arise in

“circumstances where the person... was entitled to expect to be informed of any change.”

Beach Petroleum,

“the question to be asked is whether the circumstances are such as to give rise in the applicants to a reasonable expectation that silence would be broken if particular matters exist.”

Fair Trading Act

not

Witham v MacPherson

Contractual Non−Disclosure,

146 In Metalcorp Recyclers Pty Limited v Metal Manufactures Limited [2003] NSWCA 213 Handley JA, with whom Hodgson JA and Gzell J agreed, quoted with approval what he described as the “relevant principles were felicitously summarised by Black CJ in Demagogue Pty Limited v Ramensky,” quoted above. His Honour added:

“…silence that is capable of being misleading or deceptive never stands alone. In the absence of some positive duty to speak, silence can only be misleading or deceptive against a background of other facts known to both parties which make what is actually said so incomplete that it conveys a misrepresentation.”

147 In Noor Al Houda Islamic College Pty Limited & Anor v Bankstown Airport Limited [2005] NSWSC 20 Hoeben J at paragraphs 180-181 dealt with competing submissions as to whether a party relying on misleading or deceptive conduct by silence has to establish:

Henjo Investments Pty Limited & Ors v Collins Marrickville Pty Limited

Having read the cases to which I was referred by the parties it seems to me that the better view and that which is supported by more recent authority is that the proper test is whether there is “a reasonable expectation of disclosure”. (Warner v Elders Rural Finance Limited (1993) 41 FCR 399 at 401-2, Franich v Swannell (1993) 10 WAR 459 at 474-5, Arbest Pty Limited v State Bank of NSW Limited (1996) ATPR 41-481, Fraser v NRMA Holdings Limited (1995) 55 FCR 452 at 465.)”

148 The weight of these authorities, in my view, point to the proper test being whether in all the circumstances there was a reasonable expectation that the Applicants would disclose to prospective purchasers that the property was the scene of the Gonzales murders. Many of the Applicants’ submissions which were concerned with the issue of whether there is a common law duty on agents to disclose in the circumstances are therefore inapplicable.

149 I would add that in any case the provisions of s.52 of the Property Stock and Business Agents Act 2002 and the Rules of Conduct placed a duty on the Applicants in the present circumstances to disclose that the property was the scene of the Gonzales murders.

150 Conclusion Ms Hinton made a positive representation to Ms Lin to the affect that the owners were in the process of moving out. The property was presented in a condition consistent with that statement. Neither Ms Hinton nor Mr Hinton told any of the prospective purchasers that the house was a deceased estate. There was nothing in the advertising material or contractual documents which showed that the property was a deceased estate. The house obviously was not being lived in. There was nothing about the manner in which the house was presented which would automatically alert prospective purchasers to the fact that the house was the scene of a crime, so that they could make inquiries, let alone that the house was the scene of a notorious triple murder which remained a focus of public attention. The house was poorly maintained, unclean, not occupied and half-packed. The Applicants were consciously silent as to the property being the scene of the Gonzales murders. That was a fact that could not be discovered in the course of usual of events by a properly advised purchaser. It was also a fact which would have a significant impact on the minds of prospective purchasers in determining whether to make an offer to purchase the house at all, and if so, with respect to the price they would be prepared to pay. To many prospective purchasers, as the evidence indicates, living in a home in which such a tragedy has occurred is not a possibility to be considered. Mr Hinton contemplated this in his discussions with Mrs Claridades. Ms Hinton certainly contemplated that the fact that the house was a murder scene could affect the price a purchaser was prepared to pay. Yet both of them chose not to disclose the history of the property to prospective purchasers. Whether rational or not I accept that such beliefs and opinions, as the evidence demonstrates, were widely held among the prospective purchasers and were concerns about which Mr Hinton and Ms Hinton were aware.

151 I am satisfied that those circumstances gave rise to a reasonable expectation that prospective purchasers would be told that the property was the scene of the murders. I am further satisfied that.52 of the Property Stock and Business Agents Act 2002 and the Rules of Conduct imposed a duty on the Applicants to disclose that fact to the purchasers.

152 I accept that as far as the purchasers are concerned they would not have entered the contract to purchase the property if they had been aware it was the scene of the murders. It follows that, as a consequence of the Applicants’ failure to so alert the purchasers, they were induced to enter the contract.

153 I am therefore satisfied that each of the Applicants in trade or commerce engaged in conduct which was misleading and deceptive in breach of s.42 of the Fair Trading Act 1987. In respect of Mahevi Pty Ltd, the corporate licensee, this finding is a consequence of Mr Hinton and Ms Hinton’s conduct while in its employment and in the course of their duties.

The Rules of Conduct

154 The Commissioner submits that the Applicants are each in beach of rule 3(1) and (2) of the Rules of Conduct (see out in paragraph 36) on the basis that they have each failed to “act honestly, fairly and professionally with all parties in a transaction” and have “mislead or deceived” parties in a transaction.

155 I am satisfied that, in accordance with my reasons for finding that each of the Applicants has breached s.52 of the Property Stock and Business Agents Act 2002 by concealing a material fact, and s.42 of the Fair Trading Act 1987 by engaging in conduct that was misleading or deceptive, that they are each in breach of these rules.

156 Both Mr Hinton and Ms Hinton failed to act honestly, fairly and professionally when they concealed the material fact of the murders from the purchasers, and thereby induced them to purchase the property. Their professional obligation under s.52 and rule 3(1) was to disclose the material fact. Their decision not to do so was, in the circumstances, neither honest nor fair. Mahevi Pty Ltd, the corporate licensee has by virtue Mr Hinton’s and Ms Hinton’s breach of that rule, while acting on its behalf, also breached rule 3(1).

157 I note that no finding was made by the Commissioner with respect to a breach of rule 3(2) by the corporate licensee. No specific submissions have been made to respect to that issue. In those circumstances, I do not propose to consider that issue.

Supervision by Mr Hinton

158 Finally, as against Mr Hinton, the Commissioner submits that he, as the person in charge of the business of the principal licensee (Mahevi Pty Ltd), failed to properly supervise that business. I am comfortably satisfied that he failed to establish procedures designed to ensure that the provisions of the Property Stock and Business Agents Act 2002 and the Fair Trading Act 1987 relevant to the conduct of that business were complied with. I have found that Mr Hinton as agent in charge adopted procedures with respect to the sale of the Gonzales property which allowed the agency and its employees to conduct the business in breach of s.52 of the Property Stock and Business Agents Act 2002, the Rules of Conduct, and s.42 of the Fair Trading Act 1987. It is clear that he failed to establish appropriate procedures to guard against such breaches and ensure compliance with these requirements.

159 The Commissioner has also submitted that Mr Hinton failed to properly supervise Ms Hinton. It seems clear from his evidence and his conduct following his return form overseas, that he was acting on the belief that Ms Hinton had followed his instructions (misconceived as they were). Ms Hinton certainly has maintained throughout that she did so, but I have found on the evidence that she did not tell prospective purchasers that the house was a deceased estate, as instructed by Mr Hinton. That, however, does not relieve Mr Hinton of the obligation to supervise Ms Hinton in the conduct of the business.

160 In the course of that supervision Mr Hinton was obliged to ensure that Ms Hinton complied with the legal obligations imposed on the business by the Property Stock and Business Agents Act 2002, the Rules of Conduct and the Fair Trading Act 1987. By knowingly allowing Ms Hinton to conceal a material fact, and to not disclose a matter which potential purchasers had a reasonable expectation would be disclosed, he failed to properly supervise an employee engaged in the business.

Disciplinary Action

161 At the conclusion of the hearing Mr Sheldon undertook to seek instructions as to whether the Applicants, if they were unsuccessful in their appeal, wished to contest the penalties determined by the Commissioner. I indicated that if that were the case and I found against the Applicants, I would reconvene having delivered my decision with respect to the substantive issues.

162 Mr Sheldon has made written submissions calling for a reduction in penalty. I am uncertain, in the light of those submissions, whether the Applicants wish to address me on penalty or rely on the submissions alone.

163 I therefore propose to publish this decision and list the matter for directions on 27 September 2006 at 9:30am at which time the parties are to advise if they wish to be heard on penalty. If not, I shall deliver a decision on penalty shortly thereafter based on the present submissions. The party’s solicitors are not required to attend that directions hearing in person, but may participate by phone.

164 At that directions hearing I would also like to hear from the parties as to issue of costs which I reserved on 1 November 2005, so that this matter can be brought to a conclusion.

Orders

165 In the light of the above:

Property Stock and Business Agents Act

ii. engaged in misleading or deceptive conduct, namely the non-disclosure of murders which occurred on the property, in breach of s.42 of the Fair Trading Act 1987; and

iii. failed to act honestly, fairly and professionally on breach of rule 3(1) of the Rules of Conduct.

Property Stock and Business Agents Act

ii. engaged in misleading or deceptive conduct, namely the non-disclosure of murders which occurred on the property, in breach of s.42 of the Fair Trading Act 1987; and

iii. failed to act honestly, fairly and professionally in breach of rule 3(1) of the Rules of Conduct

iv. misled or deceived a party to a transaction in breach of rule 3(2) Rules of Conduct; and

v. failed to supervise the business of the corporation in breach s.32 of the Property Stock and Business Agents Act 2002.

Property Stock and Business Agents Act

ii. engaged in misleading or deceptive conduct, namely the non-disclosure of murders which occurred on the property, in breach of s.42 of the Fair Trading Act 1987;

iii. failed to act honestly, fairly and professionally in breach of rule 3(1) of the Rules of Conduct; and.

iv. misled or deceived a party to a transaction in breach of rule 3(2) Rules of Conduct.

Citations

Hinton v Commissioner for Fair Trading [2006] NSWADT 257

Most Recent Citation

Cases Citing This Decision

3

Hinton v Commissioner for Fair Trading, Office of Fair Trading [2007] NSWADTAP 17

Hinton v Commissioner for Fair Trading (No2) [2006] NSWADT 299

Charles Lloyd Property Group Pty Ltd v Buchanan [2013] VSC 148

Cases Cited

27

Statutory Material Cited

8

Seyfarth v Minister for Immigration and Multicultural and Indigenous Affairs [2005] FCAFC 105

Drake v Minister for Immigration and Ethnic Affairs [1979] FCA 39

Briginshaw v Briginshaw [1938] HCA 34

Actions

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CITATION:	Hinton & Ors v Commissioner for Fair Trading [2006] NSWADT 257
DIVISION:	General Division
PARTIES:	APPLICANTS Peter Leslie Hinton Mahevi Pty Ltd Ereca Louise Hinton RESPONDENT Commissioner for Fair Trading, Office of Fair Trading
FILE NUMBER:	053055-053057
HEARING DATES:	9 & 10/08/2005, 1/11/2005, 6 & 8/2/2006
SUBMISSIONS CLOSED:	04/11/2006
DATE OF DECISION:	09/01/2006
BEFORE:	Molony P - Judicial Member
CATCHWORDS:	Property, Stock and Business Agents Act - Real Estate Agent - disciplinary determination - Real Estate Agent - disciplinary determination
MATTER FOR DECISION:	Principal matter
LEGISLATION CITED:	Administrative Decisions Tribunal Act 1997 Fair Trading Act 1987 Hire Purchase Act 1960 Limitation of Actions Act 1936 (SA) Limitation of Actions Act 1969 Property, Stock and Business Agents Act 2002 Property, Stock and Business Agents Regulation 2003 Trade Practices Act 1974 (Cth)
CASES CITED:	Arbest Pty Ltd v State Bank of NSW (1996) ATPR 41-481 Baker v. Sheridan [2005] NSWSC 121 Barclay Holdings (Australia) Pty Limited v British National Insurance Co Ltd (1987) 8 NSWLR 514 Briginshaw v Briginshaw [1938] HCA 34; (1938) 60 CLR 336 Brunninghausen v. Glavanics [1999] NSWCA 199 Clark v Esanda [1984] 3 NSWLR 1 Commonwealth Bank of Australia v Mehta (1991) 23 NSWLR 84 Demagogue Pty Ltd v Ramensky (1992) 39 FCR 31 Do Carmo v Ford Excavations Pty Ltd (1983-4) 154 CLR 234 Drake v Minister for Immigration and Ethnic Affairs (1979) 46 FLR 409 Fraser v NRMA Holdings Limited (1995) 55 FCR 452 Henjo Investments Pty Ltd v Collins Marrickville Pty Ltd (1988) 79 ALR 83 Karina Fisheries Pty Ltd v Mitson [1990] 26 FCR 476 Kimberley NZI Finance Ltd v Torero Pty Ltd [1989] ATPR (Digest) 53 Lam v Ausintel Investments Australia Pty Ltd (1989) 97 FLR 458 Mayne Nickless Ltd v Pegler [1974] 1 NSWLR 228 Metalcorp Recyclers Pty Limited v Metal Manufactures Limited [2003] NSWCA 213 Minister for Aboriginal Affairs v Peko-Wallsend Ltd (1986) 162 CLR 24 Permanent Trustee Australia Pty Ltd v FAI General Insurance Company Limited [2001] NSWCA 20, 50 NSWLR 679 R v Curran [1983] 2 VR 133 Reed v. King (1983) 145 Cal.App.3d 261, 193 Cal. Rptr.130 Rhone Poulenc Agrochimie SA v UIM Chemicals Services Pty Ltd (1986) 12 FCR 477 Smoker v Pharmacy Restructuring Authority (1994) 125 ALR 157 Sola Optical Aust Pty Ltd v. Mills (1987) 163 CLR 628 Warner v Elders Rural Finance Limited (1993) 41 FCR 399 Winterton Constructions Pty Ltd v Hambros Australia Limited (1992) 39 FCR 97 at 114
REPRESENTATION:	APPLICANT R Sheldon instructed by T Murray, Solicitor of Tress Cox RESPONDENT P I Lakatos SC instructed by J Coss, Legal Officer, Office of Fair Trading
ORDERS:	1. The Tribunal finds that Mahevi Pty Ltd as licensee: i. concealed a material fact, namely the murders which occurred on the property at 6 Collins Street, and thereby induced the purchasers to enter into a contract to purchase the property, contrary to s.52(1) of the Property Stock and Business Agents Act 2002; ii. engaged in misleading or deceptive conduct, namely the non-disclosure of murders which occurred on the property, in breach of s.42 of the Fair Trading Act 1987; and iii. failed to act honestly, fairly and professionally on breach of rule 3(1) of the Rules of Conduct; 2 The Tribunal finds that Mr Peter Hinton as a Director and Licensee in charge of Mahevi Pty Ltd: i. concealed a material fact, namely the murders which occurred on the property at 6 Collin Street, and thereby induced the purchasers to enter into a contract to purchase the property, contrary to s.52(1) of the Property Stock and Business Agents Act 2002 ii. engaged in misleading or deceptive conduct, namely the non-disclosure of murders which occurred on the property, in breach of s.42 of the Fair Trading Act 1987; and iii. failed to act honestly, fairly and professionally in breach of rule 3(1) of the Rules of Conduct iv. misled or deceived a party to a transaction in breach of rule 3(2) Rules of Conduct; and v. failed to supervise the business of the corporation in breach s.32 of the Property Stock and Business Agents Act 2002; 3. The Tribunal finds that Ms Ereca Hinton as a licensee: i. concealed a material fact, namely the murders which occurred on the property at 6 Collin Street, and thereby induced the purchasers to enter into a contract to purchase the property, contrary to s.52(1) of the Property Stock and Business Agents Act 2002; ii. engaged in misleading or deceptive conduct, namely the non-disclosure of murders which occurred on the property, in breach of s.42 of the Fair Trading Act 1987; iii. failed to act honestly, fairly and professionally in breach of rule 3(1) of the Rules of Conduct; and iv. misled or deceived a party to a transaction in breach of rule 3(2) Rules of Conduct; 4. This application is listed for a directions hearing on 27 September 2006 at 9:30am to determine whether a further hearing is required on the issue of disciplinary action, and to consider reserved costs

[2006] NSWADT 257

01/09/2006