John R Ring Pty Ltd v The Commissioner of Consumer and Business Affairs - [2009] SASC 174

SUPREME COURT OF SOUTH AUSTRALIA
(Full Court)
JOHN R RING PTY LTD v THE COMMISSIONER OF CONSUMER AND BUSINESS AFFAIRS
[2009] SASC 174
Judgment of The Full Court
(The Honourable Chief Justice Doyle, The Honourable Justice Anderson and The Honourable Justice Kourakis)
18 June 2009
CONVEYANCING - RELATIONSHIP OF VENDOR AND PURCHASER - STATUTORY PROTECTION OF PURCHASERS
Section 24A(2)(b) of the Land and Business (Conveyancing and Sale) Act 1994 (SA) prohibited a representation as to a "likely price range" for the sale of residential land specifying as the lower limit of the range an amount less than the prescribed minimum advertising price - appellant placed advertisements in newspapers relating to residential land - advertisements specified a 'Vendor Selling Range' (VSR) and a 'Buyer Inquiry Range' (BIR) - the BIR specified a range which included the VSR, but which extended to a figure below that specified in the VSR and less than the prescribed minimum advertising price - advertisements included the statement:
Additional information for buyers: "Buyer Inquiry Range" This is not the selling range but a buyer inquiry range. If you are looking for a home within this range we suggest you may be interested in this property and recommend an inspection.
Appellant sought declaration that advertisements did not contravene s 24A - by cross-claim, respondent sought declaration that BIR conveyed a representation as to a likely price range for the sale of land for the purposes of s 24A - single Judge made declaration sought by respondent - appeal against decision of single Judge.
HELD: advertisements aimed at the general public - most readers of an advertisement for the sale of land would realise that the vendor is not bound by a range stated in an advertisement and may accept a figure outside of the range, but would consider that the vendor might accept a price within the range - expression 'likely price range for the sale of land' indicates the concept of a 'realistic possibility' - a significant number of readers would understand the BIR to be a representation that there is a realistic possibility that the vendor would accept a price within this range - appeal dismissed.
Land and Business (Conveyancing and Sale) Act 1994 (SA) s 20, s 20(1), s 24A, s 24A(1)(a)(ii), s 24A(1)(b), s 24A(1)(d), s 24A(2)(b); Land Agents Act 1994 (SA); Statutes Amendment (Real Estate Industry Reform) Act 2007 (SA), referred to.
John R Ring Pty Ltd v The Commissioner of Consumer and Business Affairs [2009] SASC 35, discussed.
Henderson v Pioneer Homes Pty Ltd (1980) 29 ALR 597; World Series Cricket Pty Ltd v Parish (1977) 16 ALR 181, considered.

WORDS AND PHRASES CONSIDERED/DEFINED
"likely price range", "likely price range for the sale of land"

JOHN R RING PTY LTD v THE COMMISSIONER OF CONSUMER AND BUSINESS AFFAIRS
[2009] SASC 174
Full Court: Doyle CJ, Anderson and Kourakis JJ

DOYLE CJ: In 2007 Parliament amended the Land and Business (Sale and Conveyancing) Act 1994 (SA) (“the Act”). The amendments were intended to prevent the practice known as “bait pricing” or “bait advertising” by land agents when marketing residential land (as defined in the Act). The practice referred to involves land agents advertising properties that are for sale and referring to a price or price guide that is significantly less than the land agent’s estimate of the price likely to be obtained for the land, and significantly less than the price that the vendor is likely to accept.
By s 24A of the Act Parliament made it an offence for a land agent, in marketing residential land, to “make a representation as to a likely price range for the sale of the land” unless the price range stated conforms to certain criteria specified in s 24A. The section deals also with representations as to a likely price, but as this case is concerned with a representation as to a price range, I will confine my attention to that aspect of s 24A.
A Judge of this Court granted a declaration to the effect that a form of advertising routinely used by John R Ring Pty Ltd (“the Agent”) gave rise to or contained a representation as to a likely price range for the sale of land referred to in the advertising: John R Ring Pty Ltd v The Commissioner of Consumer and Business Affairs [2009] SASC 35. The Agent denied and continues to deny that the form of advertising gives rise to or involves a representation as to a likely price range for the sale of the land described in advertisements.
The significance of the Judge’s declaration is that if the form of advertising used does give rise to or contains a representation as to a likely price range for the sale of land, then, having regard to the Agent’s usual practice, the price range which the Agent represents will not comply with the specified statutory criteria, and an offence against s 24A will have been committed.
In effect the Judge decided that the Agent’s usual method of advertising residential land for sale would give rise to an offence against s 24A of the Act.
The Agent has appealed against the Judge’s decision.
Before the Judge the question of whether it was appropriate to make a declaration at all was argued, but on appeal that point was not pursued. Each of the parties asked us to decide the appeal.
The Act
The Act regulates the sale of land and businesses, and the preparation of conveyancing instruments. The licensing of land agents is regulated by the Land Agents Act 1994 (SA).
The amendments that were made to the Act in 2007, aimed at “bait pricing” or “bait advertising” are contained in Part 4 of the Act, which was substituted by the Statutes Amendment (Real Estate Industry Reform) Act 2007 (SA). The provisions on which this case turn are to be found in s 20 and s 24A.
Section 20 sets out a number of matters that must be recorded in an agreement signed by the vendor and the agent, before an agent may act on behalf of the vendor in the sale of residential land. Relevantly to the present case, s 20 provides as follows:
20—Authority to act as agent
(1)An agent must not act on behalf of a vendor in the sale of residential land unless the agent has been authorised to so act by an agreement (a sales agency agreement) that—
(a) specifies the agent's genuine estimate of the selling price expressed without any qualifying words—
(i)as a single figure; or
(ii)as a price range in figures with an upper limit that does not exceed 110 per cent of the lower limit; and
(b) specifies the selling price sought by, or acceptable to, the vendor expressed without any qualifying words as a single figure; and
…
The Agent’s “genuine estimate” and the owner’s statement are then used as a basis or foundation for the prohibition that is found in s 24A.
Section 24A provides as follows:
24A—Representations as to likely selling price in marketing residential land
(1)For the purposes of this section—
(a)     a representation is made in marketing land if—
(i)it is made in an advertisement for the sale of the land that is published, or caused to be published, by the agent; or
(ii)it is made (whether orally or in writing) to a purchaser who has not commenced negotiations for the purchase of the land; and
(b)     information in an advertisement is a representation as to a likely price or likely price range for the sale of land if it could be reasonably taken to be such; and
(c)     a statement as to the price actually sought by, or acceptable to, the vendor of land is not a representation as to a likely price or likely price range for the sale of the land provided that the amount stated as the price is the same as the selling price sought by, or acceptable to, the vendor as expressed in the sales agency agreement at the time of the statement; and
(d)     prescribed minimum advertising price, in relation to a representation, is the amount that is the greater of—
(i)the agent's estimate of the selling price as expressed in the sales agency agreement as a single figure at the time of the representation, or, if that estimate is expressed in the agreement at that time as a price range, the lower limit of that range; or
(ii)the selling price sought by, or acceptable to, the vendor as expressed in the sales agency agreement at the time of the representation.
(2)In marketing residential land that an agent is authorised to sell on behalf of a vendor, the agent or a sales representative employed by the agent must not—
(a)     make a representation as to a likely price for the sale of the land that is less than the prescribed minimum advertising price; or
(b)     make a representation as to a likely price range for the sale of the land specifying—
(i)as the lower limit of the range an amount less than the prescribed minimum advertising price; or
(ii)as the upper limit of the range an amount exceeding 110 per cent of the lower limit.
Maximum penalty: $10,000.
The present case is concerned with a written advertisement for the sale of land, not with a representation made orally or in writing to a purchaser: cf s 24A(1)(a)(ii). The case is concerned with a statement that is said by the Commissioner to be “a representation as to a likely price range”, and so calls for consideration of s 24A(2)(b).
The following aspects of s 24A are to be noted.
The prohibition in s 24A(2)(b) strikes at “a representation as to a likely price range for the sale of land”. That raises the question of the meaning of “a likely price range”.
As can be seen, s 24A permits the making of a representation as to a likely price range, but controls the scope or extent of that range, by requiring that the price range must conform with the statutory requirement in s 24A(2)(b). That range is derived from the agent’s “genuine estimate” and the owner’s statement which are to be found in the sales agency agreement: s 24A(1)(d) and s 20(1).
So the effect of the Act is to permit a representation as to a likely price range, but to limit the extent or scope of the range, and to do so by reference to matters to be found in the sales agency agreement which, for obvious reasons, will be unknown to a potential purchaser. So, if the prescribed minimum advertising price is $100, a representation can be made that the likely price range for the sale of the land in question is between $100 and $110. A representation that specifies a wider price range will contravene s 24A. But it needs to be borne in mind that most readers of an advertisement will not understand how the range that appears in the advertisement is arrived at; their only interest will be the range itself.
The other point to be noted at this stage is that s 24A(1)(b) arguably widens the concept of what amounts to “a representation” for the purposes of the section.
Marketing land
The argument before this Court proceeded on the basis of a number of assumptions which should be identified.
Advertising in the print media is a widely used method of selling residential land. Advertisements are often quite brief. They frequently contain a reference to a price or to a price range. Advertisements are usually aimed at purchasers, rather than intermediaries. Most sales are negotiated between the vendor’s agent and the purchaser. In other words, most purchasers handle the purchase of residential land themselves.
Reflecting these circumstances, it was common ground that the advertisements in question were to be treated or assessed on the basis that they are read by the general public, which includes those who will quickly shun an advertisement and those who will read with care, those who are literate and those who have limited literacy, the cautious and the careless, those who are prudent and those who are gullible, those who have experience in the buying of residential land and those who have little or no such experience, young people and older people: see World Series Cricket Pty Ltd v Parish (1977) 16 ALR 181 at 189, 203; Henderson v Pioneer Homes Pty Ltd (1980) 29 ALR 597 at 604, 606.
In a nutshell, the advertisements in question are aimed at the general public, with all that implies in terms of the range of people that comprise the general public.
A representation as to a likely price range
The “prescribed minimum advertising price” sets the lower limit for a permissible price range under the Act: s 24A(2)(b). The “prescribed minimum advertising price” is derived from information that must be contained in the sales agency agreement: s 20(1)(a) and s 20(1)(b).
The manner in which the lower limit of a likely price range is fixed is unlikely to be known to the reader of an advertisement.
Most readers of an advertisement for the sale of residential land will understand a representation as to a price range as simply that, without understanding how it is derived or why the price range is limited as it will be, if the advertisement meets the requirements of s 24A. Many of those who read an advertisement for the sale of residential land will rely on a price range, if one is specified, as a guide in deciding whether to make the effort to find out more about the property, and in particular when deciding whether to inspect the property and to consider making an offer to purchase the property.
The majority of the readers who are interested in purchasing land will realise that the owner might sell for more or for less than the specified price range, depending on the state of the market and the number and value of the offers received by the owner.
Nevertheless, many readers of an advertisement for the sale of residential land will treat a reference to a price range as indicating that the owner of the land might sell the property at a price within the stated range, and will make a decision about whether to inspect the property and do the other things that would usually be done if one is considering purchasing a property, on that basis. In other words, most readers of an advertisement will understand that a price range stated in the advertisement will not bind the vendor in any way, but will consider that the owner might sell the property at a price within the range, and will base a decision about inspecting the property on that range.
Bearing those matters in mind, I consider that the reference in s 24A(2) to a “likely price range of the sale of land” is intended to indicate the concept of a realistic possibility, and no more than that. In other words, if an advertisement, in one way or another, represents that it is a realistic possibility that the owner will sell land at a price within a stated range, then a representation of the kind referred to in s 24A(2)(b) has been made.
The advertisements
A copy of advertisements used by the agent was put before the Judge. It suffices to refer to the revised form of the advertisement used by the agent, which the Judge identifies as JRR8.
The advertisement in question is in the form of a rectangular block, advertising five different properties. Each of the five advertisements within the block is of the same size. In the bottom right corner of the block, where there would have been space for a sixth advertisement, is a block of text containing statements to which I will refer in due course. Each of the five advertisements is in substantially the same form, although there are some variations.
I will now refer mainly to the particular advertisement on which submissions in the course of the appeal were centred.
This advertisement, like the others, is also in the form of a rectangular block. At the top left of the advertisement appear the words “Bellevue Heights”, a reference to the suburb in which the land in question is located. On the same line, and at the top right of the advertisement, is a small square containing a device similar to a circular target. Below this line is a picture of the property.
Immediately below the picture, on a single line, appears the following information: V $570,000 - $625,000 SUN 2.00-2.45. Below that there are six lines of text, containing the address of the property, and a brief description of the property. Then, on the next line appears the following information:
B “Buyer Inquiry Range”^TM $525-$625,000
Below that on the next line appears the following statement:
“SET SALE”^TM Offers close 15/9 (unless sold)
Below that is the name and the telephone number of the agent.
Three of the five advertisements are different in one respect. In the top right corner of the advertisement appears a double headed arrow. Those advertisements, for reasons that will appear in a moment, do not include the line that begins “SET SALE”.
The symbol that I described as a circular target, and the symbol that I described as a double headed arrow, appear at the bottom of the five advertisements, with the following text adjacent to them:
¤= Set Sale^TM - Selling Now until Set Date = Buyeranged^TM– Open to Negotiation
It was explained to us in the course of submissions that the target symbol refers to what is called a “Set Sale”, which means that offers to purchase the property will be accepted until the date specified. However, as Mr Ross-Smith, counsel for the agent, acknowledged in argument, this did not mean a great deal, because as the text set out above indicates, offers would be accepted until the specified date unless the property was sold beforehand.
In contrast, the symbol meaning “Buyeranged” was said to mean that the period during which offers would be received was flexible. But, with respect, the concept of “Buyeranged” appears to me to be meaningless, and in substance no different from the concept of “Set Sale”.
In the bottom right corner of the advertisement, in another vertical rectangular block, appears the following information:
V “Vendor’s Selling Range”
B “Buyer Inquiry Range”^TM
*Additional information
for buyers:
“Buyer Inquiry Range”^TM
This is not the selling range but a
buyer inquiry range.
If you are looking for a home within
this range we suggest you may be
interested in this property and
recommend an inspection.
Stated shortly, the issue was whether, in the context of the relevant advertisement, the following text and numbers:
B “Buyer Inquiry Range”^TM$525-$625,000
amounted to a representation as to a likely price range for the sale of the land. If it did, it is common ground that the price range is greater than permitted by s 24A(2), and that the Act would have been contravened.
The argument for the agent was summarised by the Judge in terms that I am content to adopt. The Judge said:
[56]The plaintiff contends that the BIR [buyer inquiry range] is something other than the selling price. The plaintiff contends that, in the legend, the BIR is described as “not the selling range”. The plaintiff contends that the legend conveys to a reader that if the buyer is considering a price within the BIR, then that buyer may be interested in the property, not because the vendor will accept, or invites, an offer within the BIR but, rather, it conveys to the buyer that, if the buyer inspects the property, the buyer will realise that the property is excellent value at the vendor’s range, and the buyer will then be prepared to pay the higher price for the property.
[57]The plaintiff contends that no reasonable reader of the advertisements would conclude that the vendor is representing, or even hinting, that the vendor’s price might be lower than that advertised as the vendor’s price range.
[58]The plaintiff submits that the BIR conveys to the average reader that the lower end of the BIR is not within the vendor’s price range, but it is a property which the buyer should consider because the upper end of the BIR is within the vendor’s price range and, therefore, not beyond what the buyer may be prepared to pay. It was submitted that the BIR conveys to a buyer that, at that range, it is worth inspecting, but that the buyer should lift his or her sights to the lower end of the vendor’s price range and consider the property at that figure. It is submitted that it is clearly conveying to a buyer that the buyer must be prepared to pay within the vendor’s price range to acquire the property. The lower price of the BIR will not be sufficient to acquire the property.
Consideration of the appeal

I agree with the Judge’s conclusion that the statement of the “Buyer Inquiry Range” contains a representation as to a likely price range for the sale of land.
In argument before the Court Mr Ross-Smith and Mr Stretton, counsel for the Commissioner, subjected the terms of the advertisement to fairly close scrutiny. But in the end one must stand back and consider the advertisement as it would be understood by ordinary members of the public, or at least by a significant part of the public. That includes people who would not think to scrutinise the text closely, people who have limited experience in the buying and selling of land, and people who are inexperienced in business matters generally.
I consider that many ordinary readers are likely to understand the “Vendor’s Selling Range” indicated in the advertisement as indicating nothing more than what the vendor hopes to obtain for the land, or wishes to obtain for the land. Such persons, reading the advertisement as a whole, might be puzzled by the reference to “Vendor’s Selling Range” and “Buyer Inquiry Range”, but in my opinion such persons, or a significant number of them, are likely to conclude that there is a realistic possibility that the owner would accept a price within the “Buyer Inquiry Range”. The use of the two different concepts in the advertisement would readily suggest to many readers that what was being presented to the reader was a range within which the vendor was hoping to sell the property, and a range within which a buyer might succeed in purchasing the property.
I do not accept the submission by Mr Ross-Smith that the text in the box at the bottom right corner of the advertisement eliminates this possibility, and supports the argument for the agent as summarised by the Judge. To the contrary, I consider that the information in that box supports the conclusion that the Judge reached. The text that purports to explain “Buyer Inquiry Range” is far from clear. To many ordinary readers the text would suggest that there is a realistic possibility that the owner will sell the property at a price within the “Buyer Inquiry Range”. Many readers would reason, quite reasonably in my opinion, that if the price at which they are willing to purchase the property is within the “Buyer Inquiry Range” and in particular within that part of the “Buyer Inquiry Range” that is below the “Vendor’s Selling Range”, the agent recommends an inspection of the property because there is a realistic possibility that an offer to purchase the property in the lower range might be accepted. I consider that few, if any, ordinary readers would understand the text to indicate that the agent recommends that they inspect the property in the hope, or expectation, in effect, that having done so they will lift their price range to a level that includes or reaches the “Vendor’s Selling Range”. I consider that the argument advanced by Mr Ross-Smith, and summarised by the Judge, is unpersuasive. In particular, the statement “This is not the selling range …” does not have the effect that he suggests. It is quite consistent with an understanding that the “Vendor’s Selling Range” is, as I have already said, what the vendor hopes or wishes to achieve, and nothing more than that.
There is another way of interpreting the advertisement that leads to the same conclusion. The amount specified as the “Buyer Inquiry Range” includes or contains the amount specified as the “Vendor’s Selling Range”. There is nothing to indicate that the “Vendor’s Selling Range” is the only price range that is related to the likely price range for the sale of the land. In fact, the price stated as the “Buyer Inquiry Range” is a price range which, on the agent’s own case, includes the likely price range but does so within a range that exceeds the range permitted by s 24A(2). In other words, on this approach, the advertisement contains the very mischief at which the legislation is aimed – a representation as to a likely price range which extends to a lower limit which, on the agent’s own case, is not in fact a price at which there is a realistic prospect of a sale.
In the course of argument Mr Stretton made the point that the symbols to which I referred, and the text relating to them, give rise to a degree of confusion. I agree with him, and I have already alluded to the confusion to which he refers. But it is worth making the point that in relation to the three advertisements for properties that are “Buyeranged”, the unexplained statement “Open to Negotiation” adds to the uncertainty about the significance of the “Vendor’s Selling Range”. But I have not found it necessary to focus on these aspects of the advertisements to reach my conclusion.
Conclusion
I agree with the single Judge. Each of the five advertisements contained in JRR8, in the part of the advertisement that states a “Buyer Inquiry Range”, makes a representation as to a likely price range for the sale of the land in question.
I would dismiss the appeal.
ANDERSON J. I agree that the appeal should be dismissed for the reasons given by Doyle CJ.
KOURAKIS J: I agree that the appeal should be dismissed for the reasons given by Doyle CJ.