Kumar v Sydney Western Realty Pty Ltd (No. 2)

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District Court


New South Wales

Medium Neutral Citation: Kumar v Sydney Western Realty Pty Ltd & Anor (No. 2) [2021] NSWDC 446
Hearing dates: 2 – 5 August 2021
Date of orders: 31 August 2021
Decision date: 31 August 2021
Jurisdiction:Civil
Before: Abadee DCJ
Decision:

See paragraphs 265 – 268

Catchwords:

TRADE AND COMMERCE – misleading or deceptive conduct – advertisement by vendor’s agent for sale of residential property – advertisement refers to expected dual income stream from two buildings on property acquired under contract for sale, one of those buildings being a granny flat – doubt about the legality of use of building as a granny flat – whether the agent was aware of such doubt – whether opinion on rental misleading or deceptive for absence of qualification – whether vendor’s agent acted as a mere conduit – whether test for causation on statutory action the same as the test under common law

TORT – professional negligence – conveyancing – omission by solicitor to advise purchaser that granny flat lacked necessary development consent from local council – content of duty of care – identification of risk of harm – whether solicitor failed to take reasonable precautions by omitting to advise client of ramifications of notice from local council that granny flat not habitable – whether factual causation – whether evidentiary onus upon solicitor to establish information could not have been obtained from local council

DAMAGES – contributory negligence – apportionment

EVIDENCE – whether Jones v Dunkel adverse inference should be drawn from failure of first defendant to call former employee as witness

Legislation Cited:

Competition and Consumer Act 2010 (Cth) ss 87CB, 139B, Sch 2 — Australian Consumer Law ss 5D, 18, 20, 21, 22, 236

Civil Liability Act 2002 (NSW) ss 5B, 5D, 5E, 5O, 34

Cases Cited:

Allianz Australia Insurance Ltd v GSF Australia Pty Ltd (2005) 221 CLR 568

Argy v Blunts & Lane Cove Real Estate Pty Ltd (1990) 26 FCR 112

Australian Executor Trustees (SA) Ltd v Kerr [2021] NSWCA 5

Australian Securities and Investments Commission v Hellicar (2012) 247 CLR 345

Blatch v Archer (1774) 98 ER 969

Butcher v Lachlan Elder Realty Pty Ltd (2004) 218 CLR 592

Campbell v Backoffice Investments Pty Ltd (2009) 238 CLR 304

Campomar v Nike International (2000) 202 CLR 45

Cape Byron Power I Pty Ltd v HSB Engineering Insurance Ltd [2017] NSWSC 1081

Cellarit Pty Ltd v Cawarrah Holdings Pty Ltd [2018] NSWCA 213

Clayton v Bant (2020) 385 ALR 41

Doppstadt Australia Pty Ltd v Lovick & Son Developments Pty Ltd [2014] NSWCA 158

Earle v Castlemaine District Hospital [1974] VR 722

Farrow Mortgage Services Pty Ltd (in liq) v Webb (1996) 39 NSWLR 601

Fink v Fink (1946) 74 CLR 127

Fox v Everingham (1983) 76 FLR 170

Gates v City Mutual Life Assurance Society (1986) 160 CLR 1

Gould v Vaggelas (1985) 157 CLR 215

Henville v Walker (2001) 206 CLR 459

HTW Valuers (Central Qld) v Astonland Pty Ltd (2004)…

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Details
Case
[2021] NSWDC 446
Decision Date

CaseChat Overview and Summary

In Kumar v Sydney Western Realty Pty Ltd (No. 2), the plaintiff sought damages from the defendants, the vendor's agent and the vendor's solicitor, for misleading and deceptive conduct in the advertisement for the sale of a residential property, as well as for professional negligence by the solicitor. The property was advertised as having a dual income stream from two buildings, one of which was a granny flat. The advertisement did not disclose that there was doubt about the legality of using the building as a granny flat, leading the plaintiff to believe it was a viable income stream. The solicitor also failed to advise the plaintiff that the granny flat lacked necessary development consent and was not habitable, which was brought to their attention by the local council.

The court had to determine whether the advertisement's reference to the granny flat constituted misleading or deceptive conduct. It also had to consider whether the agent acted as a mere conduit and if the test for causation on statutory action was the same as the test under common law. Additionally, the court had to assess the solicitor's duty of care, whether they failed to take reasonable precautions by omitting to advise the plaintiff of the ramifications of the council's notice, and whether there was factual causation. The court also examined whether the evidentiary onus was upon the solicitor to establish that the information could not have been obtained from the local council. Furthermore, the court had to consider whether a Jones v Dunkel adverse inference should be drawn from the first defendant's failure to call a former employee as a witness.

The court held that the advertisement did amount to misleading or deceptive conduct, as the agent was aware of the doubt about the legality of using the building as a granny flat. The court also found that the test for causation on statutory action was not necessarily the same as the test under common law. Regarding professional negligence, the court held that the solicitor owed a duty of care to the plaintiff and failed to take reasonable precautions by omitting to advise them of the council's notice. The court found that there was factual causation and that the evidentiary onus was upon the solicitor to establish that the information could not have been obtained from the local council. The court declined to draw an adverse inference from the first defendant's failure to call a former employee as a witness. The court ordered that the defendants pay damages to the plaintiff, with apportionment for contributory negligence.

Orders

Orders of the court

See paragraphs 265 – 268

Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

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