Laman v Zapari Property Bowes Street Pty Ltd ACN 612 564 879 (Civil Dispute) - [2020] ACAT 42

ACT CIVIL & ADMINISTRATIVE TRIBUNAL

LAMAN & ANOR v ZAPARI PROPERTY BOWES STREET PTY LTD ACN 612 564 879 (Civil Dispute) [2020] ACAT 42

XD 471/2019
Catchwords: CIVIL DISPUTE – contract and consumer law – sale contract for property purchased off the plan – whether there was a valid contract – whether there grounds for the applicant to have the contract rescinded or declared void – whether the sale contract was signed by mistake – whether there was undue influence or duress – whether there was unconscionable or misleading conduct – application dismissed and contract enforced

Legislation cited: Australian Consumer Law ss 18, 20, 21, 22

Civil Law (Sale of Contract) Act 2003 ss 10, 36, 38

Cases cited:ACCC v Lux Distributors Pty Ltd [2013] FCAFC 90
ACCC v Origin Energy Electricity Ltd [2015] FCA 278
Australian Securities and Investment Commission v Kobelt [2019] HCA 18
Codelfa Construction Pty Ltd v State Rail Authority of NSW [1982] HCA 24
Commercial Bank of Australia Ltd v Amadio [1983] HCA 14
Garcia v National Australia Bank Ltd [1998] HCA 48
Garry Rogers Motors (Aust) Pty Ltd v Subaru (Aust) Pty Ltd [1999] FCA 903
Guy Forsyth as Trustee for Endure Trust Trading as Alignity Consulting v Canberra Consulting Pty Ltd[2019] ACAT 73
L’Estrange v Graucob [1934] 2 KB 394
Paciocco v Australia and New Zealand Banking Group Ltd [2015] FCAFC 50
Paciocco v Australia and New Zealand Banking Group Ltd [2016] HCA 28
Hillman v Box as Executors of the Estate of Graeme William Box (no.4) [2014] ACTSC 107
Petelin v Cullen [1975] HCA 24
Saunders v Anglia Building Society [1971] AC 1004
State Bank of NSW v Chia [2000] NSWSC 552
Taylor v Johnson [1983] HCA 5
Westpac Banking Corp v Cockerill, Graham Douglas [1998] FCA 43
Whittle v Filfana Pty Ltd & Ors [2004] ACTSC 45

List of Books/
Texts:Lonegrass M T, Finding Room for Fairness the Sliding Scale Approach to Unconscionability, (2012-2013) 44 Loyola Univ of Chicago Law Journal 1

Tribunal: Senior Member L Beacroft

Date of Orders:  17 June 2020
Date of Reasons for Decision:         17 June 2020
AUSTRALIAN CAPITAL TERRITORY
CIVIL & ADMINISTRATIVE TRIBUNAL           XD 471/2019

BETWEEN:
RICHARD LAMAN
DESIREE LAMAN
Applicants

AND:
ZAPARI PROPERTY BOWES STREET PTY LTD ACN 612 564 879
Respondent

TRIBUNAL: Senior Member L Beacroft

DATE:17 June 2020

ORDER

The Tribunal orders that:

The application by Richard and Desiree Laman is dismissed.
The counter claim by the respondent is granted and the Tribunal orders the applicants to pay the respondent the total sum of $25,865.49, comprised of $23,245 debt, interest from the 31 March 2019 of $1502.49 and $1,118 ACAT filing fee, by 5pm 21 July 2020.

………………………………..
Senior Member L Beacroft

REASONS FOR DECISION

Background

Richard and Desiree Laman (the applicants) filed a civil dispute application with the ACT Civil and Administrative Tribunal (ACAT) on 6 May 2019. The applicants claim $1,000 in damages which is effectively a refund of a payment made under a contract for their purchase of a unit in Grand Central Towers[1] from Zapari Property Bowes Street Pty Ltd (the respondent). The applicants also seek an order that the contract is void or that it be rescinded.
[1] Contract for Sale, Morgan’s Statement dated 31 October 2019 attachment A3
The respondent owns the unit property and is the seller under the contract. The respondent engaged a company to develop the unit (the developer), and the developer is owned by an unincorporated joint venture. The developer engaged a sales company to sell the unit. The salesperson in this case is an employee of Geocon Group Pty Ltd ACN 165 918 356 and was engaged by the sales company to sell the unit.[2] The respondent denies the applicants’ claims. The respondent counter claims for payment of $23,245 under the contract (see clause 58, ‘second instalment’, payable by 30 March 2019), interest from 31 March 2019, and the filing fee of $1,118.
[2] Respondent’s submission dated 6 March 2020 [8-9]
The background to this case in summary is that the applicants attended a showroom on 2 March 2018 as a married couple (they later divorced on 7 January 2020). They were impressed by an off-the-plan unit property located in the ACT on display (the property). Both the applicants signed documents and they paid a sum of $1,000. The applicants claim that they thought that the documents they signed and the fee they paid were to reserve the property, not to purchase it. On 4 February 2019 Mr Laman notified the respondent that they could not afford to proceed. In reply the respondent advised that the applicants owed money for the purchase of the property. The respondent terminated the contract on 28 January 2020 (see clause 19) due to non-payment by the applicants.[3] The applicants then sought legal advice for the first time and were advised that a document they signed was a contract for sale of the property. The applicants claim that it was only then they realised this.[4]
[3] Applicants’ submission dated 13 February 2020, Annexure A
[4] Applicants’ civil dispute application 6 May 2019; applicants’ submission dated 12 February 2020 at [5]
The respondent claims that the contract is a valid contract for sale of the property, that the applicants have not made out their claims, and the contract therefore should be enforced.
The reasons for the orders are set out below. In summary, the applicants have the onus to prove their claims. Considering the submissions, evidence, law and associated caselaw, the applicants did not prove their case to the required standard. The respondent has the onus to prove its counter claim and it proved the counter claim to the required standard to proof, in part because the contract and related documents at the heart of this dispute were written and signed by the applicants.

Applicants’ claims and contentions

The applicants contend that they thought that the contract was to reserve rather than purchase the property, and therefore there was not a meeting of the minds and the contract was not formed.[5] They also contend that if there is a contract the respondents did not comply with the Civil Law (Sale of Contract) Act 2003, particularly sections 10, 36 and 38.[6] They also contend that the contract should be rescinded or is ‘void ab initio’[7] due to unilateral mistake or duress or undue influence, or due to unconscionable conduct or misleading/deceptive conduct under the Australian Consumer Law [8](ACL) and/or equity.[9]
[5] Transcript of proceedings 20 November 2019 page 16
[6] Submission by applicants dated 12 February 2020 at [7]
[7] Latin for ‘to be treated as invalid from the outset’.
[8] Australian Consumer Law, Schedule 2 Competition and Consumer Act2010
[9] Submission by applicants dated 12 February 2020 at [8-10]
In support of their claims, the applicants contend that by getting them to sign the ‘Buyer Acknowledgement and Authority to Exchange’ (Acknowledgment) [10] at the same time as signing the contract, then the respondents misled them since it was not the case that the applicants had a real opportunity to seek legal advice.[11] The applicants contend that the statement in the Acknowledgement about the applicants having had an opportunity to get independent legal advice (at clause 1(b)) is “untrue”, because the applicants “walked into the respondent’s premises, [th]ey were never given an opportunity to maybe even make a phone call, or maybe go away and then come back.”[12] The applicants argue that the latter is also unconscionable conduct, contrary to the ACL and also contrary to equitable principles.[13]
[10] ‘Buyer Acknowledgement and Authority to Exchange’ Morgan Statement dated 31 October 2019 Attachment A2
[11] Applicants’ submissions 13 February 2020 at [24-31]
[12] Transcript of proceedings 20 November 2019 page 18
[13] Transcript of proceedings 20 November 2019 pages 17-18
The applicants also contend that by this conduct the respondent subverted the requirements of the Civil Law (Sale of Contract) Act 2003.[14] The applicants particularly referred to section 10 that creates an offence if “required documents” are not available for “inspection…at all reasonable times”, a requirement that cannot be excluded by contract.[15] The applicants contend that inspection of the required documents including the contract for sale was not offered to the applicants as a matter of practice given they signed it within a short time after attending the respondent’s offices.
[14] Transcript of proceedings 20 November 2019 page 15
[15] see section 36 of the Civil Law (Sale of Contract) Act 2003
The applicants claim the respondents used undue influence, “corporate trickery” to overwhelm the applicants, so that the applicants signed the contract without getting independent legal advice.[16] The applicants contend that in all the circumstances the respondent “could have taken steps like asking [the applicants] to go away for a few days, there was no hurry…the apartments were not even built…but [the respondent] chose to actually lock [the applicants] in…which should not be encouraged under our law.”[17]

Respondent’s claims and contentions

[16] Transcript of proceedings 20 November 2019 page 17
[17] Transcript of proceedings 20 November 2019 page 17

The respondent contends that the applicants’ claims are “vague, ambiguous, difficult to understand and/or irrelevant to the case,”[18] but responded to each claim.
[18] Respondent’s submission dated 6 March 2020 at [10]
The respondent denies the Civil Law (Sale of Contract) Act 2003 has not been complied with – in summary they contend that the applicants provided inadequate evidence to support their claims and mis-conceived the relevant sections of that Act.[19] The respondent contends that all provisions were complied with, in particular that the contract was presented to the applicants before signing which the applicants perused, and in any case it was available from the sales office at any time prior to that.[20] The respondent pointed out that the Civil Law (Sale of Contract) Act 2003 imposes requirements on the respondent which it met, but that section 36 does not impose other duties on the respondent as the applicant contended.[21] The respondent contends that the Acknowledgment is not erroneous or misleading – rather, it is a fact that the applicants did have the opportunity to obtain legal advice and voluntarily decided not to do so because the applicants thought that this was a hassle and cheaper not to.[22]
[19] Respondent’s submission dated 6 March 2020 at [11-39]
[20] Transcript of proceedings 20 November 2019 page 22, 23
[21] Transcript of proceedings 20 November 2019 page 24
[22] Transcript of proceedings 20 November 2019 pages 33,47
They respondent contends that the applicants do not suffer from the type of disadvantage or disability that can form the basis in law in some circumstances for the orders they seek being granted. On the contrary, the respondent contends that they are both educated and literate persons who have lived and studied in Australia since 2012 and who communicate well in English.
The respondent denies that there was misleading and deceptive conduct on its part or by the salesperson.[23] The respondent cited the test set out in Whittle v Filfana Pty Ltd & Ors.[24] The respondent also referred to numerous cases in support of the test requiring an examination of the “course of conduct alleged, as a whole, and to determine the question objectively,” that the misleading and deceptive conduct must be of a nature that “leads into error.”[25] The respondent contends that conduct by it and the salesperson did not lead the applicants into error, that its conduct was compliant with all relevant requirements and that it was not required “to disclose or do anything further than that which [the salesperson] did during the exchange process.”[26]
[23] Respondent’s submission dated 6 March 2020 at [40-64]
[24] [2004] ACTSC 45 at [99]
[25] Respondent’s submission dated 6 March 2020 at [40-52]
[26] Respondent’s submission dated 6 March 2020 [59]
The respondent contends that the applicants engaged in the pre-contract discussions with the salesperson, particularly Mr Laman. The applicants were both given the opportunity to review the Contract and the Acknowledgment and they then signed these. The respondent contends that the applicants were not mislead by the Acknowledgment, rather they decided not to obtain independent legal advice.[27] In any case the applicants did have a cooling-off period which ended on the fifth business day after the contract was signed. They were given, with their copy of the contract, a letter that encouraged them to seek independent legal advice and reminded them that there may be a five day cooling off period and that changes to the contract they signed need to be requested during this cooling-off period.[28] During this cooling off period they could have obtained legal advice and rescinded the contract without penalty, but they chose not to.
[27] Respondent’s submission dated 6 March 2020 [49]
[28] Transcript of proceedings 20 November 2019 page 23; Morgan Statement dated 31 October 2019 Attachment A4
The respondent pointed out that on the applicants’ evidence it was not the salesperson who raised a possibility of paying a reservation fee but the applicants’ own acquaintances.[29] The respondent referred to the evidence of the salesperson who recalled specifically “telling the applicants that the respondent does not reserve units because the applicants used the terminology ‘reserve’ and he corrected them.”[30] The respondent contends that there was not evidence of the claim by Mr Laman[31] that the respondent had advertised that a reservation process was available, and the salesperson in his evidence stated that this is not an option made available by the respondent.
[29] Transcript of proceedings 20 November 2019 pages 37, 39, 44
[30] Respondent’s submission, dated 6 March 2020 at [44, 54-55]
[31] Transcript of proceedings 20 November 2019 page 39
The respondent contends that if the applicants were mistaken, it is a “unilateral mistake” i.e. one held only by them despite the clarity of the information and documents given to them by the respondent, and this does not entitle them to have the contract rescinded.[32] The applicants were “careless” and failed to take reasonable care.[33] In any case, the respondent contends that the documentary evidence does not support the applicants’ claim of being misled or mistaken about the document they signed. In particular, the respondent refers to the email from a respondent’s representative sent to the applicants on 31 July 2018 that requested their colour selections for the property Mr Laman conferred with Ms Laman and then returned a completed colour selection and also asked “Can I still buy another parking space for my unit?”[34] The respondent contends that the applicants cannot sustain their claim of ‘non est factum’[35] given they have significant capacity, and do not have a disability as required for this claim to be proved e.g. blindness, dependency on others due to incapacity.[36]
[32] Transcript of proceedings 20 November 2019 page 25
[33] Respondent’s submission dated 6 March 2020 at [83-84]
[34] Respondent’s submission dated 6 March 2020 at [79]; Ip statement dated 25 October 2019 Attachment B3
[35] Latin for ‘it is not [my] deed’. A claim for non est factum under contract law means that the signature on the contract was signed by mistake, without knowledge of its meaning.
[36] Petelin v Cullen [1975] HCA 24
In regard to the applicants claim of unconscionable conduct, the respondent contends that the “existence of a disparity in bargaining power… does not establish that the party which enjoys the superior power acts unconscionably, citing Paciocco v Australia and New Zealand Banking Group Ltd[37] and other authorities. The respondent contends that “there is no objective evidence that in any way demonstrates dishonesty, sharp practice or conscious wrongdoing on the part of the respondent, through its agent the [salesperson].”[38] Also the respondent contends that the applicants in this case were not “at a particular disadvantage”, and this is not the sort of case to which the principle established in Commercial Bank of Australia Ltd v Amadio [1983] HCA 14 can reach.[39]
[37] [2016] HCA 28; respondent’s submission, dated 6 March 2020 at [71, 65-76]
[38] Respondent’s submission dated 6 March 2020 at [75]
[39] Respondent’s submission dated 6 March 2020 at [72-74]
In regard to the applicants’ claim of duress, the respondent contends that this is not a case where the applicants were subjected to illegitimate pressure such that they “had little choice”, citing Westpac Corporation v Cockerill.[40] The respondent contends that if there was pressure it was from the applicants themselves being concerned that the unit they liked might be purchased by someone else.[41]
[40] [1998] FCA 43
[41] Respondent’s submission dated 6 March 2020 at [92]
In regard to the applicants’ claim of undue influence, the respondent contends that this is not a case where the facts meet the test for undue influence,[42] citing Refshauge J in Hillman v Box as Executors of the Estate of Graeme William Box (No4) at [210]: [43]
[F]olly, imprudence or want of foresight” is insufficient to allow equity’s intervention in the transfer of property on the grounds of undue influence…Rather, the circumstances must demonstrate some improper dominion or ‘psychological ascendancy’…The doctrine is aimed at preventing transfers of property which are inexplicable with regard to “friendship, relationship, charity, or other ordinary motives” on which people ordinarily act.
[42] Respondent’s submission dated 6 March 2020 at [95-105]
[43] [2014] ACTSC 107
While English is a second language for the applicants, the respondent contends that the applicants are not disadvantaged in the context of this case:
[they are] well educated individuals who have been living, studying and working in Australia since 2012. The evidence does not support that they were in a particularly weak position relative to that of the respondent, or that the respondent took advantage of their applicant’s position.[44]
[44] Respondent’s submissions, dated 6 March 2020 at [104]
When asked if the respondent’s argument was based on ‘buyer beware’ in the hearing, the respondent stated that the respondent and its salesperson fulfilled its duties and did not need to take any further action other than what has been done in this case.[45]

Issues

[45] Transcript of proceedings 20 November 2019 page 26

Is there a valid contract?
If yes, are there grounds for the applicants to have the contract rescinded or to have it declared void?

Findings

Is there a valid contract?

The Tribunal finds that there is a valid contract. As Presidential Member McCarthy has stated, the task of construing a contract involves determining and then giving effect to the intention of parties, noting as follows:
[I]ntention is to be determined objectively. It must be ascertained from the words used in the contract, not the parties’ actual intentions and still less their desires, aspirations or expectations.[46]
[46] Guy Forsyth as Trustee for Endure Trust Trading as Alignity Consulting v Canberra Consulting Pty Ltd [2019] ACAT 73 at [34] citing Codelfa Construction Pty Ltd v State Rail Authority of NSW [1982] HCA 24
The contract is written and signed, and prima facie the terms in it apply even if the applicants did not thoroughly read it or read it at all.[47] It is clearly labelled as a contract for sale and its terms are not ambiguous. The Tribunal accepts the submissions and evidence of the respondent and finds that the contract and Acknowledgment were signed after the salesperson provided an explanation of critical elements of these documents to the applicants. The Tribunal accepts that the salesperson specifically told the applicants that the contract was not for ‘reserving’ the property but for purchasing it, and also told the applicants that they had a five day cooling off period during which time they could end the contract and have their $1,000 refunded. It is clear from the evidence in the Tribunal’s view that the applicants received their copy of the signed contract, and also that they received a short readable letter explaining that they could see a solicitor and that there may be a five day cooling-off period during which time any changes to the contract needed to be requested.
[47] L’Estrange v Graucob [1934] 2 KB 394

While the statements submitted by the applicants set out, in almost identical wording, that they did not recall anyone explaining the contract to them or anyone advising them to see a solicitor before they signed the documents,[48] their oral evidence was not consistent with these statements. In her oral evidence Ms Laman stated: “if we don’t actually need to get a solicitor we don’t have to spend money for that…it would be much less of a hassle.”[49] Ms Laman also said that she could not recall if she read the contract before signing but thought she read the accompanying letter, and she said that her thought was to read the contract later but that she did not read it afterwards and mislaid the documents.[50] Mr Laman stated the following about checking the documents when he signed:
Maybe at that time I overlook…I was thinking that when we transferred the $1,000…it was just reservation. Because this is the information that I get from…the people who referred me to Geocon…So all my thinking is about, this is just a reservation for me…I didn’t …remember what [salesperson] said…my thinking…getting all this information as well from the people who referred me, it was just reservation.[51]
[48] Statement by Ms Laman 4 November 2019 at [20,25-26] Statement by Mr Laman 25 October 2019 at [20. 25-26]
[49] Transcript of proceedings 20 November 2019 page 33
[50] Transcript of proceedings 20 November 2019 page 29
[51] Transcript of proceedings 20 November 2019 page 37,39
When asked about the Acknowledgment Mr Laman stated: “I’m not really very technical person…that reads everything – it’s just like scanning….”[52] He stated in his oral evidence that when he got home he didn’t read any of the documents.[53] When asked about getting legal advice during the cooling off period Mr Laman stated: “Because …we really don’t need a solicitor to go through all this process – that it makes it easier for us.”[54]
[52] Transcript of proceedings 20 November 2019 page 37
[53] Transcript of proceedings 20 November 2019 page 47
[54] Transcript of proceedings 20 November 2019 page 47
The applicants both stated that their English comprehension is tested in some contexts. The Tribunal accepts that the evidence shows that they have successfully studied and worked in Australia since 2012. Ms Laman stated in her oral evidence that:
I have Masters in IT and systems [gained in Australia]…I’m pretty much okay with communicating [in Australia]…the question would be different for me to ask if I am understanding …the other industry,
She also stated that she has not ever studied law subjects.[55]
Mr Laman stated:
I can talk English…[b]ut when it comes to technicalities, based on my background, I can do that especially, [b]ut I don’t have law subjects or anything.[56]
[55] Transcript of proceedings 20 November 2019 page 35
[56] Transcript of proceedings 20 November 2019 page 47
Based on all the evidence, the Tribunal accepts that the applicants do not have special disabilities and that they do not suffer from a disadvantage in the context of this case. They are educated and literate persons who have lived and studied in Australia, an English-speaking nation, since 2012, and had the capacity to enter into the contract and understand and clarify as necessary the information provided to them at the time of signing and in the cooling off-period.
The Tribunal accepts the respondent’s contention that the principle of ‘non est factum’ does not apply in this case, and the Tribunal dismisses this claim by the applicants.[57]
[57] Saunders v Anglia Building Society [1971] AC 1004
The Tribunal accepts the applicants’ evidence that they thought that the effect of signing the contract was to reserve the property, as set out later below. However, in this case given the evidence taken as a whole, law and related caselaw, the Tribunal finds that this does not lead to the contract being invalid – at best it suggests a unilateral mistake as discussed later below.
For these reasons the Tribunal finds that there is a valid contract.

Are there grounds for the applicants to have the contract rescinded or declared void?

In summary, the applicants contend that there are various grounds for rescinding the contract or declaring the contract void as summarised below:
(a)Contravention of the Civil Law (Sale of Contract) Act 2003.
(b)Mistake which is where one party takes advantage of a misunderstanding by the other.
(c)Unconscionable conduct which is where one party takes advantage of the circumstances and/or characteristics of the other party and conducts themselves in a manner that is not conscionable.
(d)Misleading conduct which is where one party’s conduct is misleading or deceptive or is likely to mislead or deceive.
(e)Undue influence which is where one party abuses a position of influence or power over the other.
(f)Duress which is improper pressure.
The Tribunal accepts the respondent’s arguments regarding the alleged contraventions of the Civil Law (Sale of Contract) Act 2003. In essence, the applicants contend that the contraventions arose because of the speed by which the contract and Acknowledgment were presented and signed. The Tribunal accepts that this was caused by the applicants’ interest in proceeding, their mistake which they held onto despite a correction and oral and written information provided by the respondent, and their “excitement.”[58] The applicants could have decided to leave and see a solicitor before they signed the documents, but voluntarily chose not to.

Mistake

[58] Transcript of proceedings 20 November 2019 page 39

The Tribunal finds the applicants to be honest persons and accepts their account of their mistaken view of the nature of the contract. The Tribunal finds that in this case the applicants were mistaken about the nature of the contract. But the Tribunal also finds that this has no legal significance on the validity or enforceability of the contact. On their own evidence, the applicants developed their mistaken view about the nature of the contract from acquaintances. They then held onto this view even during the contract discussions with the salesperson, as Mr Laman put it due to “our excitement.”[59] The Tribunal finds that the applicants failed to heed clarifying explanations made by the salesperson, and also that they chose not to read the contract, Acknowledgment, and accompanying letter thoroughly, despite being given an opportunity to do so before and after signing.
[59] Transcript of proceedings 20 November 2019 page 39
There is no evidence that the respondent or the salesperson knew of their mistaken belief, had actual or constructive knowledge of this. The Tribunal accepts that the salesperson corrected them about the nature of the contract being for purchase and not for a mere reservation before they signed it. The Tribunal accepts that after the salesperson told the applicants that they could not reserve, he had no reason to know that the applicants continued to misunderstand the nature of the contract. The salesperson stated that he dealt with a lot of persons from the same cultural background as the applicants. He stated that Mr Laman presented as “highly intelligent in the way he was asking questions to understand the process” and that following the signing they “had a great relationship…he was referring other people, [be]cause of the value he saw [s]o I didn’t know…”[60] Further, when Mr Laman responded to the respondent’s request for the applicants to make their colour selection after the contract was signed, Mr Laman responded on behalf of the applicants and he also asked about how to “buy” an extra car space.[61] The respondent’s and the salesperson’s communications and dealings with Mr Laman after signing raised no suspicions that the applicants mis-understood the nature of the signed contract.
[60] Transcript of proceedings 20 November 2019 pages 52, 61, 63
[61] Ip statement dated 25 October 2019 Attachment B3
Unilateral mistake can support rescission if the mistake held by one party is known to the other party or comes about from misleading or unconscionable conduct.[62] None of the circumstances that can support rescission due to mistake exist here. On this basis the Tribunal dismisses the claim by the applicants that the contract should be rescinded due to mistake.

Unconscionable conduct

[62] Taylor v Johnson [1983]HCA 5

The applicants contend that the respondents engaged in unconscionable conduct and base their claim in both equity and under the ACL (sections 20 -22). The applicant’s claim of unconscionable conduct has overlap with the applicant’s other claims about the respondent being misleading, exercising undue influence, and duress.
As set out above, the Tribunal finds that the applicants do not suffer from special disabilities or disadvantage in the context of this case, the existence of which is a requirement that is commonly associated with making out unconscionable conduct.[63] However, this is not an essential element for the statutory prohibition on unconscionable conduct to be made out. As Presidential Member McCarthy has stated citing various cases, unconscionable conduct is “doing what should not be done in good conscience”, including “bullying and thuggish behaviour, undue pressure, and unfair tactics, taking advantage of vulnerability or lack of understanding, trickery or misleading conduct”, and a finding “requires an examination of all circumstances.”[64]
[63] Commercial Bank of Australia v Amadio [1983] HCA 14
[64] Guy Forsyth as Trustee for Endure Trust Trading as Alignity Consulting v Canberra Consulting Pty Ltd [2019] ACAT 73 at [54-56]
Unconscionable conduct involves considering normative standards and values against which conduct is compared but conduct is not assessed against idiosyncratic values of a decision-maker but public norms and values about what is unconscionable.[65] Under the ACL, section 22(1) lists matters to which the Tribunal may have regard in determining if unconscionable conduct has occurred and the section includes a mixture of procedural and substantive concerns. The matters set out there are not a checklist, since identifying one or many of them in a case does not necessarily establish unconscionable conduct – rather, conduct must be assessed as a whole which involves weighing up all the relevant circumstances including whether any of the matters set out there are present. This approach has been referred to as the ‘sliding scale’ of unconscionability such that the decision-maker weighs up the combined effect of all the relevant matters in a case.[66] This approach is applied here.
[65] Paciocco v Australia and New Zealand Banking Group Ltd [2016] HCA 28
[66] Lonegrass M T, Finding Room for Fairness the Sliding Scale Approach to Unconscionability, (2012-2013) 44 Loyola Univ of Chicago Law Journal 1
Matters set out in section 22 of the ACL that are most relevant to this case based on the submissions and evidence before the Tribunal are as follows:
(a)Relative strengths of the bargaining positions of the parties (s22(1)(a)).
(b)Whether the applicants were able to understand any documents (s22(1)(c)).
(c)Whether any unfair tactics were used against the applicants(s22(1)(d)).
(d)Whether the respondent’s conduct to the applicants was consistent with similar transactions with other customers (s22(1)(f)).
(e)Conduct of the parties after the contract was signed (s22(j)(iii) and (iv)).
(f)Whether there was good faith by the parties (s22(1)(l)).
In the Tribunal’s view there was an inequality of bargaining power between the parties, given the applicants were first-time consumers in a purchase of a property and the respondent is a commercial entity in the business of developing and selling property. The Tribunal agrees with the respondent, which cited various cases in support, that an imbalance in the bargaining power between the parties by itself is not evidence of unconscionable conduct. As noted in Paciocco v Australia and New Zealand Banking Group Ltd, “the existence of disparity in bargaining power…is an all-pervading feature of a capitalist economy” and the ACL does not preclude it – it prohibits certain exercises of power imbalances, where it is ruthlessly exploited.[67] Whether the power imbalance was so exploited in this case depends on consideration of the whole context of the case, including the matters set out below.
[67] [2016] HCA 28 at [293]
The Tribunal finds that the applicants had the ability to understand what the salesperson explained to them about the contract and the Acknowledgement, that they had a genuine opportunity to leave in order to comprehensively read these and to seek legal advice before they signed them – but they voluntarily chose not to do so. The Tribunal also finds that after they signed the documents the applicants had the ability to and a genuine opportunity to more thoroughly read these and the readable letter provided to them, to rescind the contract with no penalty if necessary in the five day cooling-off period. But they voluntarily chose not to read these or to follow-up in any way such as to seek legal advice or to make inquiries of the salesperson.
The question of voluntariness was considered in the case of Australian Securities and Investment Commission v Kobelt (Kobelt case), where a book-up system was found not to be unconscionable despite a lack of transparency and irregularities in its operation and also the disadvantage of the local Aboriginal community. The majority found that that there was no evidence that the operator of this system obtained an overall advantage that can be fairly to be said to be against good conscience, and also that the community was not so disadvantaged as to not be able to judge what was in their own interests and the book-up system’s advantages for them.[68] The minority judgments emphasised that the question of voluntariness involves considering how the willingness or intention was produced, and did the stronger of the parties unconscionably take advantage of the weaker party?[69]
[68] [2019] HCA 18 at [63-75]
[69] [2019] HCA 18 at [156-162]
In the case before the Tribunal the applicants were not disadvantaged or disabled. Unlike the community in the Kobelt case, the applicants indeed had considerable capacity. Considering the context in which the issue of voluntariness must be ascertained, the Tribunal is satisfied that the applicants signed without first seeking legal advice due to their own excitement and inability to move beyond information provided by their acquaintances. This state of mind for the applicants persisted despite information to the contrary provided by the respondent’s salesperson before signing, in the wording of the documents they signed, and in a readable letter provided to them after signing.
Considering whether there was a lack of transparency or irregularities in the sale process, as occurred in the Kobelt case, or if the respondent used unfair tactics, the Tribunal finds there was not. The essential contentions of the applicants on this matter are twofold: firstly, the respondent’s system is designed to “lock in members of the public, without giving them the benefit of at least seeking independent legal advice,”[70] and secondly, the applicants were lured into the showroom by an invitation to making a reservation of the property, not buy it. The Tribunal is satisfied that respondent’s process was consistent with similar transactions with other customers. The salesman in his oral evidence stated that he has evolved a standard practice based on his training and experience and that he used this standard practice in this case: “I’m pretty regimented in my routine after almost 10 years.”[71] “I explain the $1,000 is fully refundable within the five business day cooling off period.”[72] He stated that he “definitely” explained that they should see a solicitor.[73] He stated that he clearly remembers correcting the applicants about the term ‘reservation’, and explaining that if they proceed then they will ‘purchase’ the property.[74]
[70] Transcript of proceedings 20 November 2019 page 18
[71] Transcript of proceedings 20 November 2019 pages 51-52
[72] Transcript of proceedings 20 November 2019 page 55
[73] Transcript of proceedings 20 November 2019 pages 60-61
[74] Transcript of proceedings 20 November 2019 page 60
On the issue of unfair tactics, a leading case relevant here is ACCC v Lux Distributors Pty Ltd [2013] FCAFC 90, where a door-to-door sales company offered free maintenance checks of old vacuum cleaners that was found to be a ruse to gain entry to the homes of elderly women and sell them their product. Another case, ACCC v Origin Energy Electricity Ltd [2015] FCA 278, involved a salesperson who pretended he was from another energy supplier and who coached the consumer, despite the consumers poor English, to agree to a contract with the energy supplier that the salesperson represented. By contrast there is no evidence of such unfair tactics or undue influence in the sale by the respondents to the Laman’s. In this case the applicants had the capacity to voluntarily and did voluntarily decide to proceed with signing the contracts and the Acknowledgement without seeking legal advice before doing so. It is clear from their oral evidence that they regarded seeing a solicitor as an unnecessary cost before signing and also after signing. They relied on information that their acquaintances had given them about the nature of their dealings with the respondent, despite information and clarifications given by the salesperson and set out in the documents including a readable letter.
In regard to the applicants’ mistake about the documents being for a reservation and whether the respondent had given him that information as a form of lure, Mr Laman stated “a friend of mine” told me that and he also said that “in [the respondent’s] ads [they] have that…I read it online…but I’m not really sure”. Ms Laman’s evidence was that she thought it was merely a reservation and that she was following her husband’s lead. There was no corroborating evidence that the respondent did advertise that customers could reserve a property at the time the applicants attended the showroom. The respondent denied that this was the case, and the salesperson stated in his oral evidence that the respondent does not offer a reservation option and corrected this with the applicants before the signed. The Tribunal accepts the evidence of the respondent on this point.
Considering any conduct of the parties after the contract was signed, it is clear to the Tribunal that the applicants behaved in a manner consistent with satisfied customers who were proceeding with the sale, and there was no reasonable basis for the respondent and its salesperson to form a view that this was not the case. For example, the applicants provided their colour preferences and at that time asked if another car space could be purchased, and Mr Laman communicated with the salesperson and referred other buyers.
Considering whether the respondent has acted in good faith, the Tribunal finds it has. Acting in good faith has been characterised as acting honestly, acting consistent with the bargain and not capriciously.[75] The Tribunal finds no evidence that the respondent or its salesperson have not acted in good faith.
[75] Paciocco v Australia and New Zealand Banking Group Ltd [2015] FCAFC 50 at [288]; Garry Rogers Motors (Aust) Pty Ltd v Subaru (Aust) Pty Ltd [1999] FCA 903
Considering all the matters raised in this case about whether unconscionable conduct occurred, the applicable law and caselaw, the Tribunal finds that the respondent did not engage in such conduct.

Misleading

Under section 18 of the ACL, conduct that is misleading or deceptive or that is likely to mislead or deceive is prohibited. The Tribunal finds that this is not a case where the test for misleading conduct has been made out. The Tribunal accepts the submissions of the respondent on this point.

The test for assessing whether conduct is misleading or deceptive is an objective test. While the Tribunal finds that the applicants were mistaken in their understanding of the nature of the contract, this does not prove that they were misled by the respondent. As set out above, the Tribunal finds that the applicants are responsible for their mistake. The Tribunal also finds, as set out above, that the salesperson and the respondent did not have actual or constructive knowledge of the applicants’ mistaken view at the signing, and that after the signing there was no reasonable basis for the respondent or the salesperson to form a view that the applicants’ held this mistaken view until the dispute before the Tribunal arose.
The applicants contend that in presenting the Acknowledgment to the applicants for signing when the salesperson knew they had not obtained legal advice, the respondent exhibited conduct that was misleading. The Acknowledgment includes a confirmation by the applicants that they have “had the opportunity to obtain independent legal advice before entering into the contract.”[76] As set out above, the Tribunal finds that the applicants in this case had an opportunity to leave and obtain legal advice, but voluntarily decided not to, so this contention by them is dismissed.

Undue influence

[76] Buyer Acknowledgement and Authority to Exchange, Morgan Statement dated 31 October 2019 Attachment A2

The Tribunal finds that this is not a case where the test for undue influence has been made out. The Tribunal accepts the submissions of the respondent on this point. The Tribunal agrees with the respondent that while English is a second language, the applicants are not disadvantaged persons but well educated and sufficiently proficient in English to have lived and studied in Australia since 2012.

Duress by respondent

The Tribunal finds that this is not a case where the applicants were subject to duress by the respondent. The Tribunal accepts the submissions of the respondent on this point. In regard to duress the Tribunal finds that if there was pressure it was to a great extent from the applicants themselves being concerned that they might miss out on the unit they liked.

Duress by Mr Laman over Ms Laman

An issue that emerged in the hearing was whether Ms Laman was under the influence of Mr Laman in signing the contract such that the principles in Garcia v National Australia Bank Ltd are enlivened.[77] In the Garcia case, guarantees were given by a wife to secure the debts of her husband’s company. The husband inadequately explained the nature and risk of the guarantees to her, and the lender did not take steps to ensure she was properly informed about the nature and import of the guarantees. The court held the guarantees to be invalid.
[77] [1988] HCA 48
The following evidence was given on this point by Ms Laman:
I was just…following my husband’s lead at the time. So whatever he thinks…is best for us, I just sign it.[78]
[78] Transcript of proceedings 20 November 2019 page 29
When Mr Laman emailed the respondent to advise the respondent that they didn’t want to proceed, she stated:
Yes he [Mr Laman] informed me he would do that,…It was a decision that – my husband and I don’t really talk a lot…it was my husband who’s thinking all about the things that we were going through.[79]
[79] Transcript of proceedings 20 November 2019 page 30
Ms Laman commented about her relations with her then husband:
Its customary …that we submit to our husband…I’m not in that kind of position, but it’s happening in our marriage, and …I didn’t like it.[80]
[80] Transcript of proceedings 20 November 2019 page 31
Ms Laman confirmed that she nonetheless helped choose the colour scheme for the property – she stated that she still thought that they had only paid a reservation fee but enjoyed picking the colours: “I’m excited to see what colour is…I’m into arts…I was given chance to choose the colour, why not.”[81]
[81] Transcript of proceedings 20 November 2019 page 33
Mr Laman did not disagree with her evidence and stated, “When you …discuss things to your wife, they follow the lead.”[82]
[82] Transcript of proceedings 20 November 2019 page 46
The salesperson’s responses to questions about Ms Laman’s engagement with the process before signing were as follows:
I’m very inclusive of both parties…It comes down to who’s more driving the questioning…she was involved in the process…asking questions…but not to the same extent [as Mr Laman].[83]
[83] Transcript of proceedings 20 November 2019 page 62
He indicated that he went through a process of qualifying Mr Laman’s capacity to purchase but not Ms Laman’s, and recalled that Mr Laman confirmed he was employed – this process is about checking to see if the potential purchasers are employed so there is prospect of a sale and the salesperson will get paid.[84]
[84] Transcript of proceedings 20 November 2019 page 65
The Tribunal finds that Ms Laman was under some degree of influence by her then husband, Mr Laman. However, the principles of Garcia do not apply in this case. Firstly, there was insufficient evidence presented for the Tribunal to find that the influence amounted to undue influence, that Ms Laman did not exercise her free will to sign. Secondly, Ms Laman was not a guarantor but a party to the contract, so she gained a benefit from the documents she signed. Further, Ms Laman was present with Mr Laman when the salesperson explained the contract, so she received the same information as Mr Laman. While she was not as active in the discussions with the salesperson, she did engage before signing, for example, she asked questions. Also, she engaged with the process after signing, exhibited conduct consistent with being a satisfied customer, for example, she inputted into the colour selections. Caselaw on the application of the Garcia principles supports the Tribunal in this finding.[85]
[85] Garcia v National Australia Bank Ltd [1988] HCA 48; State Bank of NSW v Chia [2000] NSWSC 552

………………………………..
Senior Member L Beacroft
HEARING DETAILS

FILE NUMBER:	XD 471/2019
PARTIES, APPLICANT:	Richard and Desiree Laman
PARTIES, RESPONDENT:	Zapari Property Bowes Street Pty Ltd ACN 612 564 879
COUNSEL APPEARING, APPLICANT	N/A
COUNSEL APPEARING, RESPONDENT	N/A
SOLICITORS FOR APPLICANT	Prudential Legal
SOLICITORS FOR RESPONDENT	Meyer Vandenberg
TRIBUNAL MEMBERS:	Senior Member L Beacroft
DATES OF HEARING:	20 November 2019