Lester v Queen Victoria Apartments No. DCCIV-01-754

LESTER v QUEEN VICTORIA APARTMENTS
[2003] SADC 63
Judge Lunn
Civil
The defendant

At all relevant times Harley Hooper and Richard Wood were directors of the defendant company. It had other directors in China, but they played no part in the events in question in this action. Hooper and Wood were each qualified valuers and were experienced property developers in this State. Annie Leo was employed by the defendant as their personal assistant and did general administrative work for it. Georgie Taarnby and Paul and Guy Marshall were each real estate salespersons employed by the defendant.
The Queen Victoria Hospital Redevelopment Project
In about 1998 the defendant bought a six storey building on Fullarton Road at Rose Park which previously had been the Queen Victoria Maternity Hospital. They proposed to convert the building into seventy one luxury apartments, of which each would have its own community title, and most would be offered for sale. It retained Con Bastiras as its architect for the project and Spectra to produce the necessary architectural drawings and designs for the individual apartments. Later Peter McLoughlin was employed as its project manager. Alexander & Symonds Pty Ltd was employed by it as its surveyor to prepare plans and to obtain the necessary planning approvals and community titles.
The redevelopment project involved removing the existing roof of the six storey building and constructing on top of it in light-weight materials two additional storeys which were to contain nine two-storey luxury penthouses with their living areas on the seventh floor and their bedrooms on the eighth floor.[1] These penthouses were numbered from west to east, 701 to 709. Each of the nine penthouses had balconies attached to them and car parking facilities on either the ground floor or in the basement. These balconies and car parks were subsidiary entitlements to the community titles to the penthouses and were described as “subs” to the particular penthouse numbers. Penthouse 701 was the best apartment in the building as it had views to the west as well as to the south and a greater balcony area than the other penthouses. Penthouse 709 was regarded as the second best as it had views to the east out to the hills.
[1] Subsequently this was varied for apartments 701 and 702 in that 701 took the eighth floor level of 702 and 702 was confined to the seventh floor.
The penthouses all faced north. On the seventh floor a corridor ran the full width of the floor along its southern side. This corridor was common property. At the eastern and western ends of this corridor were tops of sets of concrete stairs which came up from the ground floor. These stairwells did not go up to the eighth floor, but inside each of the penthouses on the seventh floor was another set of stairs going up to the eighth floor. The spaces occupied by the tops of these stairwells on the seventh floor meant that there was a significant reduction in the area available for each of penthouses 701 and 709 on the seventh floor as compared with the penthouses 702 to 708.
Between the southern boundary of the stairwells and the southern wall of the corridor on the seventh floor there were small areas which were identified early in the planning process as being potentially available for storage. This area at the eastern end of the corridor is referred to as the “S/E corner” and at the western end as the “S/W corner”. This case is principally concerned with the S/E corner. There was no satisfactory evidence about the likely dimensions and volume of storage rooms in these corners, but they had the potential to be significant.
As the total internal areas of the penthouses on both floors was only about 150 square metres, and as the apartments on the lower floors were even smaller, there was an obvious attraction for many occupants of penthouses and apartments to have the use of secure storage areas within the building which were outside of their own apartments. Many, but not all, penthouses and apartments were allocated various areas in the building as storage facilities for their occupiers. Such storage areas were identified as a subsidiary entitlement to a particular penthouse or apartment. Such subsidiary storage rights added to the value of the apartment. For purchasers who had more goods and chattels than they could comfortably place in the minimalist furnishing of their penthouses and apartments, the availability of such stores was a significant selling point for the penthouse or apartment.
In May 1999 Spectra produced plans of the proposed seventh floor showing the layout of the penthouses and the common areas. These plans showed the S/E and the S/W corners as stores, but did not indicate that they were to be allocated to penthouses 709 and 701, or any other penthouses. There were numerous other versions of these plans produced in the succeeding months as the project progressed. In all of them these two corners were designated as stores. There was no qualification stated of “future” or “possible” stores.
In about August 1999 the defendant commenced an advertising campaign for the sales of the apartments.[2] A display suite was opened on the ground floor showing the general nature of the proposed apartments. Brochures were prepared and distributed. A diagram of the seventh floor in one of the brochures showed the S/E and S/W corners as being stores. However, sales of the apartments could not commence because the necessary approvals had not been obtained and all the architectural drawings had not been finalised. Under its arrangements with its financiers the defendant had to pre-sell 60% of the apartments off the plan before building work could commence.
[2] The term “apartments” in these reasons includes the penthouses unless the context otherwise requires.
A sales launch for the project was arranged to take place on 3 September 1999. It had been hoped that selling could then commence but the necessary documentation and approvals were not obtained in time. Accordingly, as an interim measure the defendant invited prospective purchasers to take up options on particular apartments which they could exercise when the defendant was later able to enter into contracts of sale.
In the few days prior to the launch on 3 September there was frantic activity by the defendant to be in a position at the launch to offer options to potential purchasers. A set of architectural drawings dated 1 September 1999 was issued to the sales staff which they showed to prospective purchasers. Copies of these drawings were pinned up on the walls of the display suite. In them the S/E and S/W corners were shown as stores on the seventh floor in the same way as had occurred in earlier plans. This set of plans also contained a plan for the basement showing two substantial car parks being allocated to penthouse 709 and the areas at the bottom of those car parks being designated as “future store”. In the few days prior to the launch there had been considerable discussion between Hooper, Wood, Taarnby and possibly others about the allocation of storage areas to particular apartments and the decisions on them were then made. The only apartment subsidiaries for stores which were allocated to penthouse 709 were those for future stores in the basement adjacent to the car parks for that penthouse. The S/E and the S/W corners were not allocated as storage subsidiaries to penthouses 709 or 701 or to any other apartments. Those making the allocations at this time apparently believed from what they had been told by their advisers that the S/E and S/W corners were either not available, or were possibly not available, as storage subsidiaries for penthouses 709 and 701 because of problems associated with provisions for fire safety or the like. However, the designation “store” was not removed from the architectural plans for these areas. On 2 September the defendant issued a price list for all apartments to its salespersons which stated that the only storage subsidiary allocated to penthouse 709 was a “future” facility which apparently referred to the area adjacent to its car park.[3] The significance of only a future store being designated was that any purchasers of penthouse 709 subsequently would have to obtain the consent of the Strata Corporation to the erection of the storage facility on the site shown and would have to pay for its construction themselves over and above the purchase price of penthouse 709. The launch did take place on 3 September and a number of options were issued.
[3] In this price list penthouse 701 was allocated a store in the basement.
The plaintiff’s purchase of penthouse 709
In about 1998 the plaintiff had met Hooper and they, and their respective families, had become good friends. Before mid 1999 Hooper had told the plaintiff about the redevelopment of the old hospital and had shown him some of the plans which showed the S/E corner as a store. Hooper told him that he himself would be buying penthouse 701, which was the best penthouse, and that Lester could have the next best penthouse which was 709. Lester agreed. He attended the launch and on that day entered into an option to purchase penthouse 709 for $510,000.
By 1 October 1999 the defendant had obtained the necessary approvals to enable it to enter into contracts for the sales of apartments. On that day Hooper entered into a contract to purchase penthouse 701 which included a storage subsidiary. Taarnby prepared a proforma contract for the plaintiff to purchase penthouse 709. She filled in some of the details in her handwriting. She sent it to the plaintiff. On 15 October there was a social function at the display suite for potential purchasers but the plaintiff did not attend. Hooper told Taarnby at that function that he had agreed with the plaintiff that the deposit under his contract need only be $30,000 and not the $51,000 which Taarnby had earlier written into the contract document.
On Saturday, 16 October the plaintiff met with Taarnby at the display suite to execute his contract. He firstly executed a version of the contract document which will be referred to as the Purchaser’s Contract.[4] Taarnby witnessed his signature to it. He then executed another version of the contract, which will be referred to as the Vendor’s Contract.[5] His signature to this was witnessed by his girlfriend, Gosia Shild.[6] Taarnby left for Melbourne shortly after this meeting. On Monday, 18 October Wood executed both versions of the contract on behalf of the defendant. On that day the defendant posted the Purchaser’s Contract to the plaintiff. On 5 November the plaintiff gave a bank guarantee to the defendant for the payment of the deposit in lieu of the payment of the deposit of $30,000.
[4] This name is given to it because it subsequently came into his possession as the purchaser.
[5] It is called this because it remained in the possession of the defendant. Some differences between the two versions will be dealt with later.
[6] The defendant’s counsel agreed that no point was to be taken from the plaintiff’s failure to call Gosia Shild.
Subsequent history
It is not necessary to go into the subsequent history in as much detail as was covered in the evidence. On 10 November 1999 and subsequently plans of the seventh floor were produced on behalf of the defendant which still showed the S/E corner as a store. There is a plan dated 23 March 2000 in the records of Alexander & Symonds showing the S/E corner as a storage subsidiary of penthouse 709. In May 2000 Bastiras, to the knowledge of the defendant, had communications with Spectra about reducing the size of the stores in the S/E and S/W corners although he referred to them as general stores, and not as apartment subsidiaries. In June 2000 a decision was apparently taken to delete the S/E and S/W stores entirely. However, shortly afterwards there were seemingly some steps taken to reinstate them, but they were again deleted. The building work was completed in early 2001 and the ends of the southern corridor were left empty without the S/E or the S/W stores being constructed. However, Hooper arranged a variation of his contract for penthouse 701 so that a small storage facility was constructed alongside the internal staircase on the seventh level of penthouse 701.
Just after mid January 2001 Lester met with McLoughlin at the partly constructed penthouse 709. There he learnt for the first time that he was not to receive the S/E store when in response to his query about it, McLoughlin informed him that it had been deleted from the building contract. McLoughlin told him to speak to Hooper about it. In late 2000 there had been a serious falling out between the plaintiff and Hooper over a private matter which was not disclosed in evidence. They were no longer friends and were barely on speaking terms. The plaintiff spoke to both Hooper and Wood about the absence of the S/E store but he did not get any satisfaction from them. By a letter of 5 April 2001 the plaintiff’s solicitor rescinded the contract for the purchase of penthouse 709, which had not then been settled upon, on the grounds of the defendant’s failure to provide the S/E store. The defendant refused to accept this rescission, or the repudiation inherent in it, and itself purported to rescind the contract in June 2001 for the plaintiff’s failure to settle on it. On 19 October 2001 the defendant resold penthouse 709 for $530,000. It has sought the forfeiture of the plaintiff’s deposit of $30,000 under the contract.
The issues
In this action the plaintiff seeks a declaration that the contract for his purchase of penthouse 709 is no longer binding upon him or alternatively relief for misrepresentation or misleading or deceptive conduct. If he is successful in this, he seeks no other consequential relief apart from damages of $3,350 being charges he has incurred in relation to his bank guarantee for the deposit, pre-judgment interest on that amount and costs. The defendant has counterclaimed for forfeiture of the deposit under the contract and other damages arising out of the plaintiff’s alleged breach of contract.
On the contractual questions the primary issues are whether there was a contrast between the parties and, if so, what were the terms of it and which party was in breach of it.
The witnesses
I find the plaintiff to have been an impressive and generally reliable historian, although he was probably mistaken about some details. I accept his version of events where they are in conflict with other oral evidence.
The plaintiff’s counsel was generally content to accept the evidence of Taarnby. As will be mentioned later there are major inconsistencies in her version of events but in view of the plaintiff’s attitude I need not go behind her evidence. She did not have any real recollection of what had occurred in respect of this sale. She has conducted hundreds such sales of apartments off the plans and she was relying almost entirely upon what would have been her general practice. It was not until June 2001 that she was first asked to recollect what had happened in October 1999.
Hooper’s evidence was not convincing where it was in conflict with that of the plaintiff. He tended to be somewhat evasive in some of his answers.
Except where I state otherwise, I accept the evidence of the other witnesses which was largely uncontroversial.
Preparation and execution of the contract
I find the following proved on the balance of probabilities upon the evidence which I accept. On 1 October 1999 Taarnby prepared what became the Purchaser’s Contract by filling in in light blue biro various sections which had been left blank in the proforma. In the Schedule she filled in in Box 2 the name, but not the address, of the plaintiff and in Box 3, which is the description of the land being sold, the apartment number 709, the balcony number “SUB 709”, the car park number “SUB 709”, and in particular the storage area “SUB 709”. In her evidence she could offer no explanation why she included in the description of the land in this Box 3 “Storage area No SUB 709”. Her instructions at the time were clear that no storage subsidiary was to be part of penthouse 709. She put the date of 1 October 1999 in her handwriting on the front sheet. She sent this one copy of the contract document to the plaintiff. He gave it to his solicitor to look at, but unfortunately his solicitor did not have time to do so. The plaintiff retrieved this contract from his solicitor without obtaining any legal advice about its contents.
At some point in time the handwriting of Taarnby in Box 3 to this Schedule of the Purchaser’s Contract of “SUB 709” was obliterated with whiting out material. Taarnby denied having done it and of knowing who did it. The plaintiff, who I accept on the point, said that it had not been whited out at the time at which he signed the contract on 16 October. The plaintiff had no motive to do it and it was not suggested that it was done by him or by anyone on his behalf. Clearly it was done while the Purchaser’s Contract was in the possession of the defendant and prior to it being sent back to the plaintiff on 18 October.[7]
[7] The plaintiff did not read the document immediately after it was returned to him and did not discover the whiting out until after McLoughlin had told him that the S/E storage area had been deleted in January 2001.
I reject the submission of the defendant’s counsel that this whiting out in the description of the land being sold occurred before the plaintiff had executed the Purchaser’s Contract. Apart from the plaintiff’s evidence there is a further reason for finding that it was whited out after the plaintiff had signed the Purchaser’s Contract. Although it was not referred to in evidence, there is another instance of whitings out in the contract documents. It was common ground that during the discussions on 16 October Taarnby outlined in green highlighter on a copy of the architectural plan of 1 September 1999, which she stapled to the contract documents, the areas occupied by penthouse 701 on the seventh and the eighth floors. At that time the position of the sink and the cooker in penthouse 709 on the seventh floor were changed by handwritten notations made by Taarnby and initialled by the plaintiff. What is clear from the original contracts which were tendered in evidence is that on this plan a dob of highlighter had been applied to obliterate the sink as shown on the photostatted plan and that another small dob of white out had been placed over the green highlighter to show the new position of the sink.[8] These applications of white out must have occurred after Taarnby had applied the green highlighter at the meeting with the plaintiff. It would seem highly likely that the same person put this white out on the plan as put it in Box 3 of the Schedule and that it was done at the same time.
[8] This was not apparent to me during the course of the trial because I was working off a photostat copy of the Purchaser’s Contract.
A further complication is that the Vendor’s Contract is not in entirely the same terms as the Purchaser’s Contract. Of particular significance is that in Box 3 in the Schedule on the Vendor’s Contract where the white out is situated on the Purchaser’s Contract a notation “N/A” appears in the handwriting of Taarnby. “SUB 709” was not written in that position on the Vendor’s Contract and there is no white out there. Taarnby could offer no explanation for this discrepancy.
Taarnby’s evidence about when and how the Vendor’s Contract was prepared was inconsistent and unsatisfactory. I reject any suggestion that the Vendor’s Contract had been sent to the plaintiff with the Purchaser’s Contract. The plaintiff did not see the Vendor’s Contract until it was presented to him for signing shortly after he had signed the Purchaser’s Contract. It is likely that the handwritten parts of the Vendor’s Contract were completed by Taarnby partly before 16 October and partly at the meeting with the plaintiff on that day after the equivalent parts of the Purchaser’s Contract had been filled in. It is clear that the whole of the Vendor’s Contract was prepared by Taarnby and that the plaintiff had not read it before he signed it. Taarnby presented it to him for signing with representations that its contents corresponded completely with those of the Purchaser’s Contract and that he was only required to execute it so that each party could afterwards have an executed copy of the contract document. Insofar as the plaintiff executed anything in that Vendor’s Contract which was materially different from what appeared in the Purchaser’s Contract, the defendant is now estopped from relying upon any differences in the Vendor’s Contract which are to the prejudice of the plaintiff. Clearly in the circumstances the Purchaser’s Contract was the primary and the operative document and the case is to be decided upon this basis.

In the Purchaser’s Contract the notation of “STORE” has not been deleted in the S/E corner on the copy of architectural plans of 1 September 1999 which Taarnby stapled to the contract. In Attachment A, which is a secondary plan prepared by Alexander & Symonds apparently on 23 September 1999, the plan of the seventh floor had a notation within the area of penthouse 709 “INCLUDING BALCONY STORAGE CARPARK”. That same plan shows the S/E corner as a store and has a notation by it of “STORE SUB 709”. That same Attachment includes a plan of the basement which shows an area designated as “CARPARK SUB 709”, but neither there, nor anywhere else in the contract document, is there any reference to a “future” store for penthouse 709.
There is no dispute that Taarnby highlighted on the attached plan of the seventh floor in green the area of penthouse 709 and on the plans in Attachment A she highlighted penthouse 709 and its car park subsidiary in the basement in pink. She did not put any highlighter on the areas shown on the plan as the S/E store. I reject her evidence that she marked these areas in highlighter in the plaintiff’s presence to show him the entirety of what he was obtaining under the contract. It is more likely that she highlighted these areas as showing penthouse 709, its balcony and car park, but she did not make the point to the plaintiff that he was not getting anything else, and particularly no storage facility. I accept the plaintiff’s evidence that he had been told previously by both Hooper and Taarnby that he was obtaining a storage subsidiary in the S/E corner as part of his purchase of penthouse 709 and that he was never told anything to the contrary. Taarnby’s purported explanation that any references to storage in the contract refer to the future store by the car park in the basement is inconsistent with there being no reference at all to such a future store in the Purchaser’s Contract. In any event the highlighting of the areas on the plans by Taarnby has no contractual significance. There is nothing in the contract expressly or impliedly to say that what was being sold was limited only to that area which was highlighted.
On the contents of the Purchaser’s Contract, as they appeared at the time at which it was signed by the plaintiff, it was the clear meaning of the whole of the document, including its annexures, that what the plaintiff was purchasing included the subsidiary storage facility in the S/E corner as shown in the plans. If there was any ambiguity, which there is not, a resort to parol evidence would be to the same effect as the plaintiff had been told previously by both Hooper and Taarnby that the S/E corner, as shown on the plans which he had seen, was a storage subsidiary in his purchase of penthouse 709. At the time he executed the Purchaser’s Contract the plaintiff clearly believed he was obtaining that store.
It is impossible to make a clear cut finding about whether the obliteration of the storage area “SUB 709” in the Purchaser’s Contract was made before or after it was signed by Wood on behalf of the defendant. Wood said he had no knowledge of the obliteration when he signed it. However, while he initialled the bottom of the page on which the obliteration now appears he did not initial an alteration in Box 2 of the Schedule which had previously been initialled by the plaintiff. It is likely that his perusal of the contract was fairly cursory. However, Wood’s evidence makes it slightly more probable that the obliteration occurred after he had signed the Purchaser’s Contract.
In any event the legal result is the same whether the obliteration was made between when the plaintiff signed and Wood signed or after Wood signed and before it was sent back to the plaintiff. If the former, Wood was executing a contract whose terms differed significantly and materially from those which had been signed by the plaintiff. Wood himself believed at the time that he signed it that no storage facility for penthouse 709 was being sold. By his execution of the Purchaser’s Contract in that form he was not accepting the offer constituted by the plaintiff’s execution of it in a different form, but the defendant was in effect making a counter offer which the plaintiff never accepted. Hence no legally binding contract between the parties came into existence. If the reference to the storage subsidiary had been obliterated at the time of the plaintiff’s execution from the description of the land being sold in Box 3 of the Schedule, I would not have construed the other references to the S/E store in the Purchaser’s Contract to mean that the land being sold did include that storage subsidiary.
The more likely possibility is that the obliteration occurred after the Purchaser’s Contract was executed by Wood and before it was sent back to the plaintiff. During this time the document was under the defendant’s control. It seems that by Monday, 18 October Taarnby had gone to Melbourne and the letter to the plaintiff enclosing the Purchaser’s Contract was signed and sent by Annie Leo.[9] The plaintiff’s counsel suggested she made the obliteration. She was not called and her absence was not explained. However, it is not necessary for me to go further than to find that someone representing the defendant made the obliteration. I so find. The basic rule as laid down in Pigot’s case ((1614) 77 ER 1177) that where a party alters a written contract after its execution in a material particular the contract is void is still good law in this State: Armor Coatings (Marketing) Pty Ltd v General Credits (Finance) Pty Ltd (1978) 17 SASR 270.[10] Materiality for this purpose was defined by Walters J in that decision at 283 as follows:
“…….. the question of materiality depends on whether the altered writing purports to affect the legal relations previously existing, that is, whether the alteration would result in a change in the contractual obligations between the parties, as they previously existed, so as to vary injuriously the rights against, and the duties to, the party making the alteration.”
On this definition the alteration depriving the plaintiff of the benefit of the S/E store was material. Accordingly, upon the defendant having so altered Box 3 in the Schedule of the Purchaser’s Contract, the contract became void and the plaintiff was no longer bound by it.
[9] Both counsel accepted in their addresses that this letter was signed by Annie Leo, and not by Taarnby, but there is no evidence of it.
[10] The debate in that case about whether the alteration has to be to the prejudice of the other party has no relevance in this case.
The findings made above are sufficient to entitle the plaintiff to the declaration he seeks that the contract is not enforceable against him and that the defendant is not entitled to the benefit of the banker’s guarantee. It was not disputed that in the event of this finding the plaintiff is entitled to damages of $3,350 for his expenses in maintaining the guarantee. These findings also mean that there must be judgment for the plaintiff on the counterclaim. However, in case there is an appeal I briefly deal below with some other issues raised in the evidence, but not all of them.
The defendant relied upon clause 2.2 of the contract which provided:
“The vendor shall be at liberty to procure any alteration or variation whatsoever of or to the Plans as may be required or deemed desirable by the Vendor provided that such alteration or variation does not either-
……..
2.2.2Fundamentally alter the location or size of the land or have a material or substantial impact on the key attributes of the Land ……..”
The “Land” is defined in the contract to include the subsidiary storage areas. The land, as defined, without a subsidiary storage area is of a different location and the alteration has materially impacted on the key attributes of the land compared with if it had the storage area. It may have been otherwise if the defendant had merely reduced the size of the S/E store, but the elimination of it is within the proviso in clause 2.2.
The defendant also referred to clause 12 of the contract which provided:
“(1) The Land is believed by the Vendor, and shall be taken by the Purchaser, to be correctly described but this sub-clause is without prejudice to the rights of the Purchaser under sub-clause (2).
(2)(a) No error, omission or improper or imperfect description shall annul the sale or affect the obligation of the parties to settle on the settlement day.
(b)If any error, omission or improper or imperfect decision of the Land is notified by one of the parties to the other before settlement, but not afterwards, the same shall be subject to compensation to be received or paid by one party to the other as the case may require.”
This clause does not confine the plaintiff to a remedy in damages for any misdescription of the land sold. Clause 12(2) is subject to (1) which is predicated upon the vendor believing that the land is correctly described. The defendant well knew that any reference in the contract to the S/E store in the sale of penthouse 709 was outside what it was intending to sell to the plaintiff.
I find that Hooper had represented to the plaintiff that upon the completion of the sale of penthouse 709 it would be worth between $570,000 and $600,000. It was misleading or deceptive conduct in trade or commerce contrary to s51 of the Commonwealth Trade Practices Act (“the TPA”) and s56 of the South Australian Fair Trading Act 1987 (“the FTA”)[11] as on the resale in October 2001 a price of only $530,000 was achieved. However, it was a representation as to a future matter under s51A of the TPA and s54 of the FTA which mean it will be taken to be misleading unless the representor had reasonable grounds for making the representation. Under at least s54(2) of the FTA the onus was on the defendant to show that it had reasonable grounds for making the representation. It did not discharge it. It did not adduce any evidence beyond that Mr Hooper as a qualified valuer had made that prediction. There was no evidence about its objective reasonableness or what matters Hooper took into account in reaching his conclusions. Misleading or deceptive conduct by this representation has been proved against the defendant.
[11] My references to “misleading or deceptive” conduct also extend to conduct which is likely to mislead or deceive.
I also find that the defendant through Hooper and Taarnby, and in the published plans and brochure, was guilty of further misleading or deceptive conduct in having represented to the plaintiff in trade or commerce that he would gain an entitlement to the S/E store upon his purchase of penthouse 709. I reject any suggestion that he was told that he would only get that store if it otherwise became available. Again it was a representation as to a future matter and the onus under the FTA was on the defendant to show reasonable grounds for having made these representations. It did not. Its advice was apparently always that there was at least some real uncertainty about whether the S/E and S/W corners would be available as stores. It was misleading or deceptive conduct to represent it as being a definite entitlement rather than only a possibility depending upon if it subsequently became available. Again no reasonable grounds were established for having made such a representation in absolute terms. Indeed, the evidence shows it was contrary to the defendant’s subjective belief at the time about the availability of the S/E and the S/W corners for stores.
The defendant’s counsel submitted that even if there had been misleading or deceptive conduct it was not proved that the plaintiff had suffered any loss or damage “by reason of” a contravention of s52(1) of the TPA and/or s56(1) of the FTA. The words “by reason of” in these sections expresses the notion of causation: Wardley Australia Ltd v Western Australia (1992) 175 CLR 514 at 525. Causation is essentially a question of fact to be determined by reference to commonsense and experience and one into which policy considerations and value judgments must necessarily enter: March v Stramare Pty Ltd (1991) 171 CLR 506. Where, as here, there is more than one cause for any loss it is sufficient if the misleading conduct plays some part, even if only a minor part, in contributing to it: Gould v Vaggelas (1985) 157 CLR 215 at 236; I&L Securities Pty Ltd v HTW Valuers Ltd (2002) 192 ALR 1. The plaintiff had no definite plans about what he was going to do with penthouse 709 once settlement had occurred. He could have lived there himself, he could have allowed his wife, from whom he was separated, to live there or he could have rented it out or resold it. If he or his wife was to live there, he was conscious of the need for storage space for their many possessions. Being deprived of the S/E store was a loss caused to him by the misleading conduct of the defendant. Furthermore, part of the plaintiff’s rationale in entering into the contract was that he believed Hooper as his close friend would look after his interests as the transaction progressed. If he had discovered that the representation made by Hooper about him obtaining the S/E store was false before he had signed the contract, it may well have undermined his whole confidence in Hooper and led to him not to pursue the purchase. Under s87(2) of the TPA and s85(5) of the FTA the Court has a discretion whether to avoid a contract as a remedy for loss caused by misleading or deceptive conduct. It would have been appropriate in the circumstances of this matter to have granted such relief.
I fix a lump sum of $320 in lieu of pre-judgment interest on the plaintiff’s damages of $3,350 based on a commercial rate of interest and the loss accruing progressively since November 1999. There will be judgment for the plaintiff for the declaration sought and damages, including interest, of $3,670. The counterclaim is dismissed.

JUDGMENT CITATIONS
LISTED IN ORDER OF APPEARANCE IN JUDGMENT

1 Subsequently this was varied for apartments 701 and 702 in that 701 took the eighth floor level of 702 and 702 was confined to the seventh floor.
2 The term “apartments” in these reasons includes the penthouses unless the context otherwise requires.
3 In this price list penthouse 701 was allocated a store in the basement.
4 This name is given to it because it subsequently came into his possession as the purchaser.
5 It is called this because it remained in the possession of the defendant. Some differences between the two versions will be dealt with later.
6 The defendant’s counsel agreed that no point was to be taken from the plaintiff’s failure to call Gosia Shild.
7 The plaintiff did not read the document immediately after it was returned to him and did not discover the whiting out until after McLoughlin had told him that the S/E storage area had been deleted in January 2001.
8 This was not apparent to me during the course of the trial because I was working off a photostat copy of the Purchaser’s Contract.
9 Both counsel accepted in their addresses that this letter was signed by Annie Leo, and not by Taarnby, but there is no evidence of it.
10 The debate in that case about whether the alteration has to be to the prejudice of the other party has no relevance in this case.
11 My references to “misleading or deceptive” conduct also extend to conduct which is likely to mislead or deceive.

[2003] SADC 63

15 May 2003