Lonergan v JQZ Eleven Pty Ltd - [2022] NSWSC 1461

Supreme Court

New South Wales

Medium Neutral Citation: Lonergan v JQZ Eleven Pty Ltd [2022] NSWSC 1461
Hearing dates: 30 May – 2 June, 8 June 2022
Decision date: 27 October 2022
Jurisdiction: Equity
Before: Robb J
Decision:
See below at [314]-[315].

Catchwords:
CONSUMER LAW — misleading or deceptive conduct — husband and wife plaintiffs seek to purchase property ‘off the plan’ in residential tower development — design concept of tower involves installation of black privacy screens on balconies of every third floor — defendant developer omits numbering levels 4 and 14 — whether defendant’s agent represented to plaintiffs by reference to display model that unit sought to be purchased would be on numbered level with black privacy screens where representation failed to account for omission of lower level numbers — silence or non-disclosure — whether defendant’s agent failed to warn of siting of intrusive structural columns and air-conditioning unit in property as finally built — representations as to future matters — whether representations, if made, were representations as to future matters or as to present facts — limitation of liability — disclaimer — whether bevy of disclaimers in contractual provisions and promotional material capable of and successful in dispelling misleading or deceptive quality of representations — preliminary character of ‘off the plan’ development renders plaintiffs dependent on representations of defendant’s agent — causation or reliance — black privacy screens of special importance to second plaintiff suffering from skin condition — remedies — defendant liable to repay deposit plus interest — defendant precluded from prosecuting claim against plaintiffs for breach of contract or claim enforcing contractual provision in respect of purchaser’s default

Legislation Cited:
Australian Consumer Law, ss 4, 18, 232, 236, 237, 243
Competition and Consumer Act 2010 (Cth), ss 84, 137B, Sch 2
Conveyancing Act 1919 (NSW), s 55
Trade Practices Act 1974 (Cth)

Cases Cited:
Argy v Blunts (1990) 26 FCR 112
Armstrong Strategic Management and Marketing Pty Ltd v Expense Reduction Analysts Group Pty Ltd (No 9) [2016] NSWSC 1005
Awad v Twin Creeks Properties Pty Limited [2012] NSWCA 200
Boensch v Pascoe (2019) 268 CLR 593; [2019] HCA 49
Butcher v Lachlan Elder Realty Pty Ltd (2004) 218 CLR 592; [2004] HCA 60
Campbell v Backoffice Investments Pty Ltd (2009) 238 CLR 304; [2009] HCA 25
Campomar Sociedad Limitada v Nike International Ltd (2000) 202 CLR 45; [2000] HCA 12
Dylan Mann & Co Pty Ltd as trustee for the Mann Family Trust v Tiejag Pty Limited as trustee for the Skeihy Khoury Family Trust [2018] NSWSC 1334
Flight v Booth (1834) 1 Bing (NC) 370; 131 ER 1160
Google Inc v ACCC (2013) 249 CLR 435; [2013] HCA 1
Henjo Investments Pty Ltd v Collins Marrickville Pty Ltd(No 1) (1988) 39 FCR 546
HG & R Securities Pty Ltd v Sayer [2009] NSWSC 427; (2009) 14 BPR 27,045
IOOF Australia Trustees (NSW) Ltd v Tantipech (1998) 156 ALR 470
Ireland v WG Riverview Pty Ltd (2019)…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2022] NSWSC 1461
Decision Date: 27 October 2022

CaseChat Overview and Summary

Lonergan and another sued JQZ Eleven, a property developer, over the purchase of a property in an off-the-plan residential tower development. The plaintiffs sought to purchase a unit that was represented to have black privacy screens on its balcony, a feature that was particularly important to one of the plaintiffs due to a skin condition. However, the developer omitted numbering levels 4 and 14, leading to the plaintiffs’ unit being on an unnumbered level without the promised privacy screens. Additionally, the developer failed to warn the plaintiffs about the siting of intrusive structural columns and an air-conditioning unit in the property as finally built.

The court had to determine whether the developer's agent had misled or deceived the plaintiffs by representing that their unit would have black privacy screens on a numbered level, despite the omission of lower level numbers. The court also considered whether the developer's agent failed to warn the plaintiffs about the siting of structural columns and the air-conditioning unit, and whether these representations, if made, were as to future matters or present facts. Furthermore, the court examined whether a series of disclaimers in contractual provisions and promotional material were effective in dispelling any misleading or deceptive quality of the representations.

The court found that the developer was liable for misleading or deceptive conduct. The developer's agent had represented that the plaintiffs’ unit would have black privacy screens on a numbered level, but this was not the case due to the omission of lower level numbers. The developer also failed to warn the plaintiffs about the siting of structural columns and the air-conditioning unit. The court held that these representations were not merely as to future matters, but as to present facts, as the plaintiffs were relying on the developer's representations at the time of purchase. The court rejected the developer's argument that the disclaimers were effective in dispelling any misleading or deceptive quality of the representations. The court ordered the developer to repay the deposit plus interest to the plaintiffs and precluded the developer from prosecuting a claim against the plaintiffs for breach of contract or enforcing a contractual provision in respect of the purchaser’s default.

Orders