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) 101 NSWLR 658; [2019] NSWCA 307

Massoud v Nationwide News Pty Ltd; Massoud v Fox Sports Australia Pty Ltd [2022] NSWCA 150

Ng v Chong [2005] NSWSC 270; (2005) 12 BPR 22,903

Taco Co of Australia Inc v Taco Bell Pty Ltd (1982) 42 ALR 177

Trilogy Funds Management Ltd v Sullivan (No 2) [2015] FCA 1452; (2015) 331 ALR 185

Victorsen v Easy Living Holdings Pty Ltd [2019] NSWSC 1721; (2019) 19 BPR 39,893

Xu v Lindsay Bennelong Developments Pty Limited [2020] NSWSC 1692

Category:

Principal judgment

Parties:

David Kenneth Lonergan (First Plaintiff)
Victoria Ingrid Lonergan (Second Plaintiff)
JQZ Eleven Pty Ltd (ACN 168 380 265) as trustee for the JQZ Eleven Unit Trust (ABN 97 142 041 731) (Defendant)

Representation:

Counsel:
P Lane (Plaintiffs)
S Docker (Defendant)

Solicitors:
Pikes & Verekers Lawyers (Plaintiffs)
Thomson Geer (Defendant)

File Number(s):

2021/00103409

Judgment

1. On 11 November 2016, David Kenneth Lonergan and Victoria Ingrid Lonergan entered into a standard form contract with JQZ Eleven Pty Ltd (JQZ) by which Mr and Ms Lonergan agreed to purchase from JQZ a property ‘off the plan’ for $1,518,000.

2. The parties agree that, at the date of exchange of contracts, JQZ was the registered proprietor of the land with folio identifier 4/1046092 located at 101 Waterloo Road, Macquarie Park. JQZ is a special purpose vehicle that was incorporated by its holding company for the purpose of carrying out a substantial home unit development on the land that involved the construction of four towers with 680 home units and 1,674.8 m² of retail space. As JQZ’s name would suggest, the development was the eleventh development undertaken by the group of companies of which JQZ is part.

3. JQZ was in fact the proprietor of the land and carried out the development through a development management agreement dated 21 December 2017 with Waterloo Road Development Pty Ltd, which was a member of the same group of companies as JQZ. Nothing turns on this agreement, and it will be appropriate to treat JQZ as the developer.

4. The contract between the Lonergans and JQZ was for the purchase of a unit, being a lot in an unregistered plan of subdivision of the land designated as Lot 133. The unit was initially known as unit 11803 and is now known as unit 1803A/101 in Tower A (the Unit) in what is known as “Prime” (the Prime Development).

5. In accordance with the contract, albeit by instalments, the Lonergans paid the deposit of $151,800, which JQZ accepted. The parties agree that the contract was not completed on the completion date of 6 December 2019 and has never been completed. The parties each acted to terminate the contract in January 2020, and it is agreed that the contract is at an end, although there is a dispute as to which termination was effective.

Relief sought

6. By their statement of claim filed on 14 April 2021, the Lonergans sought a declaration that they validly terminated their contract with JQZ, an order that JQZ return to them their deposit of $151,800 with interest, and an award of damages for breach of contract by JQZ.

7. On the second day of the hearing, I granted leave to the Lonergans to file in court their amended statement of claim, which was the same as their original statement of claim save for the introduction of two new prayers for relief. The Lonergans sought an order that JQZ refund the deposit pursuant to s 232 of the Competition and Consumer Act 2010 (Cth), Sch 2 (Australian Consumer Law), and an order restraining JQZ from enforcing cl 9 of the contract pursuant to s 243 of that Law. Clause 9 provided JQZ with alternative means for recovering its loss upon non-completion of the contract by the Lonergans. As will be seen below, the Lonergans appear to have relied upon additional alternative sections of the Australian Consumer Law in their final submissions.

8. The Lonergans' amended claim based upon the Australian Consumer Law was pleaded in par 37A of their amended statement of claim by reference to pars 40A and 41 of their defence to JQZ's amended cross claim. By that defence, the Lonergans alleged that the Unit, as completed, differed from the Unit, as marketed, in a number of ways that they called "the discrepancies". The discrepancies that were relevant at the end of the hearing were that the Unit had two structural columns installed on the balcony and one column in the living area. The Unit also had an air-conditioning unit on the floor of the balcony, the operation of which would blow hot air into the middle of the balcony. None of these features was present in the display suite that they inspected or depicted on the floor plan that was given to the Lonergans before they entered into the contract. The final alleged discrepancy was that the Unit did not have black privacy screens installed on its balcony, contrary to an assurance allegedly made to the Lonergans by JQZ's estate agent.

9. The Lonergans alleged that the failure by JQZ to disclose that the columns would be constructed in the completed Unit and the air-conditioning unit would be installed on the balcony (which the parties called the “columns representation”) involved failures to disclose that the Lonergans called "representations by silence". However, the particulars given by the Lonergans of the representations included the physical displays of the proposed units and the floor plan given to them by the agent. The parties called the representation concerning the installation of the privacy screens the “privacy screen representation”. The Lonergans alleged that all the representations were made with respect to future matters within the meaning of s 4 of the Australian Consumer Law. I think it will be preferable to separate the columns representation into separate representations concerning the installation of the structural columns and the positioning of the air-conditioning unit. In the latter case I will refer to the “air-conditioning representation”.

10. By its amended statement of cross claim filed on 30 June 2021, JQZ sought a declaration that it had validly terminated its contract with the Lonergans, a declaration that the deposit and interest on the deposit have been forfeited to JQZ and that JQZ is entitled to retain those monies, and either judgment in respect of the amount payable under clause 9.3.1 of the contract for deficiency on resale, or an award of damages for breach of contract by the Lonergans.

Misleading or deceptive conduct claim issues

11. The parties supplemented the pleadings concerning the Lonergans' misleading or deceptive conduct claim by agreeing on the issues that arose in respect of that claim, which I will paraphrase as follows:

1. Did JQZ, by its agent, make the privacy screen representation?

2. Did JQZ, by its agent, make the columns representation?

3. Did JQZ engage in misleading or deceptive conduct?

4. Did the Lonergans rely on the alleged misleading or deceptive conduct in making their decision to enter into the contract?

5. Did the Lonergans suffer loss and damage?

6. What was the loss and damage suffered by the Lonergans?

7. Are the Lonergans entitled to a remedy under the Australian Consumer Law?

12. JQZ ultimately accepted that the conduct of the agent, Mr Li (Roger) Zhu of CBRE, was deemed, pursuant to s 84(2) of the Competition and Consumer Act, to be the conduct of JQZ, and that that and JQZ’s own alleged conduct had been engaged in in trade and commerce.

13. The parties contested additional issues concerning the effectiveness of the notice to complete upon which JQZ relied to make time of the essence of the contract, as well as other related issues, which I will explain below after the issues relevant to the Lonergans' misleading or deceptive conduct claim have been determined.

Summary of misleading or deceptive conduct claim

14. It will be convenient to begin by making the following brief observations concerning the essence of the Lonergans' misleading or deceptive conduct claim as finally prosecuted.

15. The privacy screen representation claim arose out of the fact that, as a design feature, the three-bedroom units on every third floor of Tower A in the Prime Development in which the Unit was to be located would have black privacy screens installed on their balconies. The Lonergans claim that this was a particularly attractive feature to them because Ms Lonergan suffers from a skin condition called rosacea that causes her to develop hives on the parts of her skin that are subjected to direct sunlight, which can leave her isolated and unsightly for periods in the order of seven days. Accordingly, the installation of black privacy screens on the balcony would substantially increase the utility of the balcony to the Lonergans. Unbeknownst to the Lonergans, as JQZ is controlled by Chinese persons and as the Prime Development was to be marketed to Chinese purchasers, the development was planned on the basis that no level would have the numeral 4 in its level number, because 4 is a number that is considered unlucky in Chinese custom. That meant that the Prime Development, when constructed, would not have a Level 14. According to the Lonergans, when the agent, Mr Zhu, advised them that the Unit, being unit 11803 on Level 18, would be constructed with black privacy screens installed, his determination that the screens would be installed on Level 18 miscarried because he did not allow for the fact that there would be no Level 14. Accordingly, his advice to the Lonergans that black privacy screens would be installed on Levels 6, 9, 12, 15 and 18 was incorrect. Relevantly to the Unit, when Tower A of the Prime Development was constructed, the black privacy screens were installed on the equivalent unit on Level 19 and not on the Unit.

16. Before they entered into the contract, the Lonergans were shown by Mr Zhu a completed display suite, including a fully built sample living room. The Lonergans claim that there was no structural pillar in the display living room, nor was any column depicted in the floor plan that Mr Zhu gave them. Further, the floor plan did not depict any columns on the balcony. The floor plan also did not depict the air-conditioning unit for the Unit as being located on the floor of the balcony, in such a way that the exhaust air from the unit would blow directly across the balcony. The Lonergans say that, as constructed, there was a 500 mm x 500 mm column in the living room that encroached into the area in a manner that reduced its size and amenity, and that the two columns installed on the balcony protruded 800 mm into the balcony from its corners, also reducing its size and amenity.

17. The contract involved the Lonergans buying the Unit ‘off the plan’. The significance of that expression may differ according to the precision and finality of the relevant plan at the time the contract is entered into. Where the plan of the building has been completed, the plan may be sufficient to inform the purchaser of the description of the property with a high level of specificity. The purchaser only need expect the vendor to cause the property to be constructed in accordance with the plan. Where, however, as in the present case, the plan against which the contract is made is rudimentary and incomplete, the purchaser faces a substantially increased risk that the plan will not be an adequate description of the property to be purchased, or that the plan may be changed in a way that disappoints the purchaser's expectations.

18. As will be seen, immediately after they inspected the Unit following its completion, the Lonergans raised their complaints with JQZ. Initially, the Lonergans asked JQZ to delay the completion process under the contract to negotiate a reduction in the price. JQZ responded that Mr Zhu did not have authority to make representations on its behalf and it relied upon terms of the contract that permitted JQZ to change the plan, and other terms that disclaimed any liability to the Lonergans. Relatively shortly after the due completion date, JQZ served a notice to complete and purported to terminate the contract upon non-completion by the Lonergans. The Lonergans in turn treated the purported termination by JQZ as a repudiation of the contract, which they themselves purported to terminate.

19. Although the Lonergans claim that, in their particular circumstances, the absence of the black privacy screens being installed on the Unit significantly diminished its amenity for them, as did the unexpected installation of the structural columns in the living room and on the balcony of the Unit, together with the siting of the air-conditioning unit, it may be that the magnitude of that loss of amenity was not substantial relative to the price of the Unit. The issue is how the relevant provisions of the Australian Consumer Law should operate in this context, where JQZ simply denied the legitimacy of the Lonergans' claims and terminated the contract. In practical terms, in the circumstances of this case, did the Australian Consumer Law have the effect that JQZ ought not to have terminated the contract without first addressing the Lonergans' claims?

20. For the reasons that follow, I have found that the Lonergans have established their claim that JQZ engaged in misleading or deceptive conduct in respect of the privacy screen representation and the columns representation. I am not satisfied that the Lonergans have proved their claim in relation to the siting of the air-conditioning unit. The Lonergans are entitled to appropriate relief against the consequences of the misleading or deceptive conduct, which I will consider below.

21. It will be convenient to start by analysing the terms of the contract and making a number of preliminary observations concerning the relationship of those terms to the misleading or deceptive conduct claim now made by the Lonergans. I will then consider the evidence and set out the facts that I consider are material to this claim. I will then consider the relevant principles of law, and finally, I will explain the outcome of the misleading or deceptive conduct claim by reference to the submissions made by the parties.

The contract

22. As noted, on 11 November 2016 the Lonergans as purchasers and JQZ as vendor entered into a contract for the sale and purchase of the Unit, described as “Lot 133, 101 Waterloo Road, Macquarie Park, in an unregistered plan, being a plan of subdivision of Lot 4 in DP 1046092”. The Contract took the form of the 2016 edition of the contract terms published by The Law Society of New South Wales and The Real Estate Institute of New South Wales.

23. The price payable was $1,518,000, with a deposit of $151,800, and the balance payable of $1,366,200.

24. The date for completion, as stated on the front page of the contract, was specified by reference to additional condition 32.1, which defined "Completion Date". Relevantly, "Completion Date" was defined in additional clause 32.1 as being: "14 days after the day on which the Vendor's Notification is served”. By the same additional clause, "Vendor's Notification" was defined as meaning: “the notice in writing provided to the purchaser or the purchaser's solicitor advising of Registration and the issue of an Occupation Certificate”.

25. Beside the reference to "purchaser" were three boxes beside each of which were stated the words "JOINT TENANTS", "tenants in common", and "in unequal shares" respectively. None of the boxes was ticked. Clause 20.15 had the effect that, where the contract provided for choices, "a choice in BLOCK CAPITALS applies unless a different choice is marked." Consequently, the Lonergans contracted to purchase the Unit as joint tenants.

26. As clause 20.4 provided that: "If a party consists of 2 or more persons, this contract benefits and binds them separately and together", the liability of the Lonergans under the contract was joint and several.

27. Clause 9 provided for the consequences of "Purchaser's default" materially as follows:

9    Purchaser's default

If the purchaser does not comply with this contract (or a notice under or relating to it) in an essential respect, the vendor can terminate by serving a notice. After the termination the vendors can –

9.1    keep or recover the deposit (to a maximum of 10% of the price);

…

9.3.    sue the purchaser either –

9.3.1   where the vendor has resold the property under a contract made within 12 months after the termination, to recover –

the deficiency on resale (with credit for any of the deposit kept or recovered and after allowance for any capital gains tax or goods and services tax payable on anything recovered under this clause); and

the reasonable costs and expenses arising out of the purchaser's non-compliance with this contract or the notice and of resale and any attempted resale; or

9.3.2   to recover damages for breach of contract.

28. Clause 15 required the parties to complete by the date for completion and, if they did not, a party was authorised to serve a notice to complete if that party was otherwise entitled to do so.

29. Additional clause 34 dealt with the Prime Development and contained terms requiring JQZ to use reasonable endeavours to cause the building to be constructed. Although additional clause 34.1 required JQZ, subject to the terms of the contract, to "use reasonable endeavours to cause the Building (in so far as it contains the Property) to be constructed … generally in accordance with the Development Consent", the Development Consent (which had not been issued at the time) was defined in additional clause 32.1 in a way that permitted JQZ to make any modification or variation that JQZ "in its absolute discretion, believes it will require to permit it to carry out the Development or the Development Works". Additional clause 34.3 relevantly provided:

(a)   The vendor discloses and the purchaser acknowledges that:

…

(iii)    the Draft Documents and concept drawing and plans in connection with the Development Site … are not final, are for marketing and illustrative purposes only, are subject to Authority approval and/or agreement with third parties and may change at any time…

…

(c)   Despite, and in addition to, additional clause 34.1, the vendor may at any time seek an amendment to the Development Consent, or seek any Additional Approval, which it considers necessary or desirable, provided that such applications/consents are not inconsistent with the vendor’s obligations and the rights of the purchase under this contract.

30. "Draft Documents" was a term defined in additional clause 32.1 as including the Schedule of Finishes and the Draft Strata Plan and any other document attached to the contract.

31. Additional clause 35.1 provided for an allowance in favour of JQZ that required the Property to be finished "substantially as specified in the Schedule of Finishes" and reserved the right to JQZ to change any finish to a finish of at least equal quality to the finish specified in the Schedule of Finishes.

32. In particular, additional clause 35.1(d) provided:

(d)   The purchaser acknowledges that the display suite or samples displayed (if any) are not an exact replica of the Property but rather is indicative of the general style, quality and finish of properties within the Development. The chattels, fixtures and fittings used in the display suite (or any samples displayed) are not inclusions and will not be provided by the vendors in the Property.

33. As will be seen, JQZ relied upon this term in support of its argument that the Lonergans understood that the Unit, as constructed, might not have black privacy screens, and that structural columns might be placed in the Unit inconsistently with the display suite.

34. In the context of discussing relevant terms of the contract, it will be convenient to make some observations about the significance of those terms to the argument ultimately made by JQZ that they had the effect that JQZ's conduct was not misleading or deceptive, or that the Court should find that the Lonergans did not rely upon that conduct in entering into the contract. Some of the observations will concern the possible meaning of the relevant terms, even though the Court is not required to construe the contract for the purpose of these proceedings. The reason I will do so is that the contract itself, when viewed as a whole, is complex and may have been sufficiently unclear that it was confusing to laypeople such as the Lonergans. That is so, even though the Lonergans had the assistance of a conveyancing solicitor, as there were practical limitations on the extent to which the solicitor could explain the possible effect of all the terms of the contract.

35. The definition of “Development Consent” in additional clause 32.1, to which I have referred above, arguably permitted JQZ to make any modification or variation that it would require to permit it to carry out the Development. Such a discretion may well be held to be absolute, but alternatively it might be confined by its context to modifications or variations necessary to allow the Development to be completed.

36. Turning to additional clause 35.1(d), there is scope for argument and uncertainty about the degree of variation from the display suite that was permitted. The meaning of the word "indicative" is not clear and matters such as the absence of black privacy screens and the installation of structural columns in places that are unexpected by the purchaser probably fall outside "general style, quality and finish”.

37. Additional clause 37 was entitled "Plan", and contained provisions that responded to the fact that, at the date of the contract, not only was the plan of subdivision not registered, but development approval had not been given by the relevant Council, construction drawings had not been completed, and JQZ had not obtained the necessary advice of structural engineers. Relevantly, the additional clause provided:

37.   Plan

37.1   Registration of Plan

Subject to clause 34.3 and 37.3 the vendor undertakes to use all reasonable endeavours and do all such things and execute all such documents reasonably required to obtain the registration of the Strata Plan generally as shown in the Draft Strata Plan by the Sunset Date.

37.2   Disclosure

The vendor discloses that:

(a)   as at the date of this contract, the boundaries of the Property may not have been accurately defined or determined and the Draft Strata Plan is subject to final survey;

(b)   the number or configuration of lots in the Plan may vary from the number or configuration shown in the Draft Plan;

(c)   the boundaries of the Lots in the Strata Plan may vary from the boundary shown in the Draft Plan;

(d)   the vendor may carry out boundary adjustments between Lots in the Draft Plan before and after completion; and

(e)   The vendor may be required to make amendments to the Draft Plan to comply with conditions of consent imposed in the Development Consent and requirements of any Consent Authority.

37.3   Variation to the Draft Documents

The vendor reserves the right to make any such alterations and amendments to the Draft Documents which it deems necessary or desirable or as may be required by the Consent Authority or the LPI or any other public authority to effect Registration.

…

37.5   Acceptance of Variations

The purchaser agrees to accept (including under additional clauses 37.3 and 38.3) the Property as altered or amended and will not be entitled to make any requisition/or claim (or attempt to do so) unless:

(a)   such alterations, amendments, variations or discrepancies substantially, detrimentally and permanently affect the Property in a way which is other than minor;

(b)   the area of the Property shown on the Strata Plan is reduced by more than 5% of the area of the Property as shown in the Draft Strata Plan;

(c)   the location of the Property is not in substantially the same position as it appears on the Draft Strata Plan;

in which case the purchaser will have a right to rescind this contract in the manner specified in additional clause 40.

…

38. These provisions are intended to provide JQZ some latitude in relation to changes that may be made to the Draft Strata Plan and the other Draft Documents. Again, however, there is scope for contention as to whether the entitlement of JQZ to make changes would be unrestrained, or whether it would be limited to the making of changes in response to the requirements of any Consent Authority or the LPI or any other public authority that might in some reasonable way be required to achieve the development consent or registration of the strata plan. The use of an expression such as "which it deems necessary or desirable" may be found, as a matter of construction, to be limited by the context.

39. The apparent effect of additional clause 37.5 is to prevent the Lonergans from making any claim in relation to any alteration that has a minor effect on the Unit, or in circumstances where the area of the Unit is reduced by more than 5% of the area as shown in the draft strata plan. The wording of additional clause 37.5(a), insofar as it suggests that alterations must be substantial, detrimental and permanent before a claim may be made, but then says that the effect of the alteration must be other than minor, is problematic for lack of clarity. The contractual remedy, where the Lonergans are entitled to make a claim, is to rescind the contract. It should be noted, however, that, as reinforced by JQZ in a disclaimer in the floor plan given to the Lonergans that I will consider below, the floor plan was prepared at an unspecified scale. As will also be noted when the draft strata plan is considered, the only dimension specified is an area of the Unit in square metres.

40. The effect of additional clause 40 was that the right to rescission granted by clause 37 could only be exercised within seven days of JQZ giving the Lonergans notice of the relevant amendment or variation. Time was made of the essence of the right to rescind.

41. Additional clause 42 was called "Disclosure Material" and provided:

42.1    Disclosure

The purchaser acknowledges that the vendor has made available to the purchaser and the purchaser has inspected (or not inspected by its own election) the Disclosure Material.

42.2    Purchaser Warranties

The purchaser warrants that it has conducted all further investigations, inspections and enquiries of its own as it has been necessary or appropriate to verify or satisfy itself as to anything contained in the Disclosure Material.

42.3    Acknowledgements

The purchaser acknowledges that the vendor has not made and does not make any representation, warranty or statement:

(a)    as to the completeness or accuracy of the Disclosure Material;

(b)    that the Disclosure Material comprises all documents or information in the possession or control of the vendors in relation to, or which may affect the Property or any adjoining or nearby properties.

…

42. "Disclosure Material" was defined in additional clause 32.1 as meaning: "the information, documents and other forms (sic) disclosures made in this contract including those documents and disclosures made or attached in Annexure "E" (if any)."

43. Annexure E to the copy of the contract that is in evidence does not list any documents. As the definition of "Disclosure Material" is inclusive, additional clause 42 may operate in relation to other documents and disclosures made in the contract, which would at least include the Draft Strata Plan in Annexure B, and the Schedule of Finishes in Annexure C.

44. Additional clause 43, under the heading "Purchaser's Acknowledgment", contained terms which had the effect of disclaiming liability on JQZ's part, relevantly, as follows:

43   Purchaser's Acknowledgement

43.1   Property Status

The purchaser acknowledges that:

(a)   the purchaser has inspected the Property;

(b)   the purchaser enters into this contract as a result of the purchaser's own enquiries and inspections;

(c)   the purchaser has not been induced to enter into the contract by, and has not relied on any marketing material, statement, representation or warranty by or on behalf of the vendors or any agent or employee of the vendor other than those as set out in this contract, including any statements or representations as to potential or projected yield, return, use (present or potential) or development potential; and

(d)   the Property is sold and is to be accepted by the purchaser in its present state of repair and condition and subject to legal and physical defects (if any) and any Contamination.

43.2   Purchaser's Own Enquiries

The purchaser relies entirely upon its own enquiries and investigations in relation to the following:

(a)   the quality and state of repair of the Property and of any services;

…

(d)   the fitness of the Property for the purchaser's purposes;

…

and has satisfied itself on all such matters prior to entering into this contract.

45. It will be convenient, having set out the relevant parts of additional clause 43, to make the following observations concerning its operation in the present context. As the construction of Tower A had not commenced at the time the parties entered into the contract, and as its design had not yet been completed, it was plainly impossible for a purchaser to have inspected the Property. Not only was additional clause 43.1(a) meaningless, but it was likely in its context to confuse any layperson who tried to understand the effect of the provision. As to additional clause 43.1(b), it was all well and good for JQZ to have imposed an acknowledgement on the Lonergans that they had entered into the contract as a result of their own enquiries and inspections, but that provision begs the question of what enquiries and inspections a purchaser could undertake. Given the status of the Prime Development as being only the subject of a relatively rudimentary plan at the time the parties entered into the contract, no inspections were possible, and a lay potential purchaser might think, in the circumstances, that enquiries should be made of JQZ’s agent. Additional clause 43.1(d) was plainly meaningless at best, as the Property did not have a present state of repair and condition.

46. Additional clause 43.1(c) is in a different position because, as a statement of the negative, it was capable of application, notwithstanding that it was impossible for a potential purchaser to satisfy the purchaser's requirements in the property by means of any enquiry or inspection. The practical effect of additional clause 43.1(c) (and 65.2, which is set out below) was to require a purchaser to identify every feature of what the purchaser was informed by the display suite, any available plans, and all representations made by JQZ's agent that was important to the purchaser, and then seek to protect the vendor by having the requirement that the feature be inserted in the contract.

47. Additional clauses 43.2(a) and (d) are also obviously impossible to apply given that the Property did not exist at the date of the contract.

48. I will come to the significance of the Lonergans having the advice of a conveyancing solicitor below. The issue will be whether the Lonergans' knowledge of any of the above terms of the contract has had the effect of preventing JQZ's conduct being misleading or deceptive, or the Lonergans entering into the contract other than in reliance on that conduct. Any advice that the solicitor gave the Lonergans may be relevant to those issues. However, in the context of the analysis of the terms of the contract, it should be noted that, as I have explained, the meaning of some of the terms, insofar as they gave JQZ latitude to make changes, is not entirely clear. Some of the terms plainly could not apply to the purchase of the Unit because they assumed that the Unit existed and could be inspected. JQZ has sought to 'cherry pick' the terms that could apply practically to an 'off the plan' unit whose design was preliminary and incomplete. However, the reaction of a potential purchaser to the terms of the contract should be approached in a holistic way, if the issue is whether those terms had the effect that JQZ's conduct was not misleading or deceptive, or to support a conclusion that the Lonergans knew that they could not rely on any representation by JQZ or its agent, or upon any other information provided to them by JQZ.

49. In addition to clause 15, additional clause 49 required the parties to complete the contract by the Completion Date, and clause 49.2 provided:

49.2   Notice

(a)    In the event that completion does not take place by the Completion Date, then the party who is ready, willing and able to complete and is not in default may serve the other party with a notice (Notice to Complete) in writing requiring completion to take place not less than ten (10) Business Days from (and including) the date of service of the Notice to Complete, then for the purposes of this contract time will become and be deemed to be of the essence for the purposes of completion.

(b)    Following service of the Notice to Complete, time is deemed to be of the essence for the purposes of completion.

(c)    For all purposes at law and in equity, the parties acknowledge that 14 days is reasonable and sufficient notice within which to require completion.

50. Additional clause 49.3 entitled the parties to withdraw any Notice to Complete issued by them or to extend the period of notice, or to issue subsequent Notices to Complete.

51. Additional clause 64 provided for a method for the service of notices in the following terms:

64.2   Service Method

Any notice may be served by delivery in person or by post or transmission by facsimile (if the facsimile number is specified in this contract) to the address or number of the recipient specified in this contract or most recently notified by the recipient to the sender.

52. Additional clause 65.2 provided:

65.2   Entire contract

This contract contains the entire understanding between the parties concerning the subject matter of the contract and supersedes all prior communications between the parties.

53. The preliminary strata plan in Annexure B to the Contract simply depicts the Unit by the outline of its boundaries and the symbols "PT133 121sq.m.". This depiction appears on the page representing “Level 16”.

Background facts

54. I will begin my consideration of the evidence by stating my conclusions concerning the creditworthiness of the evidence given by the witnesses.

Findings on credit of witnesses

Mr Lonergan

55. It was evident from the evidence given by Mr Lonergan that he gave the greater attention to the events that led to the Lonergans entering into the contract than did Ms Lonergan. They both participated in those events and discussed and agreed the course that they would take, but Mr Lonergan appears to have focused more on the detail of the transaction than did his wife.

56. I found Mr Lonergan to be an entirely satisfactory witness, whose evidence on the material issues I have been able to accept with confidence. I will explain below why I reject the submission made by JQZ that Mr Lonergan was an unsatisfactory witness. Mr Lonergan gave direct and immediate answers to all the questions that were asked of him in cross-examination. Wherever he could answer a question in the simple affirmative he did so. Mr Lonergan appeared to me to answer questions without regard to the consequences to his case. In particular, as will be seen, he readily admitted that he had read terms in the draft contract upon which JQZ seeks to rely in its defence. Furthermore, it was my impression that Mr Lonergan’s answers were generally appropriate to the questions. I accept Mr Lonergan as a witness of truth. The transaction was a very important one for the Lonergans, and I accept that Mr Lonergan paid attention to detail, at least to the extent that was possible given the relatively incomplete nature of the plans for the Prime Development. I have not hesitated to accept Mr Lonergan’s evidence on points of detail, because the subject matter was generally important to the Lonergans and was of a nature likely to be retained in memory.

57. JQZ's first submission as to why Mr Lonergan was not a satisfactory witness rested on his evidence that, in an application for finance for the purchase of the Unit that he made on 30 October 2019, he did not disclose as a liability a debt of $140,000 that he owed to Bendigo and Adelaide Bank. JQZ submitted that Mr Lonergan initially denied the non-disclosure and then attempted to explain that it was disclosed by the repayments being part of the monthly groceries expense, which JQZ said was an incredible explanation. The circumstances in which the $140,000 debt arose were not explored in any detail in the evidence. Mr Lonergan appeared to be surprised by the questions directed at the existence of the debt and did not appear to have time to have fully recalled those circumstances. Mr Lonergan said that the debt arose as a result of a judgment in some unidentified class action suit (T 114.3). He said that an order had been made that the debt be paid by instalments of $1,570 per month (T 113.30). He said that he would not intentionally have misled the lender to whom the credit application was made (T 114.31), and that he believed the monthly repayment of the judgment debt was disclosed in the monthly expenses of $5,735 (T 113.34). There is some force in JQZ's submission that Mr Lonergan's evidence appeared to be questionable on this issue but, given the absence of detail, I am not prepared to accept that this incident demonstrates that Mr Lonergan is a generally untruthful person. If in some way the judgment debt arose out of a class action, it may have concerned some investment made by Mr Lonergan with other persons in the same class. I am not prepared to disbelieve Mr Lonergan's explanation, which I take to be that he treated the liability as a monthly expense.

55. Next, JQZ submitted that Mr Lonergan had falsely stated that he had a loan approval from Pepper Finance to cover the liability to Bendigo and Adelaide Bank as well as to finance the completion of the contract. JQZ made this submission by reference to Exhibit D1, which was a Final Approval dated 2 August 2017 by Pepper Group Ltd trading as Pepper Money for a loan of $363,069.13 secured on a property at Ermington owned by Mr Lonergan. On Mr Lonergan's evidence, that borrowing was made to pay out an earlier mortgage and to obtain funds to pay the balance of the deposit under the contract. Mr Lonergan's evidence was (T 111.26): "… So, when you take out a bank loan, they don't only just give you the deposit, they look after the whole scenario at the end of settlement. So, we had approval from Pepper Money and this was a – this was to try and get a lower value rate – interest rate" (referring to applications for finance that the Lonergans had made to alternative lenders). JQZ also relied upon the following part of the cross-examination of Mr Lonergan (T 116.14-22):

Q. By the time of the inspection of 7 November, Mr Lonergan, you had no finance approved, did you?

A. We had the original Pepper loan approval, which was based on the whole scenario, so Shore Financial had started discussions with banks to get a lower interest rate.

Q. Did the Pepper loan approval cover the repayment of the Bendigo and Adelaide Bank loan?

A. Yes.

59. JQZ's submission was technically correct insofar as the Lonergans appeared not to have had a final binding loan approval for the amount necessary to complete the contract. The only loan approval that was in evidence covered the balance of the deposit. However, it appears from Mr Lonergan's evidence that it was his position that he had discussed the matter with Pepper Money and that he had been given to understand that, having made an advance that included funds necessary to pay the deposit under the contract, it had already considered the Lonergans' financial position and it had indicated in some way a preparedness to provide the balance of the finance. Mr Lonergan's position was that all the evidence that was tendered concerned unsuccessful applications for finance that had been made through a mortgage broker to lenders who were likely to require a lower interest rate than would Pepper Money. I am not satisfied that JQZ has adequately demonstrated that Mr Lonergan knowingly gave false evidence to the Court. The evidence did not establish what the true arrangement was between the Lonergans and Pepper Money. There is some plausibility in Mr Lonergan's assertion that Pepper Money would not have advanced the deposit money without satisfying itself that the Lonergans were a good credit risk for a loan for the balance of the price. I reject JQZ's attempt to persuade the Court that an apparently honest witness has given dishonest evidence based upon imprecise inferences asserted by JQZ about the Lonergans' relationship with Pepper Money.

60. Thirdly, JQZ submitted that the Court should find Mr Lonergan was an unsatisfactory witness because (a) he said that he would not have contributed to the purchase if Ms Lonergan had gone through with the contract to purchase the two-bedroom unit (which I will explain below) alone, which JQZ submitted was obviously necessary, and (b) Ms Lonergan gave contrary evidence. Mr Lonergan did say that he was not "going to contribute to the purchase" (T 31.29). Ms Lonergan accepted that Mr Lonergan was going to contribute to the purchase price, although she said that she was not sure that the two-bedroom unit would be an investment for both the Lonergans, even though it was going to be in her name (T 157.11-157.17). So far as the cross-examination of the Lonergans was concerned, the issue was left there. The difficulty the Court has in accepting JQZ's submission is that the issue was not explored in sufficient detail to justify a finding that Mr Lonergan's evidence was untruthful. Ms Lonergan in fact signed the first contract for the purchase of a two-bedroom unit in her own name for a price of $1,190,000, which required the payment of a deposit of $119,000. The two-bedroom unit, if purchased, would have been an investment property, and there is no evidence as to whether the rent from the leasing of the property would have covered the holding costs of the mortgage. Ms Lonergan apparently had some funds to apply towards payment of the deposit, but when the Lonergans decided to buy the Unit, which required payment of a deposit of $158,000, they had to make other arrangements, including obtaining the agreement of JQZ to defer the payment of part of the deposit, and it became necessary for Mr Lonergan to join Ms Lonergan as a purchaser. The evidence is insufficient to enable the Court to determine what the real position was, and whether Mr Lonergan could not honestly say that he understood that he would not be contributing to the price of the two-bedroom unit.

61. JQZ's fourth submission was that Mr Lonergan persisted in giving instructions to Hunt & Hunt to send letters stating that Mr Zhu had said that the Lonergans could have a bath in the Unit, when JQZ had in fact rejected a formal application that a term to that effect be inserted in the contract. It is true that the Lonergans asserted, after the date of their inspection of the completed Unit, that they had been told by Mr Zhu that they could have a bath in the main bathroom. Mr Lonergan explained the error by saying that, when the claim was made on their behalf, they had not revisited the correspondence between the solicitors before the date of the contract. Mr Miller, their solicitor, who wrote the later letters making the complaint, had obviously also forgotten that he had made a request that the inclusion of a bath be inserted in the contract but that the request had been rejected by JQZ. This represents a trivial error in recollection by both Mr Lonergan and Mr Miller and does not bespeak dishonesty on Mr Lonergan's part.

62. JQZ's final submission as to why the Court should find that Mr Lonergan was an unsatisfactory witness was based upon the fact that Mr Lonergan denied in cross-examination that he had decided not to complete the contract by 7 January 2020, when he had in fact written to his mortgage broker to that effect on 3 January 2020. I do not accept that this relatively trivial error in recollection as to dates justifies a finding that Mr Lonergan was not an honest witness.

Ms Lonergan

63. I also found Ms Lonergan to be a creditworthy witness. I am satisfied that Ms Lonergan answered questions put to her in cross-examination truthfully and to the best of her ability. Ms Lonergan did not have quite the same grasp of the detail of events as did her husband, but I am satisfied that was because she left it to Mr Lonergan to attend for both of them to some of the details of the transaction, so that, for example, she did not read the contract, the floor plans provided to her by Mr Zhu, or the draft strata plan annexed to the contract. I have no hesitation in accepting the evidence given by Ms Lonergan.

Mr Zhu

64. I accept that the evidence given by JQZ's agent, Mr Li Zhu, was given conscientiously and to the best of his ability. I accept Mr Zhu as an honest witness. However, the credibility of the evidence given by Mr Zhu must be assessed having regard to the fact that his role was to procure purchasers for the units in the two stages of the Prime Development that were the subject of the retainer of CBRE, his employer. It was Mr Zhu's role to converse with a substantial number of potential purchasers who attended the display suite during the marketing program. This was not a case where the agent dealt with a relatively small number of potential purchasers in respect of a single property over a significant marketing period. There were two open days, and there was evidence that on each day a substantial number of potential purchasers attended, so that queues formed, and potential purchasers had to wait for some time until a representative of CBRE became available to speak to them. Consequently, Mr Zhu must have spoken with a significant number of potential purchasers on each occasion. He would have been required to cover substantially the same subject matter with a significant number of interested parties. There is no reason to think that anything discussed with the Lonergans would have stood out in Mr Zhu's memory. The evidence does not disclose when Mr Zhu was first required to recall his interactions with the Lonergans. However, his affidavit was made on 19 October 2021, about five years after the relevant events occurred. Mr Zhu could not be expected to have actually recalled his interaction with the Lonergans in reliable detail.

65. I am satisfied that, where Mr Zhu has given evidence of the detail of his interactions with the Lonergans, he has been required to reconstruct that recollection, and his evidence has been influenced by his attempt to recall what he would have done in the circumstances based upon his general recollection of his ordinary practices. That does not reflect dishonesty on Mr Zhu's part, but is a reflection of the process he was required to engage in to respond to the evidence given by the Lonergans.

66. Where the evidence of the Lonergans departs from the evidence given by Mr Zhu on the central issues of fact, I have preferred the evidence given by the Lonergans.

The remaining witnesses

67. The remaining witnesses for JQZ, Ms Yi Zhou, who was its development executive, Mr Justin Wu, who was its program manager, and Mr Roger Mattar, its solicitor, gave relatively uncontroversial background evidence.

The Lonergans’ circumstances

68. Mr and Ms Lonergan were about 46 and 41 years of age respectively at the date of the contract. They had three children who were then about 15, 11 and 3 years of age.

69. Mr Lonergan completed his Higher School Certificate in 1988. He obtained a Trade Certificate in Fire Systems from NSW TAFE in 1992, a Certificate IV in Fire Technology from the Sydney Institute in 2002, and a Graduate Certificate in Fire Safety Engineering from the University of Western Sydney in 2012. At the time of the contract, Mr Lonergan was employed as a Services Infrastructure Manager by Sydney Airports Corporation. He was made redundant on 30 September 2020 and was self-employed at the time of the hearing.

70. Ms Lonergan completed her Higher School Certificate in Perth in 1992. She obtained a Diploma in Hotel Management from a Community College in Arizona, USA, in 1995.

71. At the time the contract was entered into, the Lonergans were living in a rental apartment in Chatswood with their three children.

72. Mr Lonergan was the owner of a house at Ermington, which he had acquired from his mother for a price of $200,000, which he had borrowed by a mortgage secured on the property. Mr Lonergan’s aged mother lived at the Ermington property. Both the Lonergans sometimes stayed at the property to look after Mr Lonergan’s mother.

73. The Lonergans had not previously bought a property ‘off the plan’. The Lonergans initially planned to acquire an investment unit. By searching on the Internet, the Lonergans discovered the proposal by JQZ to construct the Prime Development. This was an attractive proposition to the Lonergans because it adjoined the Macquarie Centre, which was a large shopping mall with a lot of shops, restaurants and other amenities including a cinema complex. It also had a railway station on the Epping-Chatswood railway line.

74. The Lonergans decided that they would look at the Prime display centre. Ms Lonergan registered their interest in the Prime Development and received an invitation by email for a "VIP" event from CBRE on 4 October 2016. The invitation to the launch of the display centre included a requirement that a "$5,000 Expression of Interest (EOI) amount" be paid to secure an appointment at the launch, which was to be refundable if a decision was made not to make a purchase.

75. As will be seen, the Lonergans’ perspective in responding to JQZ’s conduct is important to the determination of whether that conduct was misleading or deceptive. I find in this respect that the Lonergans were inexperienced in the purchase of residential property on the open market and that they had no experience in purchasing units ‘off the plan’. They were renters and had to mind their money carefully. They were prudent and careful people and attended as best they could to the detail required in entering the contract. Mr Lonergan’s professional experience lay in managing services infrastructure. He did not have significant experience in what was required for the design and construction of substantial home unit developments. Ms Lonergan had no relevant experience in these matters. Both were substantially dependent on the information provided to them by JQZ and its agent in deciding whether they should enter the contract.

First visit to the display suite

76. The opening of the display centre was held on 23 October 2016, which was a Sunday. When the Lonergans arrived, there was a long queue outside. After some delay they were introduced to Mr Zhu, a CBRE sales consultant, who used the first name Roger.

77. The display suite for the Prime Development included:

• floor plans for each of the floors in the then proposed Stage 1 of the Prime Development, which was to be two buildings, and included Tower A in which the Unit was eventually built;

• a fully built sample bedroom;

• a fully built sample kitchen and dining area;

• a fully built sample bathroom;

• a fully built sample living room; and

• a scale model of the Prime Development, together covering an area about as big as a dining table and about 50 cm high.

78. The Lonergans did not specifically say so in their evidence, but it is an obvious inference from their evidence and the lack of contradiction in the evidence given by JQZ that the fully built sample living room did not have a large structural column in it.

79. Towards the end of the tour of the display suite, the Lonergans discussed the purchase of unit 11505, which had two bedrooms plus a study. They then had a conversation with Mr Zhu, in which he explained that they would have to put down a $5,000 ‘expression of interest’ deposit that day. The Lonergans agreed and Ms Lonergan paid the $5,000 using her credit card.

80. After 23 October 2016, the Lonergans discussed the possibility that the two-bedroom plus study unit might be too small for their purposes. They discussed whether it would be preferable for them to buy a three-bedroom unit. Mr Lonergan’s Ermington property required rebuilding and the construction of a granny flat. The Lonergans and their children would be able to live in a three-bedroom unit as their home while the Ermington property was reconstructed. In the longer term, a three-bedroom unit in the Prime Development might be an alternative and preferable home for the Lonergans, particularly after their children left home.

Second visit to the display suite

81. The second meeting with Mr Zhu happened on 30 October 2016, when the Lonergans went back to the display centre at about 10:00 or 11:00 AM to have a look at the floor plan of apartment 11505. They looked through the Stage 1 lot plans on the wall and the unit model again and had a discussion with Mr Zhu about unit sizes. In his first affidavit, Mr Lonergan said in par 18 that Mr Zhu said: “The 3 bedrooms are a fair bit larger than the 2 bedrooms with study. And some of them have the black privacy screens on the balcony at no extra cost.”

82. Ms Lonergan said in par 15 of her first affidavit that a conversation to the following effect occurred:

David:    We are discussing with each other if a 2 bedroom plus study will be big enough.

Mr Zhu:    Why don't you go for a 3 bedroom? There are still some available. Some of them have the black privacy screens on the balconies.

Me:       Is there a cost for the black privacy screens?

Mr Zhu:    No, there is no cost for the black screens.

83. Although some potential purchasers might have been indifferent as to whether the unit that they selected had black privacy screens, it was a feature of particular interest to the Lonergans.

84. In the following and later paragraphs I will set out extracts from the evidence given by witnesses in cross-examination. For the sake of brevity and clarity I will sometimes abbreviate the evidence as set out in the transcript.

85. Ms Lonergan’s evidence on the subject in cross-examination was (T 152.21-153.16):

Q. In there you say that you suffer from rosacea and need to stay out of the sun as much as possible. Do you see that?

A. Correct.

Q. When you say you need to stay out of the sun, does that mean the sun in the middle of the day?

A. Well, any of the sun in any time.

Q. But it's true, isn't it, that the sun during the middle of the day is much stronger. Is that more of a problem than in the afternoon or the morning?

A. Not always.

Q. Is the problem that's caused by the sun is that it creates a rash? Is that right?

A. Hives. Rash and hives as well because I have rosacea and urticaria, which is all hives everywhere and all over my body.

Q. It’s the place on your body that feels the sun that that there's the problem. Is that right?

A. I don't understand.

Q. If you get sunlight on your face, that's where the skin problem is. Is that right?

A. Which ever part of my body exposed to the sun it will affect. Say for example, if I’m on summer I’m going to the beach with the kids, I come back with all hives everywhere.

Q. But wherever the sun hits. Is that right?

A. Yes, that's right.

Q. So you do go to the beach with the kids, do you.

A. Not that often. I would love to, but yeah not that often.

Q. Is it right that it’s the sun in the middle of the day that's more of a problem than in the evening or the morning?

A. Sometimes in the evening can be really sunny as well and depends on the way that - at the moment Sydney where you can’t predict.

Q. Do you have creams that you can put on your face do you if--

A. Yes. If I come back, for example, if I come back with the rashes all over the body and stuff like that so I straightaway took the medication and then after I put some ointment as well, which is called Rozex for the rosacea and some cream that's prescribed by the doctor and then maybe about seven days it will reduce. And then normally I isolate myself because this look really, really not pretty. Even my little ones say, “You just look ugly Mum.” You know, so, like rest everywhere. So, hives.

86. It was suggested to Ms Lonergan in cross-examination that her suffering from rosacea was not in fact a reason for the Lonergans to choose a unit with black privacy screens, but Ms Lonergan insisted that it was, and I accept her evidence.

87. Ms Lonergan’s evidence was, in the following terms, that she would not have purchased the Unit if she did not think that it had black privacy screens (T 160.48-160.50):

Q. You still would have signed that contract even if you did not think that it had black privacy screens. Do you agree or disagree with that?

A. No, I wouldn’t buy it if that’s no black screen.

88. On the same subject, the cross-examination of Mr Lonergan was as follows (T 106.29-106.46):

Q. Mr Lonergan, you knew, as of 18 November 2016, that subject to obtaining the relevant approvals from the council and from the strata corporation, that if there were no black screens built on the outside of unit 11803, you could have installed yourself?

A. No.

Q. Do you say that because you didn’t give it any thought at the time?

A. No. It would depend on the screens and whether it had any screens.

Q. Mr Lonergan, I suggest to you that you and your wife would have entered into this contract to purchase 11803 whether or not you had understood that it was going to have black privacy screens?

A. I can only speculate. I would say no.

Q. And I suggest to you that you didn’t raise the question of black privacy screens through your solicitor with the vendor solicitor before 18 November because it was not an important consideration in you purchasing the property.

318. I do not propose to decide the remaining issues that I have set out above. My principal reason is that it is obvious from the length and complexity of the reasons given for determining the Lonergans’ misleading or deceptive claim that it has taken considerable judicial effort to determine that claim in a proper way. The determination of the remaining issues that do not now arise would require at least the same amount of judicial effort. I cannot justify the time and effort involved given that it would prevent the Court from determining in a timely way many other claims that are awaiting judgment.

319. To reduce the risk of judicial inefficiency if my determination of the misleading or deceptive conduct claim is overturned, I have set out comprehensively above the facts that have been established by the evidence.

320. I think it is warranted that I make the following additional observations. It is clear from the evidence that Mr Lonergan received actual notice of both Notices to Complete. He said in evidence that he was offended that his name was not on either notice as an addressee. Mr Lonergan gave instructions to Hunt & Hunt on behalf of the Lonergans in response to both notices.

321. The issue of whether the second Notice to Complete was effective is in my view a question of law and depends upon whether it is an essential formal requirement of a notice to complete that it be addressed to all the parties to the contract who are under an obligation to complete. The Lonergans’ case on this issue relied upon the judgment of Hamilton J in Ng v Chong [2005] NSWSC 270; (2005) 12 BPR 22,903. There may be grounds for distinguishing that decision. The validity of the conclusion reached by his Honour may also, with respect, be a contentious question. I do not think that it is appropriate for a judge at first instance in this Court to express conclusions on these questions by way of obiter dictum, and it is not warranted in the circumstances that I expend the time necessary to consider them properly, and the advancement of the law will not be assisted by my expressing insufficiently considered personal views.

322. In relation to JQZ’s conventional estoppel response, the evidence established that the two notices to complete were addressed solely to Ms Lonergan (as well as Hunt & Hunt) because of an administrative error in JQZ’s solicitors’ office because of the purchaser’s details not being adequately updated after Ms Lonergan terminated the first contract under which she was the sole purchaser. On the issue of whether a conventional assumption existed as between JQZ and the Lonergans through their solicitors, it should be noted that the Lonergans’ solicitor responded to the two notices to complete using the expressions “our client” and “her”, as if he was only acting on behalf of Ms Lonergan: see [159]-[169] above.

323. While the remaining issues that I have not determined probably give rise to complex questions of law, it is unlikely that their determination will, if that becomes necessary, depend upon many significant facts that I have not determined, or that are not obviously established by the evidence.

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Decision last updated: 27 October 2022