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JUD-GMENT No. 2bQ
MOT FOR DISTRIBUTIOY
) No. ACT G 78 of 1987
| BCIWW: | GREGORY MORGAN LORKIN and JOHN |
| HALTER REDENSKI |
Applicants
| AND: | COLLIERS I ~ A T I O N A L | PROPERTY |
| CONSULTANTS PTY LIMITED |
Respondent
| J U M ; E N G ORDm | : Neaves J. |
1. Declares that the respondent is entitled to the following particulars, namely -
| (a) Particulars of the acts facts | matters |
and circuratances on which the applicants rely in support of the allegation in par.2 of the amended statement of claim that the rcapondent knew or ought to have known that the applicants were proposing to finance the sub-division of the Ridgeview Estate.
| (b) Particulars of the acts facts | matters |
| and circuratances on | which | the |
applicant8 rely in support of the allegation in par.5 of the amended statement of claim that the respondent intended the various matters set out in that paragraph and
the further allegation therein that the respondent knew or ought to have
known of those matters.
| Particulars of | the purchase by the |
applicants of shares in Jaifilm Pty Limited as alleged in par.7 of the amended statement of claim, including the usual particulars of any
| agreement | pursuant | o | which | the |
purchase was effected.
Particulars of the terms, including interest, on which the sums totalling $210,000 referred to In par.7 of the
| amended statement of claim were | lent |
| to Jaifilm Pty Limited. |
Particulars of the acts facts matters and circumstances on which the
| applicants rely in support of | the |
allegation in par.8 of the amended statement of claim that the respondent was in breach of the duty alleged in par.6 thereof.
| Particulars, | substantially | in |
accordance with pars 53-65 inclusive
of the letter dated 14 January 1988
| addressed by the | respondent's |
| solicitors to the | applicants' |
solicitors, of the matters set out in
par.9 of the amended statement of
claim.
Particulars of the nature of each
| head of loss | or damage claimed and, |
where the amount claimed under any head is capable of substantially exact calculation, particulars of the amount claimed and the manner of its
2. Directs that the respondent within 7 days from the date of this order deliver to the applicants' solicitors an amended request for particulars giving effect to the declaration made herein.
3. Directs that the applicants furnish the particulars requested within 21 days after receipt of the amended request for particulars.
| 4. Reserves to each party | liberty | to | apply | on 24 |
| hours' notice to resolve any | dispute arising in |
relation to the amended request for particulars.
| 5. Directs | that the respondent | file | and | serve | a |
defence to the amended statement of claim within 14
| days after the receipt | of | the particulars |
| requested. |
| 6. Directs | that the matter | be | listed | for | further |
directions on 1 July 1988.
| 7. Orders | that | the costs of the motion notice | of which |
| is dated 12 April 1988 be costs in | the cause. |
| - | Note: Settlement and entry of orders | i dealt with in Order | 36 |
| of the Federal Court Rules. |
| IN THE m | COURT OF AUSTRALIA | ) |
| 1 |
| AUSIW&IAN CAPITAG TERRITORY | ) |
| |
| DISTRICT RDGISTRY | ) ) |
| GENERAt DIVISION | ) |
GREGORY HORGAN LORKIN and JOHN
HALTER REDMSKI
Applicants
| AND: | COLLIERS INTERNATIONAC PROPERTY
CONSULTANTS PTY LIMITED |
Respondent
C O W : Neaves J.
| By motion on notice | the | respondent, | Colliers |
International Property Consultants Pty Limited, has sought an order that the applicants, Gregory Horgan Lorkin and John Walter Redemski, provide further and better answers to a
| request made by letter dated 14 January | 1988 for particulars of |
| Patters alleged in the statement of claim | filed in this |
| proceeding on behalf of the applicants. |
| The applicants' claim against | the respondent is for |
unspecified damages and interest. It is alleged that the respondent, being a corporation within the meaning of the T r a d e practices A c t 1974 (Cth) ("the Act"), engaged in conduct that
| was misleading or deceptive or was likely to mislead | or deceive |
contrary to the provisions of s.52 of the Act. !She conduct relied upon is the furnishing by the respondent in or about
| September 1985 of what | is referred to as "a | written valuation |
report" in respect of a proposed sub-division by a company
known as Jaifilm Pty Limited of certain land in New South Wales
described as "the Ridgeview Estate" (pars 2 and 3 of the
| amended statement of claim). | The report is alleged to | have |
| been prepared | by | the respondent upon instructions from | a |
| company known as Finance Corporation of Australia Limited | "on |
account of Jaifilm Pty Limited" (par.3). It is further alleged that the valuation report "represented" various matters identified in the statement of claim (par.4) and that "In truth
| and in fact, the said | representations were false, untrue and |
| inaccurate" (par.9). | The applicants say that, acting on the |
| faith of the | representation6 and in reasonable reliance upon |
| them, they were | induced to purchase shares in Jaifilm Pty |
Limited and to lend certain moneys totalling $210,000 to that company (par.7).
In the alternative, the applicants sue the respondent
| in | negligence. | It is alleged | (par.5) | that | the respondent |
| intended and knew or ought to have known that the contents | of |
| the valuation report would be communicated to the | applicants; |
| that, | in conformity with normal commercial | practice, the |
| applicants would be responsible | for the payment of the |
| respondent's fee for the valuation report; | and | that | the |
| applicants would rely or were reasonably entitled to | rely upon |
the report and its contents and would, or would more probably than not, be induced thereby to advance and to pay and outlay moneys of their m to or for Jaifilm Pty Limited for the purpose of facilitating the purchase of Ridgeview Estate and the subaequent sub-division, development and sale thereof. The respondent is alleged (par.6) to have been under a duty to the applicants to take care in the making of the representations
| and, | in | particular, to take reasonable | care | to avoid the |
Imparting thereby to the applicants of information andlor advice which was incorrect. The respondent is alleged to have
| been guilty of negligence | in | making | the | representations |
| (par.8). |
| The above summary of the applicants' claim | is taken |
| from the amended statement of claim which was filed, by | leave, |
on 11 Harch 1988. As the letter dated 14 January 1988 was based upon the statement of claim prior to its amendment, the language in uhlch some of the requests are cast is not apt to
| refer to what | is alleged in the document as amended. |
| The particulars sought are set out in | 73 numbered |
paragraphs. The applicants have furnished particulars which
| the respondent regards as sufficient in respect of three of |
| thoee paragraphs. | It is convenient to deal with the issues |
| raised by reference | to the various paragraphs | of the amended |
| statement of claim | in relation to which an order for further |
and better answers is sought.
| As to par.1 of the | amended statement of claim, which |
alleges that the respondent is and was at all material times a
corporation within the meaning of the Act and a valuer carrying
on business in the Australian Capital Territory, I do think the respondent is entitled to the further particulars requested.
| As to par.2, | the respondent requested to be informed |
| of | the acts facts matters and circumstances on which the |
allegation was based that the respondent knew or ought to have
| known that | the | applicants | were | proposing | to finance | the |
| sub-division of the Ridgeview Estate. | The applicants' answer |
| was in these terms: |
| "Direct communication between | the Applicants and |
| the Respondent further particulars | of which are |
| a matter of evidence". |
| In my opinion, the answer is inadequate. | The respondent | is |
| entitled to have particulars | of the acts facts matters and |
| circumstances on | which the applicants rely in support | of the |
allegation that the respondent knew or ought to have known of what the applicants proposed. The respondent also sought precise details of what the applicants proposed but, in my
| opinion, | the | respondent | is not | entitled | to | have the |
applicants furnish such details.
| Paragraph 3 relates to the preparation of the valuation report and the circumstances in which it came to be prepared. In my opinion, the respondent is not entitled, at this stage, that is to say before the respondent has delivered a defence, to the particulars requested. However, if, upon the delivery by the respondent of its defence, an |
| Issue arises between | the parties whether the valuation |
report a s prepared "upon instructions from Finance Corporation of Australia Limited on account of Jaifilm Pty Limited" as alleged in this paragraph, the respondent will be entitled to be informed whether those instructions were oral or in writing and to receive the usual particulars in relation thereto. It must be borne in mind that the circumstances in which the respondent received instructions to prepare the report are within its own knowledge.
| Further, the allegation is that | the instructions were |
| received from a | third party having, so far as appears, no |
| association with the applicants so that it would | seem |
| appropriate that, | if the applicants become obliged | to |
| deliver such particulars, they should | not be required to do |
| so until after discovery. |
As to par.5, the substance of which has already been set out, I am of opinion that the respondent is entitled to have particulars of the acts facts matters and circumstances on which the applicants rely in support of the allegation that the respondent intended the various matters
| set out in the paragraph and of the further allegation | that |
the respondent knew or ought to have known of those matters.
| However, the language | of the relevant | requests needs | some |
| amendment | to | accord | with the | language of the amended |
statement of claim.
| As to par.6, | which sets out the duty which it is |
alleged the respondent owed to the applicants, I am of
opinion that the amended statement of claim sets out with
| sufficient particularity the facts and circumstances | which |
| are alleged to give rise to the duty. | I therefore, do | not |
| propose to direct the applicants | to | provide | further |
| particulars. |
| As to par.7, the respondent is entitled, | in my |
| view, to have particulara of the purchase by | the applicants |
| of shares in Jaifilm Pty Limited | including | the | usual |
particulars of any agreement pursuant to which the purchase was effected. The respondent in also entitled, I think, to have particulars of the terms, including interest, on which
| the sums | totalling $210,000 were lent to that company. |
| However, in my | opinion, the respondent is not entitled to |
| have M answer | to its request to be informed precisely of |
| the profit the applicants were expecting to | make. |
| Paragraph 8 alleges that the respondent, in breach of its duty as set out in par.6, | was guilty of negligence in |
| making the representations set out in par.4. | In my opinion, |
| sufficient particularity has been | given of | the facts and |
| circumstances in which the duty alleged | is said | to have |
| arisen. However, | the respondent is, I think, entitled to |
| be informed of the acts facts matters and circumstances | on |
| which the applicants rely to establish that there was a |
| breach of that duty. | In other words, the respondent | is |
| entitled to be informed of the respects in which it is | said |
| to have been negligent. |
| Paragraph 9 alleges that the representations set out in par.4 were false, untrue | and inaccurate and purports |
| to give particulars | of that allegation. In | the course of |
| argument, counsel | for | the applicants disclosed that the |
applicants do not assert that the opinions expressed in the
| report were not held but allege that there | was no basis upon |
| which an expert valuer, acting properly, could | have arrived |
| at the conclusions set | out | in the | valuation report. | I |
understood counsel to be foreshadowing that the case for the
applicants would be that the “representations“ contained in
the valuation report were made without any foundation and
| with reckless | indifference as | to their | accuracy. | Some |
further amendment of the statement of claim to make clear the basis of the claim may be desirable. The difficulties of bringing a case such as this within the scope of 6.52 of
| the Act have | recently been adverted to by a Full Court | of |
| this Court in Anvita | Ptv Limited v. | Swan ProDerties Pty |
Limited (15 April 1988 - unreported).
| For the most part, | par.9 merely states the negative |
| of what is alleged | in par.4 even though much of what is |
| alleged in par.4 is clearly matter of judgment, opinion or |
estimate. It is unnecesmary to set out the whole of the particulars contained in par.4 - it is sufficient to refer
| to some examples. That paragraph alleges, inter | U, that |
| the valuation report represented that: |
| “ ( 2 ) | Stage 1 would | on a more conservative |
estimate realise $451,000;
...
The advertising and promotion of Stage 1
would be $7,500;
| !Che margin for the develoDer. that | is | ~~ |
| the profit expectation | on itage 1, was |
| $85,000; |
| ... |
The land value of the undeveloped Stage
1 was $158,000;
...
The Manly sub-division to the south-east of the Ridgeview Estate was comparable for the purposes of valuation."
The applicants have, in answer to the respondent's request for particulars, identified the paragraphs of the valuation report in which each of the representations is alleged to be
found. The particulars given in par.9 in relation to the
sample sub-paragraphs of par.4 set out above are as follows:
Stage 1 was not capable of realising as much as $451,000, but M estimated sum of less than $361,000.
...
The advertising and promotion of Stage 1 would not have been $7,500, but an
| estimated sum of $10,000. |
The margin for the developer, that is
the profit expectation on Stage 1, would
not have been $85,000, but in fact would
have been a 106s.
...
The land value of Stage 1 was not
$158,000 but an estimated sum of $68,000
or less.
...
The Manly sub-division to the south-east was not comparable for the purposes of valuation."
| The respondent, in relation to the | particulars |
| given in par.9 and | set out above, requested to | 1 be informed |
| how the sums of | $361,000 | (particular | ( 2 | ) 1 , | $10,000 |
| (particular ( 4 ) ) and $68,000 | (particular ( 7 ) ) were arrived |
| at or calculated and, in relation | to particular ( 5 ) , how | it |
was alleged that the margin for the developer would have
| been a loss. | In relation to particular (18). the applicants |
were asked to state "every respect in which it is alleged that the pknly subdivision to the south east was not
| comparable | for | the purposes of valuation". | Similar |
| particularity was sought in respect of the allegations | made |
| in the other parts of par.9. | The applicants' only reply was |
| that the matters raised were matters | of evidence. |
| In my opinion, the | respondent is entitled to have |
| further | particulars of the | matters | set | out | in | the |
| particulars | given in | par.9. | These | are the particulars |
| sought in pars 53-65 inclusive | of the letter dated 14 |
| January 1988, though the language in which some of those paragraphs are cast appears to require amendment. |
| Paragraph 10, in my view, gives sufficient particulars of the conduct alleged to be misleading | or |
| deceptive or likely to mislead or deceive. | I propose to |
| make no order In respect of that paragraph. |
Paragraphs 11 and 12 go to damages and are in the
following terms:
"11. "he value of the land was insufficient to permit the proposed sub-division to be made and the Applicants did not make the expected profit and were unable fully to recover the loan to Jaifilm Pty Limited with interest.
12. In consequence of the foregoing, the
| Applicants have | suffered | loss and | |
| |
The respondents requested the following particulars as to
"71. State precisely all steps taken by the applicants to make the expected profit.
72. State precisely all steps taken by the applicants to recover fully the loan to Jaifilm Pty Limited with interest saying
| when each | step was taken." | |
As to par.12, the applicants were asked to state precisely
each item of loss or damage claimed, setting out precisely
| the amount | claimed. | To these | requests, the applicants |
| answered, as to par.11, | that the matters raised were matters |
| of evidence and, | as to par.12. that the claim was for |
| general 105s and damage and that, at the time of | answering |
| the request | for | particulars, | no special damages were |
| claimed. |
In my opinion, the answers given are inadequate
having regard to the nature of the claim which the
applicants seek to establish. If the applicants succeed in
| establishing | that | he | conduct | of the respondent was |
| misleading or deceptive or | likely to mislead or deceive in |
| contravention of s.52 of | the Act, they will be entitled to |
recover, not damages at large, but the amount of the loss or
damage shown to have been suffered as a result of the
offending conduct (see 8.82 of the Act). In the course of
| argument | upon the motion, | counsel for the | applicants |
indicated that the damages which the applicants seek to recover are to be measured by the difference between the profit which the valuation report furnished by the respondent stated would be realized from the sub-division, development and sale of the Ridgeview Estate and the profit
| which would have been disclosed by | a valuation report |
| properly prepared. | The amended statement of claim fails to |
disclose this as being the case which the respondent has to meet and is, in consequence, deficient in that respect. The answers made to the particulars sought clearly do not remedy the deficiency.
| The applicants are obliged, in my view, to inform the respondent of the nature of each head of loss or | damage |
| claimed and, where the amount claimed under | any head is |
capable of substantially exact calculation, particulars of
| the amount claimed and | the manner of its calculation. |
I have already indicated my view that, at this stage, that is prior to delivery of defence, the respondent
| is not entitled to the particulars sought under | par.3 of the |
| amended | statement of | claim. | Counsel for the applicants |
| submitted that the | Court should not order | that any of | the |
| other particulars be provided before defence although it | is |
| to be noted that this was not a ground relied upon by | the |