McEntee v SJ Berry

Case

[2022] SASCA 133

9 December 2022

Supreme Court of South Australia

(Court of Appeal: Civil)

SJ BERRY PTY LTD & ANOR v MCENTEE & ANOR

[2022] SASCA 133

Judgment of the Court of Appeal  

(The Honourable President Livesey, the Honourable Justice Lovell and the Honourable Justice Bleby)

9 December 2022

REAL PROPERTY - BOUNDARIES OF LAND AND FENCING - ENCROACHMENT OF BUILDINGS AND PARTY WALLS

TORTS - MISCELLANEOUS TORTS - DECEIT - GENERAL PRINCIPLES

TRADE AND COMMERCE - COMPETITION, FAIR TRADING AND CONSUMER PROTECTION LEGISLATION - CONSUMER PROTECTION - MISLEADING OR DECEPTIVE CONDUCT OR FALSE REPRESENTATIONS - PARTICULAR CASES - REAL ESTATE TRANSACTIONS

TRADE AND COMMERCE - COMPETITION, FAIR TRADING AND CONSUMER PROTECTION LEGISLATION - CONSUMER PROTECTION - MISLEADING OR DECEPTIVE CONDUCT OR FALSE REPRESENTATIONS - CHARACTER OR ATTRIBUTES OF CONDUCT OR REPRESENTATION - RELIANCE, INDUCEMENT AND CAUSATION

TRADE AND COMMERCE - COMPETITION, FAIR TRADING AND CONSUMER PROTECTION LEGISLATION - CONSUMER PROTECTION - MISLEADING OR DECEPTIVE CONDUCT OR FALSE REPRESENTATIONS - CHARACTER OR ATTRIBUTES OF CONDUCT OR REPRESENTATION - FAILURE TO TAKE REASONABLE CARE OF OWN INTERESTS

TORTS - NEGLIGENCE - CONTRIBUTORY NEGLIGENCE - APPLICATION OF APPORTIONMENT LEGISLATION IN CASES OF CONTRIBUTORY NEGLIGENCE

Appeal against a decision of a judge of the District Court.

The first appellant conducts a real estate business, with the second appellant as its sole director. In early 2017, the appellants assisted the vendors with marketing their property in Woodside for sale.

In March 2017, an agent of the respondents entered into a sale contract of the Woodside property on the respondents’ behalf. After completion of the contract, the respondents were made aware of an issue relating to a misalignment and house encroachment, and a further issue relating to a studio separately constructed on the property.

At trial, the respondents were successful in establishing a case against the appellants in a number of causes of action, including deceit and fraudulent misrepresentation, misleading and deceptive conduct, and a breach of duty of care.

On appeal, the appellants complained that in finding for the respondents, the trial judge had erred in both fact and law. Broadly, the appellants contended that:

•the judge erred in his application of the principles of proof applicable to findings of knowledge necessary to prove fraud and deceit. The appellants complained that the judge:

•       ‘did not have sufficient regard’ to the principles in Briginshaw v Briginshaw (1938) 60 CLR 336 and Butcher v Lachlan Elder Realty Pty Limited (2004) 218 CLR 592;

•       consequently erred in his findings of Ms Berry’s knowledge about the Encroachment Issues; and

•       misused his advantage as trial judge;

•the judge erred in his findings of reliance and inducement with respect to facts that the judge should have found but did not, and conclusions of law that he should have drawn but did not;

•the judge erred in his findings with respect to the representations claimed to have been made by the second appellant, again with respect to facts he found that he should not have found, facts that he should have found but did not, and conclusions of law that he should have drawn;

•the judge erred in failing to draw certain inferences in accordance with the principles established in Jones v Dunkel (1959) 101 CLR 298 such that the standard of proof required by Briginshaw v Briginshaw was precluded from being met; and

•the judge erred in the assessment of damages with respect to the encroachment issues and in the application of principles of apportionment.

Held, dismissing the appeal:

per Livesey P, addressing appeal ground 1, but otherwise agreeing generally with the reasons of Bleby JA:

1.The appellants failed to demonstrate that the trial judge made any error in his treatment of the evidence having regard to Briginshaw and Butcher.

2.      The findings made by the trial judge were clear, detailed and compelling.

3.The appellants’ challenge to the findings of the trial judge that the appellants were liable to the respondents in deceit must be rejected.

per Lovell JA, agreeing generally with the reasons of Bleby JA: 

1.While there was some tension between the trial judge’s credibility findings and some objective evidence which supported the appellant’s evidence, it could not be said that the findings were ‘glaringly improbable’.

per Bleby JA:

1.The judge was not required to make express references to the Briginshaw principles each time he made a finding of requisite knowledge and intention on the part of the appellants. He had, in any event, identified that he would be making findings on the action in deceit in accordance with those principles.

2.It was open to the judge to find that the second appellant did not disclaim any belief in the truth or falsity of the agent’s representation so as to be merely passing it on for what it was worth.

3.The judge’s findings with respect to the second appellant’s knowledge about the encroachment issues were made on the basis of carefully explained findings of fact. They revealed no deficiency of principle. They were not glaringly improbable.

4.The judge’s initially expressed findings about credibility and reliability of the various witnesses were supplemented by further findings in the context of the various contests of evidence. The appellants have not established that the judge misused his advantage.

5.The judge made detailed findings of reliance and inducement. The appellants have identified no basis for disturbing the judge’s findings.

6.The judge’s conclusions with respect to the studio representations were reached after careful consideration. The appellants have not identified how these conclusions can be said to be in error.

7.With respect to the principles in Jones v Dunkel, in circumstances where the appellants have not attempted to explain what evidence could have been given by any of the individuals they complained should have been called at the trial, the issue is not so much the respondents’ loss of an opportunity to respond at trial, but rather the appellants’ failure to explain the pertinence of the complaint.

8.It is not necessary or appropriate to speculate about what the result might have been had evidence as to the value of the property after the resolution of all issues been adduced. The judge was presented with an orthodox methodology of assessing loss. The appellants have not demonstrated that the judge erred in adopting Mr Winter’s valuation as at the date of the contract.

9.The apportionment determinations do not apply to the claims in deceit or to the damages for contravention of s 30 of the Australian Consumer Law. The appellants have not explained how the warranties and indemnities as between vendors and agent are relevant to that assessment.

Competition and Consumer Act 2010 (Cth) ss 84(2), 87CB, 87CD, 137B, 236; Competition and Consumer Act 2010 (Cth) Schedule 2 (Australian Consumer Law) ss 2, 18, 30, 30(1)(e), 30(1)(f), 236; Development Act 1993 (SA); District Court Act 1991 (SA) s 43; Encroachments Act 1944 (SA); Fences Act 1975 (SA); Real Property Act 1886 (SA) s 251 and Part 7A; Law Reform (Contributory Negligence and Apportionment of Liability) Act 2001 (SA) s 8; Limitation of Actions Act 1936 (SA) s 25; Supreme Court Act 1935 (SA) s 50; Trade Practices Act 1974 (Cth) s 52; Uniform Civil Rules 2020 (SA) r 218.17, referred to.
Abalos v Australian Postal Commission (1990) 171 CLR 167; Akerhielm v De Mare [1959] AC 789; Annand and Thompson Pty Ltd v Trade Practices Commission (1979) 25 ALR 91; Bisset v Wilkinson [1927] AC 177; Briginshaw v Briginshaw (1938) 60 CLR 336; Brunskill v Sovereign Marine & General Insurance Co Ltd (1985) 59 ALJR 842; 62 ALR 53; Butcher v Lachlan Elder Realty Pty Limited (2004) 218 CLR 592; Chambers v Jobling (1986) 7 NSWLR 1; Coal and Allied Operations Pty Ltd v Australian Industrial Relations Commission (2000) 203 CLR 194; Cook v Flaherty [2021] SASC 73; Crouch & Ors v The Bloody Mary Group & Ors [2020] SASC 68; Coulton v Holcombe (1986) 162 CLR 1; Derry v Peek (1889) 14 App Cas 337; Devries v Australian National Railways Commission (1993) 177 CLR 472; Doyle v Olby (Ironmongers) Ltd [1969] 2 QB 158; Effem Foods Pty Ltd v Lake Cumbeline Pty Ltd (1999) 161 ALR 599; Fleming v Advertiser [2016] SASCFC 109; Foster v Public Trustee [1975] 1 NZLR 26; Fox v Percy (2003) 214 CLR 118; Gardam v George Wills & Co Limited (1988) 82 ALR 415; Gates v City Mutual Life Assurance Society Ltd (1986) 160 CLR 1; Gould v Vaggelas (1985) 157 CLR 215; Holmes v Jones (1907) 4 CLR 1692; HTW Valuers (Central Qld) Pty Ltd v Astonland Pty Ltd (2004) 217 CLR 640; John McGrath Motors (Canberra) Pty Ltd v Applebee (1964) 110 CLR 656; Jones v Dunkel (1959) 101 CLR 298; Jones v Hyde (1989) 63 ALJR 349; Kizbeau Pty Ltd v WG & B Pty Ltd (1995) 184 CLR 281; Krakowski & Anor v Eurolynx Properties Ltd & Anor (1995) 183 CLR 563; Krakowski v Eurolynx Properties Ltd (1995) 183 CLR 563; L Shaddock & Associates Pty Ltd v Parramatta City Council (No.1) (1981) 150 CLR 225; Macks v Viscariello (2017) 130 SASR 1; Marks v GIO Australia Holdings Ltd (1998) 196 CLR 494; Masters v Cameron (1954) 91 CLR 353; McEntee & Anor v SJ Berry Pty Ltd & Ors [2021] SADC 102; Maxcon v Vadasz (No 2) (2017) 127 SASR 193; Musa v Alzreaiawi [2021] NSWCA 12; Mutual Life and Citizens’ Assurance Company Limited v Evatt (1968) 122 CLR 556; Neat Holdings Pty Ltd v Karajan Holdings Pty Ltd & Ors (1992) 67 ALJR 170; Norbis v Norbis (1986) 161 CLR 513; Potts v Miller (1940) 64 CLR 282; Rejfek v McElroy (1965) 112 CLR 517; San Sebastian Pty Ltd & Anor v Minister of Administering the Environmental Planning and Assessment Act 1979 & Ors (1986) 162 CLR 340; Sargent v Campbell [1972-1973] ALR 708; Simons v Zartom Investments Pty Ltd [1975] 2 NSWLR 30; Smith v Chadwick (1884) 9 App Cas 187; Smith v Moloney (2005) 92 SASR 498; Smith v New Court Securities Ltd v Citibank NA [1997] AC 254; Smith v NSW Bar Association (1992) 176 CLR 256; South Australia v Johnson (1982) 42 ALR 161; Stone v Chappel (2017) 128 SASR 165; State Rail Authority of New South Wales v Earthline Constructions Pty Limited (1999) 73 ALJR 306; Suttor v Gundowda Pty Ltd (1950) 81 CLR 418; Ted Brown Quarries Pty Ltd v General Quarries (Gilston) Pty. Ltd. (1977) 16 ALR 23; The Crown v McNeil (1922) 31 CLR 76; Toll (FGCT) v Alphapharm Pty Ltd (2004) 219 CLR 165; Toteff v Antonas (1952) 87 CLR 647; Travinto Nominees Pty Limited v Vlattas (1973) 129 CLR 1; Trawl Industries of Australia Pty Ltd v Effem Foods Pty Ltd (1992) 27 NSWLR 326; University of Wollongong v Metwally (No 2) (1985) 60 ALR 68; Voulis v Kozary (1975) 180 CLR 177; Warren v Coombes (1979) 142 CLR 531; Yorke v Lucas (1985) 158 CLR 661, considered.

SJ BERRY PTY LTD & ANOR v MCENTEE & ANOR
[2022] SASCA 133

Court of Appeal – Civil: Livesey P, Lovell and Bleby JJA

LIVESEY P:

Introduction

  1. By this appeal the appellants contest their liability in damages to the respondent purchasers for:

    1.deceit and fraudulent misrepresentation;

    2.contraventions of ss 18 and 30 of Schedule 2 to the Competition and Consumer Act 2010 (Cth), being the Australian Consumer Law, for misleading and deceptive conduct; and 

    3.negligent misrepresentation.

  2. The first appellant, SJ Berry Pty Ltd (‘SJ Berry’), was the company retained as land agent by the vendors of residential property at 14 Langbein Avenue, Woodside at or following a meeting with Ms Sandra Berry on 22 December 2016.

  3. Ms Sandra Berry, the second appellant, was the sole director of SJ Berry who made statements and representations to the respondent purchasers’ agent in connection with the sale and purchase of the property.  The respondents said that these statements and representations induced them to enter into a land contract with the vendors for the sale and purchase of the property dated 30 March 2017. 

  4. The primary judge held that Ms Berry was jointly liable with SJ Berry as a person ‘involved’ in contraventions within the meaning of s 2 of the Australian Consumer Law.

  5. The statements on which the respondent purchasers relied were made by Ms Berry to Mr Paul McEntee, who was acting as the agent for the first and second respondents, his wife and sister-in-law.  Those statements were made by Ms Berry during a private inspection of the property by Mr McEntee on 22 March 2017, in addition representations were made in marketing material and the contract, concerning issues relating to:

    (a)the misalignment of the fence and the encroachment of the house at 14 Langbein Avenue onto neighbouring property at 16 Langbein Avenue (together involving an area of 13.8m2, which by the time of trial was not disputed[1]), as well as

    (b)the conversion of a garage into a separate studio without Development Approval or Building Rules Consent and whether that room was habitable.[2]

    [1]     McEntee v SJ Berry [2021] SADC 102 at [32].

    [2]     McEntee v SJ Berry [2021] SADC 102 at [105]-[108].

  6. These statements and representations were referred to in the pleadings and reasons as the ‘Agent’s Representation’,[3] the ‘Vendors’ Representation’,[4] the ‘Express Studio Representation’ and the ‘Implied Studio Representation’.[5]

    [3]     McEntee v SJ Berry [2021] SADC 102 at [414]-[416].

    [4]     McEntee v SJ Berry [2021] SADC 102 at [455]-[457].

    [5]     McEntee v SJ Berry [2021] SADC 102 at [11]-[13], [580]-[585], together with the ‘Studio Marketing Representation’.

  7. The respondent purchasers contended, and the primary judge accepted that, but for the appellants’ wrongdoing, they would not have entered into the land contract at the agreed price of $547,500.[6] 

    [6]     McEntee v SJ Berry [2021] SADC 102 at [449]-[453], notwithstanding the dangers of relying on hypothetical evidence [441]-[442], [522].

  8. The primary judge also found that the vendors were liable for contraventions of ss 18 and 30 of the Australian Consumer Law, as well as for breach of contract, but their appeal was resolved before the hearing of this appeal.

  9. The respondent purchasers’ case was run at trial on the basis that the causes of action were proved by a combination of the statements made by Ms Berry to Mr McEntee, as well as representations made in her marketing material and the contract (principally clause 6 and General Annexure Item 1, set out below), together with her failure to properly disclose to Mr McEntee the extent of her knowledge regarding the encroachment and studio issues. 

  10. The respondent purchasers’ case was that Ms Berry grossly understated the extent of the encroachment issues, knowing that her statements and representations were false or alternatively they were made without any genuine belief in their truth.[7]

    [7]     McEntee v SJ Berry [2021] SADC 102 at [431].

  11. That case was proved by evidence and documents which demonstrated the knowledge of the vendors (though only Ms Rosewell was called to give evidence) regarding the encroachment and studio issues, as disclosed to their previous land agent, Mr Bishop, who in mid-2016 declined to continue marketing the property until the encroachment issues were resolved.[8] 

    [8]     McEntee v SJ Berry [2021] SADC 102 at [114]-[117].

  12. The respondent purchasers also relied on the disclosures made by the vendors to Ms Berry at their meeting on 22 December 2016 in connection with her engagement for the 2017 sales campaign.[9] In addition, they relied on the evidence and documents from the neighbour at 16 Langbein Avenue, Mr Kornelissen, who had been agitating the encroachment issues with the vendors for around 15 years and who had provided the vendors with surveys by Mr van Senden in 2002,[10] and by Mr Lohmeyer in 2014,[11] which the vendors later made available to Ms Berry. 

    [9]     McEntee v SJ Berry [2021] SADC 102 at [137]-[148]; the finding appears at [154].

    [10]   McEntee v SJ Berry [2021] SADC 102 at [6], [68], [88].

    [11]   McEntee v SJ Berry [2021] SADC 102 at [79]-[87].

  13. As well, the respondent purchasers relied on conversations between Ms Berry and Mr Lohmeyer on or about 24 January 2017,[12] and Mr Kornelissen on 2 February 2017,[13] which also exposed the extent of Ms Berry’s knowledge of the encroachment and studio issues, which the respondent purchasers said was not later conveyed to Mr McEntee at the site inspection, or to them before their entry into the contract. 

    [12]   McEntee v SJ Berry [2021] SADC 102 at [178]-[185]; the finding appears at [185].

    [13]   McEntee v SJ Berry [2021] SADC 102 at [197]-[211]; the finding appears at [212].

  14. The primary judge found that at the inspection Ms Berry raised the topic of the encroachment of the fence when they were standing in the backyard and told Mr McEntee that it was only slight, probably 100-200mm off the boundary.[14]  This was a gross under-estimate and false.[15]  Nothing was then said by Ms Berry to Mr McEntee about the encroachment of the house.

    [14]   McEntee v SJ Berry [2021] SADC 102 at [260].

    [15]   McEntee v SJ Berry [2021] SADC 102 at [277]-[281].

  15. An important contest at trial centred on Ms Berry’s denial of the statements that Mr McEntee attributed to her at that inspection, though she conceded in cross‑examination that, if she had acted as was suggested, that did not reflect what she then knew.

  16. It was never suggested that Ms Berry expressly disclaimed to Mr McEntee that she had no personal knowledge of the encroachment and studio issues.  It was never suggested that she warned Mr McEntee to make his own inquiries about those issues.  It was common ground that she did not give him copies of the 2002 and 2014 surveys, nor did she reveal that they existed.  She did not reveal the existence of any associated documents that she knew about (such as Mr Kornelissen’s flyer which contained part of the 2002 survey, or correspondence which explained the encroachment issues).[16]

    [16]   Such as the letter from Mr Kornelissen’s solicitors, FBR, that accompanied the survey by Mr Lohmeyer in 2014, which was sent to the vendors and later seen by Ms Berry, McEntee v SJ Berry [2021] SADC 102 at [146].

  17. The primary judge made detailed findings about Ms Berry’s state of knowledge and, by contrast, the paucity of what she revealed to Mr McEntee.[17]  Ultimately the primary judge rejected the evidence of Ms Berry: she was not a witness of truth.[18]  Where it conflicted with the evidence of Ms Berry, he preferred the evidence from Mr McEntee, the vendor Ms Rosewell and the neighbour Mr Kornelissen.  On the basis of these findings the primary judge upheld the respondent purchasers’ causes of action, again making detailed findings about each.[19]

    [17]   McEntee v SJ Berry [2021] SADC 102 at [44]-[46], [151]-[155], [180]-[185], [216]-[223].

    [18]   McEntee v SJ Berry [2021] SADC 102 at [44]-[46].

    [19]   McEntee v SJ Berry [2021] SADC 102 at [475] regarding deceit; [503], [530], [595], [604], [615] regarding misleading conduct; [647] regarding negligent misstatement.

  18. Damages for deceit were assessed by the primary judge by reference to the tortious measure of damage, namely, that sum which was necessary to put the respondents into the position they would have been had they not acted to their detriment in reliance on the appellants’ statements and representations.[20]  Damages were assessed with the benefit of valuation evidence and by reference to the difference between the amount paid by the respondent purchasers and the true value of the property having regard to the encroachment issues, being an amount of $137,500.[21] 

    [20]   Potts v Miller (1940) 64 CLR 282 at 297 (Dixon J); Toteff v Antonas (1952) 87 CLR 647 at 650 (Dixon J).

    [21]   McEntee v SJ Berry [2021] SADC 102 at [739]-[745].

  1. The respondents claimed and were awarded damages for contraventions of ss 18 and 30 on the same basis. On this part of their case the respondents added loss relating to the studio issue as well. Taken separately, the loss relating to the studio issue was assessed in an amount of $42,500 but,[22] by reference to the valuation evidence that the primary judge preferred, the loss attributable to the combined encroachment and studio issues was assessed at $167,500.[23] 

    [22]   McEntee v SJ Berry [2021] SADC 102 at [756]-[758].

    [23]   McEntee v SJ Berry [2021] SADC 102 at [759].

  2. That assessment was also the basis for the award of damages for negligent misstatement.

  3. Nonetheless, different awards were ultimately arrived at and these turned on whether the claim was apportionable and the reductions available for what amounted to contributory negligence by the respondents. A reduction of that kind was not available in connection with the claims made under s 30 of the Australian Consumer Law or in connection with the claim made in deceit.

  4. A 15 per cent reduction was made for the extent to which the respondents contributed to their own loss under the s 18 claim under s 137B of the Competition and Consumer Act 2010 (Cth). By s 87CD of the same Act, the primary judge determined that it was just and equitable to apportion liability on the encroachment issues under s 18, being 70 per cent to the appellants and 30 per cent to the vendors.[24]

    [24]   McEntee v SJ Berry [2021] SADC 102 at [769]-[773].

  5. A 15 per cent reduction was also made to the claim for negligent misrepresentation on the basis of contributory negligence under ss 7 and 8 of the Law Reform (Contributory Negligence and Apportionment of Liability) Act 2001 (SA).

    The appellants’ case on deceit on appeal

  6. I propose to address only some aspects of appeal ground 1, which concerned the case on deceit. 

  7. Although the appellants challenged the cases found against them under the Australian Consumer Law and for negligent misrepresentation, as well as the damages assessment, the focus of their appeal really concerned the finding of deceit.  That finding was only made in connection with the encroachment issues.  That this was the focus of the appellants’ appeal emerges from their written material and was frankly emphasised by senior counsel for the appellants in his reply at the hearing of the appeal. 

  8. Why the finding of deceit was sought by the respondents perhaps remains a little unclear.  It was not suggested that the remedies or damages available to the respondents under the other causes of action were, in the particular circumstances of this case, materially less valuable.  The remedies and damages available under those other causes of action incorporated the studio issue as well as the encroachment issues. 

  9. Pressing a case in deceit may in a particular case prove unnecessary where liability will be established and adequate compensation will be secured under other causes of action anyway.  Sometimes a difference in the nature or proof of another cause of action or the remedies available under it will warrant assuming the burden and risk of pressing for a finding of deceit requiring, as it must, a finding of actual fraud.[25]  This is not a case where it was suggested that the measure of damages for deceit was more advantageous because, for example, no issue of foreseeability or remoteness would arise in deceit.[26] 

    [25]   Magill v Magill (2006) 226 CLR 551 at [111]-[119] (Gummow, Kirby and Crennan JJ); Gould v Vaggelas (1985) 157 CLR 215 at 220-223 (Gibb CJ), 255 (Brennan J) and 238 (Wilson J) (as to the effect of deceit as an inducement to entry into the contract).

    [26]   Gates v City Mutual Life Assurance Society Ltd (1986) 160 CLR 1 at 12-13 (Mason, Wilson and Dawson JJ); Doyle v Olby (Ironmongers) Ltd [1969] 2 QB 158 at 167 (Denning MR), cf 168 (Winn LJ) and 171 (Sacks LJ) (damages for deceit were not restricted to that which would have flowed from a breach of warranty in contract). See also South Australia v Johnson (1982) 42 ALR 161 at 170, but this question was left open in Gould v Vaggelas (1985) 157 CLR 215 at 224 (Gibbs CJ).

  10. Sometimes deceit may also prove advantageous where there is a limitation of actions issue.[27]  In this case the most obvious advantage associated with the cause of action in deceit was that it was not regarded as apportionable or susceptible to reduction for contributory negligence.[28]

    [27]   Limitation of Actions Act 1936 (SA) s 25.

    [28]   Law Reform (Contributory Negligence and Apportionment of Liability) Act 2001 (SA) ss 3(2)(c) (as to not apportionable), 3(1) (definition of ‘negligent wrongdoing’), 7(3). See, for example, Crouch v Bloody Mary Group Pty Limited [2020] SASC 68 at [372] (Doyle J).

    The approach required on this appeal: rehearing

  11. The respondents having pressed for a finding of deceit and secured it, the question for this Court on appeal is whether that finding was affected by error. 

  12. On an appeal by way of rehearing under s 50 of the Supreme Court Act 1935 (SA), or s 43 of the District Court Act 1991 (SA), and r 218.17 of the Uniform Civil Rules 2020 (SA), it is for the appellants to demonstrate error of a kind which warrants the intervention of this Court so as to disturb the judgment of the primary judge.[29]

    [29]   Norbis v Norbis (1986) 161 CLR 513 at 518-519 (Mason and Deane JJ); Coal and Allied Operations Pty Ltd v Australian Industrial Relations Commission (2000) 203 CLR 194 at 203-204 (Gleeson CJ, Gaudron and Hayne JJ).

  13. This Court is not authorised to intervene merely so as to substitute its own view as if it were hearing the matter afresh.[30]  Rather, this Court must consider whether the findings made by the primary judge were affected by material error.[31]  That will often require that this Court consider the way in which the parties chose to conduct their litigation for they are generally bound by their conduct of the trial and confined to the issues they litigated at it.[32] 

    [30]   Coulton v Holcombe (1986) 162 CLR 1 at 7 (Gibbs CJ, Wilson, Brennan and Dawson JJ): ‘It is fundamental to the due administration of justice that the substantial issues between the parties are ordinarily settled at the trial. If it were not so the main arena for the settlement of disputes would move from the court of first instance to the appellate court, tending to reduce the proceedings in the former court to little more than a preliminary skirmish’.

    [31]   Norbis v Norbis (1986) 161 CLR 513 at 518-519 (Mason and Deane JJ): ‘According to our conception of the appellate process, the existence of an error, whether of law or fact, on the part of the court at first instance is an indispensable condition of a successful appeal’.

    [32]   Coulton v Holcombe (1986) 162 CLR 1; University of Wollongong v Metwally (No 2) (1985) 59 ALJR 481 at 483 (Gibbs CJ, Mason, Wilson, Brennan, Deane and Dawson JJ): ‘It is elementary that a party is bound by the conduct of his case. Except in the most exceptional circumstances, it would be contrary to all principle to allow a party, after a case had been decided against him, to raise a new argument which, whether deliberately or by inadvertence, he failed to put during the hearing when he had an opportunity to do so’.

  14. Nonetheless, the requirement to conduct a real review of the trial record and an evaluation of the primary judge’s reasons may warrant this Court drawing its own inferences and conclusions:[33]

    Within the constraints marked out by the nature of the appellate process, the appellate court is obliged to conduct a real review of the trial and, in cases where the trial was conducted before a judge sitting alone, of that judge’s reasons.  Appellate courts are not excused from the task of “weighing conflicting evidence and drawing [their] own inferences and conclusions, though [they] should always bear in mind that [they have] neither seen nor heard the witnesses, and should make due allowance in this respect”.

    [33]   Fox v Percy (2003) 214 CLR 118 at [25] (Gleeson CJ, Gummow and Kirby JJ). See also Abalos v Australian Postal Commission (1990) 171 CLR 167; Devries v Australian National Railways Commission (1993) 177 CLR 472.

  15. Whilst it is open for the appeal court to draw inferences or conclusions from primary findings of fact which are not disputed or which are not affected by error,[34] it is necessary to recognise the ‘natural limitations’ in a review which proceeds ‘wholly or substantially on the record’.[35]  The appeal court necessarily proceeds without the benefit of the opportunities available to the primary judge to evaluate the credibility of each witness and to experience the ‘feeling’ of the conduct of a trial which cannot always be ‘fully shared’ from a reading of the evidence on the page:[36]

    Commonly, the trial judge therefore has advantages that derive from the obligation at trial to receive and consider the entirety of the evidence and the opportunity, normally over a longer interval, to reflect upon that evidence and to draw conclusions from it, viewed as a whole.

    (Footnotes omitted)

    [34]   Warren v Coombes (1979) 142 CLR 531; State Rail Authority of New South Wales v Earthline Constructions Pty Limited (1999) 73 ALJR 306.

    [35]   Fox v Percy (2003) 214 CLR 118 at [23] (Gleeson CJ, Gummow and Kirby JJ).

    [36]   Fox v Percy (2003) 214 CLR 118 at [23] (Gleeson CJ, Gummow and Kirby JJ).

  16. Notwithstanding these kinds of advantages, in ‘some, quite rare, cases’ even where the facts fall short of being ‘incontrovertible’ the appeal court may decide that the conclusion of the primary judge was ‘glaringly improbable’ or ‘contrary to compelling inferences’.[37]  In that kind of case the appeal court must conduct its own review, making all due allowance for the advantages available to the primary judge and, if material error is disclosed, the appeal court cannot ‘shrink from giving effect’ to its own conclusion.[38]

    [37]   Fox v Percy (2003) 214 CLR 118 at [28]-[29] (Gleeson CJ, Gummow and Kirby JJ).

    [38]   Fox v Percy (2003) 214 CLR 118 at [28]-[29] (Gleeson CJ, Gummow and Kirby JJ).

  17. There was, with respect to the appellants, a tendency to revisit the issues before the primary judge in a broad way, coupled with a request that this Court simply form its own view about the case and express a contrary conclusion.  In substance, the appellants invited this Court to independently form a different view of the case, disengaged from the way in which the litigation was conducted and divorced from the findings of fact made by the primary judge. 

  18. The invitation must be declined.  The identification of error is not merely important, it is essential. 

  19. It was suggested to the appellants during the callover, before this appeal was listed for hearing, that if credibility findings were to be attacked a summary of the relevant evidence would be required.  The appellants agreed, indicating that a booklet of that evidence could be made up.  That was not done.  Instead, written submissions were delivered which asserted numerous errors of principle expressed in a broad way.  That was done without paying attention to the precise findings made by the primary judge and why those findings, including credibility findings, were said to be affected by material error. 

  20. The respondent purchasers’ written submissions emphasised that, with few exceptions, the appellants articulated no challenge to the primary findings of fact made by the primary judge.  The appellants’ 40-page reply then raised for consideration a large number of findings which it was submitted either should not have been made or alternatively which should have been made.  This led to the need for a detailed rejoinder submission from the respondents.

  21. Senior counsel for the appellants spent most of his time in argument addressing the reasons of the High Court in Briginshawv Briginshaw.[39]  Junior counsel for the appellants addressed some, but inevitably by no means all, of the factual material before the primary judge.  The net effect was that it was difficult to follow the appellants’ case and why the primary findings were said to be affected by material error or why key conclusions were otherwise glaringly improbable.

    [39] (1938) 60 CLR 336.

  22. If the appellants wished to overturn the case in deceit, it was necessary to address with precision why it was that the findings made by the primary judge were affected by relevant and material error or were otherwise glaringly improbable.

  23. Three examples are illustrative of the appellants’ approach.

  24. The first example concerns the land contract.  Though principally raised in connection with causation and reliance, it was contended that a handful of contractual provisions stood in the way of the case on deceit.  The Court was invited to consider General Annexure Item 1, and clauses 6 and 8, and draw the conclusion that these left no room for Mr McEntee or his principals to be deceived. 

  25. Clause 6.8 addressed the vendors’ warranties and provided that there were not within the vendors’ knowledge ‘except as stated in this Contract’ any ‘building and improvements which are not on or within the boundaries of the property and so far as the Vendor is aware, all dividing fences and walls are on the boundaries…’.  This standard clause must be read with General Annexure Item 1 which was prepared by Ms Berry:

    The Vendor advises that the rural dividing fence between 14 Langbein Avenue [sic] and 16 Langbein Avenue may not be on the true Boundary and that the residential building on 14 Langbein Avenue may encroach on the land at 16 Langbein Avenue.

  26. Clause 8 provides for compensation in favour of the purchaser against the vendor in the event of a misdescription of the land so as to avoid the common law right of rescission that might otherwise arise.

  27. As to these contractual provisions the appellants submitted that there was a failure by the primary judge to ‘take any account’ of clause 8; that none of these ‘were such as to give rise to any duty being owed to the McEntee parties, including any duty to disclose any unusual terms of the Contract’; and that Mr McEntee ‘had to be taken to be bound by the terms of the contract … and to have been on notice as to the need to make inquiries regarding both alignment and encroachment’, citing Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd.[40]

    [40] (2004) 219 CLR 165; Appellant’s Outline Revision 1 at [2.2], [4.4.4], [71].

  28. There are a number of responses.  First, clause 8 was not mentioned or put into issue at trial and it addresses error or misdescription in legal title.[41]  Having not been put into issue at the trial it is too late to raise this issue for the first time on appeal in circumstances where it may have been addressed by evidence and argument.  There was no error made in not addressing this clause.

    [41]   Travinto Nominees Pty Ltd v Viattas (1973) 129 CLR 1 at 13, 27-28.

  29. Secondly, the significance of the contract, as between the appellants and the respondents, was that it formed part of the evidence which fell to be addressed in determining whether the respondent purchasers were deceived or misled.  Indeed, Toll v Alphapharm recognised that the principle on which the appellants relied – that a party is taken to be bound by the terms of the signed contract – is subject to vitiating factors.[42]  Those factors included the deceit claim and so these provisions were relevant to whether the contract dispelled the claimed causative effect of the appellants’ statements and representations.  The analysis of this issue in any case is necessarily dependent on the particular facts and circumstances of the case. 

    [42]   Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd (2004) 219 CLR 165 at [54], [57] (Gleeson CJ, Gummow, Hayne, Callinan and Heydon JJ).

  30. In some cases, a provision such as Annexure 1 may represent a powerful reason why the court might reject a claim that a party was deceived or misled.  However, in the circumstances of this case the effect of Annexure 1 did not undermine the case that the purchasers were deceived and misled. In particular, the primary judge found that Ms Berry drafted Annexure 1 after consulting with Ms Rosewell and that it failed to convey the true and complete picture.[43] 

    [43]   McEntee v SJ Berry [2021] SADC 102 at [187]-[194].

  31. The primary judge gave very careful consideration to Mr McEntee’s evidence and the discussions he had with his wife about Annexure 1 before the first offer was made.  Their evidence, which was accepted by the primary judge, was that despite its terms they believed Annexure 1 only referred to the misaligned fence mentioned by Ms Berry at the private inspection.[44]  The primary judge found that what Ms Berry said at the inspection was relied on by Mr McEntee and that what she said gave him a ‘false sense of security’ and ‘both informed him and disarmed him’.[45]

    [44]   McEntee v SJ Berry [2021] SADC 102 at [299]-[305].

    [45]   McEntee v SJ Berry [2021] SADC 102 at [302]-[305], [536].

  32. This conclusion depended on a view of the evidence as a whole, including the credibility findings made by the primary judge.  The approach of the primary judge was therefore not undermined by the mere existence of provisions such as Annexure 1 and the findings which he made were not glaringly improbable.

  33. The second example concerns the complaint that the primary judge failed to apply what was described as the ‘Butcher principle’.[46]

    [46]   Appellants’ Outline Revision 1 at [4.3], [10]-[11], Butcher v Lachlan Elder Realty Pty Ltd (2004) 218 CLR 592.

  34. The appellants contended that the primary judge wrongly attributed knowledge to a real estate agent, failing to consider the true nature of the agent as an intermediary or mere conduit of instructions, ‘thus misapplying Butcher and Gardam v George Wills & Co Limited’.[47]  In the latter case French J explained his views regarding the notion of a ‘mere conduit’ or intermediary, demonstrating that the inquiry is dependent on the facts and circumstances of any particular case:[48]

    The innocent carriage of a false representation from one person to another in circumstances where the carrier is and is seen to be a mere conduit, does not involve him in making that representation. Nobody would expect that the postman who bears a misleading message in a postal article has any concern about its content or is in any sense adopting it. The same is true of the messenger boy or courier service. When, however, a representation is conveyed in circumstances in which the carrier would be regarded by the relevant section of the public as adopting it, then he makes that representation. It will be a question of fact in each case, but in my opinion the wholesaler who resells goods labelled without attribution of authorship can be taken in ordinary circumstances to adopt the text of those labels. Whether the position is different where the labels disclose the author of their text does not arise in this case. This approach does not deny the application of the defences conferred by s 85. Indeed, by analogy with the argument in relation to mens rea, the availability of those defences supports the view that the term “falsely represent” as used in s 53(a) includes the innocent implied adoption of a false statement. Section 85 discloses a legislative concern with protecting reasonable, but not merely innocent, conduct.

    [47]   Gardam v George Wills & Co Limited (1988) 82 ALR 415.

    [48]   Gardam v George Wills & Co Limited (1988) 82 ALR 415 at 427.

  35. Although Butcher was a case on misleading and deceptive conduct, the appellants cited the following passage from it, describing it as a ‘guiding principle’ demonstrating why findings of fraud could not be made on the basis of inferred knowledge:[49]

    … Suburban real estate agents do not hold themselves out – and this agent did not hold itself out – as possessing research skills or means of independently verifying title details about the properties they seek to sell.  It is also a matter of common experience – and it was certainly the fact here – that real estate agents, while they carry out tasks on behalf of their principals, are not agents in the sense of creating legal relationships between their principals and others.  Here, the agent was obviously an agent for the vendor, but only in a limited sense.  The legal relationship to be created by any contract of purchase was to be created by the purchasers directly – by bidding at the auction and then signing a contract. 

    It is a matter of common experience that questions of title to land can be complex, both legally and factually.  Hence they have to be dealt with by specialists.  So far as the complexity is factual, the specialists are surveyors.  So far as the complexity is legal, the specialists are solicitors or conveyancers, relying on specialists like surveyors.  The skills of these specialists, and the problems on which those skills are brought to bear, are quite outside what suburban real estate agents hold themselves out as doing and are likely to be able to do. 

    [49]   Butcher v Lachlan Elder Realty Pty Ltd (2004) 218 CLR 592 at [42]-[43] (Gleeson CJ, Hayne and Heydon JJ).

  1. Butcher concerned the sale of valuable waterfront property.  The real estate agent published a brochure containing a survey diagram which had been obtained from the vendor’s solicitors.  The purchasers intended to develop the property in reliance on the survey diagram.  Though the survey diagram was inaccurate, the agent’s brochure contained a disclaimer by the real estate agent regarding the reliability of information obtained from other sources:[50]

    All information contained herein is gathered from sources we believe to be reliable.  However we cannot guarantee it's [sic] accuracy and interested persons should rely on their own enquiries …

    [50]   Butcher v Lachlan Elder Realty Pty Ltd (2004) 218 CLR 592 at [7], [10] (Gleeson CJ, Hayne and Heydon JJ).

  2. The purchasers failed in their claim of misleading and deceptive conduct against the agents at trial, in the Court of Appeal and in the High Court.  The case was described as one relating to a misrepresentation about the title to land, where expertise in surveying or in land title was relevant.[51]  However the following passage demonstrates that Butcher was decided on the basis of the particular facts and circumstances of that case and it did not purport to lay down any general or guiding principle about the knowledge of land agents:[52]

    The relevant principles.  In Yorke v Lucas[53], Mason A-CJ, Wilson, Deane and Dawson JJ said that a corporation could contravene s 52 even though it acted honestly and reasonably:

    That does not, however, mean that a corporation which purports to do no more than pass on information supplied by another must nevertheless be engaging in misleading or deceptive conduct if the information turns out to be false.  If the circumstances are such as to make it apparent that the corporation is not the source of the information and that it expressly or impliedly disclaims any belief in its truth or falsity, merely passing it on for what it is worth, we very much doubt that the corporation can properly be said to be itself engaging in conduct that is misleading or deceptive.

    In applying those principles, it is important that the agent's conduct be viewed as a whole. It is not right to characterise the problem as one of analysing the effect of its “conduct” divorced from “disclaimers” about that “conduct” and divorced from other circumstances which might qualify its character. Everything relevant the agent did up to the time when the purchasers contracted to buy the Rednal land must be taken into account. It is also important to remember that the relevant question must not be reduced to a crude inquiry: “Did the agent realise the purchasers were relying on the diagram?” To do that would be impermissibly to dilute the strict liability which s 52 imposes.

    For the following reasons, the agent did not engage in conduct towards the purchasers which was misleading.  Whatever representation the vendor made to the purchasers by authorising the agent to issue the brochure, it was not made by the agent to the purchasers.  The agent did no more than communicate what the vendor was representing, without adopting it or endorsing it. That conclusion flows from the nature of the parties, the character of the transaction contemplated, and the contents of the brochure itself.

    (Footnote in original)

    [51]   Butcher v Lachlan Elder Realty Pty Ltd (2004) 218 CLR 592 at [32], [44] (Gleeson CJ, Hayne and Heydon JJ).

    [52]   Butcher v Lachlan Elder Realty Pty Ltd (2004) 218 CLR 592 at [38]-[40] (Gleeson CJ, Hayne and Heydon JJ).

    [53] (1985) 158 CLR 661 at 666. In Goldsbro v Walker [1993] 1 NZLR 394 at 398, a decision of the New Zealand Court of Appeal on comparable legislation, Cooke P described Yorke v Lucas as supporting the ‘fairly obvious proposition’ that ‘an innocent agent who acts merely as a conduit and purports to do no more than pass on instructions from his principal does not thereby become responsible for anything misleading in the information so passed on’ (emphasis in original); Richardson J approved Yorke v Lucas (at 402), and Hardie Boys J said (at 405) that it ‘may be that’ Yorke v Lucas ‘puts it somewhat too narrowly’. 

  3. In contrast to Butcher, the appellants in this case were, on the findings made by the primary judge, well aware that there were surveys that disclosed the encroachment issues and that the house encroached onto the neighbouring land.[54]  This had been explained to Ms Berry by the vendor Ms Rosewell,[55] as well as by the neighbour Mr Kornelissen,[56] and raised by the surveyor, Mr Lohmeyer.[57]  Ms Berry spoke to Mr Lohmeyer after her assistant wrote to Mr Lohmeyer expressing an interest in obtaining a plan that ‘shows how much the building encroaches onto the neighbour’.[58]  Indeed, she claimed to have experience with surveys and sales involving encroachments.[59] 

    [54]   McEntee v SJ Berry [2021] SADC 102 at [172]-[180].

    [55]   McEntee v SJ Berry [2021] SADC 102 at [148]-[155].

    [56]   McEntee v SJ Berry [2021] SADC 102 at [195]-[211].

    [57]   McEntee v SJ Berry [2021] SADC 102 at [178]-[180].

    [58]   McEntee v SJ Berry [2021] SADC 102 at [173].

    [59]   Transcript 708; McEntee v SJ Berry [2021] SADC 102 at [195]-[203], [260].

  4. It was in this context that the primary judge found that Ms Berry’s statements to Mr McEntee were made from ‘a position of someone experienced in land and who would be expected to know the true position’.[60]  The primary judge found that Ms Berry made it apparent that she was the source of the information, or at least that she endorsed what was being conveyed.[61]  Far from articulating any novel or general principle, this finding simply encapsulated the way in which Ms Berry and Mr McEntee interacted, as well as the evidence regarding Ms Berry’s actual knowledge in this case.  She was, on the evidence, far from a mere conduit. 

    [60]   McEntee v SJ Berry [2021] SADC 102 at [516].

    [61]   McEntee v SJ Berry [2021] SADC 102 at [517].

  5. It is in these circumstances wrong to contend, as did the appellants’ written submissions, that the primary judge’s finding was ‘demonstrably wrong’ and infected ‘the entire approach adopted by the [primary judge] causing the entire outcome of the trial to run awry’.[62]

    [62] Appellants Outline Revision 1 at [11]. See also [2.1], [2.3].

  6. The third example concerns the ‘Briginshaw principle’.[63] 

    [63]   Appellants Outline Revision 1 at [4.1], [4.4], [5], [7.3].  Briginshaw v Briginshaw (1938) 60 CLR 336.

  7. Though the appellants went so far as to plead by appeal ground 1 that there had been a failure to have adequate regard to these principles, the appellants’ counsel at trial did not refer to Briginshaw and the primary judge explicitly directed himself by reference to Briginshaw.[64]

    [64]   McEntee v SJ Berry [2021] SADC 102 at [410]. It has been held that the failure to give a self-direction on this issue does not establish error, Maxcon v Vadasz (No 2) (2017) 127 SASR 193 at [251] (Hinton J); Macks v Viscariello (2017) 130 SASR 1 at [535] (Lovell J, Corboy and Slattery AJJ).

  8. There really was and is no issue about what has sometimes been described as the ‘Briginshaw principle’. As later cases have emphasised, it is concerned with the quality of the proof required when so serious a matter as fraud is to be found.  It is concerned with acknowledging that the degree of satisfaction for which the civil standard of proof calls may vary according to the gravity of the fact to be proved:[65]

    But the standard of proof to be applied in a case and the relationship between the degree of persuasion of the mind according to the balance of probabilities and the gravity or otherwise of the fact of whose existence the mind is to be persuaded are not to be confused.  The difference between the criminal standard of proof and the civil standard of proof is no mere matter of words; it is a matter of critical substance.  No matter how grave the fact which is to be found in a civil case, the mind has only to be reasonably satisfied and has not with respect to any matter in issue in such a proceeding to attain that degree of certainty which is indispensable to the support of a conviction upon a criminal charge: see Helton v Allen[66] per Dixon, Evatt and McTiernan JJ.  …

    (Footnote in original)

    [65]   Rejfek v McElroy (1965) 112 CLR 517 at 521-522 (Barwick CJ, Kitto, Taylor, Menzies and Windeyer JJ).

    [66] (1940) 63 CLR 691.

  9. Similarly, in Neat Holdings Pty Ltd v Karajan Holdings Pty Ltd, the High Court explained that where criminal conduct or fraud is sought to be proved in civil litigation, the strength of the evidence necessary to establish matters on the balance of probabilities may vary according to the nature of what it is sought to prove:[67]

    Thus, authoritative statements have often been made to the effect that clear or cogent or strict proof is necessary “where so serious a matter as fraud is to be found”.  Statements to that effect should not, however, be understood as directed to the standard of proof.  Rather, they should be understood as merely reflecting a conventional perception that members of our society do not ordinarily engage in fraudulent or criminal conduct and a judicial approach that a court should not lightly make a finding that, on the balance of probabilities, a party to civil litigation has been guilty of such conduct. 

    (Footnotes omitted)

    [67]   Neat Holdings Pty Ltd v Karajan Holdings Pty Ltd (1992) 67 ALJR 170 at 170-171 (Mason CJ, Brennan, Deane and Gaudron JJ).

  10. The appellants maintained a number of propositions about the Briginshaw principle that are contrary to law.  The first of these is that there exists a ‘rebuttable presumption of honest dealing or innocence’, for which Neat Holdings was cited as authority.[68]  As the passage just extracted demonstrates, that decision is not authority for any such presumption and to view Briginshaw in that way is contrary to authority.[69]

    [68]   Appellants Outline Revision 1 at [7.3]. 

    [69]   Fleming v Advertiser-News Weekend Publishing Company Pty Ltd [2016] SASCFC 109 at [108] (Vanstone, Nicholson and Bampton JJ); Cook v Flaherty [2021] SASC 73 at [123] (Livesey J).

  11. Secondly, the appellants contended that in order to render fraudulent intent probable rather than speculative, it was necessary to both plead and prove motive.[70]  The authorities cited for this proposition were Krakowski v Eurolynx and Southern Waste Resources v Adelaide Hills.[71]  Again, Krakowski v Eurolynx is not authority for that proposition for, as the High Court held in that case: ‘A representation may be made fraudulently without prior planning.  Equally, a representation may be made fraudulently without evil motive’ and, as  Lord Herschell said in Derry v Peek:[72]

    … if fraud be proved, the motive of the person guilty of it is immaterial. It matters not that there was no intention to cheat or injure the person to whom the statement was made.

    [70]   Appellants Outline Revision 1 at [27.1], [81]. 

    [71]   Krakowski v Eurolynx (1995) 183 CLR 563 at 578. The appellants also cited Southern Waste Resources Pty Limited v Adelaide Hills Region Waste Management Authority (No 3) [2019] SASC 192 at [130]‑[131].

    [72]   Krakowski v Eurolynx (1995) 183 CLR 563 at 579-580; citing Derry v Peek (1889) 14 App Cas 337 at 374. See also Smith v Chadwick (1884) 9 App Cas 187 at 201; The Crown v McNeil (1922) 31 CLR 76 at 104.

  12. In Southern Waste Resources v Adelaide Hills, in the context of a claim for misleading and deceptive conduct, Hinton J observed:

    Neither party suggested that the Briginshaw … considerations should invariably be brought to bear in a case of misleading and deceptive conduct. That perhaps reflects the fact that s 18 of the Australian Consumer Law does not require proof of any intention to deceive or mislead.

    (Footnotes omitted)

  13. That extract does not support a proposition that it is necessary to prove ‘intention’ to ‘deceive or mislead’ to complete a cause of action in deceit.

  14. In this connection the appellants also contended that Briginshaw was authority for the proposition that it was necessary to prove ‘some unlawful incentive that motivated a false utterance’.[73]  Briginshaw is not authority for that proposition either. 

    [73]   Appellants Outline Revision 1 at [8.6.1].  Briginshaw v Briginshaw (1938) 60 CLR 336 at 362.

  15. The appellants’ submission that there was no evidence that Ms Berry had any motive to perpetrate an act of dishonesty to make false representations must be rejected.[74]  In a case such as the present, where a land agent has been found to have deceived a purchaser, the commercial incentive to secure a sale and thereby obtain sales commission or a fee may be motive enough.  Whether there has been deceit depends entirely on the facts and circumstances which have been proved to the court’s satisfaction.  In this case the primary judge nonetheless addressed Ms Berry’s intention, finding that she intended to ‘disarm’ Mr McEntee, by ‘play[ing] down the extent of the misalignment and encourage him to enter into the Contract’.[75]

    [74] Appellants Outline Revision 1 at [81].

    [75]   McEntee v SJ Berry [2021] SADC 102 at [436].

  16. Finally, as part of the attack based on the criticism that the primary judge relied on ‘vague assertions and inferences’, it was suggested that the primary judge misused his advantage as the trier of fact by failing to distinguish between a rejection of Ms Berry’s evidence and a positive finding that she lied.[76] 

    [76] Appellants Outline Revision 1 at [4.4.1]-[4.4.2], [5.5], [101]-[103].

  17. Whilst this case concerned a cause of action in deceit, that did not necessarily require a finding about whether Ms Berry had or had not given her evidence honestly. In some cases it may not be necessary to determine whether a witness has given evidence dishonestly:[77]

    Unless it be truly necessary for the purpose of disposing of the particular case, however, a specific finding that a party or witness has deliberately given false evidence should ordinarily not be made.  Ordinarily, a party or other witness will not be concerned or entitled to set out to establish that, if his or her oral evidence is ultimately found to be mistaken, the mistake was an honest one. 

    [77]   Smith v New South Wales Bar Association (1992) 176 CLR 256 at 271 (Deane J).

  18. Nonetheless, seriously adverse findings were made concerning Ms Berry’s evidence.[78]  The appellants questioned those findings and submitted that they were unnecessary and revealed error.

    [78]   McEntee v SJ Berry [2021] SADC 102 at [44]-[46], [150]-[155], [184]-[185], [194], [207], [216]-[223].

  19. A judge has considerable latitude in determining the manner by which the issues raised for determination at trial are to be resolved.  The findings which must be made by the trial judge need not follow any set pattern or formula.  In this case the primary judge followed the conventional path of addressing the pleadings and the witnesses called by each party, identifying both the common ground and where the evidence was in conflict.  He paid careful attention to the documents which were tendered.  The findings he made were detailed to the point of being painstaking. 

  20. It was necessary for the primary judge to address the conflict in the evidence of Ms Berry and Mr McEntee about what was said at the inspection on 22 March 2017.  What was said formed the centrepiece of the case against the appellants.

  21. The primary judge explained his preference for the evidence of Mr McEntee by reference to the circumstances in which the conversation at the inspection took place, including what Ms Berry knew before she met, the places at which Mr McEntee and Ms Berry were standing in the backyard and what could be seen on the rear fence line when various statements were made by Ms Berry to Mr McEntee.  These matters, particularly the objective features, together with the inherent unlikelihood of Ms Berry’s account, clearly supported the primary judge’s rejection of it. 

  22. Ms Berry sought to address the clear and serious conflict between her evidence and that of Mr McEntee about what was said at the property inspection concerning the encroachment issues by resorting to an explanation offered for the first time in the course of her cross-examination.  Bleby JA has set this issue out in some detail in his reasons.  Ms Berry had suggested in her pleaded defence that she had raised the encroachment issue by pointing to a particular post on the rear fence.  That was denied by Mr McEntee.  In his evidence he explained that a pittosporum hedge blocked any view of the strainer post where the boundary and rear fences met.

  23. When being cross-examined Ms Berry suggested that she had measured the encroachment by reference to a post on the rear fence and she said that when she was speaking to Mr McEntee she had pointed to a post that was not obscured by the pittosporum hedge.  The difficulty with this evidence was that the post identified in cross-examination by Ms Berry was 5.7m along the rear fence from the boundary fence.  As the primary judge explained, the position of that post suggested that she was telling Mr McEntee that the boundary went through the middle of the house.  That was contrary to her defence and to her case generally.  It was also contrary to the evidence of Mr McEntee. 

  24. The cross-examiner put to Ms Berry that she was fabricating this evidence in order to address what she had earlier heard during the trial about her defence being untenable because of the presence of a pittosporum hedge, which blocked any view of the strainer post where the boundary and rear fences met.[79] 

    [79]   McEntee v SJ Berry [2021] SADC 102 at [253], [259].

  25. In these circumstances it is not surprising that Ms Berry’s evidence on this topic was regarded by the primary judge as incredible.[80]

    [80]   McEntee v SJ Berry [2021] SADC 102 at [72], [184], [270]-[271].

  26. As with many features of a trial, whether it is both necessary and desirable for the primary judge to make findings about whether a witness has given evidence dishonestly will invariably depend on the issues, facts and circumstances of the case, as well as the way in which the case has been conducted by the parties.  Where a witness gives evidence on oath in order to refute the evidence of another witness, it is not necessarily an error to both reject the evidence of the first witness and to find that it was given dishonestly, particularly where the court is called on to resolve a direct conflict in the sworn evidence.

  27. Whilst the appellants asserted that Ms Berry’s account should have been accepted, that assertion cannot survive the clear and detailed findings made in this case by the primary judge. 

  28. Moreover, given the way in which the evidence unfolded, and the manner in which Ms Berry gave her evidence under cross-examination, it cannot be said that the primary judge made any error in making the further finding that aspects of the evidence that Ms Berry gave at the trial were not truthful. 

  29. It has not been demonstrated that the primary judge made any error in his treatment of the evidence, still less that he misused his undoubted advantage as the trier of fact.  His findings were clear, detailed and compelling.

    Conclusion

  30. In my opinion, the appellants’ challenge to the findings which supported the conclusion that the appellants were liable to the respondents in deceit must be rejected.  For these reasons and the reasons given by Bleby JA, appeal ground 1 should be dismissed.

  31. I otherwise agree with Bleby JA, for the reasons that he gives, that all other grounds of appeal must be dismissed.  Accordingly, I too would dismiss the appeal.

  32. LOVELL JA: I agree generally with the reasons of Bleby JA and the order he proposes. I add the following remarks in relation to Ms Berry’s challenge to the trial judge’s finding of deceit.

  33. Dr Rochow KC, counsel for the appellants, accepted that when challenging findings on appeal, the principles discussed in Fox v Percy are applicable:[81]

    However, the mere fact that a trial judge necessarily reached a conclusion favouring the witnesses of one party over those of another does not, and cannot, prevent the performance by a court of appeal of the functions imposed on it by statute. In particular cases incontrovertible facts or uncontested testimony will demonstrate that the trial judge’s conclusions are erroneous, even when they appear to be, or are stated to be, based on credibility findings.

    That this is so is demonstrated in several recent decisions of this Court. In some, quite rare, cases, although the facts fall short of being “incontrovertible”, an appellate conclusion may be reached that the decision at trial is “glaringly improbable” or “contrary to compelling inferences” in the case. In such circumstances, the appellate court is not relieved of its statutory functions by the fact that the trial judge has, expressly or implicitly, reached a conclusion influenced by an opinion concerning the credibility of witnesses. In such a case, making all due allowances for the advantages available to the trial judge, the appellate court must “not shrink from giving effect to” its own conclusion. Finality in litigation is highly desirable. Litigation beyond a trial is costly and usually upsetting. But in every appeal by way of rehearing, a judgment of the appellate court is required both on the facts and the law. It is not forbidden (nor in the face of the statutory requirement could it be) by ritual incantation about witness credibility, nor by judicial reference to the desirability of finality in litigation or reminders of the general advantages of the trial over the appellate process.

    (Footnotes omitted)

    [81] (2003) 214 CLR 118 at [28]–[29] (Gleeson CJ, Gummow and Kirby JJ).

  1. Dr Rochow underpinned his challenge to the various findings by relying on the principles enunciated in the well-known case of Briginshaw v Briginshaw.[82]

    [82] (1938) 60 CLR 336.

  2. Briginshaw considered the assessment of evidence in the context of the civil onus of proof. Justice Dixon stated:

    The truth is that, when the law requires the proof of any fact, the tribunal must feel an actual persuasion of its occurrence or existence before it can be found. It cannot be found as a result of a mere mechanical comparison of probabilities independently of any belief in its reality. No doubt an opinion that a state of facts exists may be held according to indefinite gradations of certainty; and this has led to attempts to define exactly the certainty required by the law for various purposes. Fortunately, however, at common law no third standard of persuasion was definitely developed. Except upon criminal issues to be proved by the prosecution, it is enough that the affirmative of an allegation is made out to the reasonable satisfaction of the tribunal. But reasonable satisfaction is not a state of mind that is attained or established independently of the nature and consequence of the fact or facts to be proved. The seriousness of an allegation made, the inherent unlikelihood of an occurrence of a given description, or the gravity of the consequences flowing from a particular finding are considerations which must affect the answer to the question whether the issue has been proved to the reasonable satisfaction of the tribunal. In such matters “reasonable satisfaction” should not be produced by inexact proofs, indefinite testimony, or indirect inferences. [83]

    (Emphasis added)

    [83]   Briginshaw v Briginshaw (1938) 60 CLR 336 at 361–2.

  3. The essence of this oft-cited passage is the requirement that, in determining whether evidence adduced proves a fact to the civil standard, the trier of fact should consider the significance and consequences of the finding of fact that they are urged to make. That is, persuasion of the existence of a fact to a particular standard requires ‘actual persuasion of its occurrence or existence before it can be found’ and that such state of mind not be one ‘attained or established independently of the nature and consequences of the fact or facts to be proved’. Subsequent authorities establish the requirement that proof be clear, cogent or strict; this being an expression of the quality of the evidence necessary to move a mind to a state of actual persuasion of a fact where the finding of fact is one to which serious consequences attach.[84]

    [84]   Maxcon Constructions Pty Ltd v Vadasz (No 2) (2017) 127 SASR 193 at [251] (Hinton J).

  4. While Briginshaw is often referred to in the context of a civil case involving allegations of a criminal nature, it is of course relevant to fact finding in all civil cases. An appellate court, when considering a challenge to findings of fact or findings of inferences drawn from proven facts, must also have regard to these principles.

  5. Dr Rochow, while acknowledging that the trial judge stated that in reaching his findings relating to the issue of deceit he had regard to the Briginshaw principles, submitted that the ultimate finding of deceit was ‘glaringly improbable’ and ‘contrary to compelling inferences’ in light of the Briginshaw principles.

  6. The trial judge found that Ms Berry made what is described as the ‘Agent’s Representation’ knowing it was false. Alternatively, the trial judge had ‘no hesitation’ in finding that, if Ms Berry did not have knowledge that the Agent’s Representation was false, she was reckless as to the truth of the Agent’s Representation in that she had no genuine belief it was true. There was, unsurprisingly, no direct evidence relating to the issue of deceit; it could only be proved circumstantially. Reasoning circumstantially to the ultimate conclusion of deceit is a form of abductive reasoning. That is, reasoning to the best explanation from established facts. Here, the abductive reasoning must be informed by the Briginshaw principles.

  7. I gratefully adopt Bleby JA’s analysis of the evidence and the trial judge’s findings of fact.

  8. Issues of credibility at trial arose not just between Ms Berry and Mr McIntee, but also between Ms Berry and the vendors (Ms Rosewell and Mr Kloosterman) and between Ms Berry and the neighbour, Mr Kornelissen. While there is some tension between the trial judge’s credibility findings relating to discussions between Ms Rosewell and Ms Berry, the trial judge, for clear and cogent reasons, preferred the evidence of Mr McIntee and Mr Kornelissen where it conflicted with that of Ms Berry. In reaching his conclusions about the credibility of the various witnesses, the trial judge relied not just on demeanour, but on the intrinsic likelihood or unlikelihood of the evidence given by the witness and also how the witness’s evidence compared with other evidence that he found convincing and acceptable. The approach of the trial judge in that regard was orthodox.

  9. I accept, as Dr Rochow submitted, that there was some objective evidence that supported the appellants’ position. Further, I accept the submission that it is important that a trial judge does not ‘cherry pick’ evidence and observations, allowing into the collection of facts only those that confirm the conclusion. It is important to consider the evidence that would disconfirm that conclusion. As the Full Court observed in Viscariello v Macks:[85]

    Reasons are not necessarily adequate because they reveal a chain of reasoning leading to a conclusion. A conclusion is not to be drawn from a collection of convenient facts that lead inevitably to that particular result. What is required is a careful assessment of all of the relevant facts, and where necessary, an explanation as to how the “inconvenient” facts can be put to one side or given little weight. As has often been said a fact does not cease to exist because it is ignored

    [85] (2017) 130 SASR 1 at [92].

  10. As Bleby JA observed, the trial judge clearly considered all the evidence and made comprehensive findings. The appellants have not established that the trial judge has overlooked or given insufficient weight to any particular aspect of the evidence. The trial judge had regard to the principles enunciated in Briginshaw. While the Briginshaw principles refer to the quality of the evidence necessary to move a mind to a state of actual persuasion of a fact where the finding of fact is one to which serious consequences attach, the standard of proof remains on the balance of probabilities. Unlike a criminal case, it was not necessary for the trial judge to exclude all reasonable hypotheses consistent with the appellants’ case.

  11. The appellants have not established on appeal that the trial judge’s findings are ‘glaringly improbable’ or ‘contrary to compelling inferences’.

  12. BLEBY JA:      The first appellant, SJ Berry Pty Ltd, conducts a real estate business. The second appellant, Ms Sandra Berry, is its sole director. In 2017, SJ Berry marketed a property on behalf of Ms Katherine Rosewell and Mr Roelef Kloosterman (‘the Vendors’), being 14 Langbein Avenue, Woodside, South Australia (‘the property’).

  13. On 30 March 2017, Mr Paul McEntee entered into a contract with Ms Rosewell and Mr Kloosterman for the sale and purchase of the property, in the name of ‘Paul McEntee or Nominee’ (‘the Contract’). The primary judge found that he did so as agent for the first and second respondents, who are his wife and his sister-in-law, respectively.

  14. The respondents’ case at trial was that following completion, two issues arose. First, on 28 May 2017, the neighbour resident at 16 Langbein Ave advised Mr McEntee of the extent of a misalignment of the fence between 14 and 16 Langbein Ave, and the encroachment of the house at no. 14 onto the land at no. 16. The east-west boundary fence was misaligned such that at the eastern rear boundary of the property, it intersected the rear (north-south) fence at a point on the land at no. 16, some 2.67m north of the true boundary. The house at no. 14 was built in line with the misaligned fence, such that at its eastern rear corner, it encroached north onto the land at no. 16 by 0.53m. The western front corner of the house sat on the boundary. The total amount of land at no. 16 affected by these encroachment issues was approximately 13.8m² (‘the Encroachment Issues’).

  15. The second issue arising after completion was that Mr McEntee discovered that a separately constructed studio on the property (‘the Studio’) had structural and other defects. These required a significant amount of work to rectify. The bottom chord of the roof trusses had been cut and other work had been done to the Studio without local council approval.

  16. With respect to the Encroachment Issues, the respondents claimed that during a private inspection of the property with Ms Berry on about 22 March 2017, Ms Berry pointed to the fence and said to Mr McEntee words to the effect that ‘there might be a slight issue with the existing boundary fence being over marginally’. They claimed that she did not expand on her statement and gave no further explanation (‘the Agent’s Representation’). They pleaded that as a result of the content and circumstances of the Agent’s Representation, Mr McEntee understood that any issue with the alignment of the fence would only be minor.

  17. The respondents further pleaded Clause 6 of the Contract, which included the following Vendor’s Warranties and General Annexure Item 1. Clause 6 provided, relevantly:

    6      Vendor’s Warranties

    There are not within the Vendor’s knowledge except as stated in this Contract and in the Form 1

    6.1    any outstanding or impending demands, orders or requisitions of any competent authority relating to the property;

    6.4    any outstanding or impending notice, demand or liability to join in or contribute to the construction or repair of a dividing fence between the property and any adjoining land under the Fences Act or otherwise;

    6.8    any building and improvements which are not on or within the boundaries of the property and so far as the Vendor is aware, all diving fences and walls are on the boundaries of the property.

  18. General Annexure Item 1 provided:

    The Vendor advises that the rural dividing fence between 14 Langbein Aveune [sic] and 16 Langbein Avenue may not be on the true Boundary and that the residential building on 14 Langbein Avenue may encroach on the land at 16 Langbein Avenue.

  19. The respondents pleaded that as a result of the Agent’s Representation and the vendor’s and Ms Berry’s silence in relation to these clauses, Mr McEntee understood that the statement in General Annexure Item 1 was a reference to the slight issue Ms Berry had referred to at the inspection, and that any issue referred to in the Annexure was minor (‘the Vendors’ Representations’).

  20. With respect to the Studio issue, the respondents claimed that the marketing for the property included the following statements (‘the Studio Marketing Representations’):

    1.‘Circa 1880s cottage with detached studio and peaceful rural outlook’;

    2.‘Sympathetically renovated…, the home… features a separate, fully insulated garden studio’.

  21. The respondents further claimed that when Ms Berry and Mr McEntee reached the Studio, Ms Berry said words to the effect that the ‘garden studio’ had recently been renovated by the Vendors with the intention that Ms Rosewell’s daughter could stay in the Studio (‘the Express Studio Representations’).

  22. The respondents claimed that by implication, the Studio Marketing Representations and the Express Studio Representations (together, ‘the Studio Representations’) represented that the Studio was able to be used as a habitable space and had all necessary approvals to allow the Studio to be used as a habitable space (‘the Implied Studio Representations’).

  23. The respondents claimed successfully against the appellants and the Vendors. This appeal does not concern the claims against the Vendors. The claims against the appellants, all of which were successful, comprised:

    1.deceit and fraudulent misrepresentation in relation to the Encroachment Issues;

    2.as against SJ Berry, misleading and deceptive conduct contrary to ss 18 and 30 of the Australian Consumer Law (‘ACL’);

    3.as against Ms Berry, a claim pursuant to s 2 of the ACL that Ms Berry was jointly liable with SJ Berry for SJ Berry’s contravention of the ACL, as a person involved in that contravention on the basis that she procured the contravention of ss 18 and 30 of the ACL or was directly or indirectly, knowingly concerned in or a party to the contravention; and

    4.a claim that Ms Berry and SJ Berry owed a duty of care to the applicants to take reasonable care in making the Agent’s Representation and the Studio Representations to Mr McEntee.  It was further alleged that both Ms Berry and SJ Berry knew the Agent’s Representation to be false at the time it was made.

  24. The judge assessed damages on each cause of action. These assessments are set out below.

    The issues arising on appeal

  25. The appellants articulate five broad grounds of appeal. Each ground complains that the primary judge ‘erred in fact and law’ in respect of a broad topic and proceeds to list many sub-grounds, over several pages, without distinguishing between the claimed errors of fact and of law. There was a degree of disconnection between some of the sub-grounds and the submissions made in support of the appeal, such that the appellants’ arguments on appeal were, in a number of respects, difficult to follow. Broadly speaking, the appellants complain on appeal that:

    ·the judge erred in his application of the principles of proof applicable to findings of knowledge necessary to prove fraud and deceit. The appellants complain that the judge:

    ·‘did not have sufficient regard’ to the principles in Briginshaw v Briginshaw[86] and Butcher v Lachlan Elder Realty Pty Ltd;[87]

    ·consequently erred in his findings of Ms Berry’s knowledge about the Encroachment Issues; and

    ·misused his advantage as trial judge;

    ·the judge erred in his findings of reliance and inducement. This ground comprises a collection of complaints about facts that the judge should have found but did not, and conclusions of law that he should have drawn but did not;

    ·the judge erred in his findings with respect to the Studio Representations, again with respect to facts he found that he should not have found, facts that he should have found but did not, and conclusions of law that he should have drawn;

    ·the judge erred in failing to draw certain inferences in accordance with the principles established in Jones v Dunkel,[88] such that the standard of proof required by Briginshaw v Briginshaw[89] was precluded from being met; and

    ·the judge erred in the assessment of damages with respect to the Encroachment Issues and in the application of principles of apportionment.

    [86] (1938) 60 CLR 336.

    [87] (2004) 218 CLR 592.

    [88] (1959) 101 CLR 298.

    [89] (1938) 60 CLR 336.

  26. These complaints require a clear exposition of the findings made by the trial judge, the evidence on which those findings were made, and the issues joined at trial to which those findings were directed. The first three broad grounds, which relate to the establishment of elements of the various causes of action, challenge findings that depended on the judge’s assessment of the various witnesses’ credibility. These findings must be assessed in the context not only of the issues joined on the pleadings, but also of the contests that unfolded during the trial. To this end, it is necessary to maintain close regard to the function of this Court as elucidated by the plurality in Fox v Percy:[90]

    However, the mere fact that a trial judge necessarily reached a conclusion favouring the witnesses of one party over those of another does not, and cannot, prevent the performance by a court of appeal of the functions imposed on it by statute.  In particular cases incontrovertible facts or uncontested testimony will demonstrate that the trial judge's conclusions are erroneous, even when they appear to be, or are stated to be, based on credibility findings.[91]

    That this is so is demonstrated in several recent decisions of this Court.[92]  In some, quite rare, cases, although the facts fall short of being “incontrovertible”, an appellate conclusion may be reached that the decision at trial is “glaringly improbable”[93] or “contrary to compelling inferences” in the case.[94]  In such circumstances, the appellate court is not relieved of its statutory functions by the fact that the trial judge has, expressly or implicitly, reached a conclusion influenced by an opinion concerning the credibility of witnesses.  In such a case, making all due allowances for the advantages available to the trial judge, the appellate court must “not shrink from giving effect to” its own conclusion.  Finality in litigation is highly desirable.  Litigation beyond a trial is costly and usually upsetting.  But in every appeal by way of rehearing, a judgment of the appellate court is required both on the facts and the law.  It is not forbidden (nor in the face of the statutory requirement could it be) by ritual incantation about witness credibility, nor by judicial reference to the desirability of finality in litigation or reminders of the general advantages of the trial over the appellate process.

    (Footnotes in original)

    [90] (2003) 214 CLR 118 at [28]-[29] (Gleeson CJ, Gummow and Kirby JJ).

    [91]   E.g., Voulis v Kozary (1975) 180 CLR 177; State Railway Authority (NSW) v Earthline Constructions Pty Ltd (in liq) (1999) 73 ALJR 306; 160 ALR 588; cf Trawl Industries of Australia Pty Ltd v Effem Foods Pty Ltd (1992) 27 NSWLR 326 at 349-351.

    [92]   E.g., Effem Foods Pty Ltd v Lake Cumbeline Pty Ltd (1999) 161 ALR 599 at 603 [15]-[16]. See also SRA (1999) 73 ALJR 306; 160 ALR 588.

    [93]   Brunskill v Sovereign Marine & General Insurance Co Ltd (1985) 59 ALJR 842 at 844; 62 ALR 53 at 57.

    [94]   Chambers v Jobling (1986) 7 NSWLR 1 at 10.

  27. The appellants attach to each of the challenges contained in the first three grounds a complaint that having regard to the standard required by Briginshaw, the findings complained of were ‘glaringly improbable’. This does not exhaust the grounds, but it highlights the necessity of explaining the findings in the context of the evidence and the issues joined.

    The judge’s findings of fact, in context

    The witnesses

  28. The primary judge found that Mr McEntee was ‘an impressive witness who generally gave evidence in a considered and careful fashion although at times he was, understandably, defensive’.[95] He accepted that Mr McEntee was both an honest and reliable witness. He accepted his evidence.[96] He also accepted that the evidence of each Ms McEntee and her sister Deborah, the applicants at trial and respondents to this appeal, was honest and reliable, and accepted their evidence.[97]

    [95]   McEntee & Anor v SJ Berry Pty Ltd & Ors [2021] SADC 102 at [36].

    [96]   McEntee & Anor v SJ Berry Pty Ltd & Ors [2021] SADC 102 at [39].

    [97]   McEntee & Anor v SJ Berry Pty Ltd & Ors [2021] SADC 102 at [40].

  29. The respondents (applicants at trial) called Mr Taylor Bishop, the agent who had preceded SJ Berry unsuccessfully in marketing the property. The judge found Mr Bishop to be an honest and reliable witness and accepted his evidence.[98] The respondents also called Mr Darren Kornelissen, the neighbour resident at 16 Langbein Ave. Mr Kornelissen gave evidence of his dealings with the Vendors about the encroachment, as well as his dealings with Ms Berry and Mr Bishop. He had been aware of and lived with the encroachment issue for 15 years at the time of the sale. The judge found that he did his best to recall events as they occurred, assisted by records he had kept, and considered him to be an honest and reliable witness.[99]

    [98]   McEntee & Anor v SJ Berry Pty Ltd & Ors [2021] SADC 102 at [41].

    [99]   McEntee & Anor v SJ Berry Pty Ltd & Ors [2021] SADC 102 at [42].

  1. The appellants’ submissions in support of this ground do not go much beyond asserting the complaints set out in the ground. The only development of the ground in submissions was to say that the judge dismissed much of Ms Berry’s evidence where it conflicted with others’, even when ‘contemporaneous documentary evidence’ supported her assertions, and to give one example.

  2. The example offered was the finding that the decision to market the property online with private inspections was made to stop Mr Kornelissen from drawing the Encroachment Issues to the attention of potential purchasers.[229] The judge found that this was done so that Ms Berry ‘could exercise control over how the fact and extent of both the house encroachment and the misalignment was communicated to prospective purchasers’.[230] The appellants submitted that in making these findings, the judge ‘ignored’ that there had previously been private inspections and did not place any weight on the evidence of Mr Kornelissen’s ‘interference’, Ms Rosewell and Ms Berry having reported his conduct to the police. They further submitted that the judge had no regard to Ms Berry’s and Ms Rosewell’s denials and failed to explain why he rejected their evidence.

    [229] McEntee & Anor v SJ Berry Pty Ltd & Ors [2021] SADC 102 at [224].

    [230] McEntee & Anor v SJ Berry Pty Ltd & Ors [2021] SADC 102 at [225].

  3. The judge accepted Mr Kornelissen as an honest and reliable witness.[231] He made detailed findings about Ms Berry’s state of knowledge. He made findings about what had occurred at the previous inspections. His initially expressed findings about credibility and reliability of the various witnesses were supplemented by further findings in the context of the various contests of evidence. This complaint rises no higher than that the judge should have made other findings. It is otherwise undeveloped. The appellants have not established that the judge somehow misused his advantage.

    [231] McEntee & Anor v SJ Berry Pty Ltd & Ors [2021] SADC 102 at [42].

    Ground 2: whether the judge erred in his findings of reliance and inducement

  4. This ground is comprised of a series of complaints about what the judge ought to have found but failed to find, with varying degrees of connection to the issues of reliance and inducement. One group of complaints is directed to what the judge should have found with respect to Mr McEntee’s obligations to the respondents as Nominees and Ms McEntee’s obligation to Deborah McEntee (the second respondent) with respect to knowledge and representations regarding the property.[232] The appellants did not address these complaints in submissions. The contentions do not appear to have been pursued at trial. In those circumstances there is no apparent justification for having included them in the Grounds of Appeal and no basis for expecting this Court to consider them further.

    [232] Appeal Grounds – Revision 1 (FDN 12), B5, B6.2.

  5. The ground then reiterates a form of the appellants’ complaint about the judge’s finding of knowledge, rather than reliance and inducement as announced in the heading to the ground.[233] This complaint has been addressed above. As the respondents observed, this formulation of that complaint proceeds on a wrong premise, that the respondents were required to show that Ms Berry knew the precise extent of the encroachment, rather than the appellants’ knowledge and belief that the representations were misleading or deceptive.

    [233] Appeal Grounds – Revision 1 (FDN 12), B6.1.

  6. The ground then focuses on the relevance of the terms of General Annexure Item 1 in the Contract, and in particular the word ‘may’. The appellants complained that the judge ought to have found that:

    ·Mr McEntee and the respondents read General Annexure Item 1;

    ·the word ‘may’ was part of a true expression on the part of the Vendors of the ‘potential’ of the Encroachment Issues, such as to terminate any reliance or reasonable reliance on the Agent’s Representations or ‘Conduct’; and

    ·Mr McEntee and the respondents were bound by the terms of Item 1 under the principles in Masters v Cameron[234] and Toll (FGCT) v Alphapharm Pty Ltd,[235] such that any assumption that Mr McEntee made about Item 1 was irrelevant.

    [234] (1954) 91 CLR 353.

    [235] (2004) 219 CLR 165.

  7. The appellants did not explain the relevance of Masters v Cameron and Toll (FGCT) v Alphapharm Pty Ltd. The principle that parties are bound by the objective terms of the contract is subject to any vitiating issue, such as those which formed the bases of the causes of action in this matter.[236] The relevance of General Annexure Item 1 at trial was to the questions of whether that Item denied the causative effect of the representations and, where it became relevant, contributory negligence.

    [236] Toll (FGCT) v Alphapharm Pty Ltd (2004) 219 CLR 165 at [46], [57].

  8. As set out above, the judge found that given his findings of Ms Berry’s state of knowledge following the conversation with Mr Lohmeyer, the use of the word ‘may’ in each instance in General Annexure Item 1 was false.[237] The judge made detailed findings about reliance on the misleading conduct of Ms Berry and Mr and Ms McEntee’s discussion about General Annexure Item 1,[238] culminating in the conclusion:[239]

    It is clear to me that by making the Agent’s Representation to Mr McEntee at the Inspection in the terms I have found but without mentioning the house encroachment, which in the circumstances was the most serious of the Encroachment Issues, Ms Berry has given Mr McEntee what may be described as a false sense of security in relation to the Encroachment Issues, or to put it another way, has disarmed him in relation to any other encroachment that may exist. The terms of General Annexure Item 1, using as it does the word “may” simply serves to reinforce that position.

    [237] McEntee & Anor v SJ Berry Pty Ltd & Ors [2021] SADC 102 at [192]-[193].

    [238] McEntee & Anor v SJ Berry Pty Ltd & Ors [2021] SADC 102 at [299].

    [239] McEntee & Anor v SJ Berry Pty Ltd & Ors [2021] SADC 102 at [304].

  9. The appellants went further and submitted that in the face of the word ‘may’, the respondents and Mr McEntee chose not to make further enquiries, despite evidence about their experience in property investment. They submitted that reliance could only be assessed if the respondents had called evidence from their advisers.

  10. Even if this submission could be said to relate to a ground of appeal, it is without merit. As the respondents submitted, the evidence was that no such advice was received and there was no pleading that they had received any such advice. They did not need to call evidence to prove the negative.

  11. The final paragraph of this ground[240] simply asserts that the judge should have found that the appellants were not liable to the respondents for any of the claims in fraud, deceit, misleading and deceptive conduct, negligent misstatement or otherwise. Expressed as it is to be a sub-ground of the complaint of findings or reliance and inducement, this ground is meaningless. It makes no attempt to identify error.

    [240] Appeal Grounds – Revision 1 (FDN 12), B6.6.

  12. In submissions, the appellants extended their complaints on the general topic of reliance and inducement to the judge’s finding that had Mr McEntee known of the house encroachment, he would not have entered into the Contract (‘the no transaction finding’) and that the conclusion of reliance was prevented by cl 8 of the Contract. That clause provided:

    8.     Misdescription

    This Contract will not be terminated for any error or misdescription of the property but the Purchaser will be entitled to seek compensation from the Vendor for any loss or damage arising from the error or misdescription subject to any claim being notified and demanded within 14 days of settlement.

  13. Neither of these complaints has an apparent foundation in the Grounds of Appeal. Clause 8 was not raised at trial. Had the appellants sought to rely on it, they would have had to cross-examine Mr McEntee at least as to why he and the respondents did not rely on it when they discovered the full extent of the encroachment. The appellants should not be permitted to raise this argument now.[241] Its merit is, in any event, dubious. It is not immediately apparent that there was a relevant misdescription of the property in the Contract.[242]

    [241] Coulton v Holcombe (1986) 162 CLR 1 at 7-8; Suttor v Gundowda Pty Ltd (1950) 81 CLR 418 at 438.

    [242] See Travinto Nominees Pty Ltd v Vlattas (1973) 129 CLR 1 at 13 (Barwick CJ).

  14. As to the no transaction finding, the complaint appears to rise no higher than that the judge should have found differently. The appellants have demonstrated no basis for disturbing this finding.

  15. Ground 2 fails. The appellants have identified no basis for disturbing the judge’s findings on reliance and inducement.

    Ground 3: whether the judge erred in his findings with respect to the Studio Representations

  16. This ground attacks a number of the findings made by the trial judge with respect to the Studio Representations and extends to asserting what the judge should have been found. At the outset, it should be observed that no claim with respect to the Studio Representations was based in deceit. However, the submissions of the appellants in part looked to challenge the capacity of the evidence to have established fraud.[243] This is an instance of the disconnection between the grounds of appeal, the appellants’ submissions and the matters determined at trial.

    [243] Written Submissions of the First and Second Appellants – Revision 1 (FDN 37) at [75.6], [75.7].

  17. It is helpful here to restate the relevant conclusions of the judge. As set out above, the judge found that the Studio Representations, combined with the Consent Statement, constituted a representation that the Studio was able to be used as a habitable room and that it had all necessary consents (that is, the Consent Representations). The judge found that the Consent Representations constituted conduct that was misleading and deceptive or likely to mislead or deceive contrary to s 18 of the ACL. He further found that the Consent Representations constituted false or misleading representations concerning the use to which the land was capable of being put or may lawfully be put. Consequently, he found that Ms Berry, and thereby SJ Berry, had breached s 30(1)(f) of the ACL.

  18. The judge also found the existence of a duty of care in relation to the Studio Representations. He found that the intention of the Studio Representations was to convey to potential purchasers that the Studio was able to be used as a habitable room.

  19. It is to be recalled that the judge found that Ms Rosewell told Ms Berry that she had done up the Studio, but not the precise extent to which she had done it up. He also found that Ms Berry understood the Studio had not been approved for use as a bedroom and that she understood it would not be appropriate to say to a potential purchaser that it had been done up for someone to stay in. He found that Ms Berry was aware that the Studio had no approval for use as a habitable room, yet that was how it was marketed.

  20. The appellants first complained that the judge erred ‘in fact and law’ in finding that the appellants made any actionable representation that the Studio Representations could have given rise to any implication of either habitability or Council approval. This appears to rely on the description of the Studio in the marketing as a ‘garden studio’. However, it fails to take account of the full combination of representations the judge found to be made, including the marketing representations, and Ms Berry’s statement that the Studio had recently been renovated by the Vendors with the intention that Ms Rosewell’s daughter could stay in it.

  21. Next, the appellants complained that the judge erred in finding that they made any implied representations that induced the Contract. This seems to be an attack on the finding that they made the Implied Studio Representations. The appellants’ submissions do not expand on why this finding was impermissible, other than by reference to the next paragraph of the ground. That paragraph complains that the judge erred in finding that the Implied Studio Representations and concept of a ‘habitable room’ should be assessed against the definitions in the National Construction Code, which was not within the contemplation of the parties.

  22. This submission misunderstands the judge’s reference to the definition of ‘habitable room’ in the National Construction Code. He referred to that in order to assess whether approvals were required but which had not been given. That was not to suggest that the definitions were in the contemplation of the parties.

  23. Next, the ground complains that the judge erred in finding that the Consent Representations were made by Ms Berry by the Contract and that they were misleading and deceptive or likely to mislead or deceive, contrary to ss 18 and 30 of the ACL. This is a complaint about the judge’s final conclusions. It does not usefully identify any error. In light of Ms Berry’s evidence about her observations of improvements to the Studio, Ms Rosewell having told Ms Berry she had done work to it and Ms Berry’s knowledge that it had no approval for use as a habitable room, the findings that the Consent Statement was false and that the Consent Representations were misleading or deceptive were obviously open.

  24. The appellants then challenged the finding that the respondents relied on any of the representations concerning the Studio. The judge’s conclusions are set out above. They were reached after careful consideration of the naturally self-serving element to Mr McEntee’s evidence. The appellants have not identified how these conclusions can be said to be in error.

  25. Next, the appellants complained that the judge should have found that the Express Studio Representations occurred in a conversational anecdote for which Ms Berry was a mere conduit, that they did not constitute a representation of fact and that they could not have given rise to an implication that consent had been given. The difficulty with this is that the conversation occurred during an open inspection. The purpose of the conversation was manifestly to advance a sale. There was no evidence that Ms Berry disclaimed the truth of the statement. This attempted characterisation of the Express Studio Representations with a view to drawing the conclusion urged is untenable.

  26. The next sub-ground is that the judge should have found that the Studio was marketed as a ‘garden studio’, which did not imply that any consent had been given. This artificially decontextualises two words in the marketing (which in any event referred to a ‘separate, fully insulated garden studio’) from the balance of the representations.

  27. The appellants then complain that the Implied Studio Representations are inconsistent with the intentions of Mr McEntee to build a bathroom at the back of the Studio and convert the Studio into another bedroom, and that those intentions also demonstrated a lack of reliance. These contentions do not follow. Mr McEntee’s intentions do not affect the question of whether the Studio Representations were made. As to reliance, it is to be recalled that Mr McEntee’s evidence was that had he been aware that the Studio could not have been used as a living area without the need to undertake structural works, that would have affected his position with respect to the offers he made, and he may not have made an offer. The judge’s finding to that effect was not glaringly improbable.

  28. Finally, with respect to Ms Berry presenting the Contract and the Consent Statements to the appellants, the appellants complain that the judge should have found that Ms Berry was acting as a mere conduit, with no expression of belief or disbelief in the truthfulness of the representations. There was no evidence that Ms Berry had communicated any disclaimer as to the truth of the Consent Statements. She prepared the Contract and the Consent Statements, knowing that work had been done and that approval had not been given. The judge did not err in failing to find that Ms Berry was a mere conduit with respect to the Consent Representations.

    Ground 4: whether the judge erred in failing to draw inferences in accordance with the principles in Jones v Dunkel that precluded the strict proof required under Briginshaw

  29. Ground 4 complains that the judge failed to draw inferences in accordance with the principles in Jones v Dunkel,[244] and in so doing, failed to find that the respondents had not strictly proved their case in accordance with Briginshaw principles. In this regard, the appellants list the respondents’ failures to call:

    ·Ms Fran Panagaris, Ms McEntee’s mother who was a conveyancer. Mr McEntee had forwarded to Ms Panagiaris his email to Ms Berry of 29 May 2017 asking why the misalignment and encroachment had not been highlighted to them;

    ·Mr Jeff Yablon, the draftsman who attended at the property with Mr McEntee after the Contract had become unconditional. Mr McEntee’s evidence was that he did not discuss possible boundary issues with Mr Yablon;

    ·Mr Grant Atkins, the conveyancer engaged by the respondents;

    ·Mr Nick Bilby, a representative of Beyond Bank, from whom the respondents obtained finance.

    [244] (1959) 101 CLR 298.

  30. The appellants did not develop these complaints in submissions at all. The written submissions merely repeat the effect of the ground. With respect to Ms Panagaris, the submissions speculate that the respondents may have communicated with her at an earlier stage. They do not identify any basis for that speculation, or the relevance of any evidence Ms Panagaris might have given to a fact in issue. Neither have the appellants identified any relevant evidence that any of the other indicated individuals could have given.

  31. Further, the appellants made no submission in accordance with the principles of Jones v Dunkel at trial with respect to any of these individuals. Had the appellants raised the point at trial, the respondents would have had an opportunity to respond to explain the absences.[245] However, in circumstances where the appellants have not even attempted to explain what evidence any of these individuals could have given, the issue is not so much the respondents’ loss of an opportunity to respond at trial, but rather the appellants’ failure to explain the pertinence of the complaint. Ground 4 is wholly without merit.

    Ground 5: whether the judge erred in the assessment of damages with respect to the Encroachment Issues and in the application of principles of apportionment

    The assessment of loss

    [245] Musa v Alzreaiawi [2021] NSWCA 12 at [83].

  32. The respondents relied at trial on expert valuation evidence of a Mr Chris Winter, a certified practising valuer. Mr Winter adopted a direct comparison approach. He valued the property as at the date of the Contract, 31 March 2017, under four different scenarios.

  33. The first scenario was to assume that the misalignment was minor, i.e., 100‑200mm, and that this was known. Mr Winter considered that there was no material difference between the market value and the purchase price paid.

  34. The second scenario assumed that the full extent of the misalignment and encroachment was disclosed prior to entering into the Contract. Mr Winter considered that without resolution of the issues, the property would have been virtually unsaleable.

  35. The best case, in Mr Winter’s opinion, is that the purchaser would be presented with a resolution of the Encroachment Issues, with the value being reduced by the loss of amenity and aesthetics from the reduced front boundary (as eventually occurred). On that basis, he valued the property at $520,000, achievable on the best case, with a pro-active approach. On the worst case, he valued the property as having a land value of $275,000, with a nominal $35,000 for improvements.

  36. Mr Winter considered both best and worst cases to be unlikely. He considered that a value of $410,000, representing a reduction of about 25 per cent, would sufficiently motivate a purchaser to accept the risk of negotiating with the neighbour and incurring the potential loss of amenity and outlook.

  1. The third scenario assumed that the unapproved status of the Studio was disclosed. He considered that it was reasonable to expect that, with those disclosures, a prudent purchaser would obtain further information, such as a building inspection. He concluded that it was unlikely that this would render the property unsaleable, but that the value of the property would reduce by between five and 10 per cent. He adopted a mid-point of that reduction percentage, which he calculated at $42,500.

  2. The fourth scenario looked to the market value with the misalignment, the encroachment and the unapproved Studio all taken into account. He considered the market value of the property in those circumstances to be $380,000.

  3. The Vendors called an expert valuer, Mr Brian Scarborough. He was asked for his opinion of the value of the property on 31 March 2017. He adopted two approaches, one of which presented an opinion of value of $450,000, and the other, $475,000.

  4. The judge accepted Mr Winter’s opinion. It is not necessary to interrogate the competing methodologies of these two expert valuers, as the appellants did not complain that the judge erred in not accepting Mr Scarborough’s opinion. The challenges are to the judge’s assessment of loss on the basis that he accepted the valuations of Mr Winter. Neither is it necessary to consider further the assessment of loss with respect to the Studio, as the appellants no longer challenge that assessment.

  5. On the loss caused by the deceit and fraudulent misrepresentation on the Encroachment Issues, the judge referred to the well-known authorities establishing that an applicant is entitled to be put in the position they would have been, were it not for the deceit.[246] He further referred to the recent statement by Doyle J in this Court in Crouch & Ors v The Bloody Mary Group Pty Ltd & Ors:[247]

    In an action for deceit, the plaintiff is entitled to recover as damages a sum representing the prejudice or disadvantage he or she has suffered in consequence of altering his or her position under the inducement of the fraudulent misrepresentation made by the defendant. It is a question of determining how much worse off the plaintiff is as a result of entering into the transaction which the representation induced him or her to enter than he or she would have been had the transaction not taken place. The plaintiff is generally entitled to recover all of his or her consequential losses directly flowing from reliance on the relevant representation, the object of the award of damages being to place the plaintiff in the position he or she would have been but for the deceit.

    (Footnote omitted)

    [246] Gould v Vaggelas (1985) 157 CLR 215 at 220-221; Gates v City Mutual Life Assurance Society Ltd (1986) 160 CLR 1 at 12; Kizbeau Pty Ltd v WG & B Pty Ltd (1995) 184 CLR 281 at 291.

    [247] [2020] SASC 68 at [329] (Doyle J).

  6. The judge found that there was a difference in the market value of the property of $137,500, identified by Mr Winter in the second scenario, in that the market value of the property at the date the Contract was entered into was $410,000, as opposed to the $547,500 paid. He consequently held the respondents were entitled to damages for deceit in the sum of $137,500. He held that they were not entitled to damages for the costs incurred to resolve the Encroachment Issues ($9,493.08) or for the decrease in market value after resolution of the Encroachment Issues (claimed to be $36,000) as to do so would be to recover twice for the same loss.

  7. On the assessment of damages under s 236 of the ACL, in respect of the breaches of ss 18 and 30, the judge said:[248]

    There is no requirement that where a section 18 claim concerns conduct that involves a misrepresentation, the person who alleges damage must have relied on the misleading conduct. All that is necessary is a sufficient and direct link between the loss and damage alleged to have been suffered and the misleading or deceptive conduct.[249] There is no authority to this effect in relation to section 30, however I see no reason to differ from the authorities dealing with section 18.

    (Footnote in original)

    [248] McEntee & Anor v SJ Berry Pty Ltd & Ors [2021] SADC 102 at [749].

    [249] See Marks v GIO Australia Holdings Ltd (1998) 196 CLR 494 at 529 [101] per Gummow J.

  8. Subject to his dealing with the impact of s 137B of the CCA, he found that the loss suffered by the appellants with respect to these breaches was $137,500, based on Mr Winter’s second scenario.

  9. The appellants did not plead that the respondents had suffered loss or damage as a result of their failure to take reasonable care within the meaning of s 137B of the CCA. The judge found on the s 18 claim, notwithstanding the pleading failure, that Mr McEntee and the respondents had suffered loss or damage partly as a result of their failure to take reasonable care, to the extent of 15 per cent, such that the loss sustained by them consequent on the Encroachment Issues was reduced to $116,875. He went on to note that s 137B does not apply to a claim for a contravention of s 30 of the ACL.

  10. The claim under s 18 of the ACL was an apportionable claim under s 87CB of the CCA. Pursuant to s 87CD, the judge considered that on the Encroachment Issues it was just and equitable to apportion liability under s 18 as to the appellants, 70 per cent and as to the Vendors, 30 per cent. Apportionment was not available on the s 30 claim.

  11. On the action for negligent misstatement against the appellants, the judge held that the measure of damages was the same as for deceit. However, s 8 of the Law Reform (Contributory Negligence and Apportionment of Liability) Act 2001 applied. The judge concluded that there should be a reduction for contributory negligence of 15 per cent in relation to the Encroachment Issues.

    The approach on appeal

  12. The appellants only addressed their appeal with respect to damages and quantum in written submissions. As a preliminary matter, those written submissions included the following paragraph:[250]

    In circumstances where the Trial Judge has made a number of alternative assessments of damages, these submissions do not address the quantum in detail and leave will be sought to make separate submissions on this issue following the determination of the [sic] whether any of the causes of action are maintained.

    [250] Written Submissions of the First and Second Appellants – Revision 1 (FDN 37) at [110].

  13. The respondents indicated at the hearing of the appeal that they opposed that course being taken. The appellants did not apply for leave; they made no oral submission on the matter. An appellant should, in any event, be prepared to argue the entirety of their appeal at the hearing; there should be no expectation of adjourning grounds of appeal relating to damages.

    Damages and quantum – encroachment issues

  14. The Grounds of Appeal complain that the judge erred in allowing $137,500 for a reduction in value of the property at the date of settlement because of the unresolved encroachment issue, by failing to consider that the respondents had mitigated their loss through the land swap with Mr Kornelissen. In consequence, the damages assessed represented a windfall to the respondents. They should have been limited to the cost of resolving the encroachment issue with Mr Kornelissen ($9,493.08) and the decrease in market value after the adjustment to the boundary ($36,000).

  15. The appellants’ written submissions in support of these grounds were brief. First, they submitted that the judge did not adequately address s 236 of the ACL. They did not develop this submission and have not, as a result, identified error in the judge’s treatment of the section.

  16. Next, they submitted that the judge erred in assessing the difference in value as at the date of the transaction. They acknowledged the judge’s reference to and quoting of the well-known passage of Gibbs CJ in Gould v Vaggelas:[251]

    It is well established that in an action of deceit where the plaintiff has been induced by the fraudulent misrepresentation of the defendant to enter into a contract of purchase, the measure of damages usually applicable is the difference between the real value of the property at the time of the purchase and what the plaintiff paid for it: Holmes v. Jones;[252] Potts v. Miller;[253] Toteff v. Antonas;[254] Foster v. Public Trustee;[255] Ted Brown Quarries Pty. Ltd. v. General Quarries (Gilston) Pty. Ltd.[256] Events that happen after the time of the purchase may throw light on the real value of the property at that time: Potts v. Miller.[257] Where the property has depreciated in value after the purchase, and the depreciation was due to some cause inherent in the property itself, the depreciation must be considered in determining the real value of the property at the relevant time, but where the cause of the depreciation was “independent”, “extrinsic”, “supervening” or “accidental”, the additional loss is not the consequence of the inducement and it should not be taken into account in arriving at the value of the property at the time of the purchase: Potts v. Miller.[258]

    (Footnotes in original)

    [251] (1985) 157 CLR 215 at 220.

    [252] (1907) 4 C.L.R. 1692, at pp. 1702-1703.

    [253] (1940) 64 C.L.R. 282, at pp. 289, 297.

    [254] (1952) 87 C.L.R. 647, at pp. 650-651.

    [255] [1975] 1 N.Z.L.R. 26, at p. 28.

    [256] (1977) 16 A.L.R. 23, at p. 31.

    [257] (1940) 64 C.L.R., at pp. 289-290, 299.

    [258] (1940) 64 C.L.R., at p. 298.

  17. However, the appellants submitted that in this case, the judge failed to apply this authority correctly, in light of the actual losses incurred by the respondents. They submitted that the judge ‘did not consider’ the authorities that permit a court to depart from the date of transaction as the relevant date for valuation purposes, where that does not produce a just result.[259]

    [259] Smith v New Court Securities Ltd v Citibank N.A. [1997] AC 254 at 266; HTW Valuers (Central Qld) Pty Ltd v Astonland Pty Ltd (2004) 217 CLR 640 at [63].

  18. The appellants submitted that the resolution between the respondents and Mr Kornelissen represented mitigation of the respondents’ loss. The actual loss suffered by the respondents was the cost of the resolution with Mr Kornelissen and the reduction in value of $36,000, ‘if anything at all’. It was not the difference between the purchase price and the valuation as at the date of the Contract.

  19. There is an immediate difficulty with this submission. The figure of $36,000 was the amount claimed by the respondents to represent the decrease in market value of the property. However, as the judge found, there was no evidence of that consequential loss of value.[260]

    [260] McEntee & Anor v SJ Berry Pty Ltd & Ors [2021] SADC 102 at [742].

  20. It was orthodox for the respondents instead to run a case based on the difference between price and value as at the date of the Contract. The appellants did not lead any evidence as to valuation. It was open for them to argue that damages for the encroachment issues should, in all the circumstances, be limited to the cost of resolution with Mr Kornelissen. However, it is quite another thing to say that the judge erred in applying the approach endorsed by Gould v Vaggelas.[261]

    [261] (1985) 157 CLR 215 at 220.

  21. The resolution with Mr Kornelissen appears not to have been straightforward. The evidence suggests that it was protracted and involved the respondents giving up a portion of the frontage of the property, with a dog-leg fence obscuring part of the view from the verandah. There was no valuation evidence as to the value of the property after the resolution of all issues. The scope for any argument as to why valuation as at the Contract date did not produce a just result was thereby lessened. It is not necessary or appropriate to speculate about what the result might have been had such evidence been adduced. It was not. The judge was faced with a property that was not the same property, and which was apparently less appealing. He was presented with an orthodox methodology of assessing loss. The appellants have not demonstrated that the judge erred in adopting Mr Winter’s valuation as at the date of the Contract.

  22. The appellants also submitted that the judge should have disregarded the Contract price, as by the time of the purchase, the respondents were on notice of the JLL Mortgage valuation of $520,000 procured by the bank, which required Ms McEntee to deploy some personal funds. The submission does not proceed beyond this bare assertion. Mr Winter’s evidence was that the purchase price was within the range. The judge did not err in adopting the purchase price.

    Damages and quantum – apportionment

  23. The Grounds of Appeal also claim that the judge erred in finding that the appellants and the Vendors were jointly and severally liable for the amount of $167,500, and failed to consider:

    ·the nature of the relationship between vendor and agent;

    ·the warranties and indemnity in the Agency Agreement; and

    ·the terms of the Contract, the Fences Act 1975 (SA), the Encroachments Act 1944 (SA), the Vendors’ continuing disregard of the van Senden Survey and their refusal to pay for the costs of another survey.

  24. Finally, the Grounds of Appeal assert that the judge ought to have had regard to the fact that the Vendors were liable to indemnify the appellants for any loss and damage and found that the appellants were not liable for any loss and damage to the respondents.

  25. The appellants’ written submissions on these sub-grounds essentially just repeat the effect of the sub-grounds themselves. They do not develop the complaints. In any event, the apportionment determinations do not apply to the claims in deceit or to the damages for contravention of s 30 of the ACL. Further, the appellants have not explained how the warranties and indemnities as between Vendors and agent are relevant to that assessment.

  26. The appellants made a further, written submission that Mr Kornelissen was out of time to make a claim in respect of the encroachment, as the limitation period for adverse possession had expired. That submission does not address s 251 and Part 7A of the Real Property Act 1886 (SA). In any event, it is not necessary to consider the submission further. It is not supported by any ground of appeal. It was not pleaded or argued at trial, and it was not developed at all in submissions.

  27. Ground 5 should be dismissed.

    Conclusion

  28. I would dismiss the appeal.


Most Recent Citation

Cases Citing This Decision

4

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Cases Cited

51

Statutory Material Cited

1

McEntee v SJ Berry Pty Ltd [2021] SADC 102
Toteff v Antonas [1952] HCA 16