McEntee v SJ Berry Pty Ltd

[2021] SADC 102

DISTRICT COURT OF SOUTH AUSTRALIA

(Civil: Application)

MCENTEE & ANOR v SJ BERRY PTY LTD & ORS

[2021] SADC 102

Judgment of his Honour Judge O'Sullivan  

27 August 2021

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

On 27 May 2017, the applicants, became the registered proprietors of a property at Woodside, South Australia (“Property”). They purchased the Property from the third and fourth respondents (“Ms Rosewell” and “Mr Kloosterman” respectively and together “the Vendors”).

The Real Estate business which marketed the Property from early 2017 was the first respondent (“SJ Berry”) trading as Sandra Berry Real Estate.  The second respondent ("Ms Berry") was the sole director of SJ Berry.

Mr Darren Kornelissen owned the adjacent property to the north of the Property. Since 2002 he had asserted to the Vendors that the Property encroached onto his property as shown in a survey conducted in 2002. That encroachment comprised a misalignment of the boundary fence between the two properties (“misalignment”) and an encroachment of the house on the Property onto his property (“house encroachment”), (together the “Encroachment Issues”).

The third respondent had purchased the Property in the late 1990s, at which time a garage (now referred to as a “Studio”) on the Property was in a rundown state. The previous owner had used it for his auto-electrical business.

The third respondent had made a number of alterations and improvements to the garage. The Property was marketed for sale by SJ Berry showing clearly that the Studio was being used as a habitable room. The third and fourth respondents had received no Development Approval or Building Rules Consent for the work done to the garage before it became a Studio. The work done to the Studio resulted in the roof of the Studio being structurally unstable.

Mr Paul McEntee ("Mr McEntee") is the husband of the first applicant and brother-in-law of the second applicant. On 22 March 2017 Mr McEntee inspected the Property with Ms Berry. During that Inspection Ms Berry made certain representations as to the extent of an encroachment by the boundary fence between the Property and the adjoining property. No mention was made of the house encroachment.

During the Inspection, Ms Berry also made certain representations to Mr McEntee as to the use to which the Studio was being used.

On 30 March 2017, Mr McEntee entered into a contract for the purchase of the Property in the name of “Paul McEntee and or Nominee”.

In entering into the contract and inspecting the Property, Mr McEntee acted as the agent of the applicants.

The respondents were aware of the Encroachment Issues and that the Studio had work done to it which had not received either Development Approval or Building Rules Consent.

The Contract contained a provision in relation to the Encroachment Issues which was conditioned by the word “may”. It also contained a condition that there were no known alterations or improvements made to the Studio without consent.

Completion occurred on 27 May 2017. After completion the applicants became aware of the true nature and extent of the Encroachment Issues and that work had been done to the Studio without Development Approval or Building Rules Consent.

The applicants claim against the respondents as follows:

1. As against all respondents in deceit and fraudulent misrepresentation in relation to the Encroachment Issues;

2. Against SJ Berry, misleading or deceptive conduct contrary to sections 18 and 30 of the Australian Consumer Law (“ACL”);

3. As against Ms Berry and the Vendors, a claim pursuant to section 2 of the ACL that each of Ms Berry and the Vendors are jointly liable with SJ Berry for SJ Berry’s contravention of sections 18 and 30 of the ACL, as persons involved in those contraventions;

4. As against Ms Berry and SJ Berry, a claim in negligent misrepresentation;

5. As against the Vendors, a claim for breach of Contract, specifically:

5.1  For breach of the warranties claimed in clauses 6.1, 6.4, 6.5 and 6.8 of the Contract in relation to the Encroachment Issues; and

5.2 For a breach of contractual warranty contained in schedule 2 of the Contract and clause 6 of the Contract, that all renovations to the Studio had all necessary consents.

Held

The applicants have established their causes of action:

1. As against all respondents in deceit in relation to the Encroachment Issues;

2. As against the first and second respondents:

(a) For contravening sections 18 and 30 of the ACL in relation to the Encroachment Issues and the Studio;

(b) For negligent misrepresentation in relation to the Encroachment Issues and the Studio.

3. As against the third and fourth respondents:

(a) For contravening sections 18 and 30 of the ACL in relation to the Encroachment Issues and the Studio.

(b) For breach of contract in relation to both the Encroachment Issues and the Studio.

4. The court will hear the parties as to the form of orders sought consequent upon the court’s findings and the question of interest and costs.

Briginshaw v Briginshaw (1938) 60 CLR 336, 362 , applied.

Crouch & Ors v The Bloody Mary Group Pty Ltd & Ors [2020] SASC 68 at [275-285]; Bradford Third Equitable Benefit Building Society v Borders [1941] 2 All ER 205 at 211; Magill v Magill (2006) 226 CLR 551 at [37]; Krakowski v Eurolynx Properties Ltd, (1995) 183 CLR 563, 573-577; Gould v Vaggelas (1984) 157 CLR 215; Lord Buddha Pty Ltd v Harpur [2013] 41 VR 159; Stone v Chappel [2017] 128 SASR 165, [359]; Butcher v Lachlan Elder Realty Pty Ltd (2004) 218 CLR 592; Miller & Associates Insurance Broking Pty Ltd v BMW Australia Finance Ltd (2010) 241 CLR 357; Software Integrators Pty Ltd v Roadrunner Couriers Pty Ltd (1997) 69 SASR 288, 296-298; Williams v Pisano (2015) NSWLR 342; Yorke v Lucas (1985) 158 CLR 661, 666; Gardam v George Wills & Co Limited (1988) 82 ALR 415; Ingot Capital Investments Pty Ltd v Macquarie Equity Markets Ltd [2008] 73 NSWLR 653; ABN AMRO Bank NV and Ors v Bathurst Regional Council and Ors (2014) 309 ALR 445, 727; Annand and Thompson Pty Ltd v Trade Practices Commission [1979] 25 ALR 91; The Mutual Life and Citizens’ Assurance Company Limited v Evatt (1968) 122 CLR 556, 571 ; L Shaddock and Associates Pty Ltd v Parramatta City Council (No.1) (1980) 150 CLR 225; San Sebastian Pty Ltd & Anor v Minister of Administering the Environment, Planning and Assessment Act 1979 and Ors (1986) 162 CLR 340, 356-357; Tepko Pty Ltd v Water Board (2001) 206 CLR 1; Gates v City Mutual Life Assurance Society Ltd (1985) 160 CLR 1, 12 ; Kizbeau Pty Ltd v WG & B Pty Ltd (1995) 184 CLR 281, 291, considered.

MCENTEE & ANOR v SJ BERRY PTY LTD & ORS
[2021] SADC 102

Introduction

1. On 30 March 2017, Mr Paul McEntee (“Mr McEntee” or “Paul”) entered into a contract (“Contract”) with the third and fourth respondents (“Ms Rosewell” and “Mr Kloosterman” respectively and together “the Vendors”) for the sale and purchase of the property at 14 Langbein Avenue, Woodside, South Australia (“Property”). 

2. The Property faces west.  It is bounded on its northern boundary by no.16 Langbein Avenue, owned by Mr Darren Kornelissen (“Mr Kornelissen”). 

3. Ms Rosewell and Mr Kloosterman had owned the Property since the late 1990s.[1]

   [1]    T971.19-21

4. Mr Kloosterman had been in a domestic relationship with Ms Rosewell but in the period 2016 to mid-2017 they had separated albeit they were still living together. Ms Rosewell had a daughter, Jordie and a son, Ty, who at that time were aged about 25 and 13 respectively. Jordie was not living at the Property in 2016-2017.[2]

   [2]    T970.22-972.15

5. At the trial, Mr Kloosterman and Ms Rosewell were represented by the same counsel. There is no suggestion that Mr Kloosterman took a different approach or disagreed with anything Ms Rosewell said or did. It is not suggested that if Ms Rosewell is liable in any of the causes of action brought by the applicants, Mr Kloosterman is nonetheless not liable.

6. In 2002 Mr Kornelissen had a survey conducted of the boundary between no.16 and no.14 Langbein Avenue by a surveyor - Mr Geoffrey van Senden. Mr van Senden produced a plan of survey dated March 2002 (“2002 van Senden survey”).[3] As from in or about April 2002, Mr Kornelissen asserted to both Ms Rosewell and Mr Kloosterman that the Property encroached onto his property. That encroachment comprised a misalignment of the boundary fence between the two properties (“misalignment”) and an encroachment of the house on no.14 onto his property (“house encroachment”), (together the “Encroachment Issues”).[4]

   [3]    Exhibit A3, Vol 1, Tab 2

   [4]    Exhibit A3, Vol 1, Tab 3, Tab 6

7. The Vendors initially put the Property on the market in early 2016, with a real estate agency named Harcourts Real Estate. It was taken off the market in mid-2016 after Mr Kornelissen approached potential purchasers attending at open inspections of the Property and handed them a “flyer” informing them of the Encroachment Issues. In December 2016, Ms Rosewell approached the second respondent (Ms Berry), about marketing and selling the Property. The Property was put on the market again in early 2017.

8. The Real Estate business which marketed the Property from early 2017 was the first respondent (“SJ Berry”) trading as Sandra Berry Real Estate.  That company is no longer the proprietor of the business name.[5]  It is an admitted fact that Ms Berry was the sole director of SJ Berry.[6] Ms Berry was, and remains, the principal of Sandra Berry Real Estate and had the conduct of the marketing and sale of the Property in 2017.

   The Encroachment and the Studio

   [5]    T687.12-27

   [6]    R1, R2, Revised Defence [5]

9. On 22 March 2017, Mr McEntee inspected the Property during a private inspection (“Inspection”) he had arranged with Ms Berry.  Ms Berry was present during the Inspection. Later in the Inspection, he was joined by his wife, Ms Jane McEntee (“Ms McEntee” or “Jane”). 

10. The principal dwelling on the Property is a three-bedroom house.  There is also a garage on the Property to which significant work has been done. The garage was marketed by Sandra Berry Real Estate in the Marketing Materials for the Property (“Marketing Materials”) as a “Studio”.

11. At about the time Ms McEntee arrived at the Property on 22 March 2017, Ms Berry spoke to Mr McEntee about a potential issue with the boundary fence between no.14 and no.16.  What was said between Mr McEntee and Ms Berry during this conversation is in dispute, and is referred to in the Statement of Claim - Revision 2 as the “Agent’s Representation”.[7] Ms McEntee was not present during that conversation.

    [7]    Statement of Claim, Rev 2 [11]

12. There is also a dispute between the parties as to how the Studio was represented both expressly by Ms Berry to Mr McEntee and in the Marketing Materials. The applicants allege that Ms Berry orally represented to Mr McEntee during the inspection in words to the effect that the Studio had been recently renovated by the Vendors with the intention that Ms Rosewell’s daughter could stay in it (“Express Studio Representation”).[8]

    [8]    Statement of Claim, Rev 2 [12A]

13. Insofar as the Marketing Materials are concerned,[9] it is alleged that material described the Studio as being a “… separate fully insulated garden studio” (“Studio Marketing Representation”). It is alleged further that the Studio Marketing Representation and the Express Studio Representation impliedly represented that the Studio had all the necessary approvals to allow it to be used as a habitable room (“Implied Studio Representation”).

    The Contract

    [9]    Statement of Claim, Rev 2 [9A]

14. After the Inspection, Mr McEntee made a number of offers to purchase the Property.  Mr McEntee and the Vendors eventually agreed on the figure of $547,500.  Mr McEntee’s signature on the Contract was witnessed by Ms McEntee.

15. The purchaser under the Contract,[10] was described as “Paul McEntee and/or Nominee”. 

    [10] Exhibit A3, Vol 1, Tab 37, p143

16. Clause 6[11] of the Contract provides:

    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;

    6.5    any encroachments onto the property by any building or structure from the adjoining land;

    …

    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.

    [11] Ibid at p147 (Exhibit A3, Vol 1, Tab 37)

17. On page 2 of the Contract[12] is a Schedule which provides:

    Known encroachments and fences not on boundaries (if any) - see General Annexure, Item 1.

    [12] Ibid at p144

18. The General Annexure to the Contract provided at General Annexure Item 1:[13]

    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.

    [13] Ibid at p157

19. The Schedule on page 2 of the Contract also contained a section which provides:

    Alterations and Improvements erected without consent (“notified works” if any) (General Condition 5)

    NONE KNOWN

    The Property settles

20. Completion of the Contract occurred on 26 May 2017. 

21. The eventual purchasers and the applicants in this matter are Ms McEntee and her sister-in-law Ms Deborah McEntee (“Deborah”), as nominees of Mr McEntee. Deborah is married to Mr McEntee’s brother, Michael (“Michael”).  In these reasons I refer to Mr McEntee, Ms McEntee, Deborah and Michael together as “The McEntee family”.

22. After completion, two issues arose.

23. First, on 28 May 2017, Mr McEntee became aware from Mr Kornelissen of the extent of the misalignment and the house encroachment after Mr Kornelissen showed him the 2002 van Senden Survey.  The 2002 van Senden survey reveals the misalignment and the house encroachment is such that the true boundary between no.14 and no.16 Langbein Avenue runs through the northern side of the house situated on the Property.

24. The applicants allege that had the true position concerning the extent of the misalignment and house encroachment been made known to them, Mr McEntee, (and thereby the two applicants as nominees) would not have purchased the Property.  They allege further that as a result of the conduct of the first to fourth respondents they have suffered loss. 

25. Second, it was discovered by Mr McEntee that the Studio had a structural defect which required a significant amount of work to rectify as well as other defects.  The structural defect was that alterations had been made to the roof trusses such that the bottom chord of the trusses had been cut.  The applicants also found out that other work done to the Studio (apart from the cutting of the bottom chord of the trusses) had been done without the approval of the local council, being the Adelaide Hills Council (“Council”). 

26. Ultimately, the applicants, through Mr McEntee and Mr Kornelissen, resolved the encroachment issue by arranging a land swap of 13.8m² to compensate for the Encroachment Issues. That land swap runs along the northern boundary of no.14 commencing at the front of the house on no.14 and terminates at the street on the western boundary of the Property. The land was transferred to Mr Kornelissen by means of a boundary re-alignment. 

    The Applicants' Claims

27. The applicants’ claims comprise a number of causes of action which I summarise below and deal with in detail later in these reasons:

    1.As against all respondents, deceit and fraudulent misrepresentation; [14]

    [14] Statement of Claim, Rev 2 [29]-[41]

    2.As against SJ Berry;

    2.1Misleading and deceptive conduct contrary to sections 18 and 30 of the Australian Consumer Law (“ACL”).[15]

    [15] Statement of Claim, Rev 2 [42]-[47]

    2.2As against Ms Berry and the Vendors, a claim pursuant to section 2 of the ACL that Ms Berry and the Vendors are jointly liable with SJ Berry for SJ Berry’s contravention of the ACL, as persons involved in that contravention on the basis that:

    2.2.1Ms Berry procured the contravention of sections 18 and 30 of the ACL or was directly or indirectly, knowingly concerned in or a party to the contravention; and

    2.2.2The Vendors aided, abetted, counselled or procured the contravention or permitted, have been by act or omission, directly or indirectly knowingly concerned in or a party to the contravention.[16]

    3.As against Ms Berry and SJ Berry, 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 is further alleged that both Ms Berry and SJ Berry knew the Agent’s Representation to be false at the time it was made.[17]

    4.As against the Vendors, a claim for breach of Contract, specifically:

    4.1For breach of the warranties claimed in clauses 6.1, 6.4, 6.5 and 6.8 of the Contract in relation to the Encroachment Issues;[18] and

    4.2For a breach of contractual warranty contained in schedule 2 of the Contract and clause 6 of the Contract, that all renovations to the Property had all necessary consents.[19]

    [16] Statement of Claim, Rev 2 [47]-[48]

    [17] Statement of Claim, Rev 2 [49]-[50]

    [18] Statement of Claim, Rev 2 [26]-[28]

    [19] Statement of Claim, Rev 2 [28A]

    Witnesses

28. The trial of this action occupied 11 days and was interrupted by a Covid lockdown.

    Applicants’ witnesses

29. The applicants called lay evidence from Mr McEntee, Ms McEntee, Deborah, Mr Kornelissen and Mr Taylor Bishop (“Mr Bishop”) of Harcourts Real Estate. The applicants called expert valuation evidence from Mr Christopher Winter of Herron Todd White who prepared a report valuing the Property as at 31 March 2017.[20]

    [20] Exhibit A7

30. A building report prepared by Mr Paul Effingham of Adelaide Building Consultants dated 26 February 2020 was tendered without the need for Mr Effingham to attend for cross-examination.[21] 

    [21] Exhibit A8

31. The applicants also tendered a report dated 17 July 2020 from Mr Geoffrey Clifton van Senden who carried out the 2002 van Senden Survey.[22] Mr van Senden’s report was received without the need for him to attend for cross-examination.

    [22] Exhibit A24

32. At the hearing of this matter, the respondents did not dispute the extent of the misalignment or the house encroachment at the relevant times.

1. The Vendors took a number of objections to the expert reports of Mr Winter and Mr Effingham. I received the reports de bene esse and indicated I would rule on those objections prior to delivering my judgment in this matter. I published my ruling on the objections on 29 July 2021.

   First and second respondents’ witness

2. The first and second respondents called Ms Berry as their only witness.

   Third and fourth respondents’ witnesses

3. The third and fourth respondents called Ms Rosewell as their only lay witness. They called expert valuation evidence from Mr Brian Scarborough who prepared a report valuing the Property as at 31 March 2017 and a supplementary report dated 13 December 2019.[23]

   [23] Exhibit R3, 4-26

   Assessment of witnesses

   Mr McEntee

4. Mr McEntee was an impressive witness who generally gave evidence in a considered and careful fashion although at times he was, understandably, defensive.  He was obviously aggrieved by what he considers to be a wrong perpetrated against him and which induced him to enter into a contract which it is alleged has resulted in financial loss to the applicants.

5. On occasions, he became irritated or upset when propositions were put to him in cross-examination in relation to whether he had been misled and/or the extent to which he had been misled. As part of that irritability, he had a tendency to argue with the cross-examiner occasionally. However, I find that reaction understandable and I did not receive the impression that in giving evidence on the few occasions he became irritated or upset that he was being anything other than honest and forthright.

6. Counsel for SJ Berry and Ms Berry submitted that Mr McEntee was not being truthful when cross-examined about the use to which the Property was to be put when it was first purchased ie: as tourist accommodation. I do not accept that submission. As will become apparent, it is clear to me and I accept that the letting out of the Property to defray mortgage costs was always in the back of Mr McEntee’s mind and also that of the applicants when the decision was made to purchase the Property.[24]

   [24] T90.12-19; T255.22-10; T265.15-270.27

7. I am satisfied that Mr McEntee was both an honest and reliable witness.  I accept his evidence.

   Ms McEntee and Deborah

8. I am also satisfied that the evidence of both Ms McEntee and Deborah was honest and reliable.  Both were impressive witnesses whose evidence I accept.

   Mr Bishop

9. Mr Bishop’s evidence related to his time as the real estate agent retained by Ms Rosewell and Mr Kloosterman to sell the Property.  I am satisfied that he was an honest and reliable witness. I accept his evidence.

   Mr Kornelissen

10. Mr Kornelissen’s evidence concerned his dealings with Ms Rosewell and Mr Kloosterman in relation to the boundary encroachment as well as his dealings with Ms Berry and Mr Bishop.  As at 2017, he had been living with the misalignment and the house encroachment for some 15 years.  The Encroachment Issues were clearly a source of some frustration to him but I consider he gave his evidence in a forthright and considered manner, doing his best to recall events as they occurred, assisted as he was by the various records he had kept.  I consider him to be an honest and reliable witness whose evidence I accept.

    Mr Winter

11. Mr Winter gave his evidence in a measured way and in accordance with his role as an expert witness. I accept his evidence.

    Ms Berry

12. I am satisfied that on matters that were not contentious Ms Berry gave her evidence honestly and to the best of her ability.  However, when it came to matters which had the potential to impact on her liability or the liability of the first respondent she was often evasive and argumentative.  She was at times a most unimpressive witness who would not accept propositions put to her which were compelling or alternatively would put forward versions of events which in the overall context of this matter I consider to be incredible and/or disingenuous. 

13. I deal with the 2002 van Senden Survey and Ms Berry’s knowledge of the extent of the misalignment and house encroachment at various times and her knowledge of what the 2002 van Senden Survey revealed later in these reasons. I do not accept her evidence about the state of her knowledge in relation to the misalignment and the house encroachment as at March 2017.

14. On those issues where there is a conflict in the evidence between that of Mr McEntee and Ms Berry, I do not accept Ms Berry as a witness of truth and I prefer and accept Mr McEntee’s evidence. In those areas where there is a conflict in the evidence between that of Mr Kornelissen and Ms Berry, I do not accept her as a witness of truth and I prefer and accept Mr Kornelissen’s evidence.

    Ms Rosewell

15. Ms Rosewell suffers from some psychological issues for which I make allowance in assessing her as a witness. Generally, when it comes to matters that were not contentious, she gave her evidence honestly and to the best of her ability. However, when it came to matters which had the potential to impact on her liability and the liability of the fourth respondent, her evidence was far from satisfactory, being evasive and argumentative.

16. I deal with the question of the 2002 van Senden Survey and Ms Rosewell’s state of knowledge of that survey, as well as the misalignment and the house encroachment later in these reasons. I do not accept her evidence about the state of her knowledge in relation to the misalignment and the house encroachment in the period between 2002 and the date of completion under the Contract (26 May 2017).

17. I received the very strong impression she was both intent on and content to ignore what the 2002 van Senden Survey revealed about the misalignment and the house encroachment, as from the time Mr Kornelissen provided it to her and Mr Kloosterman which was in April 2002.

18. That position translated into her being a very unimpressive witness who took, at times, incredible and/or disingenuous positions. Specifically, where there is a conflict in the evidence between Ms Rosewell and Mr Kornelissen, I do not accept her as a witness of truth and I prefer and accept Mr Kornelissen’s evidence.

19. Where there is a difference between Ms Berry and Ms Rosewell, I indicate whose evidence I prefer and why.

    Mr Scarborough

20. The remaining witness called by the third and fourth respondents was Mr Scarborough. He gave his evidence in a measured way and in accordance with his role as an expert witness. It is necessary to prefer the evidence of one expert over the other. In this case I prefer Mr Winter’s evidence for the reasons I explain later in these reasons.

    Factual Narrative

21. In this section of my reasons, I set out a factual narrative which contains the findings I have made and which are relevant to my consideration of the applicants’ causes of action. 

22. A number of the matters in the factual narrative are not contentious and arise from admitted facts on the pleadings or simply are not in dispute, such that the narrative comprises my findings. Where matters are controversial or the circumstances are such that a specific finding is required, I make specific findings and explain my reasons for doing so.

    No.14 and no.16 Langbein Avenue

23. Ms McEntee and Deborah McEntee are the Registered Proprietors of the Property which comprises the land located at 14 Langbein Avenue, Woodside, South Australia.[25] Until 26 May 2017, the Property was owned by Ms Rosewell and Mr Kloosterman.[26]

    [25] Statement of Claim, Rev 2 [1], [2]

    [26] Statement of Claim, Rev 2 [3]

24. Ms Rosewell purchased the Property in the late 1990s. In 2016 she was living in the house on the Property with, Mr Kloosterman and their son, Ty. Although living in the same house, Ms Rosewell and Mr Kloosterman had separated. Ms Rosewell’s daughter, Jordie, was no longer living at the Property.[27]

    [27] T970.22-971.15

25. What was described as the Studio on the Property had been initially approved by the Council as a garage and had been used by the previous owner to run an auto electrical business. It was in a rundown state when Ms Rosewell purchased the Property.[28]

    [28] T1068.28-1070.15

26. Ms Rosewell did some work to the Studio and it was used by the Vendors for a range of purposes including storage for Ms Rosewell’s business and an office. Jordie used it for her architecture studies. Ms Rosewell denied the Studio was ever used as a bedroom. I deal with the work done to the Studio by Ms Rosewell and the use to which the Studio was put later in these reasons.

27. Mr Kornelissen is the Registered Proprietor of the land located at 16 Langbein Avenue Woodside which abuts the north-northeast boundary of the Property.[29]

    [29] The Statement of Claim pleads Mr Kornelissen’s property as being immediately to the east however during evidence it became clear that Mr Kornelissen’s property is located immediately to the north-northeast of the property.  Nothing turns on that.

28. Mr Kornelissen was born in 1969 and lived at no.16 Langbein Avenue until he was approximately 10 years old. He moved out of that property when his parents divorced and during the time he lived away from no.16, he visited his father at that address frequently.[30] He became the Registered Proprietor of no.16 in 1996 when he purchased it from the Public Trustee following his father's death.

    [30] T522.4-37

29. During the period 1999-2001, each year he did not live at no.16 for periods of five months or so whilst he travelled to the United States.

    The boundary fence

30. There was no boundary fence between no.14 and no.16 from the front of the Vendors’ house to the front or western edge of the Property.[31]

    [31] T526.15-36

31. The boundary fence between the two properties started at the front of the Vendors' house, which was in line with the rear of Mr Kornelissen's house and extended to the rear of the Property.

32. As at 2001, the first section of the boundary fence between the two properties, moving from the start of the fence and going towards the rear of the two properties, was comprised of old hardwood fence posts which had permapine posts bolted to them, wire strung between the hardwood posts and climbing rosebushes on the wire. That part of the fence extended for the full length of the side of the Vendors' house until it reached a point in line with the rear of the Vendors' house. From that point, the boundary fence was comprised of hardwood posts and chicken wire but was in a state of disrepair with some ivy growing on it.

33. Towards the rear of the boundary fence there were a series of hardwood posts which ended at the rear boundary where an old strainer post was located (“centre strainer post”). The rear fences of both no.14 and no.16 initially comprised hardwood posts and chicken wire and in both cases comprised a boundary fence with another property to the east of both properties which fronts onto Onkaparinga Valley Road.[32]

    The 2002 van Senden Survey and the Encroachment Issues and the Vendors’ knowledge of the Encroachment Issues

    [32] Exhibit A3, Vol 1, Tab 2

34. In late 2001, Mr Kornelissen had a conversation with Ms Rosewell and Mr Kloosterman about replacing the rear fence of both properties as well as the boundary fence between the two properties.  He made a number of measurements and in doing so detected what he described as a discrepancy of approximately 2.5 metres between the measurements he had taken along his back fence from an old strainer post (“northern strainer post”) where it met no.18 Langbein Avenue (which is to the immediate north of no.16) to where the boundary fence between no.16 and no.14 met the rear fence of both properties. The discrepancy stemmed from a difference between what he had measured as compared to that which had been revealed in an independent valuation he had commissioned. 

35. He told Ms Rosewell and Mr Kloosterman about what he had found and indicated he was going to engage a Surveyor.[33]

    [33] T530.4-532.15

36. On 4 March 2002, Mr Kornelissen engaged Surveyors Olden & van Senden Pty Ltd as a result of which Mr Geoffrey van Senden carried out a survey of the boundary between no.14 and no.16 on 21 March 2002.[34] The survey he carried out is the 2002 van Senden Survey.[35] Mr van Senden sent the 2002 van Senden Survey to Mr Kornelissen under cover of a facsimile dated 25 March 2002.[36] That facsimile sets out three options for dealing with the house encroachment.

    [34] Exhibit A24

    [35] Exhibit A3, Vol 1, Tab 2

    [36] Exhibit A3, Vol 1, Tab 5

37. As part of the survey, a number of pegs were placed by Mr van Senden.  One of those pegs was at the point at which the true boundary between no.14 and no.16 intersected with the rear fences of no.14 and no.16. When compared to where the centre strainer post was, that revealed the boundary fence encroached onto no.16 by approximately 2.7 m.[37]

    [37] T534.6-538.23

38. The Property to the east of no.14 and no.16 and with which both properties share a boundary is noted on the 2002 van Senden Survey as allotment 91.[38]

    [38] Exhibit A3, Vol 1, Tab 2

39. Travelling south along the rear boundary of no.14 from the peg placed by Mr van Senden to mark the position where the true boundary between no.14 and no.16 met the rear fence, there was a distance of about 3 metres to the point at which the southern boundary of allotment 91 met the rear fence of no.14. At that corner there was another old strainer post (“southern strainer post”) marking the intersection of the southern boundary of allotment 91 with the rear fence of no.14.

40. That meant that the distance between the southern strainer post on no.14 at the point at which it met the southern boundary of allotment 91 and the centre strainer post at the point where the existing boundary fence between no.14 and no.16 met the rear fence of no.14 and no.16 was approximately 5.7 metres. The boundary fence therefore encroached onto no.16 at the centre strainer post by approximately 2.7 metres.[39]

    [39] Exhibit A3, Vol 1, Tab 4; T536.21-538.4 

41. As a result of speaking with Mr van Senden and considering the 2002 van Senden survey, in or about March 2002 Mr Kornelissen became aware of the misalignment and the house encroachment. As I have noted, the covering facsimile from Mr van Senden suggested three options for dealing with the house encroachment.[40]

    [40] Exhibit A3, Vol 1, Tab 5; T530.1-536.8

42. On 19 April 2002, Mr Kornelissen wrote to Ms Rosewell and Mr Kloosterman in which he provided a copy of the 2002 van Senden Survey, together with Mr van Senden’s covering facsimile and alerted them to the misalignment and the house encroachment shown on that Survey.[41]  There is no issue that Mr Kornelissen provided the Vendors with the 2002 van Senden Survey and Mr van Senden’s covering facsimile on or about 19 April 2002 and I so find. Mr Kornelissen did not receive a response to that letter until on or about 5 April 2003.[42] 

    [41] Exhibit A3, Vol 1, Tab 6; T538.26-539.12

    [42] Exhibit A3, Vol 1, Tab 12

43. On or about 12 June 2002, an agreement had been reached between Mr Kornelissen, Ms Rosewell, Mr Kloosterman and Ms Lynne Hurt of Graham Reynolds Real Estate, who was the real estate agent charged with the management of allotment 91, for Mr Kornelissen to demolish the existing wire fence between the three properties and erect a post and rail, colorbond fence.  That agreement[43] was reached at a meeting at Ms Hurt’s office between Mr Kornelissen, Ms Hurt, Ms Rosewell and Mr Kloosterman. I find that at that meeting, Mr Kornelissen had a copy of the 2002 van Senden Survey, which was discussed amongst those present because Mr Kornelissen was to erect the new rear fence not just on his property but also along the rear boundary of no.14 to where it met the southern strainer post.[44] That work was done by Mr Kornelissen shortly after the meeting.[45]

    [43] Exhibit A3, Vol 1, Tab 7

    [44] T539.13-543.31

    [45] Exhibit A3, Vol 1, Tab 8

44. During the period 2 July 2002 to 12 September 2006, Mr Kornelissen kept a series of notes and copies of letters in relation to his dealings with Ms Rosewell and Mr Kloosterman.[46] On 7 March 2003, Mr Kloosterman wrote a further letter to Ms Rosewell in relation to the house encroachment,[47] to which Ms Rosewell replied by letter dated 5 April 2003, to which I have referred above.[48] It is apparent from that letter that Ms Rosewell, and I infer Mr Kloosterman, did not accept the existence of the misalignment and the house encroachment, notwithstanding they had been provided with the 2002 van Senden Survey and Mr van Senden’s covering facsimile.

    [46] Exhibit A3, Vol 3, Tab 99

    [47] Exhibit A3, Vol 1, Tab 12

    [48] Exhibit A3, Vol 1, Tab 12

45. In her evidence, Ms Rosewell described the 2002 van Senden Survey as a “pegging certificate” because that is the term used in the covering facsimile from Mr van Senden to Mr Kornelissen sent 25 March 2002.[49] She insisted the 2002 van Senden Survey was not a survey, notwithstanding the title of the document is “Plan of Survey”.[50]

    [49] Exhibit A3, Vol 1, Tab 6

    [50] Exhibit A3, Vol 1, Tab 5

46. Ms Rosewell’s insistence that the 2002 van Senden Survey was not a survey, but a “pegging certificate” appeared to me to be an attempt to downplay the significance of the 2002 van Senden Survey and to distance herself from the knowledge of the information it contained. Her attempt to do so does her no credit.

47. A change in the certificate of title (“CT”) reference for Mr Kornelissen’s property occurred in late 2013 or early 2014 because Mr Kornelissen’s title was re-issued after being adjusted for an encroachment by Mr Kornelissen’s carport over his northern neighbour's boundary at no.18 Langbein Avenue. In order to have a new CT issued, a survey of Mr Kornelissen’s property was performed by Surveyors Veska and Lohmeyer (“the 2014 Lohmeyer Survey”).[51]

    [51] Exhibit A3, Vol 1, Tab 16, T550.25-553.1

48. Ms Rosewell received a copy of the 2014 Lohmeyer Survey from her sister-in-law in 2016 and confirmed that as at 2016 she had had the copy of the 2002 van Senden Survey for nearly 14 years and the 2014 Lohmeyer Survey for at least two years. [52]

    [52] T1037.8-1038.5 - The evidence at the trial in 2021 was 20 years and at least 4 years respectively.

49. When she received the 2014 Lohmeyer Survey, she understood that that survey showed the boundary fence between the Property and Mr Kornelissen’s property was located 2.67m to the north of the true boundary where the centre strainer post was located. Nonetheless, she denied that was consistent with what was being suggested by the 2002 van Senden Survey[53] and she was evasive when it was put to her that the survey[54] was consistent with the 2002 van Senden Survey in that both showed an encroachment.

    [53] T1039.2-1040.13

    [54] T1037.35-1038.5, T1055.20-1057.27

50. Ms Rosewell’s denial was untenable and she was evasive in cross-examination as to whether she accepted that the 2002 van Senden Survey suggests that the boundary fence between the two properties where it met the rear fence of both properties was somewhere between two and three metres away (north) from the true boundary as shown on that Survey.[55] However, ultimately she accepted that proposition.

    [55] T1054.5-29; T1055.2-26

51. Further, Ms Rosewell was evasive in cross-examination as to whether or not the 2002 van Senden Survey showed the house as encroaching onto Mr Kornelissen’s property. Again, ultimately under cross-examination she accepted that it did.[56]

    [56] T1043.2-1049.17, 1052.2-7

52. There is no issue that the 2002 van Senden Survey revealed both the misalignment and the house encroachment and the Vendors consented to Mr van Senden’s report[57] being received into evidence without the need to call him.

    [57] Exhibit A24

53. I find that the 2002 van Senden Survey demonstrates that the house on no.14 and the boundary fence between the two properties encroached onto the land on no.16 as shown on that document.

54. I also find that Ms Rosewell, and I infer Mr Kloosterman, both seemed intent on, and content to, ignore that which confronted them in the 2002 van Senden Survey, a position which they maintained during the sale process and indeed until relatively close to trial.

1. On or about September 2014, Mr Kornelissen contacted Community Mediation Services in relation to the boundary issues.[58] Ultimately, the mediation did not resolve the issues between the Vendors and Mr Kornelissen, although a draft deed was prepared but never signed.[59] I am unable to infer anything from the fact of mediation or even the preparation of a deed.

   Findings in relation to the Vendors’ knowledge of the Encroachment Issues

   [58] Exhibit A3, Vol 1, Tab 13

   [59] Exhibit A3, Vol 1, Tab 61, p350; Tab 62, p358-362; Tab 60A; T560.25-564.25

2. I find that as from on or about 19 April 2002, the Vendors knew from the 2002 van Senden Survey, from Mr van Senden’s covering facsimile, from their communications with Mr Kornelissen, from their meeting held on or about 12 June 2002 and from their own observations that the boundary fence between the two properties was not on the correct boundary and that the house on no.14 encroached onto the land of no.16, to the extent shown on the 2002 van Senden Survey.

   The Studio

3. When Ms Rosewell purchased the Property in the late 1990s, the Studio was a rundown garage. It had cladding and the previous owner had used it for his auto-electrical business. Ms Rosewell cleaned it up, painted it, put down some carpet, skirting boards, did some flushing of the internal linings, and stripped doors and windows.[60] She also did other work which I deal with later in these reasons.

   [60] T971.19-972.8

4. Ms Rosewell denied that her daughter ever slept in the Studio and agreed that the lighting in the Studio was done by an electrician. She described doing work on the Studio so it could be used as a warm dry place for what she needed, but not a living area.[61]

   [61] T1079.1-1082.25

5. A consideration of the photographs of the Studio in the Marketing Material show a building that is far removed from being a rundown garage and very different from that which was the subject of the original planning approval for the garage.[62]

   [62] Exhibit A3, Vol 2, Tab 81; T1076.13-1077.37

6. In particular, whereas in the planning approval for the garage, it is shown as having twin opening doors, the photographs show the Studio having a set of French doors to the left of the front of the Studio and windows to the right, with a front porch covered by what appears to be a verandah.[63] There is also a window on the left of the Studio when looked at from the front.[64]

   Roof trusses

   [63] Exhibit A3, Vol 3, Tab 107, p966

   [64] Ibid p967, 968

7. There is a further issue with the roof trusses for the Studio. After the Contract was completed, Mr McEntee discovered that the bottom chord of the roof trusses had been cut.

8. Ms Rosewell said in evidence that when she purchased the Property in the late 1990s, the ceiling of the Studio had its existing configuration, as shown in Exhibit A14, marked by a blue line and headed 'cut truss'.[65] She said she did no work to, nor did anyone on her behalf, do work to the ceiling, apart from painting and some flushing,[66] although she said that she had an electrician replace the lighting in the Studio.[67]

   [65] T1005.16-1006.4

   [66] Ibid

   [67] T1079.35-37

9. Ms Rosewell did not know whether the ceiling had been raised from its original height, however she said there was insulation in the ceiling and she had replaced the original insulation. As there was no manhole in the ceiling, she removed some sheets of the corrugated iron roof in about the middle of the roof to insert the insulation. When doing so, she did not observe that someone had cut the bottom chord of the trusses at some point in time. She inserted the insulation by climbing into the roof space and standing on planks that she had placed to span what she described as 'timber beams'.[68] The ceiling was attached to those beams but she did not know to what those beams were attached. She thought the timber beams ran crosswise with the ceiling attached to them.[69]

   [68] T1071.34-1072.19

   [69] T1073.30-1075.4

10. In cross-examination by counsel for the applicants, Ms Rosewell described the Studio, when she purchased the Property, as “just a garage” which the previous owner had let run down. Once again, she agreed she put in some skirting boards, stripped down doors and windows and fixed one of the broken glass panes, as well as doing some flushing and painting work.[70]

    [70] T1068.28 - 1070.15

11. Ms Rosewell was taken to the original planning approval for the garage, [71] which became the Studio.

    [71] Exhibit A3, Vol 2, Tab 81, p531; T1075.13-1077.37

12. Although Ms Rosewell’s evidence was that no work was done by her or on her behalf to the roof trusses, I do not accept that evidence for the following reasons:

    1.Ms Rosewell described the Studio as “just a garage” which the previous owner had let run down when she purchased the Property.

    2.Ms Rosewell said that she put insulation into the ceiling space and did that by removing a couple of the roof sheets from the middle of the roof.

    3.However, the drawings for the garage, which appear to be for a proprietary “P Wyten and Sons Garage”,[72] lodged by Mrs PA Lauterbach show a ceiling space from the top of the bottom chord of the roof trusses to the ridge beam of 0.6 metres (600 mm). The height of the garage from ground level (not the finished floor level of the concrete slab) to the ridge beam is depicted as being 2.70 metres. As I will detail later, it is not in dispute that when Mr McEntee applied for Development Approval the height from the finished floor level to the underside of the ceiling of the existing Studio was 2.17 metres.[73] Even allowing for a distance from finished floor to ridge beam of 2.7 metres, at most the roof space from the upper surface of the gyprock ceiling lining to the ridge beam was 530 mm.[74]

    4.To suggest, as Ms Rosewell does, that someone could climb into the roof space which has a maximum height of 600 mm at the ridge beam, far less 530 mm, utilising planks laid across beams which were only in place to hold up gyprock, is simply not credible.

    [72] Exhibit A3, Vol 2, Tab 8, p531

    [73] Exhibit A3, Vol 2, Tab 75, p442-443

    [74] 2.1m from ground level to ridgeline. 0.6m from bottom chord of the trusses to ridgeline. If the ceiling height is 2.17m, an extra 70mm has been taken from the distance between the upper side of the gyprock ceiling and the ridgeline, hence 530mm.

13. I find that either the Vendors, or persons engaged on their behalf, have cut the bottom chord of the trusses in order to give the ceiling its profile in the manner shown in the photographs at Exhibit A3, Volume 3, Tab 107 and it was whilst that work was being done that the roof insulation was installed.

    The Vendors attempt to sell the Property in early 2016 - First attempt

14. In early 2016 the Vendors decided to sell the property.  They engaged Mr Bishop of Harcourts Real Estate as their real estate agent.[75]  On 22 April 2016, they met with Mr Bishop, at which time they completed and signed a Residential Sales Agency Agreement. In completing that Agreement, Mr Bishop asked questions of the Vendors and completed it in accordance with their instructions.[76]

    Encroachment Issues

    [75] T656.20-657.5

    [76] Exhibit A3, Vol 1, Tab 21, T658.9-21

15. Part of the Residential Sales Agency Agreement refers to encroachments or fences not on the true boundaries which is ticked “none known”.[77] Mr Bishop said Ms Rosewell told him there were no issues with the boundaries.[78]

    [77] Exhibit A3, Vol 1, Tab 20, p31

    [78] T658.9-27; T660.15-26

16. I accept Mr Bishop’s evidence about what he was told by Mr Rosewell in completing the Residential Sales Agency Agreement with Harcourts.

17. Ms Rosewell said that as at 22 April 2016, which was the date she completed and signed the Residential Sales Agency Agreement with Mr Bishop, she was not sure whether the Property encroached on Mr Kornelissen's property.[79] I do not accept that evidence for the reasons I have set out above.

    [79] T1009.15-24

18. I find Ms Rosewell’s statement to Mr Bishop that there were no issues with boundaries on the Property was false.

    Studio

19. At the meeting on 22 April 2016, Mr Bishop discussed what he described as “the barn” with the Vendors, at which time they advised it did not have approval for use as a bedroom.[80]

    [80] T657.6 - 33

20. A different section of the Residential Sales Agency Agreement addresses whether there were any building works done without the necessary consents. Mr Bishop has completed that section of the agreement by ticking “none known”.[81] Mr Bishop said that in relation to the Studio he asked Ms Rosewell whether it had Council approval for use as a bedroom and was told by Ms Rosewell “no”. I accept that evidence. He described the discussion he had with Ms Rosewell about aspects of work she had done on the Studio which involved adding windows and reclaimed doors.

    [81] T658.22-27, T1009.5-1011.33

21. Mr Bishop said that he received the impression Ms Rosewell had done some of the work herself.[82] When it was put to her in cross-examination that she had added windows and reclaimed doors, she denied she had retro-fitted reclaimed window frames and doors but said she had stripped existing windows and doors and put bondwood planking on the front of the French doors. I do not consider that to that extent Mr Bishop’s evidence is inconsistent with Ms Rosewell’s evidence.  However, it is clear from the photographs of the Studio to which I have referred above that a significant amount of work had been done to the Studio which I find was done by, at least, Ms Rosewell.

    [82] T657.23-33

22. Ms Rosewell agreed that she did not have Council permission that would permit the Studio to be used as a living area.[83]

    [83] T1068.28 - 1082.25

23. Since it did not have Council approval, Mr Bishop advised that the Studio could not be marketed as a bedroom and it should be marketed as a Studio.[84] [85]

    The Property is marketed and open inspections held - 2016

    [84] Exhibit A3, Vol 1, Tab 20, p31; T657.6-658.8, T971.19-972.18

    [85] In the transcript it is reported as 'had a bedroom', however that is wrong and should read 'as a bedroom'.

24. When the Studio was marketed by Harcourts, the Studio is presented as being furnished with a couch, a chest of drawers, a coffee table, a rug, carpeting, lighting and a single arm chair.[86]

    [86] Exhibit A3, Vol 3, Tab 108, p966-968

25. The Property was marketed by Mr Bishop using open inspections and written Marketing Material which included photographs. Those photographs were subsequently used by Sandra Berry Real Estate.[87]

    [87] Exhibit A3, Vol 3, Tab 107

26. During the first open inspection in early to mid-2016,[88] Mr Kornelissen attended and handed to prospective purchasers a “flyer” alerting them to the existence of the Encroachment Issues.[89] Mr Bishop was given a copy of the flyer by Mr Kornelissen

    [88] Exhibit A3, Vol 1, Tab 20

    [89] Exhibit A3, Vol 1, Tab 19

27. The flyer is a single folded sheet of paper with typing on one page and on the opposite page an extract from the 2002 van Senden survey which shows the house on no.14 Langbein Avenue encroaching over the boundary of no.16 Langbein Avenue.

28. Mr Bishop had discussions with Mr Kornelissen after which he advised the Vendors to resolve the Encroachment Issues before continuing to market the Property.[90]

    [90] T660.31- 661.38

29. Mr Bishop said that Ms Rosewell wanted him to continue marketing the Property and that upon questioning her, he formed the view that she was clearly aware of the misalignment and the house encroachment and that she had tried to solve it but that the Council had got it wrong.[91]

    [91] T662.6-21

30. Subsequently, Mr Bishop was copied into a letter to Ms Rosewell from Mr Kornelissen's solicitors, FBR Law dated 13 May 2016. That letter was sent by Registered Post and enclosed a copy of the 2002 van Senden Survey and sets out clearly the Encroachment Issues.[92]

    [92] Exhibit A3, Vol 1, Tab 24

31. As a result of Mr Kornelissen approaching potential purchasers, ultimately Mr Bishop refused to continue to market the Property until the Encroachment Issues had been resolved and ceased marketing it in mid-2016.[93]

    [93] Exhibit A3, Vol 1, Tab 25, T661.37-664.8

    The Vendors attempt to sell the Property in early 2017 - Second attempt

32. Ms Berry has operated a real estate agency business for 13 years, establishing Sandra Berry Real Estate in 2008. She describes herself as the principal of the business. Ms Berry was first licensed as a Real Estate Salesperson in 2003 and as a Land Agent in 2007.

33. SJ Berry trading as Sandra Berry Real Estate acted as the Land Agent for the Vendors in the marketing and sale of the Property with Ms Berry being SJ Berry’s representative responsible for the conduct of the marketing and sale of the Property.

34. She initially appraised the Property in early 2016, however at that time the sales retainer was awarded to Mr Bishop.

    The meeting on 22 December 2016 - Encroachment Issues

35. Ms Rosewell contacted Ms Berry in December 2016 by telephone and asked to meet with her. The meeting occurred at the Property on 22 December 2016, initially with Ms Rosewell, but later Mr Kloosterman joined after what Ms Berry described as “a lot of conversation had gone on”.[94]

    [94] T689.13-28

36. That same day, 22 December 2016, SJ Berry Pty Ltd trading as Sandra Berry Real Estate, entered into a Residential Sales Agency Agreement with Ms Rosewell and Mr Kloosterman.[95]

    [95] T689.22-690.7, Exhibit A3, Vol 1, Tab 30

37. Both Ms Berry and Ms Rosewell gave evidence about the meeting between the two on 22 December 2016.

    Ms Berry’s evidence - Encroachment Issues

38. Page 3 of the Residential Sales Agency Agreement contains a section titled “Known Encroachments and Fences Not On Boundaries” (if any).  Under which is written in Ms Berry’s handwriting:

    North boundary is unfenced the adjoining neighbour has conducted his own survey and believes a portion of the home encroaches on his boundary approximately 13.8 M².

39. Ms Berry said that this notation was written by her with Ms Rosewell sitting beside her and that it was “… precisely what Katherine told me. I wrote it with her sitting beside me”.[96]

    [96] T692.24-693.10

40. Insofar as the reference to 13.8 square metres in the Residential Sales Agreement is concerned, Ms Berry said that she had no idea where that came from but that was what Ms Rosewell's instructions were as to what Mr Kornelissen was saying.

41. In examination-in-chief Ms Berry said that Ms Rosewell told her the Property had previously been marketed by Mr Bishop but had been taken off the market because of issues with Mr Kornelissen coming onto the Property and handing out flyers.[97]

    [97] Exhibit A3, Vol 1, Tabs 18, 19

42. Ms Berry said that Ms Rosewell showed her the flyer, following which she asked Ms Rosewell what she could tell her about it.

43. Her evidence-in-chief on that topic is set out below:[98]

    [98] T690.26-692.17

    A.Basically I said to her what can she tell me about her understanding of the flyer and she said that for many years that Darren, in her words 'had been banging on about her house being over his boundary'. I said to her 'Is there a survey that goes with this because this isn't a survey plan'. She said 'No, I don't have a survey for it'. I said 'Then why would he be handing these out at the front of the property'. She said 'The fact that the house is over the boundary'. I said 'Do you believe that that's the case'. She said 'No, I don't believe that's the case'.

    Q.Did she give a reason for that to you.

    A.Yes, she did. She said to me 'My home has been here for 100 years or more and I know that the land division in this area was done in the 50s some time, so how could it be that my house could be over a boundary, wouldn't the boundary had to have been drawn after my house was here', which I thought was rational. I said to her what else could she tell me about it and she explained that the neighbour had recently bought land from the other side of his property and I said to her 'Well if that's the case then there would have to be a new title that's been issued for that, have you got a copy of that title' and he said 'No, he wouldn't give me that either'.

    Q.Just regarding what is depicted on p.28 of the tender book,[99] you just said in your evidence that you did not consider that was a survey.

    A.Yes.

    Q.Why is that.

    A.Well, it doesn't have a survey with details on it.

    Q.P.28.

    A.P.28.

    Q.Yes, p.28 in tab 19.

    A.Sorry I'm looking at the wrong tab, tab 19. Okay, it looks to me like a handwritten drawing with some markings on it. The first thing that I would be looking for, if it was a survey plan, would be a certification by the land surveyor on it, dates when it was completed by the land surveyor and whether or not it was put into council and registered. I would be looking for a lot more detail.

    [99] Which is the drawing forming part of the flyer

44. In cross-examination, Ms Berry agreed there were some precise measurements, angles and bearings given on the plan forming part of her flyer and she agreed it was derived from some sort of plan but did not know at the time whether it was from a full survey plan or not. She agreed it came from someone who is not a layman.

45. Apart from the technical information on the drawing forming part of the flyer which shows that it has been prepared by someone with professional qualifications it also gives the title reference to both properties, albeit a new title reference for no.16 for the reasons I have explained.

46. Although the drawing forming part of the flyer is not a full survey, as I have noted, it has been clearly prepared by someone with professional qualifications and, in my view, faced with a drawing showing this type of information, someone as experienced as Ms Berry would immediately recognise the document as being an extract from a survey.

47. In cross-examination, Ms Berry also agreed that Ms Rosewell had all sorts of papers spread out over the table but said that she did not take any of the documents with her. She said Ms Rosewell told her that Mr Kornelissen had a survey done in 2002 (which is the 2002 van Senden Survey), but that she was not shown a copy of that survey on 22 December 2016[100] and that Ms Rosewell told her she did not have a copy of the van Senden Survey. On being pressed further in cross-examination, she said that she did not know that in this matter Ms Rosewell was maintaining she had the 2002 van Senden Survey all along.[101]

    [100] T756.11-757.19; T789.9-790.11

    [101] T790.20-24

48. She also agreed that she was in court when Mr Kornelissen gave evidence that he wrote a letter to Ms Rosewell enclosing the 2002 van Senden Survey,[102] but said she did not remember that evidence.[103]  The 2002 van Senden Survey is a critical piece of evidence. In giving the answer that she did not remember that evidence, I consider Ms Berry was being evasive.

    [102] Exhibit A3, Vol 1, Tabs 5, 6

    [103] T790.25-33

49. During the course of the meeting on 22 December 2016, Ms Rosewell told Ms Berry about the 2014 Lohmeyer Survey[104] and Ms Berry noted that the 2014 Lohmeyer Survey did not show any portion of any house over a boundary and the boundary line had been surveyed.

    [104] T1014.11

50. That evidence is disingenuous for a number of reasons and I find is an attempt by Ms Berry to deflect attention from her potential liability. The first reason is that the 2014 Lohmeyer Survey is a survey of Mr Kornelissen’s property. One would not expect it to show an encroachment by a building on the Vendors’ property. The second is that the 2014 Lohmeyer Survey shows no structures on Mr Kornelissen’s property, other than a shed, which is well north of the boundary and the remains of the boundary fence in the south-eastern corner. In particular, it does not show Mr Kornelissen’s house, nor does it show the Vendors’ house.

    Ms Rosewell’s evidence - Encroachment Issues

51. Ms Rosewell said she explained the background to the flyer with Ms Berry in the original telephone conversation she had with her when it was arranged for Ms Berry to come out to the Property. She told Ms Berry in that telephone conversation that Mr Kornelissen had had a new survey done in 2014.[105]

    [105] T975.11-26

1. In her evidence-in-chief, Ms Rosewell said that at the meeting on 22 December 2016 she had all the paperwork she had collected over the years in relation to the Property. She said that she had the 2002 van Senden Survey which, as I have noted, she referred to as a “pegging certificate”, as well as Mr Kornelissen's paperwork and diagrams.[106]

   [106] T975.31-976.6

2. She discussed the copy of the “flyer” she had with Ms Berry noting the title reference for no.16 in the drawing accompanying the flyer had changed from that on the 2002 van Senden Survey.[107]

   [107] Exhibit A3, Vol 1, Tab 2; T976.21-977.31

3. Ms Rosewell sought to draw a distinction between the drawing forming part of the flyer,[108] which showed a certificate of title reference for Mr Kornelissen’s property as 6136/119, whereas the 2002 van Senden Survey showed a CT reference for that title as 5359/691.[109]I have dealt with how that change in title reference came about above.

   [108] Exhibit A3, Vol 1, Tab 19

   [109] Exhibit A3, Vol 1, Tab 2, T973.8-975.4

4. I consider that in seeking to draw that distinction Ms Rosewell is attempting to justify her position that no encroachment existed and to that extent her position was consistent with her intent to ignore that which confronted her in relation to the Encroachment Issues.

5. Ms Rosewell confirmed that she had the 2002 van Senden Survey because Mr Kornelissen had given it to her and that she discussed the 2002 van Senden Survey with Ms Berry,[110] who said that she had dealt with encroachments before.

   [110] T978.15-17

6. They also discussed the 2014 Lohmeyer Survey which she had in electronic form. She said that Ms Berry did not ask to take copies of any of the documents, but had Ms Berry asked for them, she would have given Ms Berry a copy of them.

7. Ms Rosewell’s evidence-in-chief about the discussions at her meeting with Ms Berry on 22 December 2016 in relation to the Encroachment Issues is set out in part below: ^[111]

   [111] T975.11-976.6

   …And in your conversation with Ms Berry before the meeting on 22 December, did you explain this background to her.

   A.    Yes.

   Q.    What was arranged then, in the phone call.

   A.When I originally spoke, she said she would come out. I had a probably 20-minute conversation with her on the phone, explaining how - I mean, I was probably upset at the time, 'cos I was just telling her what happen, Darren's interference. I said that he'd had a new survey done in 2014, and that was the CT number. And I'd already looked that up to see what that was, and it didn't show the house, only a fence in the wrong spot.

   Q.    So, you'd arranged then to meet on 22 December at -

   A.    I'm not sure the date, but some time in December.

   Q.    Yes. Where was the meeting held.

   A.    In my house.

   Q.    What did you have with you, for the purposes of the meeting.

   A.I had all he paperwork that I'd collected over the years - council papers, which said it was No.10 and not No.14 Langbein Avenue. All of it related to No.10, not 14, which was very confusing when I paid and received this from council. There was also lots of other paperwork there, other surveys that I'd got from Lands and Titles, showing surveys where they'd tried to change the survey, in 1976, was one of them, the original sizes of these blocks. There was the 2002, there was Darren's new paperwork, there were his diagrams, and diagrams I didn't know who had done them. Yeah, lots.

   …

8. When she completed the Residential Sales Agreement with Ms Berry at this meeting,[112] she was asked by Ms Berry as to the extent of the house encroachment that Mr Kornelissen was claiming, in response to which Ms Rosewell retrieved one of the documents Mr Kornelissen had prepared showing the house encroaching by an area of 13.8 m²,[113] which is where that figure in the Residential Sales Agreement comes from. She said she discussed the document showing 13.8m² with Ms Berry and told her about the covering letter from Mr Kornelissen’s solicitors, FBR Law dated 13 May 2016, that accompanied that document.[114]

   [112] Exhibit A3, Vol 1, Tab 30

   [113] Exhibit A3, Vol 1, Tab 24, 27

   [114] Exhibit A3, Vol 1, Tab 24

9. In cross-examination, it was put to Ms Rosewell that she had not shown Ms Berry the FBR letter addressed to her and Mr Bishop dated 13 May 2016,[115] prior to it being sent to Ms Berry much later on 30 May 2017. She responded that paperwork was on her table and that Ms Berry could have looked at anything she needed to and asked for anything, but she did not know if she showed the FBR Law letter to Ms Berry.[116] The reference to the area of the encroachment of 13.8 m² comes from that letter and I consider it more likely than not that Ms Rosewell showed Ms Berry the FBR letter dated 13 May 2016 on 22 December 2016 and I find accordingly.

   [115] Exhibit A3, Vol 1, Tab 24

   [116] T1013.37-1014.30

10. She said Ms Berry told her she would contact Mr Bishop in order to obtain all the information about her house, including photographs.[117]

    Findings in relation to the meeting on 22 December 2016 - Encroachment Issues

    [117] T984.11-985.31

11. I accept Ms Rosewell’s evidence about what was discussed with Ms Berry in the telephone conversation prior to the meeting on 22 December 2016 and what was discussed and made available to Ms Berry at the meeting on 22 December 2016. Ms Rosewell was clearly concerned about Mr Kornelissen’s behaviour on prior occasions by handing out the flyer and it makes sense for her to raise that immediately with Ms Berry when she first contacted her in late 2016. Further, at the meeting on 22 December 2016, Ms Rosewell was providing a narrative to Ms Berry and it is logical for her to have gone through that narrative assisted by reference to the documents that she had collected over the years.

12. A cursory examination of the flyer shows that save for the title reference the drawing forming part of the flyer is an extract from the 2002 van Senden Survey.

13. I do not accept that Ms Berry was told by Ms Rosewell that she did not have the 2002 van Senden Survey.[118] I acknowledge the CT reference on the drawing that formed part of Mr Kornelissen’s flyer[119] has a different CT reference to the 2002 van Senden Survey,[120] but I have explained why that is and Ms Berry knew a new title had been issued for no.16. She could only have known that if Ms Rosewell had the 2002 van Senden Survey at the time.

    [118] T690.26-36

    [119] Exhibit A3, Vol 1, Tab 19

    [120] Exhibit A3, Vol 1, Tab 2

14. I have found that Ms Rosewell had a copy of the 2002 van Senden Survey and it is inconceivable that given what occurred with Mr Kornelissen during the time that Mr Bishop was attempting to sell the Property, Ms Rosewell did not show Ms Berry the 2002 van Senden Survey at the meeting on 22 December 2016.  Accordingly, I find that on 22 December 2016 Ms Rosewell showed Ms Berry the 2002 van Senden Survey.

15. Further, I do not accept Ms Berry’s evidence that she found Ms Rosewell’s explanation as to why Ms Rosewell did not accept the 2002 van Senden Survey results rational. I find Ms Berry’s evidence of her apparent dismissal of the drawing forming part of the flyer as being an extract from a survey, was both convenient and disingenuous.

16. There is no doubt Ms Rosewell showed the 2014 Lohmeyer Survey to Ms Berry because Ms Rosewell had indicated during that meeting that Mr Lohmeyer had recently surveyed Mr Kornelissen’s property for the purposes of Mr Kornelissen purchasing the land to the north of his property,[121] as shown on the survey. I find Ms Berry was shown the 2014 Lohmeyer Survey by Ms Rosewell at the meeting.

    [121] T704.38-705.11

17. The fact that Ms Berry and Ms Rosewell discussed the flyer, that Ms Berry was shown the 2002 van Senden Survey, that Ms Berry was informed of the area of encroachment being 13.8m² and that Ms Berry was shown the FBR letter dated 13 May 2016, satisfies me that there was information shared between the two of them, at least at the meeting on 22 December 2016, such that Ms Berry and Ms Rosewell both knew as a matter of fact of the misalignment and the house encroachment and I so find.

18. I am strengthened in my findings concerning Ms Berry’s knowledge of the misalignment and the house encroachment following the 22 December 2016 meeting by the text of the Residential Sales Agency Agreement on page 3 that specifically refers to the fact that the adjoining neighbour “has conducted his own survey”.  In the circumstances that information can only have come from Ms Rosewell and/or Mr Kloosterman and given it was a topic of conversation, again, it was inconceivable that Ms Rosewell did not show Ms Berry the 2002 van Senden Survey.

    The meeting on 22 December 2016 - Studio alterations and improvements without consent

19. Below the entry in the Residential Sales Agency Agreement dealing with encroachments and fences not on boundaries is a section titled “ALTERATIONS AND IMPROVEMENTS ERECTED WITHOUT CONSENT (“Notified Works” if any)”.

20. The answer that has been written in to that section is “none known”[122].

    [122] Exhibit A3, Vol 1, Tab 30, p63

21. Ms Berry wrote in the Sales Agency Agreement that was completed between her, Ms Roswell and Mr Kloosterman on 22 December 2016 that the Studio was insulated, had power and was wired for an air-conditioning unit. [123] Ms Berry said that Ms Rosewell did not tell her that anyone occupied the Studio, but did say that sometimes her daughter would hang out with her friends there.[124] I accept that evidence.

    [123] Exhibit A3, Vol 1, Tab 30, p68

    [124] T696.31-697.2

22. In the Marketing Materials produced by Sandra Berry Real Estate for the Property,[125] apart from the photographs of the Studio, the following paragraph appears:

    Sympathetically renovated to incorporate many of its original features, the home comprises three bedrooms, open plan living, country kitchen, European bathroom and laundry and features a separate, fully insulated garden studio.

    [125] Exhibit A3, Vol 3, Tab 107

23. That is the only mention of the Studio in the text.

24. The Marketing Materials, which I understand came from the first respondent’s website, is a combination of photographs and text which Ms Berry sourced from Harcourts Real Estate.[126] Ms Berry wrote the words on page 973 of Exhibit A3, volume 3; “separate, fully insulated garden studio”.

    [126] Exhibit A3, Vol 3, Tab 107; T695.25-696.22

25. In cross-examination by the Vendors’ counsel, Ms Berry agreed that the Studio did not have anything in it that might indicate it was a bedroom[127] and that she marketed it as a Studio which she agreed was a neutral description of that part of the Property.[128] Under cross-examination by the applicant’s counsel, Ms Berry agreed that she was aware that building works should be approved by Council in some instances.[129]

    [127] T763.4-6

    [128] T762.32 - 763.24

    [129] T840.2-8

26. Ms Berry denied that Ms Rosewell had described to her the works to the Studio that she had arranged to be done[130] but agreed that she had observed the Studio had been internally lined, that there was a French-style window, timber double doors and that the room was furnished such that everything she saw was an alteration from a garage.[131] She said that Ms Rosewell did not tell her that Ms Rosewell’s daughter sometimes used the Studio as a bedroom.[132] She understood the Studio had not been approved for use as a bedroom and that it would not be appropriate to say to a potential purchaser that the Studio had been done up for someone to stay in.[133]

    [130] T840.38-841.2

    [131] T842.4-34

    [132] T843.19-23

    [133] T844.27-845.31

27. In her evidence-in-chief, Ms Rosewell denied that she said to Ms Berry that the Studio had been renovated for her daughter to use as a bedroom but agreed that she may have described it as a Studio for her daughter to do her architecture work as well as storage of her clothing.[134] In cross-examination, Ms Rosewell agreed that she told Ms Berry she had fixed up the Studio so Jordie could do her architecture in it.[135]

    [134] T972.11-18

    [135] T1080.20-38

28. Ms Rosewell was aware that there was no approval for the Studio to be used as a bedroom. Further, she was also aware it wasn’t approved as a habitable room, seemingly making no distinction between a living and a bedroom or a habitable living area.[136]

    [136] T1086.34-1088.8

29. Notwithstanding her instructions to Ms Berry that there were no known alterations and improvements erected without consent in the Residential Sales Agency Agreement, I find that Ms Rosewell knew that was wrong.

30. I accept Ms Berry was not told by Ms Rosewell of the precise extent of the work Ms Rosewell had done to the Studio, however there is no doubt, and I find that Ms Rosewell told Ms Berry she had done work to the Studio. Further, I find that it must have been readily apparent to Ms Berry that work had been done to the Studio.[137]

    [137] T842.4-34

31. An examination of the photographs of the Studio in the Marketing Material for the Property clearly shows it as a habitable room and there is no room for doubt that is how it was marketed ie: a habitable room.

32. I find that Ms Berry knew work had been done to the Studio and that notwithstanding the Studio had no approval for use as a habitable room, nonetheless that was how it was marketed.

    Findings in relation to the meeting on 22 December 2016 - Studio

33. I find that the Studio had not received any approval for the works carried out to it nor for its use as a habitable room, whether that be Development Approval or Building Rules Consent and that both Ms Berry and Ms Rosewell were aware of that fact.

    The period between 22 December 2016 and 2 February 2017

34. After the 22 December 2016 meeting between Ms Rosewell and Ms Berry, three things occurred in relation to the 2002 van Senden Survey and the Encroachment Issues.

    Communications with Mr Lohmeyer

35. First, following the meeting, Ms Berry instructed her assistant, Ms Seidel, to communicate with Mr Lohmeyer of surveyors Veska & Lohmeyer.

36. Ms Seidel did so, following which she sent Mr Lohmeyer an email on 12 January 2017 at 11.49am, asking for him to provide Sandra Berry Real Estate with the plan that shows the encroachment of no.14 Langbein Avenue Woodside over the neighbour’s property.[138]

    [138] Exhibit A3, Vol 1, Tab 31

37. The email refers to a telephone conversation between Ms Seidel and Mr Lohmeyer. No evidence was led concerning that conversation and neither Ms Seidel nor Mr Lohmeyer were called to give evidence. The email from Ms Seidel to Mr Lohmeyer was responded to by Mr Lohmeyer on 17 January 2017 at 12.08pm,[139] in which he enclosed the plan his firm prepared[140] and informed Ms Seidel that the fence line of no.14 encroaches 2.67 m onto Mr Kornelissen’s land at the rear boundary in these terms:

    Just how that sits with the house, I am not sure, but you could get an idea by measuring back from that old fence (if it is still there) 2.67 metres and look in a straight line to the peg at the front. Look for the words … 'REMAINS F2.67'.

    [139] Exhibit A3, Vol 1, Tab 32, p81

    [140] Exhibit A3, Vol 1, Tab 16

38. The email concludes with an offer to go back to the properties so as to produce a more accurate description. A further exchange of emails occurred concerning costs. On 18 January 2017 at 12.05pm, Mr Lohmeyer quotes a cost of $533.50 to perform a survey to establish how much the house at no.14 encroaches onto no.16.[141]

    [141] Exhibit A3, Vol 1, Tab 32, p80

39. It seems that Ms Seidel had a conversation with Ms Rosewell in which she refused to pay for the cost of a further survey in the sum of $533.50.[142] The final email in the exchange between Ms Seidel and Mr Lohmeyer was sent on 24 January 2017 at which time she informs Mr Lohmeyer that the Vendors have decided not to go ahead with the survey.[143]

    [142] T706.38-707.4

    [143] Exhibit A3, Vol 1, Tab 32, p79; T704.38-706.1

40. Ms Berry said that she had a telephone conversation with Mr Lohmeyer after she read the correspondence between Ms Seidel and Mr Lohmeyer that Ms Seidel had provided her. She said that she spoke with Mr Lohmeyer either on 24 January 2017, ie the date of the last email from Ms Seidel to Mr Lohmeyer, or alternatively the next day.[144]

    [144] T706.2-30

41. Ms Berry said she telephoned Mr Lohmeyer because she wasn't clear from Mr Lohmeyer’s email as to whether or not he had surveyed the boundary between the two properties. She confirmed that she saw the 2014 Lohmeyer Survey which she said was annexed to the email from Mr Lohmeyer, sent 17 January 2017,[145] and also confirmed her understanding that the solid line on the 2014 Lohmeyer Survey with the annotation 50.29 above the line and 289°49'10" below the line represented the boundary that had been surveyed as between no.14 and no.16 Langbein Avenue. Ms Berry said that during her conversation with Mr Lohmeyer, she raised with him whether he saw the house encroaching and that he said he didn't believe he noted a house encroaching, but he was happy to come out and carry out the survey.

    [145] T708.6-11; Exhibit A3, Vol 1, Tab 16

42. Nevertheless, Mr Lohmeyer had made it clear in his email to Ms Seidel sent 17 January 2017,[146] that one could get an idea of whether the house on the Property encroached on the land of no.16 by measuring back from the old fence 2.67m (ie: 2.67 m south from the centre strainer post) and looking in a straight line to the peg at the front of the Property.

    [146] Exhibit A3, Vol 1, Tab 32, p81

43. Although I have already made findings as to Ms Berry’s knowledge of the Encroachment Issues following her meeting on 22 December 2016, in my view, if not already on notice of the Encroachment Issues, that was sufficient to put Ms Berry on notice, and clear notice, that to determine whether the house on the Property encroached all she had to do was to measure back from the old fence (centre strainer post - which was still there) and look in a straight line to the peg at the front.

44. Under cross-examination, Ms Berry said that she attended the Property after speaking with Mr Lohmeyer, after 24 January 2017. She had not mentioned that visit in her evidence-in-chief, but she said that she checked the boundary according to what Mr Lohmeyer had told her. She said attended the Property and has a specific memory of checking the strainer post.[147]

    [147] T823.32-826.3

45. Specifically, in relation to the strainer posts, her evidence was as follows:[148]

    [148] T825.17-825.35

    Q. You have a specific memory of it, do you.

    A.    Of me checking out the strainer post?

    Q.    Yes.

    A.    Yes, I do.

    Q.    You took the Lohmeyer survey with you.

    A.    Yes.

    Q.    What were you relating to the Lohmeyer survey to the strainer post.

    A.Well Mr Lohmeyer said that the fence may or may not still be in situ. So I had determined if it was the fence that was still in situ with the fence with the roses on it, if that fence was approximately 2.6 m out of whack, that that strainer post could very possibly be that point. It seemed to be the similar distance.

    Q.I want to be clear. You say, do you, that Mr Lohmeyer told you that the dividing fence was off.

    A.No, he said there was an old rural fence - you might like to refer to the email - over the phone and in his email, and he said it may not be there anymore.

46. In this evidence, the reference to 2.6 metres which is taken from the 2014 Lohmeyer Survey, demonstrates quite clearly that the existing boundary fence finished at the centre strainer post which was 2.67 metres to the north of the true boundary.

47. I have a great deal of difficulty with Ms Berry’s evidence that she attended the Property on an occasion after she spoke to Mr Lohmeyer. As will become apparent, during her conversation with Mr McEntee at the Inspection, Ms Berry said she pointed out to Mr McEntee not the centre strainer post, but the southern strainer post where the rear fence of no.14 intersects with the southernmost boundary of Lot 91, ie: the Property to the immediate east of no.14 and no.16. If that be the case, the true boundary went through the middle of the house. In any event, if Ms Berry did visit the Property a second time, the second occasion being after she spoke with Mr Lohmeyer, then whichever of the two strainer posts she referred to must have revealed the house encroachment.

1. The date of assessment of the loss arising from deceit is the date of purchase. In this case there is no difference in the value of the Property between the date of the Contract – 31 March 2017 and the date of completion – 26 May 2017.[505]

   [505] Gould v Vagellas - Supra

2. The applicants claim loss[506] arising from the claim in deceit and fraudulent misrepresentation in the sum of $197,993.08, such sum made up as follows:

   [506] Statement of Claim, Rev 2 [25]-[41]

Difference between the contract price and the market value of the property	$137,500
Costs incurred to resolve the Encroachment Issues	$9,493.08
Decrease in market value after resolution of the Encroachment Issues	$36,000
Total	$182,993.08

1. I have found the applicants have spent $9,493.08 to address the Encroachment Issues.

2. The applicants plead that as a result of the deceit and consequent land swap they have suffered a further loss which is a decrease in the market value of the Property of $36,000.[507] There is no evidence of that consequential loss of value, but, in any event, I do not consider the applicants are entitled to recover the difference in market value after resolution of the Encroachment Issues because to do so will be to recover twice for the same loss.

   [507] Statement of Claim, Rev 2 [25.6]

3. It is for the same reason that I do not consider the applicants are entitled to recover the sum of $9,493.08 for the loss of resolving the Encroachment Issues.

4. I find that there is a difference in the market value of the Property of $137,500 as identified by Mr Winter in his scenario two which gives a market value for the Property of $410,000 as opposed to the purchase price of $547,500 as at the date the Contract was entered into.

5. Accordingly, the applicants have established an entitlement to damages for deceit against each of the respondents which I assess in the sum of $137,500.

   Loss - Misleading and deceptive conduct - section 18 and false and misleading representation in relation to the sale of the land - section 30 - ACL

6. The applicants’ claim in deceit was limited to the representations concerning the Encroachment Issues.

7. The loss claimed[508] in the claim in deceit and the claim for contravention of sections 18 and 30 insofar as the Encroachment Issues are concerned is the same, however different considerations apply.

   [508] Statement of Claim, Rev 2

   Calculation of loss

8. The applicants claim damages under section 236.

9. 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.[509] 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.

   SJ Berry, Ms Berry and the Vendors - Encroachment Issues

   [509] See Marks v GIO Australia Holdings Ltd [1998] 196 CLR 494, 529 [101] per Gummow J

10. I have found that SJ Berry engaged in misleading and deceptive conduct by reason of the Agent’s Representation, the provision of the Vendors’ Representations to Mr McEntee, the Agent’s Conduct and the Omission.

11. I have found Ms Berry jointly liable with SJ Berry for its contravention of ACL sections 18 and 30, as a person involved in SJ Berry’s contravention of those sections within the meaning of ACL section 2.

12. I have found that the Vendors are jointly liable with SJ Berry for its contravention of ACL sections 18 and 30, as persons involved in the contravention of those sections within the meaning of ACL section 2.

13. The applicants rely on Mr Winter’s scenario two and claim loss in the sum of $137,500.[510]

    [510] Exhibit A7

14. It is for the same reasons that I have found the loss attributable to the costs incurred in resolving the misalignment and the house encroachment in the sum of $9,493.08 and any resulting loss in value after rectification of the Encroachment Issues are not recoverable in deceit that I find those losses are not recoverable for a contravention of section 18 and section 30.[511]

    [511] Statement of Claim, Rev 2 [44]

15. Subject to what I say below, I find the loss to which the applicants are prima facie entitled for SJ Berry’s breach of sections 18 and 30 and Ms Berry’s and the Vendors involvement in those breaches in relation to the Encroachment Issues is $137,500.

    Studio

16. I have found that SJ Berry contravened both sections 18 and 30 and that both Ms Berry and the Vendors are jointly liable with SJ Berry for its contravention.

17. The applicants claim the costs of rectification of the Studio as well as loss of value.[512] Again, for the same reasons I have set out in relation to the claim in deceit, as well as for the contravention of sections 18 and 30, albeit in relation to the Encroachment Issues, I do not consider the applicants can recover the difference in value as at the time the Contract was entered into as well as the rectification costs.

    [512] Statement of Claim, Rev 2 [28G]

18. Again, subject to what I saw below, I find the loss to which the applicants are prima facie entitled for SJ Berry’s contravention of sections 18 and 30 and Ms Berry’s and the Vendors involvement in those breaches in relation to the Studio is $42,500.

    Encroachment Issues and Studio together

19. I find that when the Encroachment Issues and the Studio are taken together, the applicants are entitled to the loss reflecting the difference in the market value of the Property when the Contract was entered into as a consequence of the misleading or deceptive conduct and false or misleading representations. Subject to what I say below, the difference in value is that identified by Mr Winter as his scenario four in the sum of $167,500.

    A failure on the part of the applicants to take reasonable care - section 18

20. There is no pleading by any of the respondents that the applicants suffered loss or damage as a result of their failure to take reasonable care within the meaning of section 137B of the CCA.

21. That provision provides:

    137B Reduction of the amount of loss or damage if the claimant fails to take reasonable care

    If:

    (a) a person (the claimant) makes a claim under subsection 236(1) of the Australian Consumer Law in relation to economic loss, or damage to property, suffered by the claimant because of the conduct of another person; and

    (b) the conduct contravened section 18 of the Australian Consumer Law; and

    (c) the claimant suffered the loss or damage as result:

    (i) partly of the claimant’s failure to take reasonable care; and

    (ii) partly of the conduct of the other person; and

    (d) the other person did not intend to cause the loss or damage and did not fraudulently cause the loss or damage; the amount of the loss or damage that the claimant may recover under subsection 236(1) of the Australian Consumer Law is to be reduced to the extent to which a court thinks just and equitable having regard to the claimant’s share in the responsibility for the loss or damage.

22. Had I been required to consider this provision, it is clear that it applies since:

    (i) the applicants make a claim under section 236;

    (ii) I have found that the respondents’ conduct contravened section 18; and

    (iii)   as a consequence the applicants have suffered loss or damage.

23. Insofar as section 137B refers to a person not intending to cause the loss or damage, or not fraudulently causing the loss or damage, the cause of action for contravening section 18 and consequently this section, only falls to be considered if I am wrong in my conclusion about the applicants’ succeeding in their claim for deceit in relation to the Encroachment Issues.

24. In any event, it applies to the loss and damage suffered in relation to the Studio.

25. I find the requirements of section 137B are met. On that basis the amount of loss or damage recoverable by the applicants under sub-section 236(1) of the ACL for a contravention of section 18 is to be reduced by an amount which the Court thinks just and equitable, having regard to the applicants’ share and responsibility for the loss or damage.

    Encroachment Issues – reduction pursuant to section 137B (section 18 claim)

26. I have found that the Agent’s Representation had the effect of disarming Mr McEntee when he came to consider the Contract. So much so is apparent by my finding that by not mentioning the house encroachment, but by mentioning the misalignment which was the far less serious encroachment, Ms Berry has deflected attention from the major problem, which was the house encroachment. Nevertheless, it was mentioned in the Contract, albeit in qualified terms. In all the circumstances, notwithstanding section 137B has not been pleaded, I find that Mr McEntee and thus the applicants as his nominees as purchasers under the Contract, have suffered loss or damage partly as a result of their failure to take reasonable care, to the extent of 15%, such that the loss sustained by the applicants consequent upon the Encroachment Issues is reduced to $116,875.

    Studio - reduction pursuant to section 137B (section 18 claim)

27. As to the contravention of section 18 in relation to the Studio, the Form 1 that was served on Mr McEntee shows the only approval for the Studio was as a garage. The Form 1 expressly states that the Council will not necessarily able to provide a complete history of all such development that has taken place on the land.

28. There was an express provision in the Contract stating there were no alterations or improvements done without consent which I have found was false. In all the circumstances I do not consider Mr McEntee and the applicants have failed to take reasonable care, such that I do not consider any reduction to the loss I have assessed for the Studio is warranted.

    Applying the reduction

29. The reduction of 15% applied against my assessment of loss for the Encroachment Issues arising out of a contravention of section 18 is $116,875.

30. There being no reduction in relation to the Studio, my assessment of loss for the Studio is $42,500.

31. If it becomes necessary to consider the assessment of loss for both the Encroachment Issues and the Studio for a contravention of section 18, the exercise becomes slightly more difficult because Mr Winter’s opinion for the reduction in value for both the encroachment issues and the Studio together totals $167,500 whereas the difference in value for those two components respectively, when added together, totals $180,000.

32. Doing the best I can, I attribute the difference in value of $12,500 equally between the two issues. On that basis, the loss for the Encroachment Issues is reduced from $137,500 to $131,250 and the difference in value for the Studio reduced to $36,250.

33. Applying a 15% reduction to the Encroachment Issues results in a loss of $111,562.50 to which I add the adjusted loss of value for the Studio of $36,250 giving a loss of $147,812.50.

    ACL section 18 - conclusion on section 137B

34. I reduce the damages recoverable by the applicants for the contravention of section 18 by the respondents:

    - In relation to the Encroachment Issues alone from $137,500 to $116,875.

    - I make no reduction to the Studio loss alone which I assess at $42,500.

    - In relation to both the Encroachment Issues and the Studio from $167,500 to $147,812.50.

35. I note that section 137B does not apply to a claim for loss for a contravention of section 30.

    Apportionment

36. Both respondents plead section 87CD of the Competition and Consumer Act 2010 (“CCA”) which deals with apportionment of liability for apportionable claims.

37. An apportionable claim is defined in section 87CB of the CCA as:

    87CB  Application of Part

    (1) This Part applies to a claim (an apportionable claim) if the claim is a claim for damages made under section 236 of the Australian Consumer Law for:

    (a)  economic loss; or

    (b)  damage to property;

    caused by conduct that was done in a contravention of section 18 of the Australian Consumer Law.

    (2)  For the purposes of this Part, there is a single apportionable claim in proceedings in respect of the same loss or damage even if the claim for the loss or damage is based on more than one cause of action (whether or not of the same or a different kind).

    (3)  In this Part, a concurrent wrongdoer, in relation to a claim, is a person who is one of 2 or more persons whose acts or omissions (or act or omission) caused, independently of each other or jointly, the damage or loss that is the subject of the claim.

    (4)  For the purposes of this Part, apportionable claims are limited to those claims specified in subsection (1).

    (5)  For the purposes of this Part, it does not matter that a concurrent wrongdoer is insolvent, is being wound up or has ceased to exist or died.

38. Section 87CD provides:

    87CD  Proportionate liability for apportionable claims

    (1)  In any proceedings involving an apportionable claim:

    (a) the liability of a defendant who is a concurrent wrongdoer in relation to that claim is limited to an amount reflecting that proportion of the damage or loss claimed that the court considers just having regard to the extent of the defendant’s responsibility for the damage or loss; and

    (b) the court may give judgment against the defendant for not more than that amount.

    (2)  If the proceedings involve both an apportionable claim and a claim that is not an apportionable claim:

    (a)  liability for the apportionable claim is to be determined in accordance with the provisions of this Part; and

    (b)  liability for the other claim is to be determined in accordance with the legal rules, if any, that (apart from this Part) are relevant.

    (3)  In apportioning responsibility between defendants in the proceedings:

    (a)  the court is to exclude that proportion of the damage or loss in relation to which the plaintiff is contributorily negligent under any relevant law; and

    (b)  the court may have regard to the comparative responsibility of any concurrent wrongdoer who is not a party to the proceedings.

    (4)  This section applies in proceedings involving an apportionable claim whether or not all concurrent wrongdoers are parties to the proceedings.

    (5)  A reference in this Part to a defendant in proceedings includes any person joined as a defendant or other party in the proceedings (except as a plaintiff) whether joined under this Part, under rules of court or otherwise.

39. The applicants claim relief against all respondents, pursuant to section 236 for economic loss, arising out of conduct done in contravention of section 18. Section 87CB does not apply to a contravention of section 30.

40. That being the case, the requirements of section 87CB(1) are met in relation to the section 18 claim.

41. The economic loss or damage claimed against all respondents is the same, notwithstanding that the claims are based on more than one cause of action, such that the claims for economic loss arising out of a contravention of section 18 in relation to the Encroachment Issues and the Studio issues are a single apportionable claim.

42. I consider that all four respondents are concurrent wrongdoers within the meaning of section 87CB.

43. I have found all four respondents liable in deceit in relation to the Encroachment Issues. However, these sections insofar as they apply to a claim consequent upon a contravention of section 18 will only fall to be considered in relation to the Encroachment Issues if I am wrong in my conclusion about deceit.[513]

    [513] See 87CC

44. Pursuant to section 87CD(1), in proceedings involving an apportionable claim, the liability of a respondent who is a concurrent wrongdoer in relation to that claim is limited to an amount reflecting that proportion of the damage or loss claimed that the court considers just having regard to the extent of that respondent’s responsibility for the damage or loss. It is that proportion for which the court may give judgment against that respondent.

45. Pursuant to section 87CD(2), where claims involve both an apportionable claim and a claim that is not apportionable, the steps required are set out. Since the claim under section 18 of the ACL is an apportionable claim, there is no claim that is not apportionable, such that section 87CD(2) does not apply.

46. Pursuant to section 87CD(3), two steps are required in apportioning responsibility.

47. The first is to exclude the proportion of the applicant’s loss or damage for which the applicants are contributorily negligent under any relevant law. The second is for the court to have regard to the comparative responsibility of any concurrent wrongdoer who is not a party to the proceedings.[514]

    [514] Section 87CD(3)(a) and (b)

48. The second step is not required because there is no suggestion there is a party who is not a party to the proceedings who is a concurrent wrongdoer.

    Contributory negligence - Law Reform and Apportionment of Liability Act (2001)

49. Later in these reasons I deal with negligent misrepresentation. That is the only other cause of action where an issue of contributory negligence might arise. Both respondents plead section 8 of the Law Reform (Contributory Negligence and Apportionment of Liability) Act 2001. That section does not apply to a claim made under section 236 of the ACL but it does apply if an apportionment is to be made pursuant to sections 87CB and 87CD of the CCA.

50. The first step I have identified above involves a consideration of whether the applicants were contributorily negligent under any relevant law. I consider that Mr McEntee and therefore the applicants have been contributorily negligent to the same extent in relation to the Encroachment Issues as I have found pursuant to section 137B of the CCA ie: 15%.

51. I do not consider the applicants have been contributorily negligent in relation to the Studio.

    Encroachment Issues

52. As to the apportionment between on the one hand SJ Berry and Ms Berry and, on the other hand, the Vendors, I consider that although Ms Berry made the Agent’s representation and did so knowing it to be false, nevertheless the Vendors were on clear notice of the Encroachment Issues. However, the conduct by Ms Berry was, as I have found, such as to disarm Mr McEntee. Had Ms Berry not acted in the way I have found, either by refusing to accept the retainer or alternatively only accepting the retainer on the condition the Vendors address the Encroachment Issues or by making full disclosure, this dispute is unlikely to have occurred in relation to the Encroachment Issues. In all the circumstances, I consider that it is just and equitable to apportion the liability as to SJ Berry and Ms Berry, 70% together on the Encroachment Issues and as to the Vendors together 30%.

    Studio

53. As to the Studio, the position is somewhat reversed in that it is the Vendors who knew the work that they had done to the Studio, it is the Vendors who knew that they had not received the necessary consents and as I have found, it is the Vendors who either cut or arranged for the bottom chord of the roof trusses to be cut. Nonetheless, Ms Berry was aware that it was being marketed and presented as a habitable room and that it certainly had no approval as a bedroom. In all the circumstances I consider that it is just and equitable to apportion the liability in relation to the Studio as to SJ Berry and Ms Berry together 30% and as to the Vendors together 70%.

    Applying the apportionment

54. As I have noted above, Mr Winter’s scenario four valuation of $380,000 for both the Encroachment Issues and the Studio is not the result of adding the respective differences in market value.

55. Apportioning against the amounts I have found above, the result is that in the claims for contravention of section 18, the applicants are entitled to loss and damage from the respondents as follows:

    (i)     Encroachment Issues alone –

    (a)    SJ Berry and Ms Berry ($116,875 x 70%) = $81,812.50

    (b)    Ms Rosewell and Mr Kloosterman ($116,875 x 30%) = $35,062.50

    (ii)    Studio alone –

    (a)    SJ Berry and Ms Berry ($42,500 x 30%) = $12,750

    (b)    Ms Rosewell and Mr Kloosterman ($42,500 x 70%) = $29,750.

    (iii)   Both Encroachment Issues and Studio-

    (a)    Mr Winter has assessed a difference in value of $167,500 for both.

    I have reduced that amount after allowing for 15% reduction for section 137B to a total of $147,812.50.[515] In my view Ms Berry and SJ Berry should bear the greater amount of this sum on the basis that it was the Encroachment Issue and in particular the house encroachment which was the most serious of the issues. I apportion liability as against SJ Berry and Ms Berry 65% and the Vendors 35% such that their respective liability on the Encroachment Issues and the Studio is:

    SJ Berry and Ms Berry $147,812.50 x 65% = $96,078.12

    Vendors $147,812.50 x 35% = $51,734.38

    [515] Encroachment     $137,500 - $6,250 = $131,250 x 85% =     $111,562.50

    Studio$42,500 - $6,250 = $36,250 x 85% =       $36,250

    $147,812.50

    Loss - Contract

1. I have found that the Vendors have breached the Warranty contained in the Contract in relation to both the Encroachment Issues and the Studio.

   Encroachment Issues

2. The measure of damages in Contract is to put the applicants in the same position as if the Contract had been performed.[516] Had the Contract been performed in the sense that there was no breach of warranty then the applicants would not have expended the amount they did on rectifying the Encroachment Issues and would not have been left with a property which it is alleged but not established, had a residual value less than that which they paid. Accordingly, in relation to the Encroachment Issues, I find the applicants have suffered loss for breach of warranty in the sum of $9,492.08.

   [516] Robinson v Harman (1848) 154 ER 363, 365 per Parke B

   The Studio

3. As to the Studio, the applicants rely on Mr Winter’s scenario three and claim

   (i)a sum of $42,500 representing the difference in market value at the time the Contract was entered into; and

   (ii)the costs of obtaining the necessary approvals, as well as the costs of carrying out the necessary structural and other work which is claimed in the sum of $30,000.[517] It is for the same reasons that I do not consider the applicants are able to recover the difference in the value of the Property for the breach of contract in relation to the Encroachment Issues that the applicants cannot recover the difference in value for the breach of contract in relation to the Studio. The applicants’ loss is the cost of rectification.

   Studio rectification works - costs

   [517] Statement of Claim, Rev 2 [25], [28G], [43.3], [44]

4. The works carried out to the Studio were carried out by MacPlumb. That is a partnership of the two family trusts. There is no evidence that the amounts due to MacPlumb for carrying out the rectification works has been paid. Nevertheless, those costs are costs which the applicants are primarily liable to pay. I do not consider the lack of evidence that the amounts have not actually been paid as a bar to recovery by the applicants.

5. Mr McEntee had identified invoices for work done to the Studio and has reviewed those invoices further.[518] I assess the costs of rectification below,  all figures are inclusive of GST.

   [518] T187.8-38

6. The invoices are at Exhibit A3, Vol 3, Tab 110 and total $53,660.88 (including GST).

7. I have considered each of the invoices, taking into account Mr McEntee’s evidence in cross-examination and I find that the following items are not claimable:

   1.Invoice 2755[519] in the sum of $2,891.90 dealing with the concrete floor;[520]

   [519] Exhibit A3, Vol 3, Tab 110, p986

   [520] T187.13-26

   2.Materials for the new pergola for the Studio per invoice 1777[521] in the sum of $341.39;

   [521] Exhibit A3, Vol 3, Tab 110, p991-992; T364.7-28

   3.Work done on the Studio door, demolition to a window and fitting of a window opening, per invoice 2765, [522]  which Mr McEntee accepted should be adjusted. There is no evidence as to how much the amounts claimed on this invoice should be reduced, but doing the best I can I reduce the overall claim by 25%, so that the total of $1,400 is reduced by $350 to $1,050;

   [522] Exhibit A3, Vol 3, Tab 110, p1009-1010; T365.19-366.21

   4.Work done as described in invoice 1551, [523] which Mr McEntee accepted could be adjusted by one hour or so. The total cost of labour was $385/day for an eight-hour day or $48.12 per hour. Accordingly, I adjust invoice 1551 by deducting $48.12 giving a total of $2,217.88;

   [523] Exhibit A3, Vol 3, Tab 110, p1020; T367.15-37

   5.Invoice 2779, [524] which Mr McEntee accepted was a cost which was going to be incurred in any event for hanging the doors, as was the second fix to the bathroom. Again, doing the best I can, I deduct one day’s labour at $385, such that the total of invoice 2779 totals $1,045;

   [524] Exhibit A3, Vol 3, Tab 110, p1026; T368.4-36

   6.Invoice 2829[525] relates to electrical work. Mr McEntee accepted there should be some adjustment when the supporting invoices on p1080 are examined. It seems there are four items which Mr McEntee accepted should not be claimed but there is no evidence as to how much the deduction should be. Again, doing the best I can:

   [525] Exhibit A3, Vol 3, Tab 110, p1077-1082; T371.13-373.11

   (i)The series of the 25 down lights[526]- although there is no evidence as to how many lights the Studio had, I deduct five down lights at $11.81 each, thereby reducing the sum claimed for down lights by $59.05 to $209.05;

   (ii)    A timer switch three wire 10-amp fan- deduct $123.69;[527]

   (iii)   A fan/heat triumph - deduct $108.60;[528]

   (iv)Three PIR infrascan sensors- deduct one sensor at $107.55 giving a total claimable for this item of $215.09.[529]

   Allowing for these adjustments to the PR Electrical invoice on invoice 2829, the amount which the applicants can claim becomes $1,242.69.

   7.Invoice 2823. Mr McEntee agreed the painting to the house door, door jambs and windows to the shed should not be included, nor should the slab to the ensuite,[530] resulting in an adjustment to the work done on 16 and 17 July 2017.[531] Again, doing the best I can, I deduct the labour costs for one day with a result that invoice 2823 becomes $770 less $385 giving a total of $385.

   [526] Ibid p1080

   [527] Ibid

   [528] Ibid

   [529] Ibid

   [530] Exhibit A3, Vol 3, Tab 110, p1083; T373.16-374.10

   [531] Exhibit A3, Vol 3, Tab 110, p1085

8. I find the total spent on rectification work therefore totals $53,660.88 - $4,800.03 = $48,860.58.

9. The applicants plead a loss for rectification works required to the Studio of a figure “in the order of $30,000”.[532] That figure cross refers to a number of items pleaded,[533] some of which such as the new slab on top of the existing slab is not claimed.

   [532] Statement of Claim, Rev 2 [28G]

   [533] Ibid [28E]

10. Notwithstanding the claim for rectification work as being stated of “in the order of $30,000”, nonetheless the Prayer claims damages against the third and fourth respondents at common law. That being the case, I assess the damages for breach of contract in relation to the Studio in the sum of $48,860.58.

    Contract - conclusion on loss

11. I find the applicants are entitled to damages against Ms Rosewell and Mr Kloosterman for breach of contract in the sum of $48,860.58.

    Negligent Misstatement - Ms Berry and SJ Berry

12. The applicants claim for loss and damage suffered in relation to both the Encroachment Issues and the Studio as against Ms Berry and SJ Berry for negligent misstatement.

    Encroachment Issues and Studio

13. As to the Encroachment Issues, the applicants claim the difference in market value. The Prayer for relief refers to section 7 of the Misrepresentation Act 1972 (SA).[534]

    [534] Prayer [D]

14. Section 7(1) and (6) of the Misrepresentation Act 1972 (SA) provide:

    (1)     Where a contracting party is induced to enter into a contract by a misrepresentation made—

    (a)     by another party to the contract; or

    (b)     by a person acting for, or on behalf of, another party to the contract; or

    (c)     by a person who receives any direct or indirect consideration or material advantage as a result of the formation of the contract,

    and any person (whether or not he or she is the person by whom the misrepresentation was made) would, if the misrepresentation had been made fraudulently, be liable for damages in tort to the contracting party subjected to the misrepresentation in respect of loss suffered by him or her as a result of the formation of the contract, that person is, subject to subsection (2), so liable to that contracting party, in all respects as if the misrepresentation had been made fraudulently and were actionable in tort.

    (6)     In assessing any damages under this section, a court must take into consideration any award of damages under any other provision of this section, or of damages or compensation under any other law, and in assessing damages or compensation in any proceedings under any other law relating to a contract, a court must take into consideration any award of damages under this section.

15. I consider Ms Berry and the company of which she was the controlling mind as its sole director are joint tortfeasors.

16. The effect of section 7(1) is that the applicants are able to recover from Ms Berry and SJ Berry as joint tortfeasors as if the negligent misrepresentations in relation to the Encroachment Issues and the Studio had been made fraudulently. That is, the measure of damages is the same as for deceit. However, although the measure of damages is the same as deceit, nevertheless the underlying liability is for negligent misrepresentation such that section 8 of the Law Reform (Contributory Negligence and Apportionment of Liability) Act 2001 applies. Accordingly, I consider that there should be a reduction for contributory negligence which I assess as 15% in relation to the Encroachment Issues. I do not consider there is any contributory negligence in relation to the Studio for the reasons I have set out.

17. I assess the damages recoverable from Ms Berry and SJ Berry as joint tortfeasors for negligent misrepresentation in relation to the Encroachment Issues and the Studio as the difference in value between the value of the Property as at 31 March 2017 and the price paid for it. In accordance with Mr Winter’s scenario four, I assess the applicant’s prima facie entitlement to damages for negligent misrepresentation in the sum of $167,500. In assessing those damages, I do so on the basis that the applicants are not entitled to damages under other causes of action and that my assessment for this cause of action proceeds on the basis that recovery under this cause of action is the only recovery available to the applicants.

18. I assess the following loss for negligent misrepresentation:

    1.Encroachment Issues - $137,500 x 85% = $116,875

    2.Studio - $42,500

    3.Both the Encroachment Issues and the Studio - $147,812.50.

    Summary

19. The applicants are entitled to damages arising out of the various causes of action as follows:

    1.As against all respondents- damages for deceit in relation to the Encroachment Issues in the sum of $137,500;

    2.As against the first and second respondents:

    (a)Damages for contravening section 18 of the ACL in relation to the Encroachment Issues in the sum of $ 81,812.50.

    (b)Alternatively, damages for contravening section 30 of the ACL in relation to the Encroachment Issues in the sum of $137,500.

    (c)Damages for contravening section 18 of the ACL in relation to the Studio in the sum of $42,500.

    (d)Alternatively, damages for contravening section 30 of the ACL in relation to the Studio in the sum of $42,500.

    (e)Damages for contravening section 18 of the ACL for both the Encroachment Issues and the Studio in the sum of $96,078.12.

    (f)Damages for contravening section 30 of the ACL for both the Encroachment Issues and the Studio in the sum of $167,500.

    (g)Damages for negligent misrepresentation:

    in relation to the Encroachment Issues $116,875; and

    in relation to both the Encroachment Issues and the Studio $147,812.50.

    3.As against the third and fourth respondents:

    (a)Damages for contravening section 18 of the ACL in relation to the Encroachment Issues in the sum of $35,062.50.

    (b)Alternatively, damages for contravening section 30 of the ACL in relation to the Encroachment Issues in the sum of $137,500.

    (c)Damages for contravening section 18 of the ACL in relation to the Studio in the sum of $29,750.

    (d)Alternatively, damages for contravening section 30 of the ACL in relation to the Studio in the sum of $42,500.

    (e)Damages for contravening section 18 of the ACL for both the Encroachment Issues and the Studio in the sum of $51,734.38.

    (f)Damages for contravening section 30 of the ACL for both the Encroachment Issues and the Studio in the sum of $167,500.

    (g)     Damages for breach of contract in the sum of $48,860.58.

    Orders

20. The applicants have succeeded in their causes of action to varying degrees. I will hear the parties as to the form of orders and the question of interest and costs.