Neville Hank Real Estate P/L v Knope No. Scgrg-98-799 Judgment No. S6980

Neville Hank Real Estate Pty Ltd sought leave to appeal a judgment entered in favour of Knope, the respondent, by the Magistrates Court at Kadina. The appeal related to the assessment of damages for misrepresentations made by Peter Tonkin, an employee of the appellant, in relation to the purchase of commercial premises at Minlaton. The court below had found that Tonkin had failed to exercise any judgment in assessing the suitability of Jordan Builders to undertake a detailed examination of the property as requested by Knope. The magistrate found that Tonkin had misrepresented the extent of the inspection that would be carried out and that he had acted in his own interests rather than those of Knope. The magistrate assessed damages based on the costs incurred and likely to be incurred for repairs and maintenance over the first five years, but the Supreme Court found this to be incorrect.

The appeal centred on the appropriate measure of damages in cases of misrepresentation. The Supreme Court noted that the measure of damages in cases of statutory misleading or deceptive conduct, deceit, or negligent misrepresentation is generally the difference between the value of the property at the time of purchase and the price paid. The court held that there was insufficient evidence to assess the value of the property at the time of purchase, and that moneys spent on repairs and maintenance could not be a measure of damage in such cases. The court also noted that nominal damages could not be awarded under the Trade Practices Act because actual loss or damage must be proven.

The Supreme Court held that the respondent's claim should be dismissed due to the lack of evidence to assess damages. The appeal was allowed, and the judgment in the court below was set aside with a judgment dismissing the respondent's claim. The court reserved the right to hear the parties as to costs.