P-Value v Vicland Group - [2016] VSC 100

IN THE SUPREME COURT OF VICTORIA AT MELBOURNE

Not Restricted

COMMERCIAL COURT

S CI 2013 2593

P-VALUE PTY LTD (ACN 134 544 451)	Plaintiff
- and -
VICLAND PROPERTY GROUP NO 1 PTY LTD (ACN 120 079 227), MARK MARKI MARKII PTY LTD (ACN 120 089 465), WILLIAM DEREK McNEE, RODNEY MORLEY PERSICHETTI PTY LTD (ACN 108 660 751), RICHARD THOMAS, WELLARA HOLDINGS PTY LTD (ACN 127 799 928) and FRED NUCARA	Defendants

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JUDGE:	DIGBY J
WHERE HELD:	Melbourne
DATE OF HEARING:	8-11, 15, 17-18 September, 13 October 2014 and 13 April 2016
DATE OF JUDGMENT:	15 March 2016
CASE MAY BE CITED AS:	P-Value v Vicland Group & Ors
MEDIUM NEUTRAL CITATION:	[2016] VSC 100	First Revision: 30 March 2016 Second Revision: 19 May 2016

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PROPERTY – Contract of sale – Commercial property – Representations inducing purchase – Section 9 Fair Trading Act 1999 (Vic) and s 52 Trade Practices Act 1974 (Cth) – Representations in connection with sale of land – Section 13 Sale of Land Act 1962 (Vic) – Effect of related Heads of Agreement – Estoppel – Damages

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr C Northrop	Scammel Black Mileo
For the First Defendant	Mr J O’Bryan Mr A Clifton	Bowman Knox
For the Second Defendant	No appearance
For the Third Defendant	Mr R van de Wiel QC with Mr G Moloney Mr P Noonan	Diakou Faigen Jeremy Johnson & Associates
For the Fourth & Fifth Defendants	Ms L Nichols	DLA Piper Australia
For the Sixth & Seventh Defendants	Mr T Scotter	Hunt & Hunt Barry Nilsson Lawyers
For the Seventh Defendant	Mr M Gronow	Tribeca Legal

HIS HONOUR:

Background

Mrs Thi Huong Nguyen (Nguyen) is a Director, Secretary, and the sole shareholder and controlling mind of the plaintiff, P-Value Pty Ltd (P-Value).

Nguyen came to Australia together with her brother, as a refugee from Vietnam in 1978. On arrival in Australia, Nguyen had no command of the English language. Subsequent to her arrival she married in 1984 and commenced a clothing manufacturing business with her husband in 1989 which they operated from an address in Springvale, Victoria. It would appear that the Nguyen business prospered.

On 15 January 2009 P-Value completed the purchase of a commercial property at 255 Chapel Street, Prahran (the Property) from the first and second defendants (the Vendors). The Contract of Sale for the Property was signed on 5 September 2008 by Nguyen, who later became a director of P-Value when it was registered in December 2008. The third defendant, William Derek McNee (McNee), then the sole Director and sole shareholder of the second defendant, and representative of the Vendors, signed the Contract of Sale for the Vendors.

P-Value’s claim

The essence of P-Value’s claim is that:

(a) an auction of the Property had been organised by the Vendors for midday on 5 September 2008;

(b) in the late morning of 5 September 2008 Nguyen was taken by a real estate agent, the fifth defendant, Richard Thomas (Thomas), to an office of the fourth defendant, Rodney Morley Persichetti Pty Ltd (TBM Sales) which was located in the same street as the Property and which was opposite the Property;

(c) present at the TBM Sales office and from time to time, there were at least four real estate agents involved in, or associated with, the Vendors’ campaign to sell the Property and McNee. Those persons were:

· Fred Nucara (Nucara) the seventh defendant, a real estate agent and Director of Wellara Holdings Pty Ltd, the sixth defendant which trades as Beller Commercial (Beller). In September 2008, Beller was a new venture Nucara had recently set up with his co-director, Andrew Fawell;[1]
[1]T587.31-588.05.

· Richard Thomas (Thomas), the fifth defendant, a real estate agent and employee of the fourth defendant Rodney Morley Persichetti Pty Ltd (trading as TBM Sales);

· Andrew Fawell (Fawell), real estate agent and director of Beller;

· Rodney Morley (Morley), an estate agent from the fourth defendant.

(d) At a meeting in Chapel Street Prahran in the late morning of 5 September 2008 negotiations and discussions took place between McNee and real estate agents for the Vendors with Nguyen. These negotiations and discussion principally involved Nguyen, McNee, Nucara and Thomas, although Fawell, Morley and one Andrew Clifton (director and shareholder of the first defendant) were at times in attendance;

(e) At this meeting:

· and before the auction was due to commence, Nucara told Nguyen that the Vendors had an offer of $5,920,000 for the Property and as a result the auction had been cancelled;

· neither McNee nor Nucara told Nguyen that the “offer of $5,920,000” said to have been made to the Vendors by another potential buyer was in fact an offer for $5,568,800 and had, under its own terms, “terminated” at 10.00pm the day before, and that the “offer” had also been expressly rejected by McNee on 4 September 2008;

·Two Five Five Pty Ltd (255) was a tenant of level 1 of the Property held under a lease with the Vendors which appeared to oblige it to pay $200,000 rental per annum;
·Nguyen said to McNee and Nucara that she was concerned about the reliability and amount of the rental yield from the Property and in particular the ability of 255 to pay rent;
·Nucara told Nguyen that the main tenant at the Property which occupied level 1, 255, was a good tenant and good payer of rent;
·McNee did not correct or qualify Nucara’s statement about the level 1 tenant;
·McNee agreed to the inclusion of a Special Condition in the Contract of Sale which stipulated for the provision of a $200,000 security deposit in respect of the level 1 lease to 255;
·neither McNee nor any of the real estate agents present on 5 September 2008 told Nguyen that the Vendors had entered into a rent abatement agreement (the rent abatement agreement) with 255, which permitted 255 to pay no rent while the Vendors owned the Property and granted 255 a rent free period of 12 months;
·furthermore neither McNee nor any of the real estate agents present told Nguyen that as at 5 September 2008, 255 had paid no rent for its occupation of level 1 of the Property to date.

The Vendor’s statement for the Property included in the Contract of Sale detailed three leases with a combined total rent payable of $370,000 per annum. These leases were to 7-Eleven Stores Pty Ltd for a ground floor lease for 5 years at an annual rental of $110,000 payable from 1 July 2008, and to Balcony Nominees Pty Ltd for the rear of the ground floor for a period of 3 years commencing on 14 June 2008 at an annual rental of $60,000, and to 255 for a level 1 lease for a period of 7 years at an annual rental of $200,000, commencing on 30 June 2008. Nguyen was also provided with information by Thomas of TBM Sales in June and July 2008 about the $370,000 rent being paid by the three tenants of the Property, and that it should not be necessary for the tenant 255, which had a $200,000 per annum lease, to provide a director’s guarantee to secure its rent.

P-Value alleges that unbeknown to Nguyen in September 2008 when she signed the contract of sale, and unbeknown to Nguyen or P-Value in January 2009 when P-Value completed the contract, 255 had paid no rent to the Vendors and had entered into the rent abatement agreement with the Vendors not to pay rent whilst the Vendors owned the Property and for a period of 12 months from the sale of the Property by the Vendors.[2]
[2]See emails from 255 following Nguyen’s demands for payment of rent, also the admissions of McNee in the County Court proceeding at CB804.19–806.09, and in the first defendant and the third defendants’ pleadings (Amended Defence and Counterclaim, 28/8/12, [14]) (although the admission is expressed to be conditional and is also denied in reply closing subs) and CB834.14 and CB836.14, contradicting the length of the rent free period referred to in the Fourth Party Notice in the Cossari Smith proceeding).

P-Value purchased the Property and has subsequently discovered that it did so at a price which was about $2m above the market price at the time of purchase. This proceeding ensued.

The pleadings

By an Amended Statement of Claim dated 13 October 2013, P-Value claims against various defendants for misleading and deceptive conduct contrary to the Trade Practices Act1974 (Cth) (‘TPA’) and the Fair Trading Act 1999 (Vic) (‘FTA’). The specific misleading and deceptive conduct is alleged against:

(i) Vicland Property Group No.1 Pty Ltd (first defendant) and Vicland Property Group No.2 Pty Ltd (second defendant), the Vendors of the Property (the Vendors);

(ii) McNee (third defendant), the sole director of Vicland No 2;

(iii) the real estate agency TBM Sales (the fourth defendant);

(iv)Thomas (fifth defendant), a sales representative of TBM Sales during the relevant period;

(v) the real estate agency Beller (the sixth defendant Wellara Holdings Pty Ltd); and

(vi)Nucara (seventh defendant), a director of Beller.

As outlined above, the misleading and deceptive conduct alleged centres on the failure by the defendants to disclose the rent abatement agreement, various representations made by the defendants, either expressly or impliedly, that 255 was a good tenant and a good payer of rent and that the Property had rental income of $370,000 per annum.

The misleading and deceptive conduct alleged is:

(a) the failure by all defendants to disclose the existence of the rent abatement agreement;

(b) the representations made by Thomas, on behalf of TBM Sales, to Nguyen prior to the day of sale, that rent payable on the Property was $370,000 per annum and 255 had been paying and was able to pay rent under the lease of level 1 of the Property and TBM Sales were not aware of any circumstance relating to 255 which may affect its ability to pay rent under the lease;

(c) that at the meeting with Nguyen on 5 September 2008, in the company of McNee and Nucara, Thomas, acting on behalf of TBM Sales, heard Nucara state the matters in sub-paragraph (d)(i), (ii) and (iii) below and did not correct what Nucara said thereby implicitly representing that what he said was true;

(d) the representations made by Nucara to Nguyen on the day of sale that;

(vii) the auction had been cancelled because the Vendors had received an offer of $5,920,000;

(viii) 255 was a good tenant;

(ix) 255 was a good payer of rent;

(e) these representations made by Nucara on the day of sale were heard by McNee without McNee correcting what was said, thereby impliedly representing that what Nucara said was true;

(f) McNee, by agreeing to the inclusion of special condition 30, which provided for a $200,000 security deposit in respect of the 255 lease, while failing to disclose the existence of the rent abatement agreement impliedly represented that 255 had paid rent in the past and could be expected to pay rent in accordance with the terms of the lease of level 1 of the Property.

P-Value alleges that McNee (on behalf of the Vendors), Thomas (on behalf of TBM Sales), and Nucara (on behalf of Beller) did not disclose prior to or during the meeting on 5 September 2008:

(a) the existence of the rent abatement agreement;

(b) that 255 had not paid any rent at all under the lease; and

(c) under the terms of the rent abatement agreement, 255 would not pay rent for 8 or 12 months after the property was sold.[3]

[3]There was some uncertainty about for how long the rent free period was purported to extend following the sale of the Property.

P-Value alleges that had Nguyen been told of the above three matters by McNee, Thomas and Nucara, she would not have executed the contract to purchase the Property, and by failing to so disclose P-Value claims that McNee, Thomas and Nucara engaged in conduct that was misleading or deceptive contrary to s 9 of the FTA and that simultaneously, by failing to disclose the said matters the first and second defendants, the fourth defendant and the sixth defendant engaged in conduct which was misleading or deceptive contrary to s 52 of the TPA and s 9 of the FTA.

Damages claimed by P-Value consist of:

(a) the difference between the price paid for the Property and the value of the Property;

(b) additional interest and stamp duty paid on the difference in price; and

(c) legal costs incurred by P-Value in litigation with the defaulting tenant 255.

It is to be noted that P-Value’s claims are confined to claims under s 51A and s 52 of the TPA and s 4 and s 9 of the FTA.

The Defendants

The first defendant, on 19 July 2013, filed a limited defence and, on 24 October 2013 gave limited particulars thereof and otherwise took no further active part in this proceeding until after the hearing of evidence, save that on 13 April 2016 Mr Clifton appeared and sought to apply to withdraw the agreed consent orders of 6 April 2016. I refer to later in these reasons, and at that point in detail, the events of 13 April 2016, and to Mr Clifton and the first defendant’s present position.

Although not filed, Counsel for P-Value stated the second defendant was served with originating process. However the second defendant has taken no part in the proceedings. Neither has it filed an appearance or defence.

McNee however admits that at all material times he was the sole Director of the second defendant.[4]
[4]CB881-886.

Although it appears that the second defendant was deregistered on 30 October 2012, no party sought to make any point about the fact that the second defendant probably did not exist at the time of issue[5] and all active parties, including the plaintiff, presented their case and submissions as though the second defendant remained in existence.
[5]CB885.

I have proceeded to make findings in respect of the second defendant in relation to the key events of 2008 and 2009, however for the above reasons I have not made or foreshadowed any orders against that now non-existent second defendant company. I shall await any further submissions in this regard which the parties may make prior to authentication of final orders in this matter.

P-Value’s Case

P-Value alleges that in June and July 2008 Thomas, on behalf of TBM Sales and the Vendors, represented to Nguyen that the rent payable by tenants at the Property totalled $370,000 a year. Those representations are alleged to have been made orally by Thomas in discussions with Nguyen at a meeting at the Property in late June 2008. P-Value also says that these rental representations were made by email from Thomas to Nguyen on 1 July 2008. That email communicated a Schedule which attached a copy of leases of the Property, and a form of Contract of Sale which referred to three relevant tenancies, and which also attached a Section 32 Vendor Statement.

P-Value also alleges that as part of the initial discussions between Thomas, as agent for the Vendors, and Nguyen, on about 9 July 2008, Thomas informed Nguyen that there was no need for 255 to provide a director’s guarantee in respect of its lease of level 1 of the Property and in so doing Thomas, on behalf of TBM Sales, implied that 255 had been paying and was able to pay rent under its lease. P-Value alleges that by this same communication Thomas and the companies for which he spoke, TBM Sales and the Vendors, represented that they were not aware of any circumstance concerning 255 which may affect its ability to pay rent under its lease of the Property. P-Value relies upon an email from Thomas to Nguyen dated 9 July 2008 which attached a proposed Special Condition for a Contract of Sale, providing for $400,000 by way of security instead of a director’s guarantee in relation to rental obligations. P-Value’s pleadings detail that this email was sent in response to a telephone call made by Nguyen to Thomas during which Nguyen asked why it was that there was no director’s guarantee in relation to the tenants’ rental obligations.

P-Value asserts that during August 2008 Thomas asked Nguyen on a number of occasions whether she wanted to make an offer to purchase the Property before the forthcoming day of auction. There is no dispute that Thomas telephoned Nguyen on 4 September 2008 and asked Nguyen whether she would make an offer for the Property, to which Nguyen responded that she would wait to see what happened at the forthcoming auction.

P-Value also alleges that at all relevant times prior to and on the day of the auction of the Property on 5 September 2008 the defendants and each of them were aware that the payments of rent by the tenants of the Property, 255 in particular, was an important matter for purchasers of the Property, including Nguyen. P-Value’s case is that such awareness on the part of the defendants is to be inferred from the fact that the amount of rental was important to establish the return on the price paid to purchase the Property and because that fact affected the value of the Property.

Defendants’ Defence Allegations

The defensive cases of the defendants and the third defendant’s counterclaim including the key allegation in the defendants’ Defences are identified and addressed below by reference to the submissions of those parties. I note at this point however the following aspects of the defendants’ cases.

The first defendant admits that the rent payable by the tenants of the Property was important to potential purchasers and Nguyen and adds that Nguyen made her concern about rental clear by requesting a security of $400,000 and later agreeing to accept a security of $200,000.[6]
[6]First defendant’s Defence, 18 July 2013, [19].

McNee denies P-Value’s allegations of awareness by the third defendant of the importance to potential purchasers of the payment of rent by the existing tenants of the Property. Thomas also denies P-Value’s allegations to do with the importance of rental income to prospective purchasers and says that he provided written information about tenancies of the Property to Nguyen and he did so on 1 July 2008 and 4 July 2008 as set out in paragraph 16 of his Amended Defence dated 30 April 2014. Similarly, TBM Sales and Thomas deny the awareness of these same allegations made by P-Value at [19] of its Statement of Claim and so do the sixth and seventh defendants.

Nguyen also asserts that the defendants’ awareness that payments of rent by tenants of the Property, 255 in particular, were important to potential purchasers and Nguyen is to be inferred from the text of the ‘Flyer’ published by Beller promoting the auction of the Property on 5 September 2008. The Flyer relied upon by P-Value stated:

•         Total Rent $370,000 p.a.
•         3 tenants including 7–Eleven.
•         Long leases.

Nguyen also asserts that Thomas’ awareness of the matters referred to in the last two preceding paragraphs is to be inferred from the fact that in early July 2008 Nguyen asked Thomas about the reliability of 255 as a tenant and Nguyen requested a security deposit be provided in respect of the premises. Similarly, Nguyen asserts that McNee’s awareness of its importance can be inferred from the fact that he authorised Thomas to propose the inclusion of a security bond clause in the Contract of Sale for the Property. Nguyen asserts that McNee’s awareness, and that of Thomas and Nucara, can be inferred from the fact that during the meeting which occurred on 5 September 2008 Nguyen requested a $400,000 security bond because of her expressed concern about the payment of the rent by 255.

The first defendant does not admit the June-July 2008 representations although it concedes that the rent payable by tenants in respect of the Property at the relevant time was $370,000 per year. The first defendant also says that the security requested in the sum of $400,000 by P-Value was to cover any default in rental by 255 because Nguyen did not believe that 255 was a good tenant. McNee does not admit and denies respectively, the allegations relating to representations in June/July 2008 in paragraphs 16 and 17 of the P-Value pleading. TBM Sales responds to P-Value’s allegations on these particular issues by denying such allegations, save for its pleading not admitting the allegation that in August 2008, Thomas asked Nguyen whether she wanted to make an offer for the Property. Thomas admits that he sent an email to Nguyen on 1 July 2008 with an attachment and provided Nguyen with further information in relation to the Property on 4 July 2008 and that he also sent an email to Nguyen on 9 July 2008.

Pleadings – allocation of liability – apportionment – Third Defendant

In the Amended Defence and Counterclaim of the Third Defendant dated 28 August 2014, McNee contends that:

(a) P-Value’s claims against him are ‘apportionable claims’ under Part IVAA of the Wrongs Act 1958 (Vic) (‘Wrongs Act’);

(b) If (which he denies):

(x) P-Value suffered the loss or damage the subject of its claim; and

(xi) the third defendant is liable for causing any of that loss and damage –

then each of the first, second and fourth to seventh defendants is a person whose acts or omissions caused that loss or damage, for the reasons set out in the statement of claim; and

(c) pursuant to s 24AI(1) of the Wrongs Act, the third defendant’s liability is limited to an amount reflecting the proportion of the loss or damage that the Court considers just having regard to the extent of his responsibility for the loss or damage.

P-Value’s Reply to McNee’s Amended Defence and Counterclaim

In P-Value’s Reply to Third Defendant’s Amended Defence and Defence to Counterclaim dated 1 September 2014, P-Value responds that:

(a) the representations made by McNee on 5 September 2008 were made by him with no honest belief as to their truth because McNee knew at that time of the existence of the rent abatement agreement between 255 and the Vendors and also knew at that time that 255 had not paid rent and that 255 did not intend to pay rent for a period after completion;

(b) pursuant to s 13 of the Sale of Land Act 1962 (Vic) (Sale of Land Act), McNee is deemed to have made the representations he did with knowledge of their falsity;

(c) McNee’s failure to disclose;

(xii) the existence of the rent abatement agreement;

(xiii) that 255 had not paid rent at all under its lease;

(xiv) under the terms of the rent abatement agreement 255 would not pay rent for 8 or 12 months after the Property was sold;

was done intentionally to ensure that Nguyen was not aware of those matters;

(d) in the premises above, McNee’s conduct constituted fraud on Nguyen;

(e) pursuant to s 24AM of the Wrongs Act, McNee is jointly and severally liable for the damages awarded against any other defendant; and

(f) the third defendant may not rely on s 24AI(1) of the Wrongs Act to limit his liability.

P-Value made the same pleas in reply to the sixth and seventh defendants.[7]

[7]Reply to Sixth Defendant’s Amended Defence dated 25 October 2013 and Reply to Seventh Defendant’s Amended Defence dated 25 October 2013.

The detail of McNee’s counterclaim is dealt with below.

The plaintiff’s Reply pleadings which responded to the sixth and the seventh defendants’ Amended Defences both of 1 October 2013:

(a) Refer to representations pleaded at [21] of the plaintiff’s Statement of Claim attributable to Beller and Nucara and alleges that those representations were made with no honest belief as to their truth. The subject representations included the offer representation, namely that on 5 September 2008, Nucara stated that the auction had been cancelled because the vendors had received an offer of $5,920,000.

(b) Alleged against Beller and Nucara, the same matters outlined in sub-paragraphs (b), (c), (d), (e) and (f) of paragraph [31] above, and in addition the plaintiff alleges that the sixth and seventh defendants are in the premises excluded concurrent wrongdoers pursuant to s 87CC(1)(b) and (2) of the TPA and that Beller and Nucara cannot rely on the apportionment and statutory liability limitation claims pleaded in [41]-[44] of Beller and Nucara’s defences.

Apportionment Claims - Fourth, Fifth, Sixth and Seventh Defendants

The fourth to seventh defendants in their respective pleadings seek to rely on Part IVAA of the Wrongs Act and Part VIA of the TPA to establish that the misleading and deceptive conduct claims made by P-Value are an apportionable claim under the respective legislation and assert that if they have caused any of P-Value’s loss they should be entitled to an apportionment.

McNee also pleads a claim for apportionment against all other defendants pursuant to s 24AI(1) of the Wrongs Act.

The fourth and fifth defendants plead for apportionment against all other defendants (except each other) pursuant to s 87CB(2) of the TPA and s 24AF(2) of the Wrongs Act.

The sixth and seventh defendants, Beller and Nucara also plead for an apportionment against all other defendants (except each other) pursuant to s 87CD(1) and s 87CB(2) of the TPA and s 24AI and s 24AF(2) of the Wrongs Act.

Settlement of P-Value’s claims against the fourth and fifth defendants

By Order of the Court made 8 September 2014, P-Value’s claims against the fourth and fifth defendants were struck out. This came about as a result of a settlement between these parties. The settlement sum paid by the fourth and fifth defendants to P-Value was $20,000.

By subsequent Order of the Court made 9 September 2014, the fourth defendant’s Notice of Contribution against the first and second defendants dated 22 August 2014 was dismissed. The fourth and fifth defendants played no further part in the proceeding, despite the sixth and seventh defendants’ attempts to subpoena Thomas to give evidence. Despite the extended efforts of the sixth and seventh defendants, Thomas did not give evidence at trial.

There were no other contribution claims filed in the proceedings.

Notices to Admit

P-Value issued a Notice to Admit to the first defendant on 8 October 2013 with the following alleged facts:

1.Between 30 June 2008 and 5 September 2008 Two Five Five Pty Ltd (Two Five Five) made no payments of rent in respect of premises located on Level 1, 255 Chapel Street, Prahran (Level 1).
2.After 5 September 2008 Two Five Five made no payments of rent to the first or second defendants in respect of Level 1.

The first defendant did not file a notice of dispute. Accordingly, pursuant to Rule 35.03(2) of the Supreme Court (General Civil Procedure) Rules 2015 (the Rules), for the purpose of the proceeding only, it will be taken the first defendant admitted the above facts.

P-Value also issued a Notice to Admit to the third defendant on 8 October 2013 with the same set of alleged facts as above.

The third defendant did not file a notice of dispute. Accordingly, pursuant to Rule 35.03(2) of the Rules, for the purpose of the proceeding only, it will be taken the third defendant admitted the above facts.

P-Value also issued a Notice to Admit to the sixth and seventh defendants on 8 October 2013 with the following alleged facts:

1.Prior to 5 September 2008 there had been no offer to purchase the Property at 225 [sic] Chapel Street, Prahran (the Property) from the first and second defendants for the sum of $5,920,000.
2.On 5 September 2008 Nguyen Huong signed a contract (the contract) to purchase the Property from the first and second defendants for the sum of $5,925,000.
3.Prior to the signing of the contract there had been no offer to purchase the Property for the sum of $5,920,000.

By Notice of Dispute dated 21 October 2013, the sixth and seventh defendants disputed the third alleged fact contained in P-Value’s Notice to Admit of 8 October 2013. Accordingly, the sixth and seventh defendants admit the undisputed facts that:

(a) prior to 5 September 2008 there had been no offer to purchase the Property from the first and second defendants for the sum of $5,920,000;

(b) on 5 September 2008 Nguyen signed a contract to purchase the Property from the first and second defendants for the sum of $5,925,000.

Overview of Facts

The Vendors became the registered proprietors of the Property on 19 December 2007. The Vendors subsequently entered into lease agreements with three tenants for the Property:

(a) March 2008 - the front of the ground floor of the Property to 7/11 Stores for five years at commencing annual rent of $110,000;

(b) June 2008 – the rear of the ground floor of the Property to Balcony Nominees for three years at commencing annual rent of $60,000;

(c) June 2008 – the first floor of the Property to 255 for seven years at commencing annual rent of $200,000 plus GST.

On 25 June 2008 Beller was appointed by the Vendors as agents to sell the Property. At approximately the same time, Nguyen met with Thomas of TBM Sales and expressed an interest in the Property, which she had found for sale through the internet. Following on from this meeting in early July, Thomas provided Nguyen by email with details concerning the three tenancies of the Property. After Nguyen expressed concern about the rent payable by 255 and that no personal guarantees were provided, Thomas indicated that the Vendors were prepared to provide a $400,000 security deposit that could be drawn down in event of default by 255 on the lease and this could be included as a special condition of a Contract of Sale.

On 30 July 2008 the Vendors granted Beller exclusive auction authority for the sale of the Property at auction fixed for 5 September 2008. In the interim, Nguyen had sought finance for the potential purchase of the Property and in early September contacted Thomas and informed him she was still interested in the Property. Thomas informed Nguyen he could no longer deal with the Property because Beller was the exclusive agent.

On 3 September 2008, the Vendors, TBM Sales and Beller executed a written commission sharing agreement under which the Vendors would share any commission earned on a 50/50 basis.

On 5 September 2008, the day the Property was to be auctioned, Nguyen met Thomas at a café near the Property. There then followed negotiations in an office near the Property between Nguyen, Thomas, McNee and Nucara.

Although there is significant dispute between the parties about the conduct of those negotiations, including the surrounding circumstances and the timeframe within which they occurred, it is accepted that around midday at the TBM Sales office in Chapel Street, Prahran:

(a) a Contract of Sale was executed by Nguyen and McNee on behalf of the Vendors for the Property at the price of $5,925,000 plus GST;

(b) before execution, the Contract of Sale was amended to include a Special Condition 30 which provided for a security deposit of $200,000 for 2 years, which could be drawn down by the purchaser in the event of default of the lease by the tenant 255;

(c) Nucara confirmed that the Vendors already had an offer for the Property from another potential buyer;[8]
[8]T604.03-04.

(d) Nguyen raised her concerns about the first floor tenant being able to pay its rent;[9]

(e) McNee informed Nguyen that the tenant of the first floor of the Property was an experienced night club operator;[10]

(f) Nguyen was not informed of a rent abatement agreement which existed between the Vendors and 255.

[9]T605.07-12.

[10]T605.13-21.

After entering into the Contract of Sale, but prior to settlement in January 2009, Nguyen sought a valuation of the Property from Bernard Cussen (Cussen), Certified Practising Valuer of Charter Keck Cramer. Cussen informed Nguyen that she had paid above market price for the Property and provided her with the contact details of a solicitor. Nguyen gave evidence that although she contacted the solicitor she did not take it further because she had already paid the deposit and did not think she could get out of the contract.

On 9 December 2008 P-Value was incorporated. On 11 December 2008 Nguyen nominated P-Value as purchaser of the Property, as provided for under the Contract of Sale.

Prior to settlement of P-Value’s purchase of the Property on 15 January 2009, there were communications between the conveyancers for P-Value, IAC Conveyancing (IAC), and Schetzer Brott & Appel (SBA), acting for the Vendors. On 13 January 2009 Alan Storer (Storer), conveyancer of IAC, received an email from Phillip Nolan, solicitor of SBA, attaching a proposed guarantee deed relating to the $200,000 security deposit. A dispute arose between the parties to the Contract of Sale as to the terms of the proposed guarantee deed. This was resolved on the day of settlement. The resolution of this issue provided for a security deposit of $11,000 in respect of Balcony Nominees Pty Ltd and $200,000 in respect of 255, with any unused portion of the security deposit that applied to 255 (including any accrued interest) to be retained absolutely by the purchaser.[11]
[11]CB635-636; CB639.

The transaction for the purchase of the Property was completed by P-Value on 15 January 2009 using funds borrowed from ANZ Bank in accordance with a letter of offer dated 15 January 2009.

Following settlement, 255 did not pay rent to P-Value as required by the written lease. Instead, in various emails sent by Joe Cossari (Cossari) and Victor Smith (Smith) of 255, it was contended that the security deposit of $200,000 consisted of the security bond for the lease with the remaining funds of $136,000 being advanced rents to be drawn down by P-Value. In an email of 16 May 2009 it was contended that no rent would be due until 1 October 2009.

On 9 June 2009, P-Value commenced proceedings in the County Court against 255 for arrears of rent.[12] Following default of appearance by 255 at a directions hearings on 29 January 2010 and 12 February 2010, an order was made to strike out the defendant’s Amended Defence and Counterclaim and for the defendant’s Counterclaim to be dismissed.[13] Judgment in default of appearance was obtained against 255 and was entered by the County Court on 19 February 2010[14] and shortly thereafter a statutory demand was made for payment of that judgment debt.[15] Subsequently, 255’s lease was terminated by re-entry on 5 May 2010. On 28 April 2010, 255 made application to set aside the 19 February 2010 default judgment, which was dismissed by the County Court on 21 May 2010 .[16] On 25 May 2010, 255 went into liquidation.
[12]CB650.
[13]CB705; CB716.
[14]County Court orders at CB705 and CB716.
[15]CB717; CB719.
[16]CB739; CB796.

Nguyen’s evidence in chief
Nguyen interested in purchasing a commercial property in Chapel Street, Prahran

Nguyen’s evidence was that in 2008 she commenced to look for properties to purchase in Chapel Street, Prahran in Victoria. Nguyen was familiar with that area having purchased a commercial property at 276-278 Chapel Street, Prahran in 1996. That property, now owned by Nguyen, is tenanted by the Commonwealth Bank.

In 2008 Nguyen searched the web and identified a Property which was for sale at 255 Chapel Street. Advertisements for the Property indicated that a real estate organisation known as ‘TBM Sales’ was the Estate Agent for the Property. The web advertisement for 255 Chapel Street, Prahran also noted that Thomas was the TBM Sales contact for that Property.

In about late June 2008 Nguyen met with Thomas and Morley at 255 Chapel Street, Prahran. Nguyen understood from communications she had with Thomas and Morley at about this time that Morley was Thomas’ ‘boss’ at TBM Sales. Thomas conducted an inspection of 255 Chapel Street, Prahran with Nguyen. During the course of that inspection of the Property, Nguyen asked Thomas how much rent was being paid for the Property and Thomas stated to Nguyen that there were three tenants and in total they were paying $370,000 per annum. Specifically ‘7-Eleven’, the ground floor tenant, was paying $110,000 per annum and the first floor tenants paying $200,000 with a further office space producing $60,000, plus GST.[17]
[17]T142.18-27.

Nguyen, either at the time of her inspection with Thomas and Morley in late June 2008, or shortly afterwards, asked Thomas for more information about the rent being received for the Property.

On 1 July 2008 Thomas sent an email to Nguyen detailing rental agreements for the three tenancies at the Property.[18] Nguyen also asked Thomas to send her a copy of the proposed Contract of Sale, which Thomas did on 4 July 2008.[19]
[18]CB260-261.
[19]CB262-263.

Nguyen’s evidence was that she read through the materials which Thomas had sent her in early July 2008 and identified that 7-Eleven, one of the tenants, was in her view likely to be unproblematic in relation to rent. However, on looking at the materials sent, Nguyen did harbour a concern about the first floor tenant of the Property which was running a nightclub business, given the very large amount of rent that was being paid by the tenant, 255.[20] On reviewing the documents which she had received, Nguyen also noted that there was no personal guarantee provided by 255 or security deposit to secure rent.[21]
[20]T143.24-29.
[21]T144.01-09.

As a result of her concerns about rental income and the extent of rental income being paid by the nightclub on level one of the Property, and her concerns about the absence of a security deposit or personal guarantee in relation to rent from the first floor tenant, Nguyen contacted Thomas by telephone and stated that she needed $400,000 as a bond for the ‘rental upstairs’. Thomas responded that he would talk to the Vendors and get back to her.[22]
[22]T144.22-29.

Subsequently, via Thomas, TBM Sales emailed a proposed ‘Special Condition’ to Nguyen on 9 July 2008.[23]
[23]CB264-265.

Subsequently in July 2008,[24] Thomas introduced Nguyen to Nathan Stewart for the purposes of obtaining finance for the purchase of the Property.
[24]CB262, T146.03-05.

Nguyen also contacted the National Australia Bank (NAB) about finance for the Property and that bank indicated she would be able to obtain the necessary finance.[25]
[25]T145.22-146.02.

Nguyen gave evidence that, in about July 2008, she had made no decisions about the Property at 255 Chapel Street, Prahran. At about this time Thomas approached Nguyen and asked if he could act on her behalf and deal with the Commonwealth Bank in relation to the rent review for 276-278 Chapel Street, Prahran.[26]
[26]T146.27-147.04.

Nguyen explained that during the period July to September 2008, Nguyen had been in Chapel Street, Prahran and noticed that an auction board had been placed on the Property. She also noticed that the agent identified on that notice board was ‘Beller’, the sixth defendant. The same board advised that Nucara, the seventh defendant, was the contact person at Beller. After seeing the auction board Nguyen had made no decision as to whether she would purchase the Property and was focused on preparing to undertake a rent review of the earlier purchased property at 276-278 Chapel Street, Prahran

On 4 September 2008 Thomas telephoned Nguyen and asked her whether she wanted to make an offer for the Property. Nguyen responded that she did not wish to do so but wanted to wait for the auction of the Property. In that conversation Thomas also suggested that Nguyen make an offer in the order of $5,000,000 for the Property. However Nguyen stated that she was not going to make any offers.[27]
[27]T147.09-19.

Meeting at TBM Sales office on 5 September 2008

On 5 September 2008 Nguyen planned to attend the auction of 255 Chapel Street, Prahran after she had finished a separate meeting nearby in Chapel Street in relation to the review of rent at 276-278 Chapel Street.

On the morning of 5 September 2008, Nguyen met with Damien of the Commonwealth Bank to discuss issues concerning her Property at 276-278 Chapel Street, Prahran. The coffee shop at which they met was only about 100 metres from the Property. Thomas was also present at this meeting.

After the conclusion of the meeting in the coffee shop between Damien, Thomas and Nguyen, Thomas suggested he take Nguyen to the TBM Sales office which was on the first floor of a building opposite 255 Chapel Street, Prahran. Thomas suggested to Nguyen that she remain at the TBM office until the auction was about to start, at which time they would then go down to watch the auction.[28] From the TBM offices, Nguyen could see across the road to the Property and she could see people whom she thought were from the selling agent preparing for the auction, including putting up materials on the table at the Property. At about this time Nguyen also observed that the people in the vicinity of 255 Chapel Street appeared to be packing up the auction materials. Nguyen asked Thomas “what’s going on?”. Thomas said he did not know but left the TBM Sales room and returned to inform Nguyen that “the auction is cancelled”.[29]
[28]T148.22-29.
[29]T149.11-16.

After that Nguyen’s evidence was that Nucara of Beller, the sixth defendant, and McNee, sole director of the second defendant, came into the same room in the TBM Sales office and joined her and Thomas. Nguyen did not know McNee.

Nguyen described what occurred on 5 September 2008 in the TBM Sales office opposite the Property, from about 10.45am that morning as follows:

Can you just describe step by step the conversations and what was said at this point when the people came into the room?---Yes, when Fred come in to the room and he said he has someone offer 5.90 million.
HIS HONOUR: How much?---5,920,000.
He has an offer for that amount?---Yes. Then he said if I'm interested I can offer more. Then I had asked Richard Thomas for the calculator to see if 5.920 is the yield comparing with the rental return, 370,000. And after I calculated I - - -
MR NORTHROP: What calculation did you do? What was the result of the calculation?---I just calculate if you invest million and the return is 60,000 or something like that, so the yield will be 6 per cent. So if it is over 6 per cent it would be all right.
The calculation that you made for the price of 5.92, do you recall what the rental yield was as you calculated?---Yes. I couldn't remember exactly, but it's 6 point something, 18 or something like that. I couldn't remember exactly now. But it was over 6 per cent return.
HIS HONOUR: On a total rental of how much?---370,000.
MR NORTHROP: So you have just described making that calculation. After you made that calculation, what happened next?---After I make the calculation and then I said, "Yes, all right, it's over 6 per cent. It's all right." But I concerned about the tenant upstairs, as I mentioned with Richard Thomas in previous - in July.
I said about that one. And then - - -
HIS HONOUR: Just pause there, Mrs Nguyen. When you said you said about that one who were you speaking to?---Speaking to Richard Thomas, because he's the one who written the special condition through the email to me regarding 400,000.
Was there anyone else in that conversation?---Yes, Bill McNee and Fred Nucara.
To both McNee and Nucara were involved in this conversation, were they?---Yes.
So just take it slowly and be sure to say who is speaking and who you are speaking to and who is there. So just proceed, Mrs Nguyen?---Yes. When I asking about 400,000 for the Two Five Five as the tenant at that time then Bill McNee said to Richard and said, "Oh, is that the lady you're talking about?" And Richard said, "Yes, she is." Then Bill McNee pointed on the picture on the wall, that's Balcony Nominees, the nightclub operated I think in Melbourne. I couldn't remember the street. I think Little Collins or somewhere like that. He said, "The tenant is - you don't worry about the tenant. They are experienced in operating the nightclub. So don't worry about that." Then Fred Nucara told me, "Why you need 400,000 for? They are good payer." And then he pointed out to the advertising board here. He said I could get money from this advertising board - - -
Who said that?---Fred Nucara. So he said I could have some more income from rent for advertising.
Using the building to post advertising of some sort?---That's right.
MR NORTHROP: Was he referring to the advertising board that you can see in that photo or a different one?---Sorry, this one, yes. Bill McNee said to me Two Five Five was a good tenant - sorry, I don't have any worry about them.
HIS HONOUR: Who said that?---Bill McNee.
What did he say?---He said, "You don't have any problem with the tenants because they have experience in running the nightclub very successfully." And Fred Nucara told me the tenant was a good payer and I may have - I will get more rent from the board, advertising board. That make me happier. I decided to reduce from 400,000 to 200,000.
MR NORTHROP: Can you say who it was that first mentioned the figure of $200,000 as the security bond?---Fred Nucara said 200,000 should be enough instead of 400.
Did you agree to that?---After a while, yes, I did agree with that.
So you have just described having discussions about the security, the amount of the security bond, and so forth.
What happened then as far as discussions with the - - -?---After that, Richard Thomas is the one who wrote the condition on the contract book.
Were there discussions about price?---Oh, sorry. Yes, after that all that information, things like that, I make another offer is extra another 5,000 on top of it. So it becomes 9,225,000.
HIS HONOUR: Just state that figure again, please?---5,925,000.
So you made a further offer of that amount?---Yes, 5,000.
In the same conversation with the same three men?---Yes.
Who were you speaking to when you made the offer?---I spoken to - Richard Thomas is the one who always speak with me at that time, and then Richard Thomas went out and talked with McNee and then for a while after that they come in and agree with the price.
Who was it who agreed with the price?---Bill McNee.
MR NORTHROP: Why did you offer that particular figure of - - -?---Because Fred said someone had already offered 5,920,000. So in my experience in the last previous auction so normally you will put another 5,000. So that's why I offered another 5,000.
Just returning to McNee, you were told that the price was accepted. What happened after that?---After Bill McNee accepting the offer, then he asked Richard Thomas to write the condition on the contract.
And did he do that?---Yes, he did.
HIS HONOUR: The condition to do with the 200,000?---Yes.
MR NORTHROP: If you could go, please, to page 371, which is in the first volume. You see there's some handwriting there?---Yes.
To your recollection, do you recognise that writing or who wrote it?---Yes, it's Richard Thomas.
Can you say were you present when that was written? Did you see him write it?---Yes, I saw him write it.
And who else was - and was this in the same room upstairs?---Yes.
And who else was there when he was writing the clause, do you remember?---I can't remember. A number of people in there. I can't remember exactly, but it was Bill McNee after that signed the contract - signed the condition.[30]

[30]T150.01-153.31.

Nguyen’s above evidence that McNee signed the “condition” was a reference to Special Condition 30 of the Contract of Sale[31] which provided:

The Vendor shall at settlement pay to the Purchaser the sum of $200,000.00 being a security deposit over the tenancy Two Five Five Pty Ltd to be held for a period of 2 years from settlement date which can be drawn by the Purchaser at any time if the tenant is in default of the Lease. At the expiry of two years if the tenant has not been in default then $200,000.00 shall be refunded to the Vendor.

[31]CB357; CB360; CB371; T153.19-155.12.

Nguyen signed a Contract of Sale for the Property on 5 September 2008 within about an hour of her being taken to the TBM Sales office in Chapel Street opposite the Property.[32]
[32]T155.30-156.2.

At the time of signing the Contract of Sale, Nguyen mentioned to McNee and Nucara that she was not able to pay the required deposit then and there because she did not have a cheque book with her.

Nguyen’s evidence was that she was not focused on the auction of 255 Chapel Street, Prahran on 5 September 2008 and that is why she did not have a cheque book with her at the time of the auction.[33] So as to ensure the deposit for the purchase for the Property was paid immediately, at Nguyen’s suggestion, she returned home with Thomas following her, and on arriving at her home made out a cheque for the required deposit for 255 Chapel Street, Prahran and provided it to Thomas. Nguyen stated to Thomas at this time that she did not have sufficient money in her account to cover the cheque which she had provided to him and that she would organise for an electronic transfer.[34] Subsequently, on 9 September 2008 NAB transferred the deposit for 255 Chapel Street, Prahran from Nguyen’s account to the account of SBA.[35]
[33]T155.15-18.
[34]T155.30-156.09.
[35]CB518.

After the purchase – Nguyen concerned about the purchase price

Shortly after 9 September 2008, Nguyen took steps to organise finance for the purchase of 255 Chapel Street, Prahran. In this process the valuer at an organisation called Charter Keck Cramer, Cussen, whom Nguyen had earlier engaged to review rental at her other Chapel Street Property, was contacted and when told the price that Nguyen had paid for 255 Chapel Street, Cussen informed Nguyen that she had paid too much for the Property. She mentioned to him that she had already paid the deposit and asked him what she could do. Cussen gave Nguyen a contact number for a solicitor whom she could consult.[36]
[36]T159.17-31.

Nguyen’s evidence was that although very soon after signing the contract she gave consideration to whether she could ‘get out of the contract’, because she had a valuer saying she had paid too much, she did not follow up with the solicitor recommended to her and instead contacted a conveyancing assistant, Storer, to organise the finalisation of the purchase of the Property.[37]
[37]T159.24-160.16.

Nguyen’s evidence was that she did not pursue seeking advice about getting out of the contract because she had already paid a 10% deposit.[38] In fact the deposit paid was $300,000.[39]
[38]T160.5-11.
[39]T204.16-19; T277.

Nguyen’s evidence was that because of the potential impost of land tax ‘P-Value Pty Ltd’ was incorporated and became the trustee company of her family’s family trust which had earlier operated the Nguyen family business.[40] On 11 December 2008, Nguyen formally nominated P-Value Pty Ltd as purchaser under the Contract of Sale from Vicland No. 1 and Vicland No. 2.[41]
[40]T160.17-27.
[41]CB592.

The Contract of Sale for the purchase of 255 Chapel Street was settled on 15 January 2009.[42]
[42]CB635-637; CB639.

P-Value’s dispute with the tenant 255

Nguyen explained that a dispute arose in relation to the conveyance. At the time of signing the contract, Nguyen was of the understanding that there was a sum of $61,000 by way of a security deposit and a further sum of $200,000 as additional security in respect of rental. However, as Nguyen understood the finalisation of the conveyancing transaction only $200,000 of security was in effect provided.[43]
[43]T162.23-31.

By February 2009, P-Value was communicating with the tenant operating a nightclub on the first floor level of the newly purchased premises at 255 Chapel Street, Prahran, a business called ‘White Charlie’ which appeared to be operated by Cossari.[44] Nguyen’s evidence was that as early as February 2009 P-Value was not being paid any rental by the first floor nightclub tenant of the Property.[45]
[44]T168.
[45]T169.

Indeed, in February and March of 2009 the operators of the nightclub on level one of 255 Chapel Street were advising P-Value that it had been paid $200,000 in advance for rent and bonds.[46] Nguyen and P-Value knew nothing of any such position or arrangement.[47]
[46]CB642-647.
[47]T169.11-13.

In discussions Nguyen had, on behalf of P-Value, in about early February 2009 with Cossari and Smith of the nightclub tenant, Cossari was contending that the nightclub had already paid $200,000 in advance for rent and Nguyen was responding that she wanted to be paid her rent and that the $200,000 was bond money and not by way of payment in advance for rent.[48]
[48]T169.25-31.

Nguyen’s evidence in relation to the rental receipts at the Property was that the ground floor tenant 7-Eleven paid its rental and has continued to do so,[49] the level one tenant 255 paid no rent to P-Value whatsoever after settlement,[50] and the ground floor tenant of the office area, Balcony Nominees Pty Ltd, paid P-Value 2 months’ rent after settlement on 15 January 2009 and no rent thereafter.[51]
[49]T174.14-17.
[50]T174.22-36.
[51]T174.18-19.

Furthermore, although unknown to Nguyen at the time she contracted to purchase 255 Chapel Street, Prahran, the first floor tenant at that premises, 255 had not paid any rent for any period of occupation before 5 September 2008.[52]
[52]T174.22-36.

Nguyen’s evidence was that if she had been told that the first floor tenant, 255, had paid no rent prior to 5 September 2008, she would not have purchased the Property.[53]
[53]T174.22-31.

Furthermore, Nguyen was not informed that 255 paid no rent in respect of the first floor lease of the Property between September 2008 and January 2009. Nguyen’s evidence was that if she had known that fact it would also have affected her decision to go ahead with the purchase of the Property and she would not have bought it.[54]
[54]T175.05-11.

Nguyen was also asked if she had been aware that there had been some arrangement about 255 not having to pay rent for a period after she had purchased the Property would the Property have been purchased by her. Nguyen answered unequivocally that it would not have been purchased.[55]
[55]T175.12-14.

This I interpolate was clearly a reference to the rental abatement agreement between the Vendors and 255 which the first defendant Vendor admits by [14] of its Defence.

I depart from Nguyen’s evidence to note that McNee, in an unusual pleading in my view, admits the fact of the existence of “a rental abatement agreement” in relation to the 255 lease at the Property, pleading that “... if P-Value is not estopped ...” (I add by way of explanation, estopped it is asserted by P-Value’s action in the County Court seeking to recover rent from the tenant 255) “... then the third defendant: admits that pursuant to a rent abatement agreement ...” between the Vendors with 255, the tenant 255 would not have to pay any rent while the Vendors were the owners of the Property.[56]
[56]Fourth defendant’s Amended Defence and Counterclaim, 28 August 2014, [14(c)(i)]; McNee’s evidence was that the rent abatement period extended for a year from settlement of a sale by the Vendors (CB804.19–806.09).

By [14(c)(iii)] of his Defence McNee pleads that if P-Value is not estopped as explained above, then he admits that the rent abatement agreement contained a term to the effect that the Vendors would, following completion of any contract of sale of the Property by the Vendors, pay $200,000 to the purchasers of the Property to be applied in payment of the $61,000 security payable under the lease and otherwise toward the rent payable in the period following completion.

Evidence of Fred Robert Nucara

Nucara gave evidence that he was employed as a commercial real estate agent and had acted as a real estate agent for some 20 years. Nucara is a director of Wellara Holdings Pty Ltd which trades as Beller.[57]
[57]T587.19-20.

Nucara gave evidence that prior to the sale of 255 Chapel Street, Prahran and the transaction in relation to that Property he had not been instructed as a real estate agent by McNee nor was he instructed by Andrew Clifton or any company owned or operated by McNee or Clifton.[58] However, Nucara knew of the existence of McNee and Clifton. In about mid-June 2008, McNee was communicating with Nucara in relation to Nucara acting for him in respect of the sale of 255 Chapel Street.[59]
[58]T588.09-13.
[59]CB245-255; T590.11-12; T591.17-18.

On 25 June 2008, Vicland appointed Beller as its agents to sell 255 Chapel Street, Prahran, by way of an exclusive sale authority.[60] An exclusive auction authority was signed by Vicland on 30 July 2008 to engage Beller as its agent to auction 255 Chapel Street.[61]
[60]CB248.
[61]CB267; T592.05-08.

In July 2008 Nucara was not aware of ongoing negotiations between Thomas and Nguyen in relation to 255 Chapel Street, Prahran.[62]
[62]T592.21-25.

In the first week of August 2008, Nucara met with McNee at 255 Chapel Street to inspect the Property which by then was scheduled for auction on 5 September 2008.

McNee authorised the advertising brochure for the sale of 255 Chapel Street, Prahran.[63] An investment report was also prepared by Beller in relation to 255 Chapel Street, Prahran and that investment report was reviewed by McNee and he had no issues with what Beller had prepared.[64] McNee approved all advertising material and the investment report.[65]
[63]CB258-259; T594.28-30.
[64]CB843; T595.04-15.
[65]T595.23-26.

On 12 August 2008, Nucara received a copy of a letter which had come from the Vendor’s solicitors, enclosing the contracts of sale and the Vendor’s statement.[66]
[66]CB280; T595.27-31.

Beller’s records of persons who were interested in 255 Chapel Street, Prahran and who had inspected the Property did not recall Nguyen as a person interested or who had inspected the Property.[67]
[67]CB284-286; T596.05-10.

On 3 September 2008, Beller and TBM Sales entered into a commission sharing agreement in relation to the Property on a 50/50 basis and an amended sale authority was executed.[68]
[68]CB293-294.

Nucara gave evidence that the commission sharing agreement came about because McNee contacted Beller and informed Nucara that another agent had a potential buyer for the Property and that he McNee considered that this buyer ‘could perform on the day’ and therefore McNee wanted Beller to consider sharing its commission with the other agent.[69] McNee informed Nucara that the other agent was Richard Thomas of TBM Sales.
[69]T596.29-597.04.

Nucara gave evidence that he had seen the offer to purchase the Property signed by Mr Jialin Hu (Hu) dated 4 September 2008.[70] Nucara gave evidence that Hu had been dealing with James Rawson of Beller and that Hu had indicated to James Rawson that he did not like attending auctions but would like to make an offer on 255 Chapel Street prior to the auction which was due to take place on 5 September 2008. Hu came to Beller’s office at 92 Chapel Street, Prahran and met with Nucara and at that meeting signed the offer on 4 September 2008 in Nucara’s presence and the presence of another person. Nucara also confirmed that Hu’s offer was an offer made as part of documents which contained a special condition that read ‘this contract terminates if not signed by the Vendor by 10.00 pm on 4 September 2008’.[71]
[70]CB296.
[71]CB311; T597.27-598.28.

Nucara’s evidence was that he promptly informed McNee of Hu’s offer of 4 September 2008 and that McNee responded that he would get back to Nucara about his position on that offer. McNee did revert to Nucara on the evening of 4 September 2008 and told Nucara that he did not wish to accept Hu’s offer but wanted the Property to go to auction the next day.[72]
[72]T599.06-24.

Thereafter Nucara communicated with Hu telling him that his offer was unsuccessful and the auction would be proceeding and suggesting that Hu attend the auction the next day.[73]
[73]T599.25-28.

Nucara stated that Beller had started its operations in about December 2007 and that the 255 Chapel Street, Prahran auction was the agency’s first significant transaction and an opportunity for Beller to show the market that it had arrived.[74]
[74]T599.29-31; T600.12-17.

At the pre-auction meeting on 5 September 2008, Nucara’s evidence was that at the point when Thomas brought Nguyen to the first floor office of TBM Sales, those present in the room were Thomas, Nguyen, Nucara, McNee and also Andrew Fawell and Andrew Clifton who, Nucara stated went in and out of the room from time to time.

Nucara’s evidence was that upon Nguyen entering the room with Thomas, he greeted Nguyen by saying ‘it’s been a long time since I’ve seen you’ and she greeted him.[75]
[75]T603.15-24.

Nucara’s evidence was that apart from the meeting which he had with Nguyen on 5 September 2008 he did not have any other face to face conversation with Nguyen about the Property.[76]
[76]T603.31-604.02.

Nucara’s evidence was that McNee said at the meeting that he had already received an offer on the Property, which Nucara confirmed and added that we are in possession of a signed contract, but did not disclose the contract price.[77] Nucara denied Nguyen’s evidence that at this meeting he had told her that the previous contract was for $5.92 million.[78] Nucara also refuted Nguyen’s evidence that Thomas had told her that the auction had been cancelled.[79] Nucara’s evidence was that the auction was cancelled when the Vendor agreed a price for the Property and the terms of sale for the Property.[80]
[77]T604.03-06.
[78]T604.15-17.
[79]T604.18-20.
[80]T604.21-23.

Nucara’s evidence was also that during the early part of the discussion and negotiation, McNee stood up in the meeting room and said ‘look, I want $6 million’.[81] Nucara’s evidence was also that at this point Nguyen said that she was concerned about the first floor tenant and their ability to survive and pay the rent.[82]
[81]T604.32-605.01.
[82]T605.07-12.

Nucara also stated that at the meeting McNee said to those present that the nightclub tenant on the first floor had another nightclub business in the CBD and they were experienced operators.[83] Nucara’s evidence was that McNee then left the meeting saying ‘I’ll let you decide’.[84]
[83]T605.11-21.
[84]T605.20-21.

Nucara’s evidence was that he said nothing to Nguyen about the first floor tenant and Nucara denied that he stated to Nguyen that the first floor nightclub tenant was a good tenant or that it was a good payer of rent.[85]
[85]T605.24-31.

Nucara’s evidence also was that at about 11.45am on 5 September 2008, during the course of the discussion at the TBM Sales office he looked out the window to the Property and saw a number of people milling around including Hu and that shortly after Andrew Fawell, one of the real estate agents involved in the auction on Chapel Street, came up to the TBM Sales office where discussions were taking place and asked what was going on to which Nucara said we are in discussion and Fawell left.[86]
[86]T606.12-25.

In the meeting Nucara stated that he recalled Thomas suggesting to Nguyen that she should consider asking for a higher security deposit and Nguyen asked Nucara his views on her seeking a security deposit of one year’s rent of about $200,000 because of her concerns about the first floor tenant, its survival and its ability to pay rent. Nucara responded in substance that he thought the security deposit of $200,000 would be fair enough to which Nucara says Nguyen responded that she would have to have something in the contract.[87]
[87]T606.26-607.10.

Nucara then says there was discussion about drafting a clause in the contract for a $200,000 security deposit and McNee who was involved in this conversation said that before he agreed to anything he would like to know what price Nguyen was offering again saying that if he did not get $6 million he was going to go out to auction.[88] Nucara said he said directly to Nguyen that if she did not pay the price mentioned by McNee, he will be going to auction.[89]
[88]T607.23-608.07.
[89]T608.08-09.

Nucara’s evidence was that at about five minutes before the time fixed for the auction of the Property Andrew Fawell again came up from Chapel Street in an anxious state asking what was going on and Nucara responded that he would have to buy some time and that he did not have instructions as to whether the auction was going on or not.[90] Nucara stated that after his discussion with Fawell he returned to the negotiating table where Nguyen was discussing matters with Thomas and Thomas reported to him that Nguyen would pay $5,900,000 with a $200,000 security deposit. This was said in the presence of all in the negotiating room including Nguyen.[91]
[90]T608.10-17.
[91]T608.22-26.

Nucara then stated that at the next stage of the meeting in the TBM Sales office he and Thomas discussed what special clause should be inserted in relation to the $200,000 security deposit and McNee spoke to his solicitor and those discussions and Nucara’s drafting suggestions resulted in the clause ultimately inserted in the contract which was handwritten, the first two lines being written by Thomas and the rest of the handwritten clause by Nucara.[92]
[92]T609.02-610.02.

Nucara’s evidence is that after further negotiation in which McNee said that he would reduce his asking price to $5,950,000 and Nguyen asking McNee whether he would meet her half way and after a short discussion between Nguyen and Thomas writing a price of $5,925,000 on the Contract of Sale and showing it to McNee, McNee accepted that figure as the agreed purchase price.[93]
[93]T610.17-611.10.

Nucara says that after the price of $5,925,000 was agreed between McNee and Nguyen, Fawell returned to the room asking what was going on and McNee informed him that the auction is cancelled as the Property is sold.[94] Shortly afterwards Nucara says that McNee and Nguyen agreed that there would be only a 5 percent deposit on the Contract of Sale and the parties also agreed on a four month period to settlement.[95]
[94]T611.16-22.
[95]T611.23-612.09.

Nucara’s evidence was that up until the point of execution of the Contract of Sale for the Property on 5 September 2008, he was not aware of any agreement between McNee and 255 that 255 would not have to pay rent while McNee owned the Property or after McNee sold the Property.[96] Nucara said he was not aware of the rental abatement agreement until after P-Value’s proceedings had been issued.[97]
[96]T612.31-613.02.
[97]T613.06-08.

Cross-examination of Nguyen and submissions challenging Nguyen’s evidence

The third defendant submits that the evidence of Nguyen in relation to the misrepresentations which she alleges must be considered against the background of Nguyen’s capacity as a sophisticated, prospective purchaser of commercial real estate. I accept the submission by the third defendant which was also advanced by the sixth and seventh defendants.

I do not however accept the submission by McNee that Nguyen’s evidence, which may have suggested that she did not know she could have pressed for more information about tenants of the Property or obtained a valuation of the Property before signing the contract, should not be accepted because of her commercial experience. In my view the team of selling agents who dealt with Nguyen on the morning of 5 September 2008 in the TBM Sales office created a context in which it was reasonable for Nguyen to have considered that there was some urgency to securing the Property if she wished to purchase it and that it was impractical to make further inquiries or undertake further investigations at that time. This is principally because on the morning of 5 September 2008 Nguyen had been told that during the meeting with a number of real estate agents including Thomas and Nucara and also with McNee present, Nucara stated that someone had offered $5.920 million for the Property.

McNee also submits that Nguyen gave several versions of events and the sequence of events that transpired on 5 September 2008. The submission goes further and contends that most of those versions were inconsistent with the case pleaded against the third defendant. McNee submits that, in examination in chief, Nguyen said that she was not interested in purchasing the Property or making an offer for or bid at the auction for the Property until a short time before the auction, which is inconsistent with Nguyen’s earlier actions seeking detailed information about the tenants in the Property and that she had obtained and partially read the leases referred to in the sales documentation.

I accept Nguyen’s evidence that she was not particularly interested in buying the Property at or before the auction.[98] I accept Nguyen’s state of mind was that on 5 September 2008 until sometime during the meeting she was taken to at the TBM Sales office she was not focused on the auction of the Property which was to occur on 5 September 2008 and that is why she did not bring her cheque book with her to the meeting with Damien and Thomas to discuss the review of the rental from 276-278 Chapel Street, Prahran.
[98]T147.11-19; T155.15-22.

I am unpersuaded that the peripheral details of the events and conversations recounted by Nguyen and referred to in paragraph 30(a)-(r) and 31(a)-(m) of McNee’s written closing submissions point to anything other then what I regard as minor, inconsequential and understandable inconsistency in Nguyen’s evidence. I accept P-Value’s submission that on the morning of 5 September 2008, Nguyen was unexpectedly involved in discussions and negotiations in which at least five other people were present at various stages, possibly more, and in respect of which she does not suggest she has a perfect recollection but rather is able to give firm and unequivocal evidence about those matters of significance to her which were discussed and in particular which were stated to her.[99]
[99]T190.20-26; T203.03-09.

I accept as submitted by McNee that Nguyen:

(xv) conceded that McNee did not say that the tenant was a “good tenant” but said he did say “you don’t have any problem with them”;[100]
[100]T191.

(xvi) stated that the two persons (probably Nucara and McNee) joined in all three statements about the tenant of the first floor – “they was good tenant, good payment, you don’t have any problem because they have experience in running the nightclub”;[101]
[101]T193.

(xvii) stated that when Nucara spoke to her about the offer of $5.92m, and if she were interested she could offer more, and she mentioned her concerns about the upstairs tenant and asking $400,000 for security, McNee said to Thomas, “Oh is that the lady you’re talking about” and Thomas said “yes, she is”;[102]
[102]T266.

(xviii) stated after the conversation in (iii) above, she said McNee pointed to the picture on the wall and said, “you don’t have any problem with the tenants because they run the Balcony Nominees in Melbourne, it’s very successful”;[103]
[103]T267.

(xix) stated that she was not sure whether or not McNee was in the room when Nucara is said to have told her about the $5.920 million offer.[104]
[104]T270.

In my view, however, Nguyen’s evidence relied upon in sub-paragraph (v) above is general and related to the possibility that McNee was absent from the TBM Sales meeting room on more than one occasion and should therefore be given little weight. I also take into account in this regard that in a number of passages of her evidence, including at T269.10-30, Nguyen confirmed that McNee was in the meeting room when she was told about the cancelled auction and the $5,920,000 offer of another interested party.

Nucara’s evidence was also to the effect that McNee was involved in the 5 September 2008 meeting at the time there was mention of a prior offer for the property, although his evidence was that McNee proffered this information and that no sum was mentioned.[105] Nucara’s evidence was that he, McNee, Nguyen and Thomas were all in the TBM Sales Office together on the morning of 5 September 2008.[106]

In my view, although there was some equivocation at one point in Nguyen’s evidence about McNee’s presence when Nucara made the offer representation in relation to the sum of $5,920,000, I am comfortably satisfied on the predominance of the evidence given by Nguyen, confirmed by Nucara in these respects, McNee was present at the TBM Office together with Nguyen and with Thomas when the representation about the $5,920,000 offer was made by Nucara, and that the offer representation was made by Nucara very soon after all those persons were present in the TBM Office.

I am therefore comfortably satisfied that McNee was present when an offer for $5,920,000 to the Vendors was mentioned by Nucara to Nguyen and more specifically McNee heard Nucara state that there had been an offer of $5,920,000 for the Property.

[105]T604.03-06.

[106]T603.15-30; T620.09-13; T646.01-10; T649.19-27.

I do not accept McNee’s submission that Nguyen’s evidence taken as a whole should be considered to be unreliable and probably the result of unconscious reconstruction and that her evidence should not be accepted given the evidence to the contrary from Nucara. Nor do I accept McNee’s submission that Nucara withstood vigorous cross-examination without his credit being adversely affected, for reasons I will deal with below.

McNee also submits that Nguyen’s evidence conveys that little can be attributed to what was done or said by Thomas at the meeting of 5 September 2008. McNee submits that Nguyen’s evidence in relation to the extent of Thomas’s involvement in the critical aspects of that meeting defy a common experience in relation to real estate agents or common sense. McNee submits that Thomas can be taken to have been eager to secure a sale to ‘his purchaser’ so that he could claim his commission given that he (not Beller) was the person who introduced Nguyen as a potential purchaser of the Property. McNee also submits that when considering Nguyen’s evidence I should take notice of the fact that P-Value has settled with Thomas and his employer and that this occurred prior to Nguyen giving evidence, and finally that the all earned sum for which P-Value settled with Thomas is in McNee’s submission insignificant in the context of P-Value’s claim in this proceeding.

I reject the submissions made by McNee in the last preceding paragraph. In my view the evidence given by Nguyen in relation to Thomas’s involvement in the meeting of 5 September 2008 does not convey an attempt by Nguyen to minimise his significance. Her evidence was that Thomas was not seen by her at this stage as an advisor. Nguyen regards Thomas simply as a real estate agent who provided her with sales information which she requested. Further, Nguyen emphasised on a number of occasions that she had not intended to purchase 255 Chapel Street until she was in the meeting in the TBM Sales office at Chapel Street on 5 September 2008. Therefore in my view Nguyen placed no critical reliance on the communications by TBM Sales and Thomas received in the lead up to the auction. Nguyen in substance confirmed this position during her cross-examination.[107]
[107]T179-180.

I also reject the submissions because, as for the reasons I have elsewhere explained and for the reasons to which I have referred, save in relation to Nucara’s evidence about who wrote out Special Condition 30, I accept Nguyen’s evidence in all key and significant respects and reject Nucara’s evidence where it is contradictory.

I also reject the sixth and seventh defendants’ criticisms of what they contend are the faults and inconsistency and errors in Nguyen’s evidence, all of which I also consider to be minor and insignificant. The sixth and seventh defendants asserted faults, errors and peculiarities in relation to Nguyen’s evidence referred to in the sixth and seventh defendants’ closing written submissions [26]-[40] concerning the events of 5 September 2008 are all in my view inconsequential and do not in any substantial way undermine Nguyen’s evidence on matters of importance. I do however accept the error referred to in [34] in respect of Nguyen’s evidence that Thomas had written out the entirety of the special condition in the contract. This latter matter is however in my view understandable and insignificant and does not undermine Nguyen’s evidence, either generally or specifically.

The points made in relation to Nguyen’s evidence concerning the dating of the purchase of nomination form are in my view of no moment and, if in error, have no bearing on any of the critical issues and do not justify any general devaluation of Nguyen’s evidence.

Similarly, in relation to the submissions made by the sixth and seventh defendants to the effect that Nguyen’s evidence in respect of critical representations was confused and contradictory, it is my view that these points of criticism by the defendants in their written submissions dated 29 September 2014 [41](a)-(o) are insubstantial, peripheral and do not affect Nguyen’s credit in relation to the significant evidence concerning the representations made to her by statements or by silence.

I reject Beller’s submission that Nguyen’s evidence establishes or provides a proper basis for concluding that she did not recall clearly what was said at the critical meeting on 5 September 2008.

I reject the sixth and the seventh named defendants’ assertion that Nguyen conflated what had been said between McNee and Nucara as to the adequacy of the security deposit which Nguyen sought with communications which Nguyen had received by email before 5 September 2008 and which she had received immediately after purchasing the Property in a meeting with Cossari, a director of 255. In my view there is no basis on the evidence to conclude that Nguyen’s evidence conflated the above as submitted by the sixth and seventh defendants.[108]
[108]Sixth and seventh defendants’ written submissions dated 29 September 2014, [47].

Accordingly, for the reasons I have referred to above, I reject the defendants’ criticisms of Nguyen’s evidence and find her to be a frank, substantially consistent, truthful and convincing witness and to be preferred on points of dispute arising from Nucara’s evidence.

Cross-examination — Nucara

For the reasons which are outlined below I give less weight to Nucara’s evidence in relation to the critical communications on 5 September 2008 than I do to the evidence given by Nguyen in relation to those matters.

I do not accept Nucara’s evidence that he took a very minor role in any negotiation at the meeting of 5 September 2008 at TBM Sales offices and that his involvement was limited to informing Nguyen of his view that a deposit of $200,000 was ‘fair enough’ and writing out the ‘special condition’.[109] I accept Nguyen’s evidence that in conjunction with a similar statement from McNee, Nucara told Nguyen that the tenant of 255 was a good payer and Nucara stated that for that reason $200,000 should be enough as a security deposit instead of the sum of $400,000 which had been earlier raised.[110] Further, Nucara stated to Nguyen during the meeting at the TBM Sales office on the morning of 5 September 2008 that Nguyen need not be concerned to obtain a security in the sum of $400,000 because the first floor tenant, 255 was a good payer of rent and there is also a prospect of further income being generated from advertising on the external walls of the Property and Nucara drafted part of the ‘special condition’ to provide for a security deposit under the Contract of Sale for the Property.[111] I also accept Nguyen’s evidence that Nucara stated at the critical meeting that he was in possession of an offer from another potential purchaser in the sum of $5.920 million.
[109]T607.02; T607.29.
[110]T152.01-09.
[111]T151.19-24.

I also find that Nucara was present at the meeting at the TBM Sales office on the morning of 5 September 2008 with McNee and Thomas[112] when the prohibited misleading and deceptive representations I have found were made.
[112]I have elsewhere found that Thomas’ representations before 5 September 2008 and representations by silence were not relied on by Nguyen ([135] and [312]) and Thomas is not established as knowing that Nucara’s statements on 5 September 2008 were false ([310]-[312]); see also findings concerning Thomas and TBM Sales at [196], [304]–[312].

In my view Nucara’s evidence[113] is improbable given Nguyen’s evidence about events before 5 September 2008 and the email of 9 July 2008 was consistent with her evidence as to what she said at the meeting of 5 September 2008, seeking a $400,000 security deposit. It is unlikely in this context in my view that Nguyen would ask Nucara what his views were about the adequacy of a $200,000 security deposit. In my view it is much more likely in the circumstances that, as Nguyen stated in her evidence, Nucara was seeking to persuade Nguyen to reduce her security deposit requirement from $400,000 to $200,000. This is both more consistent with the natural desire Nucara would have had to remove any possible impediment to achieving the sale of the Property and consistent with Nucara’s representations about the financial reliability of 255.
[113]T606.26 to T607.10.

(c) the second defendant, Mark Markii Mark II Pty Ltd is culpable and liable for the plaintiffs’ established loss and damage in the said sums referred to in (a) above, and were that company not deregistered, it would be the subject of the same judgment and orders as McNee and the first defendant;

(d) McNee and Nucara and by his conduct Beller, as explained in the above reasons, are culpable and liable for deliberate and dishonest conduct towards the plaintiff and therefore the liability of these defendants is not excluded or limited pursuant to any statutory apportionment provisions;

(e) the fourth and the fifth defendants Rodney Morley Persichetti Pty Ltd (TBM Sales) and Richard Thomas are not liable to the plaintiff because the plaintiff placed no material reliance on any representation made by the fourth and the fifth defendants;

(f) McNee and the first and second defendants and Wellara Holdings Pty Ltd (Beller) the sixth defendant, and Nucara the seventh defendant are also culpable and jointly and severally liable to the plaintiff in the sum of $2,786,421.55. However if I am in some way incorrect in my conclusions as to the exclusion of apportionment as a result of fraudulent conduct on the part of McNee and Beller and Nucara, then undertaking an apportionment I consider that having regard to the extent of McNee and the first and second defendant and Beller and Nucara’s responsibility for the plaintiff’s loss and damage, it would be just to limit McNee and the first and second defendants joint and individual liability to a combined total of 85 percent of P-Value’s said recoverable loss and damages and Beller and Nucara’s joint and individual liability to a combined total of 15 percent of P-Value’s said recoverable loss and damage;

(g) Fred Nucara, the seventh defendant, is, pursuant to s 9 of the FTA, personally liable on the plaintiff’s claims, notwithstanding that at all material times he acted as an officer, servant and agent of his employer the sixth defendant. Nucara is also jointly and severally liable in the sum of $2,786,421.55;

(h) questions of the plaintiff’s entitlement to interest, including the recoverable sum of damages by way of costs and any questions as to the cost entitlements of any defendant are reserved to allow for any further submissions on these matters.

Orders

There shall be judgment for the plaintiff:

(a) against McNee in the sum of $2,786,421.55, plus damages in the nature of interest;

(b) against Vicland Property Group No 1 Pty Ltd in the sum of $2,786,421.55, plus damages in the nature of interest;

(c) against Wellara Holdings Pty Ltd (Beller) in the sum of $2,786,421.55, plus damages in the nature of interest;

(d) against Nucara in the sum of $2,786,421.55, plus damages in the nature of interest.

I shall reserve my decision on questions of interest, including the precise sum of damages in the nature of interest (most recently calculated by P-Value to be in the sum of $832,071.28), costs and the final form of orders in this matter until the parties have had the opportunity to address these matters.[375]
[375]Judgment on the question of interest and costs was delivered on 27 May 2016 and final orders were authenticated that day: P-Value v Vicland Group & ors (No 2) [2016] VSC 318.

---

CERTIFICATE

I certify that this and the 171 preceding pages are a true copy of the reasons for Judgment of Digby J of the Supreme Court of Victoria delivered on 15 March 2016 and subsequently revised on 30 March and 19 May 2016.
DATED this nineteenth day of May 2016.

Jake Priest
Associate

ANNEXURE ‘A’

Relevant Legislation

Wrongs Act 1958 (Vic)

Part IVAA of the Wrongs Act relevantly provides:

24AF Application of Part
(1) This Part applies to—
(a)a claim for economic loss or damage to Property in an action for damages (whether in tort, in contract, under statute or otherwise) arising from a failure to take reasonable care; and
(b)a claim for damages for a contravention of section 9 of the Fair Trading Act 1999.

(2)If a proceeding involves 2 or more apportionable claims arising out of different causes of action, liability for the apportionable claims is to be determined in accordance with this Part as if the claims were a single claim.
(3)A provision of this Part that gives protection from civil liability does not limit or otherwise affect any protection from liability given by any other provision of this Act or by another Act or law.

24AH Who is a concurrent wrongdoer?
(1)A concurrent wrongdoer, in relation to a claim, is a person who is one of 2 or more persons whose acts or omissions caused, independently of each other or jointly, the loss or damage that is the subject of the claim.
(2)For the purposes of this Part it does not matter that a concurrent wrongdoer is insolvent, is being wound up, has ceased to exist or has died.

24AI Proportionate liability for apportionable claims
(1)In any proceeding 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 loss or damage claimed that the court considers just having regard to the extent of the defendant's responsibility for the loss or damage; and
(b)judgment must not be given against the defendant for more than that amount in relation to that claim.

(2)If the proceeding involves 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 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 proceeding the court must not have regard to the comparative responsibility of any person who is not a party to the proceeding unless the person is not a party to the proceeding because the person is dead or, if the person is a corporation, the corporation has been wound-up.

24AJ Contribution not recoverable from defendant
Despite anything to the contrary in Part IV, a defendant against whom judgment is given under this Part as a concurrent wrongdoer in relation to an apportionable claim—
(a)cannot be required to contribute to the damages recovered or recoverable from another concurrent wrongdoer in the same proceeding for the apportionable claim; and
(b)cannot be required to indemnify any such wrongdoer.

24AL Joining non-party concurrent wrongdoer in the action
(1)Subject to subsection (2), the court may give leave for any one or more persons who are concurrent wrongdoers in relation to an apportionable claim to be joined as defendants in a proceeding in relation to that claim.
(2)The court is not to give leave for the joinder of any person who was a party to any previously concluded proceeding in relation to the apportionable claim.

24AM What if a defendant is fraudulent?
Despite sections 24AI and 24AJ, a defendant in a proceeding in relation to an apportionable claim who is found liable for damages and against whom a finding of fraud is made is jointly and severally liable for the damages awarded against any other defendant in the proceeding.

Part V of the Wrongs Act concerning Contributory Negligence, relevantly provides:

25 Definitions
In this Part unless inconsistent with the context or subject-matter—
court means, in relation to any claim, the court or arbitrator by or before whom the claim falls to be determined;
damage includes loss of life and personal injury;
dependant means any person for whose benefit an action could be brought under Part III of this Act;
wrong means an act or omission that—
(a)gives rise to a liability in tort in respect of which a defence of contributory negligence is available at common law; or
(b)amounts to a breach of a contractual duty of care that is concurrent and co extensive with a duty of care in tort.

26 Liability for contributory negligence
(1)If a person (the claimant) suffers damage as the result partly of the claimant's failure to take reasonable care (contributory negligence) and partly of the wrong of any other person or persons—
(a)except as provided in section 63, a claim in respect of the damage is not defeated by reason of the contributory negligence of the claimant; and
(b)the damages recoverable in respect of the wrong must be reduced to such extent as the court thinks just and equitable having regard to the claimant's share in the responsibility for the damage.

(1A)Subsection (1) does not operate to defeat any defence arising under a contract.
(1B)If any contract or enactment providing for the limitation of liability is applicable to the claim, the amount of damages awarded to the claimant by virtue of subsection (1) is not to exceed the maximum limit so applicable.
(1C)If a claim is brought in a court of limited jurisdiction, the court may award damages up to the limit of its jurisdiction even though the amount of damages has first been reduced under subsection (1) or (1B).
(2)Where damages are recoverable by any person by virtue of subsection (1) subject to such reduction as is therein mentioned, the court shall find and record the total damages which, apart from any limitation referred to in subsections (1B) and (1C), would have been awarded, if the claimant had not been guilty of contributory negligence.
(4)Where any person dies as a result partly of his or her failure to take reasonable care (contributory negligence) and partly of the wrong of any other person or persons an action brought by the dependants of the first-mentioned person under Part III of this Act shall not be defeated nor shall any damages recoverable by those dependants under that action be reduced by reason of that first-mentioned person's contributory negligence.
(5)Where, in any case to which subsection (1) of this section applies, one of the persons responsible for the damage avoids liability to any other such person or his personal representative by pleading any enactment limiting the time within which proceedings may be taken, he shall not be entitled to recover any damages from that other person or representative by virtue of the said subsection.
(6)Where any case to which subsection (1) of this section applies is tried with a jury, the jury shall determine the total damages which would have been recoverable if the claimant had not been guilty of contributory negligence and the extent to which those damages are to be reduced.

Trade Practices Act 1974 (Cth)

The TPA relevantly provides:

51A Interpretation
(1)For the purposes of this Division, where a corporation makes a representation with respect to any future matter (including the doing of, or the refusing to do, any act) and the corporation does not have reasonable grounds for making the representation, the representation shall be taken to be misleading.
(2)For the purposes of the application of subsection (1) in relation to a proceeding concerning a representation made by a corporation with respect to any future matter, the corporation shall, unless it adduces evidence to the contrary, be deemed not to have had reasonable grounds for making the representation.
(3) Subsection (1) shall be deemed not to limit by implication the meaning of a reference in this Division to a misleading representation, a representation that is misleading in a material particular or conduct that is misleading or is likely or liable to mislead.

52 Misleading or deceptive conduct
(1)A corporation shall not, in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead or deceive.
(2) Nothing in the succeeding provisions of this Division shall be taken as limiting by implication the generality of subsection (1).

82 Actions for damages
(1)Subject to subsection (1AAA), a person who suffers loss or damage by conduct of another person that was done in contravention of a provision of Part IV, IVA, IVB or V or section 51AC may recover the amount of the loss or damage by action against that other person or against any person involved in the contravention.

(1AAA) A person who suffers loss or damage by conduct of another person may not recover the amount of the loss or damage by an action under subsection (1) to the extent to which:
(a)the action would be based on the conduct contravening a provision of Division 1 of Part V; and
(b)the loss or damage is, or results from, death or personal injury; and
(c)the death or personal injury does not result from smoking or other use of tobacco products.

(1AAB) Divisions 2 and 7 of Part VIB apply to an action under subsection (1) for loss or damage a person suffers by conduct of another person to the extent to which:
(a)the action is based on the conduct contravening a provision of Division 1 of Part V; and
(b)the loss or damage is, or results from, death or personal injury; and
(c)the death or personal injury results from smoking or other use of tobacco products;

as if the action were a proceeding to which Part VIB applies.
(1AA) Subsection (1) has effect subject to section 87AB.

Note: Section 87AB may limit the amount that the person may recover for a contravention of section 52 (Misleading or deceptive conduct) from the other person or from another person involved in the contravention.
(1B) Despite subsection (1), if:
(a)a person (the claimant) makes a claim under subsection (1) in relation to:
(i) economic loss; or
(ii) damage to property;
caused by conduct of another person (the defendant) that was done in contravention of section 52; and

(b) the claimant suffered the loss or damage:
(i)as a result partly of the claimant’s failure to take reasonable care; and
(ii)as a result partly of the conduct referred to in paragraph (a); and

(c) the defendant:
(i) did not intend to cause the loss or damage; and
(ii) did not fraudulently cause the loss or damage;

the damages that the claimant may recover in relation to the loss or damage are to be reduced to the extent to which the court thinks just and equitable having regard to the claimant’s share in the responsibility for the loss or damage.

Note: Part VIA also applies proportionate liability to a claim for damages under this section for a contravention of section 52.
(2)An action under subsection (1) may be commenced at any time within 6 years after the day on which the cause of action that relates to the conduct accrued.

Further, in relation to matter of apportionment , Part VIA of the TPA relevantly provides:

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 82 for:
(a)        economic loss; or
(b)       damage to Property;
caused by conduct that was done in a contravention of section 52.
(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.

87CCCertain concurrent wrongdoers not to have benefit of apportionment
(1)Nothing in this Part operates to exclude the liability of a concurrent wrongdoer (an excluded concurrent wrongdoer) in proceedings involving an apportionable claim if:
(a)the concurrent wrongdoer intended to cause the economic loss or damage to Property that is the subject of the claim; or
(b)the concurrent wrongdoer fraudulently caused the economic loss or damage to Property that is the subject of the claim.

(2)The liability of an excluded concurrent wrongdoer is to be determined in accordance with the legal rules (if any) that (apart from this Part) are relevant.
(3)The liability of any other concurrent wrongdoer who is not an excluded concurrent wrongdoer is to be determined in accordance with the provisions of this Part.

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 P-Value 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.

Fair Trading Act 1999 (Vic)

The provisions of the FTA which are relevant to the parties cases are also set out below.

4 Representations as to future matters
(1)For the purposes of Part 2, if a person makes a representation about a future matter, including the doing of, or the refusing to do any act, and the person does not have reasonable grounds for making the representation, the representation is deemed to be misleading.
(2)In any proceeding under this Act concerning a representation made by a person about a future matter, the person making the representation bears the burden of proving that he or she had reasonable grounds for making the representation.
(3)Subsection (1) is deemed not to limit by implication a reference in Part 2 to a misleading representation, a representation that is misleading in a material particular or conduct that is misleading or is likely or liable to mislead.

9 Misleading or deceptive conduct
(1)A person must not, in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead or deceive.
(2)Nothing in the succeeding provisions of this Part is to be taken as limiting by implication the generality of subsection (1).

159 Actions for damages
(1)A person who suffers loss, injury or damage because of a contravention of a provision of this Act may recover the amount of the loss or damage or damages in respect of the injury by proceeding against any person who contravened the provision or was involved in the contravention.

(1A)Except in accordance with section 107(3), a person may not recover in the Tribunal an amount for any personal injury suffered.
(2)A proceeding under this section may be brought before the Tribunal or in any court of competent jurisdiction.
(3)A proceeding under subsection (1) must not be commenced more than 6 years after the date on which the cause of action accrued.

(1) Where a solicitor ceases to act for a party in a proceeding, unless a notice of change is filed and served under Rule 20.01, the solicitor shall forthwith—

(a)file notice that the solicitor has ceased to act; and

(b)serve a copy on all parties.

(2) A notice under paragraph (1) shall state the address of the party last known to the solicitor.

(3) Except by leave of the Court, a solicitor shall not file a notice under paragraph (1)—

(a)where the address of the party in the notice is outside Victoria;

(b)after a proceeding has been set down for trial;

(c)within 28 days after a proceeding has been finally determined subject only to an appeal, if any, to the Court of Appeal.