Street & 7 Ors v Luna Park Sydney Pty Limited & 3 Ors

[2007] NSWSC 594

CITATION:	Street & 7 Ors v Luna Park Sydney Pty Limited & 3 Ors [2007] NSWSC 594
HEARING DATE(S):	8 June 2007
JURISDICTION:	Equity Division
JUDGMENT OF:	Brereton J
EX TEMPORE JUDGMENT DATE:	8 June 2007
DECISION:	Evidence under objection admitted
CATCHWORDS:	EVIDENCE – on claim for damages for misleading and deceptive conduct – where plaintiff claims to have proceeded with conversions of commercial property to residential apartments in reliance on misrepresentation as to use of adjoining amusement park and in particular location and operation of thrill rides – whether evidence of noise experience when park subsequently opened admissible – measure of damages – where evidence potentially relevant to actual value of property
LEGISLATION CITED:	(CTH) Trade Practices Act 1974 ss 52, 82 (NSW) Crown Lands Act 1989 s 114.
CASES CITED:	Joan Street & 7 Ors v Luna Park Sydney Pty Limited & 3 Ors [2007] NSWSC 588 Potts v Miller (1940) 64 CLR 282
PARTIES:	Joan Street (first plaintiff) Roslyn Dwyer (second plaintiff) Michael Hesse (third plaintiff) Glen Eight Pty Ltd (fourth plaintiff) Susan Hesse (fifth plaintiff) Robert Simkin (sixth plaintiff) Glen Billington (seventh plaintiff) Fiona Billington (eighth plaintiff) Luna Park Sydney Pty Ltd (first defendant) Metro Edgley Pty Ltd (second defendant) Peter Hearne (third defendant) Warwick Doughty (fourth defendant)
FILE NUMBER(S):	SC 2267/05
COUNSEL:	Mr T Alexis SC w Ms P M Sibtain (plaintiffs) Mr T G Parker SC w Mr J A Potts (first & second defendants) Mr J R Clarke (third & fourth defendants)
SOLICITORS:	Wise Legal (plaintiffs) Clayton Utz (first & second defendants) Esplins (third & fourth defendants)

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

BRERETON J

Friday, 8 June 2007

2267/05 Joan Street & 7 Ors v Luna Park Sydney Pty Limited & 3 Ors

JUDGMENT (ex tempore)

1 HIS HONOUR: In judgments delivered yesterday [[2007] NSWSC 588] I dealt with the admissibility of lay noise evidence in the context, first, of a case in which the relevant plaintiffs, Mr and Mrs Hesse, claimed only damages under (CTH) Trade Practices Act 1974, s 82, occasioned by their reliance on alleged misleading and deceptive conduct contrary to s 52, and secondly, in a case in which the relevant plaintiff, Ms Street, claimed only injunctive relief to restrain the location and operation of thrill rides in the area north of Coney Island, allegedly in contravention of (NSW) Crown Lands Act 1989, s 114.

2 There now falls for consideration the admissibility of lay noise evidence in the case of the fourth plaintiff Glen Eight. Glen Eight’s case differs from that of the other plaintiffs. It had purchased Yellow Pages House, as its building was then known, at 8 Glen Street, Milsons Point, before the relevant development application and accompanying statement of environmental effect said to contain the relevant misrepresentations. The building was then used, as its name implies, as commercial premises. Glen Eight’s case is that in reliance upon the assumption, which it says was brought about by the development application and statement of environmental effects, it undertook a conversion of the property to a residential apartment development, with which it would otherwise not have proceeded, and as a result has suffered loss, that loss being the difference between the position it would have enjoyed had it retained the property as a commercial property, and that in which it in fact is as a result of the residential conversion.

3 That puts the case in a different category from one in which the plaintiff purchases property in reliance on a misrepresentation, to which the rule in Potts v Miller (1940) 64 CLR 282 applies, although it remains necessary to compare the position in which the victim of the alleged conduct would have been but for the misleading and deceptive conduct, with that in which it in fact is as a result of that conduct having taken place. In each case, one essential part of the equation is the position in which the victim is as a result of reliance on the misrepresentation, and the other is the position in which the victim would have been but for the conduct complained of. In the Potts v Miller type case, the detrimental change in position is the expenditure of the purchase money to acquire an asset, which the victim would either never have purchased, or would have purchased only at a reduced price, and the measure of loss is the difference between that expenditure and the true value of the property, typically at the time of the relevant transaction. In the present type of case, the detrimental change in position is the foregoing of an alternative which it is said would in the circumstances that have eventuated been more advantageous, and the measure of loss is the difference between the value the property would have had under that alternative (that is, left as a commercial property as Glen Eight alleges would have been the case had the relevant misrepresentations not been made), and its true value in the circumstances that have eventuated.

4 The true value of 8 Glen Street in the circumstances that have eventuated as a result of Glen Eight having embarked on the residential conversion is essentially a product of the price at which it can sell the units in the market. Those units are for sale, or at least some of them are still for sale, in the present market. In that market, they are affected by noise emanating from Luna Park, and the value at which they will sell in the present market is, at least arguably, affected by that noise. Accordingly, it is at least arguable that part of the equation that produces the value of the actual position that has resulted for Glen Eight from reliance upon the alleged misrepresentations is provided by the noise-affected units.

5 Accordingly, while I think it clear in the cases of the other plaintiffs who bring Trade Practices Act claims that the rule in Potts v Miller applies, and that the valuation is to be struck prima facie at the date of the transaction, in the present case it is far from unarguable that the present selling prices of units in the Azure is a relevant part of the valuation calculation. If that is so, then the actual experience of noise that potential purchasers would have if they inspected such a unit and observed and heard the operation of Luna Park would be a relevant consideration that such a purchaser could be expected to take into account, as affecting the price that a willing but not eager purchaser would be prepared to pay.

6 Accordingly, it seems to me distinctly arguable that lay noise evidence as to the impact of noise emanating from the area north of Coney Island on the apartments in the Azure, at present, is capable of relevance to the assessment of Glen Eight’s damages.

7 For similar reasons, the visual impact of The Ranger and other rides in the relevant area could be relevant to the assessment of Glen Eight’s damages. In addition, the visual (as distinct from the noise) impact of those rides could be relevant to the exercise of discretion whether or not to grant injunctive relief on the Crown Lands Act claim.

8 I do not think that subjective elements included in evidence given by occupants of or entrants in the relevant apartments disqualify it from consideration in this respect. Purchasers or potential purchasers of these apartments are not likely to rely on expert opinion as to the decibel levels of noise, nor as to the particular sources of that noise, but rather on their subjective impression when they stand in one of the apartments or on one of their balconies.

9 No doubt powerful submissions can be made that Mr Stanley Roth has a special interest in giving evidence on this topic, which might make it less compelling and less weighty than that of potential purchasers, but that is a consideration which will go ultimately to its weight, as distinct from its admissibility.

10 Nothing I have said ought to be taken as determining the basis upon which Glen Eight’s damages, if any, would ultimately be assessed, but it follows that I am of the view that it is sufficiently arguable that the present sale value of units is a relevant part of the valuation equation that lay evidence of the actual noise experienced in its apartments since the re-opening of Luna Park is not plainly irrelevant, but ought to be admitted.

11 I therefore admit paragraphs 89 and 90 of Mr Stanley Roth’s affidavit subject to any particular objection that the defendants might have.

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