Supetina Pty Ltd v Lombok Pty Ltd

, .!

._	C A T C H W O R D S	l '
'I

CONTRACT - application by purchaser to court seeking declaration

as to contract's validity and relief pursuant

the Trade

Practices Act 1974

- whether application constituted repudiation

contract - vendor purports to rescind contract

- purchaser

treats

vendor's

purported

rescission

as a repudiation

and

purports

rescind -

purchaser

fails to obtain declaration

sought

relief under Trade Practices Act 1974

whether

' _

purchaser disentitled from rescinding

- abandonment of contract -

right to return of deposit and instalments.

I	Trade	Practices	Act	1974
l

SpettaSile Consorzio Veneziano di Armamento e Naviqazione

Northumberland Shipbuildins Co., Ltd. C1918-193	All E.R. Rep. 963	-
(1919) 121 L.T. 628.

D.T.R. Nominees Ptv.Ltd. v. Mona Homes (1978) 138	C.L.R. 423.
Summers v. The Commonwealth (1918) 25 C.L.R. 144.

McDonald v. Dennvs Lascelles Limited (1933)

48 C.L.R. 457.

SUPEllINA PTY.LTD. & ANOR. v. LOMBOK PTY.LTD. & 0 )

SPENDER J.

BRISBANE

I	6 JUNE 1986.

IN THE FEDERAL COURT OF AUSTRAtIA

pU!XNSLAND DISTRICT REGISTRY

)	QLD G1 of 1984

GENERAL DIVISION

)

BEIWEEN:

SUPETINA PTY LTD

First Applicant

AND:

AVIONNE

J O Y VINCENT

Second Applicant

AND:

LOMBOK PTY LTD

r I. '

First Respondent

AND:

KENNETH CYRIL GUY

Second Respondent

AND:

J O H N RONALD BRYANT

Third Respondent

DATE JUDGMENT DELIVEREJ3:	6 JUNE 1986
APPEARANCES :

. .

Applicants: Mr.

J.D.M.

Muir instructed by Messrs.

McCullouqh & Robertson

j .:

First Respondent:

Mr. Glen Martin instructed by Messrs.

Skinner & Smith

Second Respondent:

Mr. V.F.P. Green instructed by Messrs.

F.K. Brown & Brown

Third Respondent:

Mr. D.R. Cooper instructed by Messrs.

Morris Fletcher

& Cross

6 JUNE, 1986

Applesarth

Peter

Associate to Spender

IN THE FDERAL COURT OF AUSTRALIA

QUEENSLAND

DISTRICT

REGISTRY

)

QLD G1 of 1984

GENERAL DIVISION	)	._.
I ,
. I

BETPEEN:

SWETINA PTY LTD

First Applicant

AND:

AVIONNE JOY VINCENT

Second Applicant

AND:

LOMBOK FTY LTD

First Respondent

AND :

KENNETH CYRIL GUY

Second Respondent

AND:

JOHN RONALD BRYANT

Third Respondent

MINUTE OF ORDER

JUDGE MAKING ORDER:

SPENDER J .

DATE OF ORDER:

6 JUNE

1986

WHERE MADE:

BRISBANE

THE COURT DECLARES:

that the two contracts entered into between the first

applicant as purchaser and the first respondent as vendor on

6 August 1981 in respect of resubdivision

307 and

resubdivision 310 respectively of subdivision 203 of portion

110 of the County of Canning, Parish of Mooloolah are	at an
end.

./2

2 .

THE COURT ORDERS:

that the applicants' claim and the first

respondent's cross-claim be dismissed;

that the first respondent pay to the first

applicant the sum

of $221,563.37, being the

sum made up of the deposits paid under those

contracts and the interest payments made

thereunder, such payment to be subject to

the conditions later referred	to	in these
orders;

that

the

applicants

pay

the

second

respondent the second respondent's costs,	i
including reserved costs and the costs of

this application,	to be taxed;	i
! '

that

the

applicants

pay

the

third

respondent

the

third

respondent's

costs,

including reserved costs and the costs of

this application,

to be taxed;

that

the

applicants

pay

the

first

respondent

one

half

the

first

respondent's costs, including reserved costs

and the costs of this application, to	be
taxed;

pending taxation of the various respondents'

costs, that the first respondent pay into

court the sum of $221,563.37, that sum to be

invested by the Registrar in an interest

I .

bearing

deposit

bank

or building

soclety of his choosing;	'_	.
that, on taxation of the first respondent's,

the

second

respondent's

and

the

third

respondent's costs, the first respondent's

costs be first paid out of the sum to be

paid into court, and then the costs of the

second respondent and the third respondent,

which costs are to rank equally as against

the balance, and the remaining sum after

payment of those costs, be paid out to the

solicitors for the first applicant.

m:-	Settlement and entry of orders is dealt

with by Order

36 of the Federal Court Rules

IN THE FDERAL COURT OF AUSTRALIA

QUEENSLAND DISTRICT REGISTRY

1	QLD G1 of 1984

GENERAL DIVISION

BFllWEEN :

SUPFllINA PTY LTD

First Applicant	9 -.
,.

AND :

AVIONNE JOY VINCENT

Second Applicant

AND:

LOMBOK PTY LTD

First Respondent

AND :

KENNETH CYRIL GUY

Second Respondent

AND:

JOHN RONALD BRYANT

Third Respondent

SPENDER J.

6 JUNE 1986

REASONS FOR JUDGMENT

This application concerns the sale of industrial land at Maroochydore on the Sunshine Coast. The applicants, seeking

relief under the Trade Practices Act

1974 ("the Act"), claim a

declaration that two contracts for purchase each dated

6 August

1981 entered into between the first applicant, Supetina Pty Ltd

("Supetina"), as purchaser and the first respondent, Lombok Pty

Ltd ("Lombok"),

vendor are void and/or voidable. at the

instance of Supetina. The second applicant, Avionne Joy Vincent,

seeks against Lombok a declaratlon that two deeds of guarantee

executed by her in favour

of Lombok on

or about the same date are

void	or	voidable at her instance. The applicants also seek	L-
. ,

repayment by Lombok of all monies paid under the contracts

or,

alternatively, damages pursuant to the provisions of the Act. the contracts and guarantees be declared void or be rescinded.

The third respondent, Mr. Bryant, at all relevant times

was a real estate salesman, employed by the second respondent, Mr. Guy, who carried on business as

r .'

a	real estate agent in

Maroochydore under the name Ken Guy Real Estate. The Statement of Claim alleges, in the alternative, that Mr. Bryant was the

agent of Lombok and

of Mr. Guy.

8 '

r ,.'

L..

I !

The Statement of

Claim alleges that

Mr. Guy was engaged

by Lombok to sell two parcels

of land (which will be referred to

as resub. 307 and resub. 3101, that he was expressly or impliedly

authorised by Lombok to make representations in relation to the

sale of the land, and that Mr. Bryant was expressly or impliedly

authorised by

Lombok

andfor Mr. Guy to make representations

covering the land.

The applicants' claim against Mr. Guy and Mr. Bryant is

for

damages

under misrepresentation andfor negligence.

the

Trade

Practices

Act,

and/

The claim that Mr. Guy was engaged by

Lombok to sell the

land, and that Mr. Guy and

Mr. Bryant were authorised in any way

by it is denied by

Lombok, which says that it gave the sole right

to sell the land

another real estate agency, East O'Brien and

Associates.

says

that

it gave

authorlty,

express

implied to either

Mr. Bryant or Mr. Guy to act

on its behalf wlth

respect to the land.

Mr. Guy says the same.

Lomhok,

in paragraph

7 of

its cross-claim, says that

Supetina "has wrongly falled to comply with its obligations to

meet interest payments under the contracts and, by its action in

bringing this application, repudiated both contracts".

Lombok, by its solicitors, on 2 March 1984 wrote to the

solicitors for Supetina:-

"We refer to

your client's application dated

January 1984,

and in particular the relief sought

in paragraphs (a) to (g) thereof.

Your client

has,

by its action, repudiated the

contracts dated

6 August

1981 between the first

applicant and the first respondent and we hereby

give you rescinded both contracts."

notice that the first respondent has

-4

Lombok claims it was entitled so to rescind, and "became

and is

entitled to forfeit the said deposits and interest payments under

both contracts".

Lombok

claims a

declaration that the said

contracts have been duly rescinded or, alternatively, rescission of the said contracts, and a declaration that the said deposits and interest payments are forfeited to the first respondent.

Supetina,

its

solicitors,

wrote

Lombok's

solicitors on 28 May 1984:-

"Your clients by your letter of 2nd March,

1984

unlawfully repudiated the above contracts. Since

that date your client has continued to assert that

it has lawfully terminated the contacts (sic) and

has made it clear that it would not perform in

accordance with their terms if it should be called

upon to do

so.

Our client

hereby

accepts

your

client's

repudiation and rescinds the contracts."

In its Further Amended Statement

Claim, Supetina says it

rescinded the contracts on the ground of the alleged unlawful

repudiation by

Lombok and claims that ''It became entitled to a

refund of all monies paid by it under the said

contracts", or

alternatively "it would be unjust and inequitable for the First

Repondent (sic) to retain the whole

or alternatively part

of the

moneys paid under the said contracts and the First Applicant

seeks relief against forfeiture or

all or part of such moneys."

I .

Supetina entered into contracts

for the purchase of two

parcels of land, resub. 307 having an area of 1.243 hectares and resub 310 having an area of 1.238 hectares, both parcels being

I	"battleaxe"	shaped	blocks	and	both	situated	on	Sugar	Road,
I
i

5 .

Maroochydore.

Each contract is dated 6 August

1981 and shows a

purchase price of

$375,000

making a

total purchase price of

$750 ,000 .

The vendor of both parcels was the first respondent,

Lombok. Mr.	& Mrs. Parry were and are directors and shareholders
of Lomhok.

The second applicant, Miss Vincent, is the controlling

force behind the first applicant and the person to whom it is

alleged certain representations were made concerning the land.

All negotiatlons for the purchase of the land were conducted by

her alone. There is

substantial issue as to Miss Vincent's

interest in the purchasing company

at the relevant time.

The applicants' Further Amended Statement of Claim filed during the

matters

complaint are particularised in the

course

the

trial.

Because

the

number

times

the

Statement

Claim has been amended, the numbering is not

completely consistent. The matters of complaint are:-

"4A. At and about Maroochydore the said Bryant

orally

represented

the

Applicants

and

advised that:

(a) the

Flrst

Applicant

should

invest

the

said

Sunshine

Coast

the

acquisition of land the construction thereon of home units or industrial sheds rather than in the purchase of

I	motel;
,I

I	(b) that the asking price of the said land

referred to in paragraph 3(d)(i) and

3(d)(ii) hereof, namely THREE HUNDRED

AND SEVENTY FIVE THOUSAND DOLLARS

( $ 3 7 5 , 0 0 0 . 0 0 )

for each of the said

subdivisions 307 and 310 was

a good

price;

! !

( c )

existed

there

approved

that

development plans and conditions in

respect of the said land which were

exceptionally good;

(d)

that the asking price for both parcels

of the said land was

a good price from

...

the purchaser's point of view;

(e)

that

the

purchase

one

both

parcels

of the

said

land

the

first

applicant

and

its

their

development

accordance

with

approved plans would provide the first

applicant with a sound investment and

a good return on moneys invested;

( f )

construction of buildings on the said

land in accordance

with

the

said

approved plans (or substantially in

, I

accordance therewith by changing the

materials

comprised

the

buildings

contemplated

thereby

portal

steel

frame

some

other

cheaper building medium) could proceed

forthwith without any earth works or

investigations.

4B. The representation and/or advice referred

to in paragraph

(a) was made or given in or

about the months of March and May 1981. All	..
other representations or advice were made or

given between mid-July 1981 and	6	August
1981.

5. The

representations in sub-paragraphs (e)

and (f) of

paragraph 4 hereof

and

paragraph 6

hereof were further made by the

showing to the first applicant of various

building plans in respect of the said land.

Particulars:

Plan dated

August 1981 Drawings Numbered

80/1285/1 to 17 inclusive.

6. At Maroochydore on or about the third day

of August 1981 the said Parry represented to

the

applicant

that

the

construction

buildings on the said land in accordance with

the said approved plans and conditions could

proceed forthwith without any earthworks	or
investigations other than the levelling	of

some mounds of

"fill" deposited on the said

I .

land.	t
6A. Further or alternatively, if, contrary to

the

applicant's

(sic) contentions,

the

time and place referred

in paragraph

hereof the said Parry represented to the

second

applicant

that

some

a little

further fill might be required or words to

such effect, such representation

(a)	was false, misleading or deceptive,

(b) was relied

on by the applicants as set

out in paragraphs

10 and 11 hereof,

(C)	was said without a belief in its truth or recklessly not caring whether it was true or false.

6B. Further or alternatively, if contrary to

the

applicants'

contentions

the

third

respondent

and

about

late

July

early

August 1981 represented

the

second

applicant and advised that some or a little

further fill was required at the back of the

said land or words to such effect, such

representation and advice

(a)	was false, misleading or deceptive,

(b)

was relied on by the applicants as set

out In paragraphs

10 and 11 hereof."

There is no allegation in para.

6B similar to 6A(c).

The

reference to

the Flrst Applicant in 4A(a) is

clearly enough an

error, because Supetina did not appear on the scene until after

August

1981.

The same might or might not be said of the

reference In 4A(e).

l '

r .

At the outset, concernlng the allegations in

6A and 6B,

it is to be noted that the applicants assert, in the alternative,

that something which the second applicant denies having been said

induced her to sign the contracts.

Paragraph 12

of the Further Amended Statement of Claim

is to be read

as alleging the representations, earlier set out

paragraph 4A, were false in that:-

t '

I	“(a1	the
the said land at the time of the said

market

value

both parcels of

representations as to value and as at

6 August 1981 was no more than

HUNDRED AND SElTENTY THOUSAND DOLLARS

($270,000.00);

(b)

the approved development conditions in respect of the said land were no more

than what

was

normally contained in

and provided for by such conditions;

(C)

the purchase of the said land and its

development

accordance

with

the

said approved plans and conditions was

a	poor investment and could provide

only a poor

return on

the

moneys

invested

therein

the

First

Applicant. ”

, -

is representations referred to in paragraphs 4A(f) and	further	alleged	in	paragraph	13	that	the	‘I	I
..

set out

above were false in that construction of buildings on the land in

accordance with the approved plans could not proceed

without:-

“(a) the depositing placing and compaction

of some 17,000 cubic metres of fill;

(b)

the carrying out of soil tests;

(C)

the revision of the said plans to take

into account the swampy nature of the

sald

land

and

the

amount

fill

placed or to be placed

on it.“

I ’.

The claim against the first respondent is pleaded in paragraph 18 in this way:-	I’
I ..

“The conduct of the First Respondent in and about

making

the

representations

referred

paragraphs 4 and 6 hereof by its said agents was:

(a) false misleading

or deceptive or

likely to

mislead or deceive; and

(b)	engaged in by the First Respondent in trade or commerce; and

the representations referred to in paragraphs

and 6 hereof were made by the third respondent on

behalf

the

first

respondent

andlor

second

' <

respondent knowing them to be false or recklessly

- .

not caring whether they be true

or false.

Particulars of alleqations in sub-paraqraph

(a):

The matters set out

in paragraphs 12 and

hereof

- ' '

In the light of the allegations in para.12, nothing turns on the

advice referred to in 4A(a). Insofar

paras. 4A(b) to

(e)

involve assertions concerning expressions of opinion (or involve

predictions), to succeed on these allegations as constituting

misleading or deceptive conduct, the applicants have to establish

in respect of one or more

of those opinions that Bryant expressed

that opinion, that

it was not honestly entertained by Bryant when

it was made and that it induced

the first applicant to enter into

the contracts: Global Sportsman Ptv.Ltd. v. Mirror Newspapers

Ptv.Ltd.

(1984)

55 A.L.R. 25; Bill Acceptance Corporation Ltd.

G.W.A.Ltd. (1983)

A.L.R. 242; Australian Ocean Line Ptv.Ltd.

West

Australian

Newspapers

Ltd.

(1985) 58 A.L.R. 549.

Mr. Bryant admits in his pleading that he told Miss Vincent that the asking price for each parcel was	a good price.
He denies the other allegations.

The other basis of the applicants' case is the alleged representation by Mr. Parry on Lombok's behalf that no fill was	l.,:
'.

needed and

a representation by Mr. Bryant that construction in

I	*
I .

I.’

10.

accordance	with the plans could proceed forthwith without any
earth works	or investigations.

The claim against the second and third respondents under

the Act, in paragraph

of the Further Amended Statement

Claim,

asserts

that

the second

and

third

respondent

were

“directly or indirectly knowingly concerned“ in the matters

alleged to

be in breach of

5-52 .

The

claim for negligent

mis-statement is pleaded as follows:-

“14. The second

respondent

and

the

third

respondent knew or ought to have known that

they and each of them were being trusted by

the applicants to give the advice referred to

in paragraph 4 andlor 6A and

6B hereof as a

basis for

action

the

part

of the

Applicants. Particulars

The	respondents were aware through having

been orally advised

of the fact by the second

applicant

and/or

through

their

Own

observations that

(a)

she had no particular knowledge of the

condltions

prevailing

the

real

property market on the Sunshine Coast;

(b)

she had no other source of independent andlor expert advice;

(C)

the third respondent‘s detailed advice

was such as to induce

an acceptance of

his expertise;

(d)

the second applicant

was

ready and

willing to invest moneys

as soon as a

property suitable for investment could

found for

her by the second and

third respondents; and

the conduct particularised in paragraph 3(h)

hereof ought to have led the second and third

respondents

conclude that their advice

would or could

be relied upon.

11.

15. The

applicants relied on such advice in

entering

into

and

executing

the

said

contracts and the said deeds of guarantee.

16. In the premises, the Second and Third

Respondents had a duty to the Applicants to

exercise reasonable care and skill in and

about the giving of the said advice.

17. The

Second

Respondent

and

the

Third

Respondent failed

to exercise reasonable care

and skill in the giving of the said advice in

that they:

(a) failed to have

due

regard

then

existing market values;

(b) failed to give

any

proper

consideration to the requirement for

industrial sheds on the North Coast;

given

(sic)

any

proper consideration to the real rate

of return to be reasonably expected

from the investment contemplated by

their said advice;

(d) failed

have

any

proper

regard

the

cost

the

said

development;

(e) failed to

have

any

proper

regard to the market for industrial land on the North Coast of Queensland.

Paragraph 3(h) of the Applicants' pleading sets out:

(h)

The Third Respondent held himself and the business of and skilled in the

giving

advice

concerning

the

valuation, purchase and development of

land

the

area

known

the

"Sunshine

Coast".

The

holding

out

took

place

through

the

Third

Respondent in or about the months of

March and May 1981 and in and about

mid-July to early August

1981:-

(i) orally

offering

advice

the

second applicant as to avenues for investment on the Sunshine Coast of Queensland;

12.

(ii)

orally

counselling

against

investments

the

first

applicant or the

second

applicant

in motel properties

and advising that the purchase

and/or

development

unit

sites, industrial sites or mini storage sheds was desirable;

(iii) performing calculations

the prospective rates of return

on investments;

(iv) expressing opinions

to the

value

various

parcels

land

including

the

subject

land ;

(V)

offering advice as to how land could be suitably developed;

(vi) pointing

out

the

second

applicant properties with the	, :
Third Respondent identified as	I":

having been sold by

him both as

agent and on his own account.

The common law liability of the second respondent, Mr.

Guy, If any, is purely vicarious.

Miss Vincent, who is a New Zealander by birth, visited Australia for two weeks in March 1981 and,

through her brother

who lived on the Sunshine Coast in Queensland, she met the third

respondent, John Bryant. Mr Bryant is also a New Zealander.

Miss Vincent expressed to Mr Bryant, whom she says she understood to be a builder and developer as well as

a real estate

agent, an interest in investing in real estate property on the

Sunshine Coast. The possibility of investing in a motel business

was canvassed, Miss Vincent having in fact owned

motel in

California in

1978/79, and though Miss Vincent was shown

a motel,

the Dolphin Motel

at Caloundra, that avenue of investment was not

l -

13.

pursued. Mr Bryant told Miss Vincent that a better investment

could be made in unit development

in industrial storage

: ,

property and he both explained the market movement

at that time

and showed her the area generally, including properties which	he
proposed to develop.

Miss Vincent returned to Australia in mid-May of 1981, again for a two week period. She saw Mr Bryant who showed

her

and her brother, amongst other properties, an industrial block on

Kayleigh Drive in much the same area as the subject properties.

Miss Vincent and her brother purchased the

Kayleigh

Drive

property

during

her

May

visit.

The property

was

purchased

through the vehicle

of her brother's company and Miss Vincent

contributed one half of the acquisition cost of

$65,000.

The

land was developed at a cost of approximately

$60,000 and sold

less than 12 months later for

$170,000.

Mlss Vincent in this

,venture recouped her original investment and received a profit of

$13,000.

On Miss Vincent's next visit to Australia in July

1981,

she again saw Mr Bryant who told her about a large light

industrial block for sale situated on Sugar Road that had been

mentioned to hlm by Bob Richardson, a real estate agent employed

by East O'Brien and Associates,

("East O'Brien"). East O'Brien

was

the

vendor's site, but there is a conflict

agent.

Miss

Vincent

inspected

the

Sugar

Road

in	the evidence on significant

aspects of her inspection. On 31 July

1981

Miss Vincent paid a

part deposit on resub. 310. On 3 August

1981 she paid

a part

deposit on resub.

307.

On 3 August

1981 Miss Vincent saw Mr.

14.

Mrs.

present, as was the sollcitor for the Parrys, Mr. Hickman, and

the solicitor for Miss Vincent, Mr. Wiqht.

Parry.

Mr. Richardson

and Mr. Bryant

were

Parry

and

That meeting on the night of

August

1981 at

the

offices of East O'Brien has considerable importance, but suffice

at this stage to say that Miss Vincent met and talked with Mr

Parry and was

shown

a roll of

17 plans prepared by Mr Ken

Crocker, a consulting engineer on the coast ("the Crocker plans") which detailed the Parrys,' proposed development of the site.

The

applicant

company

subsequently

signed

the

two

contracts for purchase.

Miss Vincent left for the

U.S. on 1 September 1981. She

returned on occasional visits thereafter. She says that she was

not aware until about May

1983

when she spoke to Mr Crocker that

she had been misled as to the value of the land, amongst other

things.

Before dealing with disputed matters of fact arlsing out

of the events between Miss Vincent's arrlval in Australia on

July 1981 and the execution of the contracts on

6 August 1981,

and

matters

immediately

thereafter,

there

are

some

aspects

concerning the credibility of witnesses	which can appropriately
be dealt with.

15.

_ I

Of central significance to the factual matters is the

, =

evidence of Miss Vincent. Her evidence in many major respects is

unreliable. She gave evidence before me over

long period.

sustained attack was made on her credit and, in a number

of very

serious respects, her account altered completely during the

course of her evidence. Her original account, for instance, was

that she did not see a site plan showing proposed buildings on

the two subject blocks until the evening of

3 August 1981. Later

in her evidence she resiled from that position and acknowledged that, on her first inspection of the subject property, that plan

was available and inspected by her.

accept that Miss Vincent

was under the strain of giving evidence for a lengthy period and

was subjected to searching and quite vigorous cross-examination

but, at the end of the

day, I am generally not prepared to accept

her

reliable

witness.

Apart

from

making

a general

assessment of her and her evidence, there were many signlficant

reliability. I do not accept her assertion that she purchased the

properties for investment, intending to develop them and to enjoy

the income that they produced. She denied she was a speculative

buyer who became financially burdened because of the downturn in

what had been a boom market. Her conduct after entering into the

details leading

the unfavourable view

I formed as to her

contract is developerlinvestor is put very much in question by her financial

inconsistent

with

her

claim.

Her

role

capacity

engage

such

a development.

Her

evidence

concerning her financial capacity was vague in the extreme. She

made no attempt to explore what avenues of finance, if any, were

available to her. She said that her intention after purchase was

to obtain a tenant before building, yet she did nothing except in

16.

a general way leave the property in

the hands of Mr. Bryant.

She

left for the United States on

1 September 1981, leaving Mr.

Bryant in control of this project.

She was asked:-

“Pursuant to

what retainer did

you retain him to be

your man on the spot?	j.
A. He was acting as my agent. Q. To do what?
A. To lease the property, to do whatever. It was
a matter of whatever came up, whatever he was able to locate.

Q. He had	carte blanche to do whatever	he liked?
A. Yes.

Her efforts in

the

months and years after that

are

hardly

consistent with her stated intention. She did

fact cause a

sign to be put on the property indicating that the land was for

sale or lease

and,

in my view, she never had any serious

intention of developing the property.

Her reliance on questions

fill, which loomed very

large m

the trial, seems at odds with her conduct concerning

that matter. She says in about mid-l983 she learned that the

value of the property was considerably less than she had paid for

it and that there were

substantial questions involving the amount

and quality of f i l l on the land. Subsequent to that and prior to

this application in 1984, there was no demand or complaint made

to Mr. Parry or to Mr. Bryant and, indeed, after learning, in her

i	words, that she had been “ripped	off“, she went to see Mr. Bryant
i
I

I	seeking his advice	in	respect	of her	intention	of	pursuing
l

employment in real estate. In fact, on any view

the evidence,

16.

I	I
I

a general way leave the property in the hands of

Mr. Bryant. She

left for the United States on

1 September

1981, leaving Mr.

l	Bryant in control	of this project. She was asked:-
I

"Pursuant to what retainer did	you retain him	to be
your man on the spot?

A. He was acting as	my agent.
Q. To do what?

A. To lease the propertv, to do whatever. It was

. -

a matter

Of whatever c a m e ~ ~ ~ ,

whatever he was able

to locate.

Q. He had carte blanche to do whatever

he liked?

I	A. Yes.
I

Her	efforts in the months and years after that are hardly

consistent with her stated intention. She did in fact cause

sign to be put on the property indicating that the land was for

sale or lease

and,

in my view, she never had any serious

intention of developing the property.

Her reliance on questions

fill, which loomed very

large in the trial, seems at odds with her conduct concerning

that matter. She says in about mid-1983 she learned that the

value of the property was considerably less than she had paid for

it and that there were substantial questions involving the amount

and quality of fill on the land. Subsequent to that and prior this application in 1984, there was no demand or complaint made

to Mr. Parry or to Mr. Bryant and, indeed, after learning, in her

words, that she had been "ripped

off", she went to see Mr. Bryant

seeking his employment in real estate. In fact, on any view

advice in respect of her intention of pursuing

I	of the evidence,
I
I

17.

I =

Miss Vincent, shortly after signlng the contract, if not before,

was aware that there was

a considerable quantity of fill required

to reach the level indicated on Plan

9 of the Crocker plans. She

performed her

own

calculations which revealed, she says, that

some 8000/9000 cub.m. of loose fill would be needed to reach that

level, yet

complaint immediately on making those calculations

was made to either

Mr.

Parry or Mr.

Bryant. She says at that

time the question of fill was

no concern to her. This

evldence is to be contrasted with her claim that she first became

aware of the lack of

fill in respect of resub.

307 and resub. 310

in late May to early June

1983.

Her aboutface concerning the

site plan

is such that little confidence can be placed on the

accuracy of her recollections of what occurred in the perlod,

involving the inspection of the site at

Sugar Road, the various

conversations with

Mr. Bryant and with Mr. Richardson, the events

of the evening of 3 August 1981 and in subsequent days with her

solicitor, Mr. Wiqht, and with others Including Mr. Richardson,

and the arrangements involvlng Supetina.

Another very signlficant matter was that she claimed to have made a number of calculations concerning the viability

feasibility of a transactions, and these calculations were in

project in

1981

at about the tune of these

a manilla folder and

she says that in the weekend prior to the commencement of the

trial, she threw out these documents.

There can be no doubt that Miss Vlncent is intelligent

and astute

with not inconsiderable commercial experience. She

inherited

interest in a large industrial property on her

I	'	18.
I

father's death. Prior to coming to Australia she was a partner In

a motel business in California in the United States and was also

involved in construction of a residential property in Hawaii and

had purchased

number of units in the United States for her

.. ,

residence.

A s an example of her business capacity, on the evening

of 3 August when there were negotiations primarily directed to

the term during which interest only payments were to be made,

initially each party was in separate rooms, with the solicitors

being the conduit of communications between each party. When an

impasse seemed to have been reached, Miss Vincent confronted

Mr.

Parry, (in fact it was the first

meetmg between Miss Vincent and

Mr.

Parry) and cut the Gordion knot and quickly secured Mr.

Parry's agreement to extending the perlod from two years to three years. This approach, accompanied by her statement "Let's stop

mucking about" bespeaks a confident and competent

busmesswoman.

I do not accept her claim that she was totally dependent	, .
i '

on Mr. Bryant for information in respect of the market value of

the property, rentals, and the viability of the project.

She

said of her solicitor,	Mr. Wiqht, that he had advised	her on the	r
L.
' - 8

purchase and "the advice that he gave her went some way towards

making her confident in her

own mind that the development was

good one." The general enthusiasm of Mr. Bryant for the project

was shared by Mr. Richardson, who had been appointed sole agent

in writing by the vendor,

Lombok.

19.

Miss Vincer~L in her evidence

says that she decided on

the weekend prior to 3 August 1981 to purchase both properties. In my view, this decision was not based on any reliance in the

correctness of Mr.

Bryant's opinions concerning the property and

its future development and the investment climate on the North

Coast at that time. favourable vendor's terms at a rate of interest which

Miss

Vincent

saw

the

purchase

with

I find was

L ..

significantly below the then prevailing rate as

an opportunity to

make substantial profits in the short term, on a resale basis.

As for Mr.

Parry, his credibility also did not escape

unscathed in

number of respects. His explanations of some

matters were concerns his answering of interrogatories concerning fill.

less

than

satisfactory.

One

particular

aspect

Hls

answer to interrogatories as to whether there was any discussion

concerning Councll approval, plans and fill prior to the

6 August

1981, to the effect that there were no such discusslons,

clearly wrong. Mr. Parry's explanation is that all

he could go

on was the contract which was dated

6 August. His attempts to

explain these

amended answers to interrogatories included the answer that the

building could be completed wlth a minimum amount of levelling of

answers

were

not

convincing.

Similarly,

his

the fill on site and that a minimum amount

of further fill miqht

be required. Before

his attention was directed to this answer,

he agreed in cross-examination that to say that

a minimum amount

of fill was required would be silly.

Mr. Parry was told in about July 1981

by Mr. Crocker,

who had prepared the plans and had taken some site levels for

2 0 .

him, LhaL there was a shortfall of some 15,000 cub.m. of fill.

However,

accepting

that

there

were

serious

deficiencies

aspects of his evidence,

I nonetheless prefer his account of the

conversation on

3 August 1981 to Miss Vincent's.

On the question of what was said at the meeting

of 3

August concerning fill, Miss Vincent's evidence was that Mr. that, apart from the levelling of "many many mounds of fill that

were at the very rear of the site", the site was complete.

Her

case is that the representation that no fill was required before

building could commence induced her to sign the contracts. In

cross-examination she denied that

Mr. Parry had told her that

some fill and levelling would be required. In chief she had said

that Mr. Bryant had discussed fill with her

followmg the meeting

August. She said that she believed that that discussion

occurred after the slgning of

the contracts and at a time when

she had received the Crocker plans. She said that in those

I '

discussions Bryant told her that she would have to put	a bit more
fill at the rear. She was asked:-

"Was it then a matter of any concern to you? Were

you then concerned about the fill?"

She answered,

"No, not at all.

She then made an assessment of her own.

She calculated

from Plan 9 of the Crocker plans that some

8,000/9,000 cub.m. of

loose fill would be needed. On doing this calculation, she made

no complaint to Mr. Parry

or, it seems, to anyone else.

I I

I	*	21.
I

As to events 1

eading up to and Including

3 August, I am

prepared to accept the account of Mr. Richardson, which account

sheds

considerable

light Richardson was the agent for the vendor, Mr. Parry having signed

on the

factual

conflicts.

Mr.

I ::

a 60	day sole agency agreement in writing with East O'Brien and

Associates. He approached Mr. John Bryant as a prospective purchaser and told him of the price and conditions of sale. The

price was $375,000 per block.

He thought the conditions of sale,

10% deposit, with the balance on interest-only payments at

16%,

were "very, very good".

After leaving a set of draft plans with

him overnight, Mr. Bryant advised him that he could not proceed with the purchase. He asked whether East O'Brien and Assoclates would be interested in selling the property on a conjunctional

basis and, after some discussions, Mr. Bryant was told that East

O'Brien were prepared to proceed on a	con~unctional basis that
"Ken Guy would.be 50-50 on one block".

Mr. arrangements,with Mr-Bryant,

Rlchardson

says

that,

some

time

later,

after

he met Miss Vincent and Mr. Bryant

r ,

at the Sugar Road site.

They walked down on to the site. There

were some "stacks

fill" on the block which Mr.Rlchardson told

Miss Vincent would need to be pushed to continue the levelling of

the property. He

indicated to Miss Vincent the Council easement

for drainage, the proposed Main Roads resumption

of land on the

rear of both blocks by reference to

a draft site plan. The three

people discussed what was indicated

on that plan.

He said that where they stood

on the site at Sugar Road,

I. .

there was a bus depot, Sunshine Coast Bus Services, adjoining.

22.

As to what could be observed from that position,

he said, "You've

got Sunshine Coast Bus Services next door which was fully filled

and you can use the two levels as

an example of what has to be

done".

told Miss Vincent "There is

soil

there to be spread"

and, if there was any further

fill to be

needed, all she had to

do was to put a sign up the front, as had been done elsewhere,

asking for clean fill. It was put to him in cross-examination by

counsel for Miss Vincent that there was no conversation on the

site about fill. This was flatly denied by Mr. Richardson and

accept that there

was the conversation to which

he deposed.

I accept further, contrary to

the suggestion similarly

put by counsel for Miss Vincent, that Miss Vlncent did in fact

on to the land with Mr. Rlchardson on the first occasion that she

went there, and I accept that there was a discussion concerning

the site plan on that site on that occasion. I accept that in

the

course

those

conversations

that

day

Mr.

Bryant

suggested that it was preferable for Miss Vincent to purchase and

pay for one of the blocks than struggling with two of

them. Mr.

Rlchardson said of his conversation with Miss Vincent on that

day, "The essence

of the conversation was that she would look at

onselllng the property". Miss Vlncent, he said, did not mention

a time

frame in that

regard.

I	On 31 July 1981, Miss Vincent paid	$3,750.00 as deposit,
I I

which was described as part deposit on Lot

310 and received a

Trust Account receipt from Messrs. East O'Brien and Associates,

signed by Mr. Richardson. Mr. Richardson says that when Miss

Vincent gave him the cheque for that amount, she said that she

23.

i	v
I I

had reached

the

decision

that

she

wanted

purchase

the

property.

The Trust Account receipt acknowledges receipt from

"Avionne Joy Vincent and/or nominee". On

3 August 1981, at a time

which I am satisfied occurred before the evening meeting with

Mr.

and Mrs. Parry and the respective solicitors, Miss Vincent paid

further $3,750.00, being described as part deposit on Lot

307 and

I	I	received	a Trust Account receipt signed by	Mr.	Richardson on
I

behalf of East O'Brien and Associates dated 3rd August 1981 for

that amount, the receipt being made out again to "Avionne	Joy
Vincent and/or nominee".

i	!
l	I

I	Mr. Richardson was asked:-
I
I
!	"Did you ever use the words to Miss Vincent that, because the property was available at builders'
I
I	terms, it was fantastic?"
I
!

To which he answered:-

"I do

not

use

the

word

'fantastic'

description.

I would

consider

was

a good

investment because it was on builders' terms.

considered it was

a good investment and

I told

I	her, yes.	"
I

He does not recall telling Miss Vincent that it was a "particularly good deal" and she should "keep quiet about it".

I -

t .

Miss Vincent's evidence was that this is

how

Mr. Richardson

!	described the deal to her.
I

I	am satisfied that, from the first visit by Miss

Vincent on the site, the question of fill had been referred to.

I	l I '
I	l - '

24.

On the evening of

August, approximately half an hour was spent

perusing the Crocker plans, and those plans, particularly

Plan 9,

show that fill would be needed.

I accept Mr. Parry's account that

he told Miss Vincent there was fill at the back, it would have to

be levelled, and that there would be further fill required. Mr.

Parry said he told Miss Vincent:-

"If you put the buildings that I suggested to her

across the front, there would not be very much

fill required there at all

... because of the fact

that there were footings and there was

lot of

meterage in footings, tremendously big footings in

that plan, there would be a lot of fill from that

that you could spread out over the site."

Concerning the discussion of the plans, Mr. Parry's

account, which

I accept, is:-

"I went through the plans with her, each one.

did most of

the talking. She did not do a lot of

talking. We did come to one plan which did show

it at

a whole lot of levels, a lot of figures

written on it, and she asked me what that was and

I sald 'That is the existing level of the land as

it stands now'.

I told her that

the levels that

were there in order to get it up to the floor

level that were stated on the plans, there would

be more fill required.

And was an amount mentioned?

A .

I did not mention any amount because

I did not

know exactly what amount that would be required."

I do not accept Miss Vincent's account that she was told

that all was needed would be to level the fill that was there.

This view is consistent with what can be observed

on Plan 9, with

what she says occurred later in discussions with

Mr. John Bryant,

and with the calculations that she said she made from

Plan 9

25.

concerning the quantity of fill that those plans indicated, and

with the absence of any complaint by her to anybody on making

those calculations.

A significant issue raised on the pleadings is whether Mr. Guy or Mr. Bryant was the agent of Lombok.

The evidence

shows that Lombok engaged East O'Brien and Associates as its sole

;, ,

agent in respect	of	the land. By	an arrangement between East	.	i
I ,.

O'Brien and Associates agreed to pay to Ken Guy Real Estate	Associates	and	Mr.	Bryant,	East	O'Brien	and	l	'-
v .
! ,

50% of	the	t :
I

commission on one block on a conjunctional basis in respect of

It arrangement prior to any signing

clear

that

Lombok

knew

nothing

this

the

sale.

of	the contracts by Miss

t .!

Vincent.

The evidence is that neither Mr. Parry nor Mrs. Parry

was aware

Mr. Bryant's existence before the evening

August 1981. The only basis on which it can be suggested that Mr.

Guy or Mr. Bryant were agents

Lombok arises out

this

conjunctional arrangement between East O'Brlen and Associates and anything said by Mr. Bryant to Miss Vincent was known by Mr. or

Mrs.

Parry at any

tlme

or, indeed,

was

not

known

them

whether Mr. Bryant had had any dealings or any conversation with

Miss

Vincent people at the August

about

the

land.

Miss

Vincent's

evidence

concerning

3 meeting was:-

"Q.

You regard Richardson as being the vendor's

agent, do

you not?

A.	Yes, I believe he was acting ... (she was cut

off).

26.

You did not regard Bryant

the vendor's

agent?

No, he was acting on

my behalf."

Mr. Richardson in his evidence was asked:-

"Q. Did

you mention the conjunctional arrangement to Mr. Parry or Mrs. Parry?

A. I mentioned

the

fact

that

there

would

conjunctional sale when Ken Guy was involved

- or,

Ken Guy Real Estate was involved. As to what the

percentage was, no.

Q. When did you mention that, and to whom? Was it

to Mr. Parry?

A. I

think it was to Mrs. Parry, and

I think it

was the

- when

I went up with the contracts of

sale, and it had been written in in biro as per

here before, and it had been initialled by Mrs.

Parry.

Q. Mr. Bryant met wlth Mr. Parry in your office on

3 August, did

he not?

A. Yes.

Q. And you introduced him then, did you not, as

the

person

who

assisted

introducing

Miss

Vincent to the property?

A. Yes.

Q. And

he was an agent,

you no doubt told him,

from Ken

Guy Real Estate?

A. That is right.

Q. And that he had assisted you in arranging the

sale?

A. That is correct."

The

words "in

conjunction with Ken Guy Real Estate" are hand printed by Mr. Bryant on the typed contract concerning Lot

307.

27.

The arrangements made by East O'Brien and Associates concerning the distribution

of the commission to which it

was

entitled pursuant

to its sole agency agreement, in my opinion,

cannot make Ken Guy Real Estate the agent of Lombok in respect

the sale. East O'Brien was appointed Lombok's agent to sell the

land. Its authority from Lombok did not extend to appointing

other agents to act on Lombok's behalf in selling the land. It

could share its commission as it chose, but that choice was not

effective to constitute the recipient the agent

of Lombok.

It follows, in my opinion, that Ken Guy Real Estate was not an agent for Lombok in respect of the sale. Nor. in	my
opinion, was there any ratification by Lombok in respect of

anything done or said by

Mr. Bryant, either in his capaclty

as an

employee of

Ken Guy Real Estate or

in any other capacity. The

initialllng by Mrs. Parry of the hand printed words does not in

the circumstances in whlch it occurred constitute	a ratification
of any conduct by Bryant by Lombok.

It is necessary to look at the issues raised by the

pleadings in the light of the conclusion that neither

Mr. Bryant

nor Mr. Guy

was the agent

of Lombok.

Section 52 of the Trade Practices Act provides:-

"A corporation shall not, in trade

or commerce,

engage in conduct that is misleading	or deceptive
or likely to mislead or deceive."

l '

1 .

!	28.	f ,
,.
I

The only possible corporation in the factual circumstances which

could infringe s.52 is Lombok, and

Mr. Bryant or Mr. Guy, being

natural persons, could only be liable under the Trade Practices

Act by the operation of s.75B of that Act as being persons

knowingly concerned directly or indirectly in a contravention by

the corporation, Lombok. Mr. Bryant not being Lombok's agent,

Lombok is not liable under the Trade Practices Act for any of Mr.

Bryant's acts or misrepresentations. The only possible basis of

liability for Lombok is the representation said to have been made

by Mr. Parry and referred to in paragraph

6A of the

Further Amended Statement

of Claim.

In Yorke v. Lucas (1985) 61 A.L.R.

307, the High Court

held that, before a person can be said to have been, in any way

directly or indirectly knowingly concerned in, or

a party to, a

contravention, he must

have knowledge

the essential facts

constituting the contravention. Neither

Mr.

Guy nor Mr. Bryant

on this material was knowingly concerned directly or indirectly

in any such representation by Mr. Parry

is alleged in

paragraph 6

or 6A of the Act. It follows that neither Mr. Guy

nor Mr. Practices Act as being a

Bryant are exposed to any liability under the

Trade

s.75B party to any contravention

of the

Act by Lombok.

The liability of each of them, if any,

is to be

found in the allegations of negligent misstatement or deceit at

common law.

I have already indicated that I do not accept that Mr. Parry represented, as alleged in paragraph

I am satisfied

that the representation alleged in paragraph

6 of the Further

29.

Amended Statement of Claim was not made.

I am satisfied that Mr.

Parry represented that some further fill would be required, and

indicated that there would not be very much at all required at

the front if development was in accordance with the plans, in the

light of the

fill available from footings. I am satisfied that

such

statement

induced

Miss

Vincent

to enter

into

the

contract. I am satisfied that she had decided to enter into the

contracts prior to the meeting of 3 August 1981, that its purpose

from her point of view was in respect of seeking more favourable

vendor's terms, and that what was said by

Mr.

Parry on that

evening concerning fill was not

a cause of

her signing the

contracts on 6 August 1981.

It follows that

Lombok 1 s not liable to either applicant

under

the Trade Practices Act

or as otherwise alleged in the

Further Amended Statement of Claim.

It was submitted that any representation made cannot be regarded as having been made to Supetina, because Miss Vincent

had no connection with Supetina until after the evening of 3

L -

August 1981.

I think it was within the contemplation of

Mr.

Parry, Mr.

Bryant, Mr.

Richardson and Miss Vincent on

3 August

that a company with which

Miss Vincent was associated might in

fact be the purchaser. Each

of the part-deposits signed by Mr.

Richardson on behalf of East O'Brien is issued to "Miss Vincent

I	or nominee". The draft contract signed by Miss Vincent on	4
I ~
I

l .

i	I	I :
I

!. .

30.

August 1984 and witnessed by

Mr.

Richardson similarly speaks

o€

the purchaser as "Avionne Joy Vincent

or nominee", even though

that contract was supplanted by the two contracts signed on	6
August 1981.

There are unsatisfactory features about the evidence of Supetina's involvement with this land, which reflect adversely on

Miss Vincent or on her professional advisers. It is admitted by Miss Vincent that some company minutes are a sham. The evidence shows that two trusts came into existence in respect of the

purchase of the subject properties. The trust instruments are

evidence and each is dated

4 August 1981: the Maroochy Trust and

the Kedding Trust. Mr. Richardson

1 s the settlor of the Kedding

!	Trust and Mr. Bryant is the settlor of the Maroochy Trust.	The	' ..
. .

trustee of both trusts is the applicant company. On behalf

Supetina on both documents appear the words:-

"Given under the Common Seal of Supetina Pty.Ltd.

by resolutlon of the Board in the presence of

Peter Raymond Vincent, a director, and Avionne Joy

Vincent, a director."

It is clear that Peter Raymond Vincent was never a director of the applicant company. It is also clear that Mr. Vincent was not

in Australia on

4 August but signed

at some subsequent date.

It was likely that a company vehicle would be formed to purchase the properties concerning which representations had been made to Miss Vincent. In my opinion, the suggestion that the

representations

cannot

regarded

as having

been

made

Supetina so as to entitle Supetina

to sue in respect

of them, is

31.

not

made

out:

see Halsburv’s Laws of Enslarld, 4th Ed., Vo1.31,

I	paras.	1037 and 1039; Spencer Bower and Turner on Actionable
I

Misrepresentations 3rd Ed. at

189.

I turn

now to the liability of Mr. Guy and

Mr. Bryant,

other than under the Trade Practices Act.

I .’

‘.

In the

light

Miss

Vincent’s

statements

that

discussions with Mr. Bryant concerning

fill occurred after the

signing of the contracts, counsel for Miss Vincent indicated that

liability against either

Mr. Guy

or Mr. Bryant in this respect

primarily is representations in 4A(d) and (e).

found

the

consideration

the

I have already dlscussed the representatlon referred to

in paragraph 4A(a).

The representation in 4A(b) is of the same

character as that in 4A(d).

So far as dA(c) is concerned, the

evidence of Miss Vincent was

to this effect:-

“Mr. Bryant pointed out to me that because of the

Council

approved

plans,

these

were

definite

considerations In the purchase

but, because of the

time factor in getting plans through Council, they

were not to be overlooked. They would definitely

have consideration in the purchase and that the

fact that they were being offered placed some

value on them.

‘I

There is simply

evidence to support the representations

pleaded.

It was accepted on all sides that the existence of

plans capable of approval by the Council, (a matter

to which a

special condition

27 of the contracts is directed), was

a matter

for

consideration

as enhancing

the

attractiveness

the

I .

L-.

, *

32.

!	purchase.	This allegation was not the subject	of	any	submission
I

I	by	counsel	for	Miss	Vincent.
I
I

Ultimately the position is that the applicants say that

there was a representation by Mr. Bryant to the effect that the

asking price for both parcels of the said land was a good price

from

the

point

parcels of the land would constitute a sound investment and a

good return on monies invested.

view,

and

there

was

purchaser's representation by Mr. Bryant that the purchase of one or

both

I am satisfied that the opinions and views expressed by Mr. Bryant were honestly entertained.

These	representations	were	said	to	involve	two	I
I

considerations, first:-

"Was

the

market

value

the

two

parcels

$750,000.00 or thereabouts?"

And the second being

"Could the proposed development or

similar one

have taken place having regard to building costs, interest rates, and market rentals at the time?"

On what was

in fact the market value as

6 August

1981, extensive valuation evidence was called by various parties,

the effect of which was to obfuscate rather than illuminate the

question of what in fact was the market value of the properties

as at

August 1981. Mr. Kortlang,

a valuer called

the

applicants, was opened being of the view that

a value of $250,000

was the market value of the property as at the relevant date,

August 1981.

In his evidence the figure

$280,000 was given. Mr.

Hobbs, also called by the applicants, gave evidence that in his

opinion,

at the relevant date, the market value was

$400,000.

Mr. Casagrande, who was called by Lombok, gave evidence that in

his opinion, at the relevant

date, the market value was

$602,000

and Mr. Brett, called by Mr.

Guy, gave evidence that $750.000

(the purchase price) was the relevant market value.

In my opinion, the evidence of Mr. Kortlang can be put

to one side. His evidence manifested a partisan approach and was

directed more to vindicating a position than to a dispassionate

_ .

determination of the market value

of the property at the relevant

date. At the other end

the numerical scale,

Mr.

Brett's

valuation is subject to a number

of flaws. His enquiries led him

to conclude that the subject sale was the best evidence of value

but, in reaching that conclusion,

it appears that his approach

was affected by an erroneous view

as to the zoning

of resub. 316,

a neighbouring block, and by failing to give proper weight to the

significant

differences

between

the

subject

property

and

neighbouring

property

on which a large

McEwen's

store

was

erected. The range

valuation

evidence

this

case

extraordinary. Four qualified valuers assess the market value

between $280,000 and $750,000.

It reflects the inexact nature

valuation, whether it be regarded as

an art or a science.

ETatkins J. said in Sinser & Friedlander Limited

v. John

D. Wood & Co. (1977) E.G. Digest of Cases

569 at 574-576:-

I . .

34.

"The valuation of land by trained, competent and

careful professional men is a task which rarely,

ever,

admits

precise

calculation.

Often

beyond

certain

well-founded

facts

many

lmponderables

confront

the

valuer

that

he is

obliged to proceed on the basis of assumptions.

Therefore, he cannot be faulted for achieving

result which does not admit

of some degree of

error.

Thus two able and experienced men, each

confronted

with

the same task, might come to

different

conclusions

without

anyone

being

justified in saying that either of them lacked

competence

and

reasonable

care,

still

less

integrity, in doing

his work...

Pinpoint accuracy in the result is not, therefore, to be expected by he who requests the valuation. There is, as I have said, a permissible margln of

error, the 'bracket' as

have called it. What

can properly be expected from a competent valuer

using

reasonable

care

and

skill

that

his

valuation falls within this bracket."

Regard

should

also

had

the

Valuer-General's

unimproved value of

$528,000,

recognising that the unimproved

value takes no account of the value of clearing or

fill and the

like. My assessment is that the market value at

6 August

1981

was of the order of

$600,000.

Where there are favourable vendor's terms, the selling price would be expected to be greater than the market value

which

reflects a cash transaction. Moreover, the market value is

properly to be determined on the principles expressed in Spencer

v. Commonwealth (1908) 5 C.L.R.

418, which may bear little

relationship to prices asked and paid in a volatile boom market,

where a significant component of the players operate on the

"bigger f

001" theory.

. .

has

acknowledged

that

no representation

precisely in

the terms alleged in the Further Amended Statement

Claim was said by Miss Vincent in her evidence to have been

made to her. I do not regard that that is

a fatal objection. In

my opinion it is sufficient if what he said and did was a

representation to the same effect

as that alleged. Mr. Bryant

admits in

his Defence that he said that the asking price was

"good price".

The evidence shows that on many occasions

Mr.

O'Brien referred to the asking price

as "the correct price".

Miss Vincent said:-

"Did you have some discussions

with Mr. Bryant

about that plan?

--- Yes I did and he provided me

with estimates of buildings costs, of borrowing

costs for a portion of

it and for the anticipated

rentals; and in my conversation he mentloned to me

that I could obtain rental of 4.85 a square foot

for the sheds on the site; and for those sheds

constructed toward the Sugar Road front, or toward

the front

toward the roadway access,

I could

obtain possibly

5 or 5.50 a square foot; that if

the sheds were constructed on the road site,

or in

other words if I had direct road access or direct

road frontage, I

could obtain $6 a square a foot.

He went ahead and he did calculations for me that

showed

the

bullding

cost

and

the

anticipated

rentals; he provided the estimates

at 4.85 a

square foot which was the minimum rental that

had quoted me for the site as being obtainable."

Did

you, yourself, do

any calculations prior to

entering

into the contract, in relation to the

--- I did calculations with Mr. Bryant based upon

financial viability or otherwise of the venture?

those figures, yes.

(Those figures are the figures or calculations

which appear on the single sheet site plan).

After your discussions with Mr. Bryant and after

your calculations, did

you decide to go ahead with

the project, with the purchase?

--- Yes,

I did,

because in doing those calculations,

I arrived at

a reasonable - or more than reasonale rate of

return for the amount

I was going to invest."

. .

3 6 .

A full answer to

these allegations, in my view, is that

the evidence establishes that Miss Vincent was determined to

purchase these two blocks of land prior to the calculations made

by Mr. Bryant as to building costs, borrowing costs, rentals and

the like which were performed by Mr. Bryant and Miss Vincent

between the meeting of

August and the signing of the contracts

on 6 August 1981, and Mr. Bryant's view

of the appropriateness

!	the asking price, equally, was not an inducement for Miss Vincent to sign the contracts.

Her state of

mind when giving the part-deposits appears

from her

evidence:-

"I advised Mr. Bryant that

I would proceed with one

of	the properties, but he in turn must have

advised

Mr.

Richardson

because

was

Mr.

Richardson who called round and collected the

deposit and Issued a Trust Account recelpt."

and later in respect

of the second block, she said:-

"By Monday,

had decided to proceed with the

second block.

This was before the evening meeting on

3 August.

She was asked:-

"Q.

The first time

you met the Parrys was on the

evening of 3 August 1981?

A. Yes.

37.

And before you met Mr.

Parry, you decided to

buy both blocks?

A. Yes."

Counsel for Lombok asked Miss Vincent:-

"Q.

But you

decided on the weekend preceding

August to buy both properties?

A .

Yes.

. . .

Q. Well, have you not given evidence that you had

declded to buy both blocks then.

A. Yes, I have, yes.

Q. So that your mind was made up.

A .

Yes,

but we still

had

with

negotiations to finalise in my mind the purchase

of that property.

Q. Were not those negotiations only wlth respect

to the vendor's terms?

A. Yes.

The allegatlon is that Mr. Bryant, in indicating to Miss

Vincent

that

the

asking

price

was

good

price from

the

purchaser's point	of	view, was in breach of his duty to Miss
Vincent.

I. I

The basis of the liability here alleged was expressed by Barwick C.J. in The Mutual Life & Citizens Assurance Company Ltd.

L _

v. Evatt (1968) 122 C.L.R. 556 at pp. 572-3.

This passage was

! .

summarised by Mason J. (with whom Aickin

agreed) in

Shaddock & Associates Ptv.Ltd. v. Parramatta City Council	(1981)
150 C.L.R. 225 at p.250 as follows:-

30.

I "

"...whenever a

person gives information o r advice to another upon a serious matter in circumstances

where the speaker realizes, or

ought to realize,

that he is being trusted to give the best of his information or advice as

a basis for action on the

part of the other party and it is reasonable in the circumstances for the other party to act on that information or advice, the speaker comes

under a duty to exercise reasonable care in the provision of the information or advice he chooses

to give.

opinion,

however,

none

of the

elements

liability is

relationship was not such as to impose the duty of reasonable

care.

established

this

case.

The nature of the

On the nature of the relationship between Miss Vincent

and Mr. Bryant and

her

reliance on his advlce, Miss Vincent says

that she never told Mr. Bryant that she was relying	on	his
expertise. She was asked:-

"Q. How frequently did

you meet him?

A . It would have been

- I knew John quite well as

he was regarded as

a friend.

What

did

you know about his expertise in

valuations and the like?

A . I

did

not

know

about

his

expertise

valuations but

I relied upon his advice."

Mr.

Bryant

formed

the

view

that

this

was

good

opportunity on favourable terms. He was not alone in that view,

Richardson being

of the same opinion. It is not inconslstent

with

some at least

of the valuation evidence.

3 9 .

If there was in the circumstances

duty on Mr. Bryant

owed to Miss Vincent, it

is no higher than the care and skill

a real estate salesman of ordinary competence familiar with

properties the nature of the subject properties. It was not

duty to advise Miss Vincent as

to value in the same way as a

registered valuer and

with the expertise expected

of a registered

valuer; Luciano v.

D.G.

Pty. Ltd.

(1980) 25 S.A.S.R.

568 at

p.582. I do

not

that

his

role

properly

approached on

the basis that he was an Investment adviser or a

valuer in respect of

his discussions with Miss

Vmcent.

If,

contrary to my opinion, the relationship between

Miss Vincent and

Mr.

Bryant was such as to require

him

exercise reasonable care, in my view the want	of reasonable care
has not been made out.

As earlier indicated,

I conclude that in any event there

was no reliance.

On the

evidence, I am not satisfied that there is

any

common law liability in either Mr. Guy or Mr. Bryant to either

appllcant.

The final matter concerns the question of repudiation

and rescission. This aspect	of the matter has caused me great
difficulty.

By clause

24 of each contract, Supetina agreed to pay

the balance of the deposit monies by

5 October 1981. Further, it

40.

undertook to pay interest only on the unpaid settlement monies at

the rate of 16% per annum, payable by equal quarterly payments of $13,500 in the case of each contract, until

5 January

1984,

whereupon the whole of the principal sum, together with interest,

became payable in full.

result Department to acquire part of the subject land, Supetina and

the

intention

the

Main

Roads

As a

Lombok entered into

deed in respect of each property, dated

4 May 1983. These deeds were the result of an agreement reached

concerning the investment of compensation monies. They provided,

inter alia, that the date

by which Supetina was to pay Lombok the

balance of purchase monies and any interest thereon was extended

January

1986,

and that interest in arrears was to be

,..	I.
I

calculated on quarterly rests at the rate of

10% per annum.

I '

Supetina failed to make some of these payments. On 17

September 1982, Lombok issued a Notice

Default in respect

an instalment due

on 6 July 1982. Supetina subsequently made

payment, and this was accepted by Lombok. Other payments were

not made. However, in these cases, no Notice of Default

was

given. Supetina argues that

the failure to make these further

payments is explicable because it had	a cross-claim or set-off in
respect of these amounts.

The applicants correctly submit that each contract is "instalment contract" as defined

by s.71(2)(b) of the Property

Law Act, 1974, since it

is "an executory contract for the sale

of land in terms of which the purchaser is bound to make

payment

payments (other than

a deposit) without becoming

entitled to receive

conveyance in exchange therefor". This

contention is Developments Pty. Ltd. v. Realty Developments Pty. Ltd.

accordance

with

the

decision

Wacal

(1978)

140 C.L.R. 503.

Section 72 of the Property Law Act restricts a vendor's

right to terminate a contract "by reason of default on the part of the purchaser in payment of any instalment or sum of money

(other than a deposit or

any part thereof) due and payable under

the contract" until

30 days after service

a notice in the

I '

prescribed form. But that statutory restriction

on the vendor's

right to terminate has no application in the present case, since

I .

Lombok did not purport to determine the contract by reason of

Supetina's non-payment. It purported to rescind the contract

because Supetina's action in bringing its application In this	t
Court was said to repudiate the contracts. This ground for

purported rescission appears in a letter dated

2 March 1984 from

the solicitors for

Lombok, which I again set out:-

"We refer to

your client's application dated

January 1984, and in particular the relief sought in paragraphs (a) to ( g ) thereof.

Your client has, by its action, repudiated the

contracts dated

6 August

1981 between the first

applicant and the flrst respondent and we hereby

give you rescinded both contracts."

notice that the first respondent has

That letter elicited the following letter, dated	28	May	1984,
from Supetina's solicitors:-

42.

“Your client

your letter

2nd March 1984,

unlawfully repudiated the above contracts. Since

that date your client has continued

to assert that

it has

lawfully terminated the contracts and has

made it accordance with their terms if it should

clear

that

would

not

perform

be called

upon to do

s o .

Our

client

hereby

accepts

your

client’s

repudiation and rescinds the contracts.“

Supetina sought the following relief

in its application

to this Court:-

Against the First Respondent

a declaration

that contracts in wrlting dated

6th August,

1981

entered

into

between

the

First

Applicant as purchaser

and

the

First

Respondent as vendor

are

vold

andfor

voidable

the

instance

of the First

Applicant:	,.
Against the First Respondents a declaration	l .I

that deeds

guarantee executed by the

Second Applicant in favour

the First

Respondent on or about 6th August, 1981 are

vold or voidable at the instance

the

Second Respondent;

Repayment by the First Respondent to the

First Applicant of all moneys paid by the

First

Applicant

the

First

Respondent

under the said contract;

Further

alternatively

against

all

respondents

damages

pursuant

the

provislons of the Trade Practices Act

1974;

Further or alternatively against the First Respondent an order that the said contracts and the said deeds of guarantee be declared void or be rescinded;

Further or other relief pursuant to Section

87 of the Trade Practices Act 1974;

Further or alternatively against the Second and Third Respondents damages for breach of

duty

andfor

misrepresentation

andlor

negligence.

”

I -:	43.
I

The first issue, then, is whether Lombok was justified in treating Supetina's application to the Court as constituting	a
repudiation of the contracts.

An	influential decision concerning this issue is the

English

Court

Appeal

decision

Spettabile

Consorzio

Veneziano di Shipbuildinq Co., Ltd. t1918-193 All

Armamento

e Naviqazione

Northumberland

E.R. Rep. 963, (19191 121

L.T. 628.

In the light of submissions by counsel for Lombok, it

is	necessary to refer to the facts of that case. An Italian

company entered into six contracts for the building of ships by

the defendants. The ships were to be constructed "as soon	as
practicable" after the builders obtained permission from the

government to do

so.

The builders obtained approval in respect

of one ship, whereupon

the

buyers intimated that they regarded

the contracts as at an end and would commence action to establish

their position. A writ was issued

agamst the builders. Duke

L.J., at p.967, describes the writ as being in "an exceedingly ambiguous form". Further, the report of the case does not make clear the basis upon which the buyers regarded the contracts as

at an end. It appears that the

writ sought rescission of the six

contracts and, alternatlvely, a declaration that the contracts

were null and void,

or had been frustrated, and were at an end.

The writ

further

claimed

damages

for

misrepresentation

connection

with

the

contracts,

suggesting

the ground

for

rescission was founded on fraud or

misrepresentation. The writ

also claimed the return of certain monies.

. t

44.

After receipt of the letter intimating legal action, and

the writ itself, the builders wrote to the buyers stating that,

since the buyers persisted in treating the contracts as at an

end, the builders would not proceed further with the construction

of the ship and proposed to "counterclaim in this action for

damages for repudiation of the contracts".

The

action on the

first writ was discontinued but, ten days later,	a new action was
commenced.

The Court of Appeal held that the letter intimating the

commencement of legal proceedings and the issuing

of the writ in

the

first

action

did

not

constitute

repudiation

the

contracts and, accordingly, the builders' letter,

to which I have

referred,

was

ineffective

constitute

acceptance

repudiation.

The

observations of the members of the Court of Appeal about whether

the issue of a writ should be understood to evince an intention

Importance of

the

case

lies

the

general

not

bound

contract. At p.966, Warrington

L.J.

stated:-

"...where one party to

a contract conceives that he

is no longer bound by the contract

or has a right

to have it rescinded

or declared null and void,

and issues

writ for

the purpose of obtaining

that which he believes to be his right, he does not by that mean to repudiate the performance of

the contract in any event. It seems to me that

submits to perform it if the court,

as the result

of the action, comes to the conclusion that

he is

bound to perform it, and it cannot be taken to be

an absolute repudiation.

45.

Duke L.J. stated

at p.

967 that he could conceive of cases in

which the commencing of proceedings would be held to evidence

repudiation of a contract but that, in the case at hand, the writ

I I

was of

"an exceedingly ambiguous

form" and was not of

"the

explicit

character

which

required

to establish

unconditional proffer Lordship adopted the remarks of Channel1 J. in Societe Maritime

repudiation

of a

contract".

His

et Commerciale

v. Venus Steam Shipping Co., Ltd. (19041, 9 Corn.

Cas. 289

that parties should be entitled to seek a declaration

whether or not a those remarks, stated that parties were entitled

contract is binding. Duke

L . J . ,

in adopting

"to assume that

they may come to court in

a properly framed action and obtaln the

I-

declsion of the court as to what their rights are in respect of a	t .
matter in dispute".
i

Atkin L.J. regarded the writ as seeking in substance

declaration whether

or not the plaintiffs were any longer bound

I	by the contracts. He observed at p.968:-
I

"It appears

that

entirely

different

thing

from

an intimation

the

plaintiffs that they in any event are not going to

perform

the

contracts.

something

quite

dlfferent

from

repudiation.

So far from

expressing the intention of the parties not to

perform the contracts, it appears to

me to leave

it to the court to say whether

or not the contract

is to be performed, and If the court says it

is,

then

impliedly

states

that

will

performed.

The decision in Spettabile establishes that the fact

that a party issues a

writ seeking a determination of whether it

bound to perform

contract does not, by that conduct,

46.

evidence a

establishes that, at least in the area of long term supply

contracts and building contracts, parties should be entitled "in

a properly framed action" to obtain a prompt decision from the

court concerning their rights. Duke and Atkin L.JJ. each stated

that they conceived of cases in which a writ may be issued in

circumstances which make it plain that the plaintiff does not

repudiation

of the

contract.

writ.

The

case

propose to perform the contract in any event. In such

a case,

the court would infer

a repudiation by the plaintiff which might

be accepted by the defendant.

Counsel distinguishable from the present case since

for

Lombok

contended

that

Spettabile

it involved a dispute

about the construction of certain contracts, whereas

this is not

such a dispute. While the report in Spettabile

is far from clear

about what the substance of the dispute was between the parties,

I am

unable

counsel's

submlssion

that

the

case

concerned only

a dispute as

to the terms of the contract.

appears in the judgment of Warrington L.J. that the

plamtiff

sought rescission of

the contracts and a declaration that the

contracts were null and void on

the

grounds of fraud and

misrepresentatlon. Therefore, there is no basis to distinguish	i-
,.
i
Spettabile on the basis that it was simply an action seeking the

court's construction of

a contract.

Spettabile has been cited in various texts and later

cases, the most authoritative recent case being the House

Lords decision in Woodar Investment Development Ltd.	v. Wimpev
Construction U.K. Ltd. C198011 1 All E.R. 571.

j	S . '	47.
I

Much of

the case law on what constitutes "rcpudiation"

involves disputes over the proper construction of contracts, in

which a party advances an erroneous view of the effect of a

contract and the issue arises whether the erroneous assertion

amounts to a

repudiation of the contract,

as properly construed.

Two recent leading Australian cases in this area are D.T.R.

Nominees Pty. Ltd. v. Mona Homes (1978) 138 C.L.R. 423, Green v.

Sommerville (1979) 141 C.L.R. 594.

case

whether the action of the respondents entitles Supetina to orders

for rescission and damages. However, there seems no reason why

does

not

involve

any

dispute

about

the

This

construction

the contracts. Instead, the dispute concerns

the

general

principles

which

apply

cases

erroneous

assertlons of generally to disputes about the rights of parties to

the

construction

a contract

not apply

a contract.

There is no sensible point of distinction between an assertlon by

a party that

it is not bound to perform a

contract because the

terms of the contract do not require

it, and an assertion by a

party that it is not bound to perform

a	contract for some other

reason, such as factors affecting the formation of the contract

or its continuing validity.

In both cases it remains to be decided whether the

assertion evinces an intention not to be bound "in any event",

that is, whether or not its assertion is justified. The fact

that a

party's assertion that it is not bound to perform takes

the form of legal proceedings does not necessarily evince such an intention. For the commencement of proceedings to constitute a

48.

repudiation, the nature of the action, Lhe

conduct 01 the party

or other circumstances would need to evidence

an intention by the

party not	to perform the contract, irrespective of the court’s
decision.

Some of the observations of the members of the House of

Lords

Woodar Construction U.K.

Investment

Development

Ltd.

v. Wimpey

Ltd. may be thought to be restricted to cases

of termination in reliance upon the terms

of the contract itself.

Lord Denning M.R. in Paal Wilson

& Co. v. Partenreederei t19837

A . C .

854

at p.877 stated in obiter that Woodar Investment

Development Ltd.

was decided “on the ground that the vendors were

entitled to rely simply on the terms of the contract”.

However, it

1 s notable that the House of Lords in Woodar

Investment Development Ltd. referred to Spettablle with approval. various passages from Spettabile stated:-

“There is a tract of authority which vouches the

proposition that the assertion by one party to the	,
other of a genuinely held but erroneous view as to	l

the validity or effect of

contract does not

constitute repudiation. (my emphasis).

I .

I	conclude that there is no sound distinction in principle

between an assertion by a party that it is not obliged to perform

a contract because the terms of the contract

do not oblige it,

and an assertion by a party that it is not obliged to perform a

contract because the contract ought	to be declared by the court
to be rescinded.

49.

i ' . I

In the light of my conclusion that the principle in

Spettabile applies to this case,

I now turn to consider whether

this case falls within the general rule

so that the commencement

of proceedings cannot be taken to be

an absolute repudiation, or

whether this is a case:

"where a writ may be issued in such cicumstances,

possibly combined with other declarations of the

rights of the parties, as to make it plain that

the party issuing the writ, in any event and

notwithstanding the decision of the court of law,

does not propose to perform the contract. (Atkin

L . J .	at 969).	,	I
i

The circumstances which would place this case within the

latter category may be briefly mentioned. It may be suggested

that the flnanclal difficulties of Supetina were such that it was

not in a position to perform the contracts in any event, and the

commencement of proceedings may be regarded as	a speculative
attempt to escape from contracts which it was not able to

perform. The suggestion that Supetina would not perform "in any

event and bolstered by the

notwithstanding

the

decision

the

court",

fact that the

basls upon which it sought to

escape the contracts may be viewed as opportunistic, and that its

failure to make instalment payments of interest may have occurred

not because it had a genuine set-off or counterclaim, but because

it was financially unable to do

so. These factors,

may be

argued, take this case outside the ordinary rule in which the court cannot draw the inference from the issue of proceedings that the party does not intend to perform the contract. However,

having carefully considered these factors,

I am of the opinion

:, :

that the issuing of proceedings in this case should be governed

the

normal including the alternative claims for damages, which

rule.

There

is nothing

the

application,

evinces an

intention not to perform if the application is unsuccessful. In deciding the issue of repudiation, the principles enunciated in

!	-:
I

the oft cited passage of the judgment of

Lord Coleridge C.J. in

Freeth

v. Burr

(1874) L.R. 9

C.P.

208 at p.213 need to be

observed: -

"...in

cases

of this sort, where the question is

whether the one party is set free by the action of

the

other, the real matter for consideration

whether the acts or conduct of the one

do or do

not amount to an intimation of an intention to

abandon and altogether to refuse performance of

the contract.

In Spettabile, Atkin L.J.,

at p.968, after reviewing a

number of authorities, stated:-

"They all come to the same thing, and they all

amount at any rate to this, that it must be shown

that the party to the contract made qulte plain

his own intention not to perform the contract."

In all the circumstances, I am unable to draw the inference that,

in any event and regardless of an adverse decision

of the court,

Supetina

intended

not

to perform

the

contracts.

Accordingly,

Lombok

was not

justified

its

solicitor's

letter of 2 March 1984 in treating the application to the court

as a repudiation of the contract.

. .

51.

The question then arises whether Supetina was entitled to rely upon Lombok‘s ineffective rescission of the contracts

1 I-

;

itself a repudiation of the contracts, and thereupon to rescind,

as it purported to do by its letter of 28 May

1984.

I	A similar	question	was	considered	by	the	High	Court	in
i

D.T.R.

Nominees Ptv. Ltd.

v. Mona Homes Pty.Ltd. (1978)

138

C.L.R. 423. That case concerned an ineffective rescission, based upon a purported repudiation by the appellant in asserting

I	erroneous	interpretation of a	contract.	At	p.433,	Stephen,	Mason
I

and Jacobs JJ. stated:-

“The respondents purported to rescind only upon the	t ,I
basis that the appellant would not complete the	1

contract as

correctly interpreted. They were in

error in rescind at the stage when they purported to do	regarding	themselves	as	entitled	to	t
t

but they were not in error in their interpretation

of the contract. The actions

of the parties must

now

considered

the

light

the

true

interpretation of the

contract.

The

purported

rescission of 19 July did not evince

an intention

not

proceed

with

the

contract

correctly

interpreted; it

did

than

evince

intention not to proceed with the contract on the

basls of

the incorrect interpretation then being

advanced

the

appellant.

That

cannot

regarded as a repudiation which would entitle the

appellant to rescind when

it was itself a party in

error.

‘ I

The Court held that the appellant, by insisting on its incorrect interpretation of the contract, was not at the time willing to perform the contract on its proper interpretation and, accordingly, was not entitled to rescind the contract.

Although counter-assertions by the parties about the construction of the

that

case

concerned

assertions

and

conkract, its governing principles appear

to me to apply to the

present case of assertions about whether the contracts were

binding.

Supetina, by its application to the Court, made an

assertion, which

have found to be erroneous that, for the

reasons stated in its Statement of Claim, the contracts were void and/or voidable at its instance and that the Court should order

their rescission. For the reasons which I have given,

Lombok was

not entitled to view Supetina's appllcation to the Court as a

repudiatlon

of the contracts, because the application did not

evlnce

an intention

not to perform the contract if the Court

found against it.

But

Lombok's

letter of resclssion of

2 March

1984,

together wlth its conduct and statements made by

Mr. Parry make

it clear that from that date

Lombok did not regard itself as

bound by the contracts. Its conduct manifested a repudiation	of
the contracts.

The question is whether Supetina is entitled to rescind

based on Lombok's repudiation.

In D.T.R. Nominees (supra), the majority said

at p.433:-

party in order to

entitled to rescind for

antlcipatory breach must at the time of rescission

himself be willing to perform the contract on its

proper interpretation."

53.

A s at 28 May 1984, at

the time Supetina purported to rescind for

wrongful repudiation, Supetina was in breach of some

its

obligations under the contracts. A s I have found, the only bases

claimed for not being bound by those obligations were not

available to it.

The

payments for July 1983, October 1983 and

January 1984 had not been paid.

Supetina was

breach, but asserted that it was not

because the contracts were not binding on it.

Supetina's position was similar to the vendor in

D.T.R.

Nominees (supra). The vendor was in breach of contract.

At the

time it purported to rescind, the vendor was insisting on an

incorrect interpretation of the contract. The majority held, at

p.432, that thls did not permlt the attribution to it of the

intention to repudiate the contract. However, the majority did

hold, at p.433, that the vendor:-

"by that stage showed that 'definite resolve or

decision against doing in the future what the

contract' Crequiredl which is referred to by Dixon

C.J. in Rawson v. Hobbs (1961) 107 C.L.R. 466 at

p.481."

It was held that this disentitled the vendor from rescinding. It

1	was not, at that time, willing	to	perform the contract on its
I

proper interpretation, although the majority was of the view that

i	I
l

I	the vendor might fall into that category	of	parties who "may be
!

willing to recognise his heresy once the true doctrine is

enunciated or

he may be willing

to accept an authoritative

exposition

the

correct

interpretation."

54.

This

contrasted with the purchaser's posltion in

Lennon v.

Scarlett and Co. (1921) 29 C.L.R.

499. The defendant

had wrongly purported to rescind. At a

time when the plaintiff

was willing to complete the contract according to its true terms,

the defendant declined. It was held that the plaintiff could

the

defendant's

repudiation

and

rescind.

Supetina, when it purported to rescind, unlike the

plaintiff in Lennon

Scarlett and

Co., was not willing to

perform the contracts according to their true terms. The time

for performance

of some of

its obligations under the contracts

had passed without performance. At the highest for Supetina at

that	tlme was the possibility that, on being told that the

contract was binding on it, it would then act as	it should have
been acting.

Supetina's appllcation to Court was without a proper basls. Its attempt to avoid the contracts stands in the same

category as the insistence on a wrong interpretation

the

appellant in

D.T.R. Nominees Ptv. Ltd.

v. Mona Homes Ptv. Ltd.

(supra). Supetina was seeking to avoid having to perform the

contracts according to their terms, although

I have found that

cannot be concluded that it intended not to perform if its

contentions were rejected by the Court and the contracts were

held to be binding.

,I	In my opinion, Supetina was not entitled to rescind.

55.

The conduct of the parties shows that, by the time the matter came to trial, neither party intended that the contracts

should be performed.

In particular, the evidence at trial

Mr. Parry

in respect of the Main Roads Department compensation

and the efforts

of Lombok to regain possession of the title deeds

show that Lombok no longer regards the contracts as binding on

it.

Given that neither party had effectively rescinded the

contracts, but that at trial neither contended that the contract

should be further performed, the position falls to be resolved in

accordance with Summers

v. The Commonwealth (1918) 25 C.L.R. 144.

In that case, the parties were found to have

"so

acted in

relation to each other as to abandon

abrogate the contract"

(at p.152).

The consequence

of the abandonment and abrogation

was that the deposit monies were returnable. A similar position

obtained in

D.T.R.

Nominees Pty. Ltd.

v. Mona Homes Pty.Ltd.

(supra) where, although

no claim was made for the return of the

deposit upon the basis that the contract had been abandoned, the

High Court was of the view that, since the contract had been

abandoned and abrogated by

the time

of trial, the deposit was

returnable. There was no order for payment

of interest.

In respect of the instalments

of interest which have

been paid, it seems to me that the same principles apply. The

contract has been terminated, not by the action of either party

in rescinding it, but by virtue

of "tacit mutual abandonment"

Summers v.

The Commonwealth (supra). I am content to follow the

course adopted in

D.T.R.

Nominees and simply to order the return

“G

56.

of those monies,

sought by Supetina.

I make no order for

interest thereon.

No basis was outlined in argument upon which

any

award of interest

these

sums

should

made.

The

application by Supetina merely sought “the return

of all moneys

paid by the First Applicant

to the First Respondent“, as did

paragraph 22(h) of the Further Amended Statement of Claim, though

this was based on the claim that Supetina was entitled to

rescind.

As	the learned author, Dr.Carter, correctly states in

para.827 of Breach of Contract, 1984, Law Book Company Limited,

“Wrongful terminations sometlmes give rise to quite

complex situations so far as the question of readiness and willlngness is concerned“

Should I be wrong in my conclusion that Supetina was disentitled to rescind the contracts, then the contracts came to an end at

the time of the rescission by

Supetma by the letter of 28 May

1984. On that holding, in my opinion, Supetina would be entitled

to the same order as

propose to make on the basis that the

parties have abandoned the contracts. Each contract recites:-

“if this sale shall not be completed for any reason

other than the default of the purchaser the said

deposit shall be refunded

to the purchaser.“

And if, contrary to

findings, Supetina had repudiated the

contracts and

Lombok

had

thereupon rescinded the contracts,

Supetina would have been entitled to

a return of the instalments

paid, subject, of course to any claim for damages by Lombok:

G-

57.

McDonald v. Dennvs Lascelles Limited (1933) 48 C.L.R. 457 at p.477-a. A f o r t i o r i , Supetina would be entitled to them if it

had not repudiated the contract, but the contracts had terminated

for 'some reason other than its default.

[1986] FCA 310

6 Jun 1986