Tyeka P/L v Clarke
[2017] SADC 96
•30 August 2017
DISTRICT COURT OF SOUTH AUSTRALIA
(Civil)
TYEKA P/L & ORS v CLARKE
[2017] SADC 96
Judgment of Her Honour Judge Tracey
30 August 2017
TRADE AND COMMERCE - TRADE PRACTICES AND RELATED MATTERS - CONSUMER PROTECTION
MISLEADING, DECEPTIVE CONDUCT
TRADE PRACTICES ACT 1974 - MISLEADING AND DECEPTIVE CONDUCT - MISREPRESENTATION ACT 1972
Plaintiffs purchased a rural property and seek rescission of contract or damages - Property advertised as supplying good stock water. Plaintiffs inspected property and allege Defendant’s agent made representations as to the source, quantity and quality of water. Allege water seen in a 10,000 gallon tank on inspection had been filled from a bore that was off-site. Whether Defendant and agent acting in trade or commerce - whether water seen was sourced elsewhere – whether bore on the purchased property was capable of filling the tank - whether description by agent amounted to misrepresentation –– whether acknowledgment by third plaintiff that had not relied on certain representations was a bar to remedy – no misrepresentation – claim dismissed.
Trade Practices Act 1974 s 52; Misrepresentation Act 1972 s 8 & 16A; Land and Business (Sale and Conveyancing) Act 1994 s 35, referred to.
Concrete Constructions (NSW) Pty Ltd v Nelson (1960) 169 CLR 594; O'Brien v Smolonogov (1983) 53 ALR 107; Bevanere Pty Ltd v Lubideuse and Others (1985) 59 ALR 334; Morton v Black (1988) 83 ALR 182; Argy v Blunts and Lane Cove Real Estate (1990) 26 FCR 112; Williams v Pisano (2015) 299 FLR 172; Netaf Pty Ltd v Bikane Pty Ltd (1990) 92 ALR 490; Campbell v Back Office Investments Pty Ltd (2009) 238 CLR 304; Commercial Management Services (SA) Pty Ltd v Glen Searles Real Estate Pty Ltd [2005] SADC 8; Guglielman v Trescowthick [2004] FCA 326; Smolonogov v O'Brien (1982) 44 ALR 347, considered.
TYEKA P/L & ORS v CLARKE
[2017] SADC 96
Tyeka Pty Ltd,[1] James Williamson and Patricia Williamson,[2] (‘the Plaintiffs’) purchased land comprised and described in Certificate of Title Volume 6064 Folio 655 (‘the property’) from the defendant James Clarke (‘Mr Clarke’). The Plaintiffs issued proceedings seeking damages from Mr Clarke in the sum of $265,300 for misleading and deceptive conduct. Alternatively, they sought an order for rescission relieving them of the burden of the contract.
[1] Described in Third Statement of Claim as the trustee of the Tyeka Super Fund.
[2] Described in the Third Statement of Claim as the agents of Tyeka in its capacity as the trustee of the Tyeka Super Fund and principal beneficiaries of the Tyeka Super Fund.
The Plaintiffs had also issued proceedings against Elders Rural Services Australia Ltd, trading as Elders Real Estate, (‘Elders’) which were formally discontinued on 14 June 2016.
Background
In October 2009, the sale of the property was advertised by Elders on the internet (‘the advertisement’).
The advertisement, listing a sale price of $150,000, read:
Sections 109 Hd Of Uroodna CRADOCK
Tyeka
89.40 hectares, 220.93 acres
Situated in some of the Flinders Ranges most scenic areas ‘Tyeka’ commands some magnificent sights. Ideal as a hobby farm, weekender, or holiday rental proposition, close enough to the historic township of Hawker for those extra comforts if needed.
The grazing land is generally rated at 1 sheep / 5 acres by the locals. The majestic old homestead is steep in history and is ready to live-in.
Waters
Bore at homestead 200’ deep . Good stock water supplied. The house is on rainwater and the bore can be used as a back up. This bore also supplies 10,000g tank and trough in paddock for stock use.
15,000g rainwater storage supplying house
1 x 5000g underground tank
1 x 10,000 concrete tank
1 x 10,000g tank and length of trough in paddock
Rainfall
Long term district average annual rainfall 300mm.
Topography
Flat to slightly undulating soft grazing country.
Improvements
Homestead –stone, outside freshly painted on mains power, partially renovated, office,
3-4 bedrooms, lounge, open fireplaces, gas and ARG wood stove in polished floored kitchen dishwasher, upgraded toilet and shower with separate laundry.
Outbuilding
Stone 2 car garage with old workers quarters (2) attached, with adjoining besser brick
accommodation (2) attached. This complex is in need of repair.
Old engine room
Dog yard
Fencing
One main paddocks plus house yard.
Principally 4 plan & 2 barb or 5 plan 1 barb steel posts in good condition, majority.
·Land Area 89.4 hectares (approx.)
The particulars contained herein are supplied for information only and shall not be taken as a representation in any respect on the part of the vendor or its agent. Interested parties should contact the nominated person or office for full and current details.
Mr and Mrs Williamson read the advertisement and spoke with the agent at Elders, Mr Graeme Jones (‘Mr Jones’). On about 15 March 2010, they visited the property and met with Mr Jones. They were shown a 10,000 gallon concrete tank (‘the tank’) which was full of water, and a windmill and bore (‘the bore’) said to have supplied that water. The Plaintiffs allege that they were induced by the representations made in the advertisement and by what they were told by Mr Jones on the telephone and at the inspection of the property, (‘the representations’) to sign a contract for the purchase of the property for the full asking price of $150,000. The contract was signed on 20 March 2010. The Plaintiffs allege that the representations were deceptive as to the way in which the property was supplied with domestic and stock water. The Plaintiffs claim that the water they observed in the tank and a stock trough was not in fact sourced from the bore. They would, they say, not have purchased the property but for the deception by Mr Clarke and are entitled to an election between rescission and damages.
The Plaintiffs allege that the representations were made in the course of trade or commerce for the purpose of the Australian Consumer Law (‘ACL’) or alternatively the Trade Practices Act 1974 (‘TPA’).
The Witnesses
Mr and Mrs Williamson both gave evidence. The Plaintiffs called engineer Dr David Ellis (‘Dr Ellis’), John Reynolds (‘Mr Reynolds’) and valuer, Robert Brooke (‘Mr Brooke’).
Mr Clarke gave evidence and called his station manager Kevin Sunners (‘Mr Sunners’), Mr Jones, and Mark Hilder, who had attended the property and carried out repairs to the bore (‘Mr Hilder’) and Robin Norris, a valuer (‘Mr Norris’).
Mrs Williamson
Mrs Williamson first saw the advertisement on 7 March 2010. At the time she was in employment as an insurance broker and living at Williamstown.[3]
[3] T42.
She and her husband had started to consider the question of retirement. They had limited funds as they had made bad investments, had lost a lot of money, and had to start again.
Mrs Williamson said it was always their intention to find a property of a couple of hundred acres where they could reside and have some stock and garden, and some sort of supplementary income. Her parents had owned a rural property and she had been involved with stock and animals throughout the years at different times, and in her work, had specialised in agricultural insurance.[4]
[4] T43.
She and her husband were looking to see if they could find a property that was going to fit their requirements. They had inspected a property in Mannum but as there was no house on that property they decided it was not suitable. When they saw the advertisement on 7 March 2010, both she and her husband thought it sounded a good option for them. She made an inquiry on line for additional information. Mr Jones replied, informing her that the property was available for inspection.
Mrs Williamson spoke with Mr Jones by telephone and made notes of her conversation.[5]
[5] Exhibit P2.
Mr Jones explained to her that the owners were from the area, had a property nearby, and were subdividing some of their property. Mr Jones told her the size of the property and went through the advertisement. He talked about the water available on the property, saying it could be used for washing but that rainwater would be better for drinking. He explained there was a bore providing good water and that sheep had been run on the property. The house would require a lot of work.[6]
[6] T47-48.
Mr Jones explained the land was going to be made freehold and Ministerial Approval would be necessary, meaning there would be some delay in settlement. Mr Jones told her that there had already been a couple of offers on the property for the full price which had fallen through because of an inability to obtain finance. Mrs Williamson arranged to inspect on Sunday 14 March 2010.
Mrs Williamson said that at the inspection she and her husband told Mr Jones what they were looking for and that they wanted to give up working in the city, put in a vegetable garden and run some sheep. She could not recall if Mr Jones said their plans were a good idea or not.[7]
[7] T64.
The inspection started at the entrance to the property, walking to the windmill and down around the house. She said she was shocked by the condition of the house, noting that it would require a great deal of work. They inspected the tank which was in a state of disrepair with steel bands around it and a new liner but there were gaps. Beside it was a black poly tank and a trough with water for stock.
She did not observe any connection between the poly tank and the sheep trough. Mr Jones said the vendor would be removing the poly tank from the property before settlement.[8]
[8] T53.
Mr Jones told them how good the water was by climbing up onto the tank saying 'It's absolutely fantastic water. You can have a drink'[9] and he scooped water in his hands and drank, asking Mr Williamson if he wanted to get up and have a look. She said her husband got up but did not have a drink. From where she was she could see the water was clear.
[9] T54.
Mr Jones told them the windmill was not a bore, but rather, was a well, and that wells are better than bores because the water is normally closer to the surface. Mr Jones told her the bore had been filled in because of a rabbit problem years ago.[10]
[10] T65.
He said the water went down to 200 feet and they were only pumping from 60 feet. He said they could put in another length of pipe and there would be a lot of water there.[11]
[11] T56.
As regards the advertisement referring to a good supply of water for stock, Mr Jones told them 'You've got plenty of water there'. He said there had been no-one at the house for a little bit of time but that Mr Clarke had always put stock on the property.
Mrs Williamson said she believed the source of water in the tank was from the bore because that was what Mr Jones had told her.[12] Mr Jones had not told them anything about stock water on the property being sourced from a remote location.
[12] T57.
On the drive back home Mrs Williamson and her husband decided they would purchase the property and the next day she contacted Mr Jones and said they were prepared to make an unconditional offer for the full asking price. The offer was accepted by Mr Clarke and they received a copy of a contract the next day.
Mrs Williamson received an email dated 18 March 2010 attaching new ‘certain conditions’.
Mr Jones had telephoned Mrs Williamson telling her that there were ‘pretty standard conditions' that needed to be attached to the contract.[13] Mrs Williamson said she and her husband read through the conditions about warranties and understood that ‘it wouldn't be expected that you could warrant how much stock you could put on a property, what profitability was there, how long water would last. We accepted that that would be a standard type of condition’.[14]
[13] T61.
[14] T62.
Mrs Williamson said they had no intention of going up to the property immediately, as they thought the land had been ‘overstocked’ and planned to let it recover for a couple of years.[15]
[15] T65.
The contract included a statement to the effect that the property had operated as a farming enterprise for the previous five years. The expression 'single farm enterprise' did not, she said, register with her to any great extent as she was more interested in the attachment pages which she read through carefully before signing, to understand what council requirements were for the land. She understood the property was in a primary production zone and that there were certain uses that could and could not be made of the property. She paid particular attention to 'Land Use' 'Intensive animal keeping' because if they were ‘going to try and get some sort of income off that land, we would not be looking at just putting 20 sheep out in the paddock, we would do something more intensive and handfeed and water and get a better profit out of it’.[16]
[16] T67.
Mrs Williamson explained in relation to intensive animal keeping that ‘Normally it would be that you would buy in feed and you would contain the stock in a more closed-in area, and for fattening up lambs, passing them on to market, doing things like that in a more intensive environment. Then you would weigh it all up so you would get some sort of better income generated than just leaving them in the paddock where we didn't have many acres to work on, so it would be something that could be done.’[17]
[17] T67.
Mrs Williamson said the availability of water was absolutely relevant to a consideration of intensive care animal keeping at the time she read the contract ‘because everything relied upon water being available in a satisfactory form and volume to be able to keep livestock healthy and provide you with feed and whatever’.[18]
[18] T67.
Before settlement on 30 July 2010, Mrs Williamson and her husband collected a key to the homestead from Mr Clarke and dropped off some furniture. They checked the boundary fences and made sure everything was intact and left.[19] They noticed a front-end loader was being used to dig a trench and saw that there was pipe work being done outside the external fence. They did not, she said, investigate the work in detail on that initial trip, nor did they inspect the windmill or the tanks.[20] They did one more trip to the property before moving in.
[19] T71.
[20] T72.
Mr Williamson moved to the property in around September 2011 and she moved in December 2011. Mrs Williamson said that when she arrived, there was no water coming from the windmill or from the bore. The tank in the paddock had disintegrated and fallen to pieces. There was no water going into the tank and no water coming into the house, meaning the toilet could not be flushed. There was only one tap in the yard and that was corroded.[21]
[21] T73.
Mrs Williamson said in that year she had not been well and decided it was time she made a move. It cost somewhere around $6,000 to move to the property. She gave evidence of her and her husband’s income in the years 2009, 2010 and 2011.[22]
[22] T74.
She understood that her husband had been trying to do something about the lack of water prior to her arrival. She had spoken with Mark Hilder from the company Hildabuilt a couple of times and understood he had come to the property prior to her arrival, pulling up the bore. She had seen the old equipment that had been below the ground lying near the windmill. The Hildabuilt employees came and replaced all the old system with all new equipment on 22 December 2011. She said she was very excited about the work thinking ‘what a great Christmas present and we were going to get the bore fixed’.[23] When they had engaged Mr Hilder to come and do the work they decided it was necessary to put in new irrigation pipes around the garden and taps to bring water to the toilet so that when the bore was put into operation they would be able to have water through to the garden. They dug in the irrigation pipes, risers and taps outside the boundary fence of the house. After Hildabuilt’s work, the water was at a ‘very, very low pressure and only a small amount of water’.[24] She spoke with Hildabuilt, who said it would take time for the pressure to build. She and her husband left for a family Christmas in Streaky Bay, returning about a week later.
[23] T76.
[24] T76.
On their return there was no water coming out the pipe in the paddock. They made several phone calls to Hildabuilt and because Mr Hilder was so busy, he sent Andrew Hilder and an employee to the property on a Friday. They could not work out what the problem was. She said:[25]
They just shook the thing like you wouldn't believe and shook it all madly and then let it go and said 'Look, we are getting a bit of water out of it now. It is going to take some time to build up pressure. Don't worry about it, just be patient, it'll eventually get right.
[25] T25.
By Sunday it had stopped again and she was told there must be a blockage. Her husband got a slight trickle of water but then it stopped altogether. By this time it was April 2012 and she rang Mr Hilder again asking for the employee who had attended in December, Charlie Webb, to attend, to be told he no longer worked for Hildabuilt. Mr Hilder told her he would see what he could do and eventually Charlie Webb came back with his father. She did not see what, if any, work was done.[26]
[26] T80.
Mrs Williamson then sought other opinions. She came to understand the historical source of the water used on the property.[27] She excavated and located pipes leading to the poly tank from outside the property.[28] She concluded from her investigations that the tank had also been filled from that remote location. Mrs Williamson said that she had taken photographs of the pipes that had been removed by Hildabuilt in 2011. It came to her attention that the pipe which had a hole, had gone missing.
[27] T82.
[28] T84.
Mrs Williamson said she realised she had a problem and tried to ascertain what water was available to the property, contacting the Department of Environment Water and Natural Resources. They provided information that showed the maximum depth drilled for the bore on the property was 36.58 metres, recorded in January 1980. The standing water level was at 20.23 metres in March 1980, and it was listed as being operational. She sent a sample of water from the bore to Veolia for testing and sought information from the Bureau of Meteorology which provided information gathered from the Hawker Weather Station, 40 km away.[29]
[29] T94.
Mrs Williamson described in detail the work she and her husband had done on the property. She had kept all the invoices.[30] She said she and her husband had spent many, many hours working and while it was hard to say how much time had been spent, she thought it would average two to three days a week for the past five years.
[30] While the invoices were produced, counsel did not wish to tender them.
Mrs Williamson said they were very short of water given there had been little rain and had restricted their showers to about once every three or four days. She was taking her washing to Port Augusta on a weekly basis and using the laundromat there.
Mrs Williamson said they had installed a garden irrigation system in anticipation of the work Hildabuilt were to carry out in December 2012. She said:
Well, it is very - it is a very dry hot area and we wanted to establish a garden there so that we could keep the dust down, have something nice and pleasant. You don't want dust blowing in all the time. There was nothing there when we moved there. We were going to do that and obviously put in vegetables and things for our own use. We worked out an area outside the fence where we believed we could put some trees in as like an orchard type thing for our own enjoyment and sustenance.[31]
As a consequence of being unable to grow vegetables on the property, they were required to spend additional amounts on food, a loss which Mrs Williamson calculated on the following basis:
I looked at what I thought we would have - no, I looked at what we spent on fruit and vegetables and meat each week and what we initially got up there for the first six or 12 months or so. I did it over a period during 2012 and 2013 I believe. At that stage the closest place for me to go and do the shopping was Orroroo, which is 140 km round trip. So what I did was I saved all my dockets from the greengrocer and from the butcher and calculated out what I was spending each week, then estimated that I probably would have spent on a 60/40 basis if I had been self-sufficient and having some stock there and some fruit and vegetables and things at home and so I calculated it out on those bases.[32]
[31] T141.
[32] T141.
When asked when it was that she and her husband had realised they could not make the property work financially, Mrs Williamson said:
It would have been sometime in late 2012 when I couldn't find an option to rectify the situation.[33]
[33] T143.
She said they kept working on the property for their own comfort because the toilets, bathroom and kitchen needed to be operational.
In cross examination Mrs Williamson said that the desire for a property was focussed on lifestyle with supplementary income but agreed that they had no expectation they would be able to maintain their previous level of income.
She agreed she had understood that a 15,000 gallon capacity for rainwater would be ample for the domestic purposes of a couple and that the property was not being sold for the purposes of offering some sort of commercial return.[34] She knew from the advertisement that it was rated as one sheep per five acres and therefore it might manage 40 to 45 sheep.[35]
[34] T149.
[35] T150.
With respect to whether the rainwater tanks had to that date been sufficient for their purposes, Mrs Williamson said:[36]
No, I don't agree with that because we have been extremely conservative. What has happened is we are conscious of the fact that there was a lack of water there. We have taken steps to buy in water just to keep a few plants in the garden growing. We have purchased an additional tank to put in the shed. There is extra work needed, but we have limited our showers, we've taken washing away, that we have been very conservative in using. It's not sufficient water there to service a family, put it that way, on a regular basis; that is just been the two of us.
[36] T162.
Mrs Williamson said that at the inspection, she could see the trough was filled with water but could not see into the tank. Mr Jones climbed up on the wire cable around the tank, leant across and scooped the water up and drank out of his hand, saying 'The water is brilliant. It's good enough to drink' and tried to encourage Mr Williamson to climb up and drink it.
When asked whether Mr Jones had used the word 'brilliant', Mrs Williamson said:
No, that was my exaggeration, I withdraw that. He said 'The water is -', well, no, I can't tell you exactly what his words were but it was … he used an adjective that was positive and I can't tell you exactly what that was, but it was exalting the benefits of the quality of the water, so I can't tell you what his exact words were but it was a positive approach to it.[37]
[37] T164.
She denied that Mr Jones said that it was 'good stock water'.[38]
[38] T165.
As regards what she told Mr Jones regarding her wish to grow vegetables, Mrs Williamson said:
I cannot tell you my exact words because I would only be guessing my exact words at this point in time. It was in a general conversation. We explained what we were looking for and we explained that we wanted to be self-sufficient, have some stock, grow our own fruit and vegetables and have some sort of a supplementary income. I cannot tell you what words I would have exactly used because it is so long ago but that is the conversation and that has been our conversation all the way through that that was our understanding. I mean, I can't be specific with how I described it. I understood what I meant but people interpret things differently.[39]
[39] T166.
Not without some debate, Mrs Williamson said she was aware the property was grazing land. She said that she investigated how the property was zoned with the council and what they were allowed to put on it and that ‘expanded your ability to come up with concept of how you may want to use that property’. It was clear from Mrs Williamson’s evidence that none of the information she had received was specific to fruit and vegetables.[40]
[40] T167.
Mrs Williamson said she knew the property was at least 70 km, perhaps 100 km north of Goyder’s Line and was aware that above Goyder's Line is considered grazing land and below is for cropping. She agreed that land above the Line is drier and not suitable for cropping but that people do [crop] north of Goyder’s Line.[41]
[41] T168.
She agreed there was no discussion with Mr Jones about the salinity of the bore water.
She understood that in the contract and from her discussions with Mr Jones that there was no warranty given with respect to the condition of any of the buildings or improvements on the property. She understood that there was no warranty with respect to the capacity or extent of any bore and no warranty of profitability or income producing ability or any other financial performance of the property.[42]
[42] T171.
On the two short day trips she and her husband took to the property prior to settlement it appeared the windmill was working but Mrs Williamson added that there was no specific need to take any notice of anything. They were she said, more intent on ‘dumping’ some furniture and getting back again because it was such a long trip to do in one day. She said she had no recollection that she looked at the windmill on either occasion.[43]
[43] T179.
She said she was not concerned in the twelve month period between their attendances at the property, that the bore and the tank would need some sort of maintenance in order to keep functioning. She added that it was standard knowledge that ‘windmills are designed to have very, very little maintenance. They only need oil once a year and you don't need to worry about it’.[44] She said that as the tank was in a bad state of repair already, they did not care about it and it was something to be replaced.
[44] T179.
She met Mr Clarke on one occasion when they went to get the key from him and had never contacted him to ask about the operation of the bore and the windmill.[45]
[45] T183.
Her husband had contacted Hildabuilt soon after he moved to the property and it was November by the time Hildabuilt attended on site and did anything. She denied Mr Hilder referred her to other contractors or that she had told him Morgan Run Mill and Bore Service were too expensive. She denied Mr Hilder had agreed to do the work at a lower quoted price at around $2,500.[46]
[46] T189.
Mrs Williamson said that it was before 7 March 2012 that she made the phone call to Mr Hilder telling him that the windmill had stopped pumping. There was, she said, consistent follow-up between January and March. She denied telephoning Mr Hilder saying that the windmill had stopped pumping after very high winds the previous night or that Andrew Webb had attended, climbed the windmill and screwed rods in which had been dislodged as a result of wind resulting in the windmill pumping again. She denied contacting Mr Hilder a few days later telling him that the pump had stopped working again after a ‘big wind’. She denied having been told by Mr Hilder that they would need to pull the bore to see where the problem was. She said she spoke with Mr Hilder to complain that the workmanship was really poor. It was nothing to do with ‘winds’.[47]
[47] T194.
Mrs Williamson did recall that sometime between 5 April and 10 April, Charlie Webb and his father came to the property and removed all the pipes, rods and pumps from the bore that had been installed in December. They found that the pump rod had become unscrewed at the pump. She said the pipes and the pump were not reinstalled because Mr Williamson was not happy with the work that had been carried out.
It was put to Mrs Williamson that on around 14 April, Mr Hilder rang and she told him she did not want the bore pipes replaced because the bore hole was not straight and that Mr Hilder had told her that having a bore hole which was not perfectly straight was not a problem because there were ways to overcome that problem. Mrs Williamson said while she had a conversation with Mr Hilder, she did not ‘think it was exactly in that context but we did have a discussion at some stage about damage to the casing’.[48] She denied conversation about whether or not the bore pipe should be replaced. Mrs Williamson said it was a lie to suggest there had been a phone call to Mr Hilder wherein he said what Charlie and Mick had seen was not a big issue and could be easily fixed with a piece of stainless steel pipe where the plastic pipe was rubbing on the edge of the hole or that he could insert a small submersible electronic pump that would cost about $1,200. Furthermore, she denied Mr Hilder said that the bore pipes and the column would be fixed at no more expense to her.[49]
[48] T196.
[49] T199.
She said Mr Hilder told her he was happy to withdraw his account and would come and collect his materials. She understood that in around October or November Mr Hilder came in and shook hands with her husband and apologised, and that was how it was left.[50]
[50] T200.
Mrs Williamson was asked about the report she had received from Water Search Pty Ltd dated 23 February 2015. The report referred to bore water salinity at 4,400 mg/litre in 1980. The Veolia report dated 20 March 2015, showed the salinity level 4,830mg/L.
She was referred to a Department of Primary Industries and Resources SA Fact Sheet that provided the salinity tolerances for livestock. For sheep it was listed at a maximum concentration for healthy growth up to 6,000 mg/L with a maximum concentration to maintain condition listed as 13,000 mg/L. With respect to beef cattle, the maximum concentration tolerated was listed as 10,000 mg/L.
Mrs Williamson maintained that the bore was too saline for such animals as her test with Veolia was not an accurate test. Furthermore, given the property is in a very hot and very dry location with high evaporation, salinity in troughs can increase dramatically in a very short period in the heat.[51]
[51] T204.
Mrs Williamson agreed that prior to purchase of the property, the Plaintiffs did not have the bore water tested to ensure the water could be used in the way they wanted.
In relation to the report prepared by Mr Reynolds, the samples he took from the bore showed a concentration of 4,717 TDS.[52]
[52] The equivalent of milligrams per litre.
Mrs Williamson maintained the bore water on the property was not suitable for sheep as the tests are not ‘efficient enough to give you a full reading because there are other factors you need to understand such as when I - and I didn't know this initially and I have learnt as I have gone along but it is important for you to understand what the other chemicals in the water are including chloride because it's not just a matter of what the total dissolved solids are, it's also the other factors that can affect your analysis that you need to know about’.[53]
[53] T208-9.
Ultimately, Mrs Wiliamson was prepared to accept the opinion of Dr Ellis, that the recommended use of water with the bore’s water quality was as stock water for sheep and kikuyu turf irrigation.
Mrs Williamson agreed that the map described as 2A[54] which showed a pipe running off the pipeline that ran between the tank and the bore and that headed towards the trough was the configuration of the pipework as it was on the day of inspection. It accurately showed a circular rainwater tank adjacent to the homestead (described as the 10,000 gallon rainwater and pressure pump) supplying the kitchen, laundry and the bathroom. It also accurately showed a square underground tank (described as the 5,000 gallon tank). The map also showed a line of underground piping running to the homestead from the pipe that runs between the bore and the tank. She accepted a pipe went to the homestead from the bore but was in the wrong position.
[54] Exhibit D10.
When it was suggested to her that water could have been run from the bore into the tank with a pressure pump on the outlet of the tank to improve the pressure from the tank to the garden, Mrs Williamson said while that would be correct in theory, there was not enough water to even fill the tank to put a pressure pump on to.[55]
[55] T216.
Mrs Williamson said that they had been carting water for probably twelve months through the council in Carrieton and from neighbours. Water from the neighbours comes from the bores of two different properties and is brought in by a tanker. That water is good quality bore water and can be used for plants and for stock without any adverse effects.[56]
[56] T217.
Since August 2015, the Plaintiffs have had angora goats on the property.[57]
[57] T219.
She agreed she had never asked Mr Jones about any details such as income figures for the property as it was, she said, a completely different concept. She said:
What we would do at Tyeka would be a different concept because it was used for grazing in the capacity of using about 40 or 50 sheep. That's what Mr Jones told us was possible. So there was no need to ask for figures on that, we would look at putting a different concept there.[58]
[58] T220.
Mrs Williamson agreed that prior to the purchase of the property she had not been aware of the tolerances of stock as regards salinity and had not formalised a plan as regards what fruit and vegetables would be grown.
When asked if she accepted she had not done her homework on the property she said:
The salinity is only one aspect. You need water in the first place to use, it's not just the salinity, it can be addressed in other ways if you have water.[59]
[59] T224.
She gave the following further evidence:[60]
[60] T225.
A‘…. there are ways of addressing that if there were - there was sufficient water to get a flow. That doesn't exist. It's not - I'm not arguing about the quality, I'm arguing that the water, there's no sufficient water.
QI don't follow that. If there had been sufficient water coming from a bore you would have had an ample amount of water with a saline level of 5,000 TDS, that would not have helped you to grow the fruit according to the information provided from the Department of Water, Land and Biodiversity; do you accept that.
AWithout taking other steps, yes.
QWhat are you talking about, some chemical electrolysis.
AYou can, you can do magnetic treatment, desalination, there are options available if the volume is sufficient.
QSo desalination, tell me about that. What is the process that you know that you could use on this bore to desalinate the water.
AThere are about five options available. Most is reverse osmosis.
QBut what do you use, what is the mechanics of it.
AYou pump the water through membranes to eliminate the salt content.
QAnd how much does this cost.
AIt's not a cost factor, it's a matter of you need to have a sufficient flow of water to be able to do it and then you need to look at the analysis of it because the water is so saline to put it through you would only recover 40% of the water, you then have a 60% waste residue to dispose of and the bore is not sustaining a bore of water -
QIt would be a waste of time to go through that process of reverse osmosis in order to water your vegetable patch on this property 100 km north of Goyder's Line.
AIt would not be just for that, it would enable you to intensive farming of stock if you had the volume of water.
QBut in any event, you hadn't seen the documentation that showed that if you wanted to put 300 mg per litre -
ANo.
Mrs Williamson gave the following evidence when asked if she thought she and her husband had acted ‘prudently’ in relation to the purchase of the property:[61]
[61] T225-6.
AWe were satisfied with what was shown to us when we went to look at it. We were satisfied with what we believed we could achieve from it. The water that was shown to us was abundant and clear, appeared to be based on what the agent told us; we were satisfied.
QSo there really wasn't anything else except what the agent told you.
AAnd the visual inspection.
QAnd the visual inspection of seeing the water.
AYes.
QWere you able to be satisfied from the information provided in the advertisement behind tab 37.
ASatisfied of what?
QThat the property was right for you.
AWith what was described?
QYes.
AAnd what we then visually saw?
QNo, I will just go through it bit-by-bit. Tab 37 is the advertisement and I think you're very familiar with it.
ANo, but I'd still like to -
QPlease take your time to find the document.
AYes.
QWere you satisfied that what was said in that advertisement meant that that was sufficient for your needs.
AYes.
QIs it your case that what the agent said when he dipped his hand in the water confirmed that satisfaction or perhaps added to it; is that what you're saying.
AYes.
QYou've relied on, you say, what the agent said and what was put in the advertisement to make the decision to purchase.
AThat's correct.
QAnd you didn't do any other homework as to the suitability of this property before making the decision to purchase; that's correct.
AWell, I didn't - yes, I'll say yes.
James Williamson
Mr Williamson explained he had a background in rural life and was familiar with the operation of the windmill at a particular property run by his parents in Victoria. In 2010 he was working as a farm manager on a rural station running sheep.
With respect to the advertisement, Mr Williamson said:[62]
Well, I liked the look of the property given that it was an old stone construction and it had character, so for that reason and the biggest plus was, you know, the acreage was good for us and also the water content of the property with a working bore etc. It was really something that you could adapt to whatever you wanted to do within reason.
[62] T234.
He said that the description in the advertisement concerning ‘waters’ were of significance to him because water is key in agriculture. He said he was impressed that the property had good stock water and was described as 200 feet deep. The house being on rainwater with the bore being used as a backup was an ideal situation. He said that a good abundance of water was essential.
On inspection, he said he noted the house needed a lot of work. He said he had done properties up before and was skilled in that sort of work and it did not faze him. The windmill appeared as if it had been looked after because there was a drive shaft that was galvanised pipe that looked brand new. With respect to what Mr Jones had told him Mr Williamson said:[63]
Well you've got plenty of water here. You'll never have a problem with water. You know, you've got the capacity here to have 10 to 15 years of water. All you'd have to do when things ran low was to add another section of pipe to the system that's there and for that reason we thought, well I was very rapt about that because I thought well we've got a system here that will certainly do what we need to do stock-wise with yourself and with a backup to the house as well.
[63] T237.
Mr Williamson said that the tank was impressive. It was not in good order because the cement was in bad repair. His evidence was:[64]
[64] T240.
AActually the agent and I jumped up on the side because the water's brimming and he said, you know 'How pure is it?' and I said 'Yeah, it's fantastic' and he actually said 'Well it's good enough to drink' and he took a handful and drank it and I was -
QDid you drink any yourself.
AI didn't.
QWhy not.
AYeah, I - yeah, I'm not so into that as much, you know. I'd go swimming in it but it was pure and he said, you know, 'You've got an abundance of water here' and I agreed, it was fantastic and I thought to myself 'Well, you know, you've got a central point there with your tank, you can do whatever you want, run lines out to anywhere and fence accordingly with that being your main source of water'.
QIt's got to be that the tank water's been clear.
AYes.
QDid that - was that significant to you at all.
ANo, well most bores are clear. So but it was, with the brand new liner that was blue, it's almost like a swimming pool effect that, you know, was so pristine because of that.
Mr Williamson said he realised that the water had been recently put into the tank.[65] He did not see the pipes going into the large tank from the homestead nor did he see the connection between the tank and the trough because they were viewing things from the other side of the tank. Mr Williamson explained that the water was key to him buying the property.
[65] T241.
With respect to whether or not Mr Williamson observed piping going into the poly tank that he saw on the property he said:[66]
No, I didn't. Actually, I was just a bit overwhelmed with the water, to tell you the truth. I just - I didn't actually inspect, which I should have done in hindsight, the system of where the water was coming into the tank, I didn't even do that.
[66] T243.
He said that when he stood by the tank he saw a pipeline leading into it. Parts of it were buried and parts of it were sitting on the ground. He said he did not inspect the whole line at that point but could see the line. He could see a pipeline running away from the tank down towards the windmill.
Mr Williamson said that Mr Jones did not say anything about the pipe from the poly tank in the direction of Lithgoe’s bore.
After Mr Jones left, he and his wife walked around by themselves looking at the sheds. At the end of the inspection it was obvious that the water in the tank came from the windmill. With respect to what he thought about the quality of the water, Mr Williamson said:[67]
I was hoping the way the agent told me that we'd have enough water for the next 10-15 years. So I was happy with that, the fact that we'd seen so much of it there, that yeah, that was good for us. Because water's key, you know? I mean this is the thing.
[67] T246.
He said he thought the stock water was coming from the bore and that the liner and how the tank was, ‘looked pretty fresh to the scene to me’. He was not told that the stock water had been coming from another property.[68]
[68] T247.
Mr Williamson said that the agent told them that they would have to be quick about any offer because there were people in line and contracts pending that could go through and they did no more investigation before making the offer.[69]
[69] T247.
Mr Williamson said that if he had understood that the water to the tank did not come from the bore or if he had known that the water on the property had historically come from a remote location he would not have bought it.[70]
[70] T248.
Mr Williamson did not check the tank when he visited the property briefly to drop off belongings before settlement. He did not return to the property until September 2011. He had thought it appropriate to let the land rejuvenate in its own time for a few years before they did anything with the property.[71]
[71] T249.
In September 2011 the tank was falling to pieces. The piping to the tank was on the ground. The liner had disintegrated simply because it was not wet anymore and had dried out. There was no water coming out of the pipes in the paddock. He saw a Hildabuilt sticker on the bore and so contacted them. Mr Hilder came out to the property and advised that the only thing that could be done was to lift the whole system up and see what the problem was. Mr Williamson said that what came out of the windmill was ‘rubbish’. The pipes were rusted and one had a large hole and the pump ‘had completely had it’.[72]
[72] T250.
Mr Hilder said that the system would need replacing. It was months before Mr Hilder came back. When Hildabuilt returned to the property they set the system up and Mr Williamson said he saw water coming out, albeit not a huge amount. As he and his wife were were about to go to Streaky Bay they were not there to see it operating fully for any amount of time. After their Christmas holiday they checked the flow and there was no water.
Mr Hilder was contacted and he told them to be patient as pressure within the line needed to build up. Eventually Mr Hilder sent Andrew Hilder to look at it. The men were only there for half an hour and after they rattled the shaft of the windmill vigorously there was water coming out. It was a flow that Mr Williamson said he was satisfied with but was very short lived, lasting only that day and the next before it stopped again.[73]
[73] T253.
Eventually Mr Hilder sent Charlie Webb and his father to the property. They pulled the bore system up to have a look at it. He was told that a rod had come loose within the system and that once it had been replaced everything would be okay. Mr Williamson said he did not argue with the men. The older man recommended that the bore not be replaced. Mr Williamson then got in contact with a Mr Ted Schulz and then contacted a boring contractor to look at re-boring the system. It was then that Mr Williamson became aware that water had previously been provided to the property from a remote source. As a result of the boring contractor’s attendance, Mr Williamson said they decided not to restore the bore.[74]
[74] T258-9.
Mr Williamson said that thereafter they were forced to bring in water from other sources. One of those sources was his neighbour.
Mr Williamson said that when he first arrived in September 2011 there was water in the toilets, sourced from the bore which would restore on flushing.[75]
[75] T263.
Mr Williamson described in some detail the work he did repairing the house.[76]
[76] T263.
In cross examination Mr Williamson confirmed his evidence that when he arrived at the property at the end of September the toilet was flushing. He said that on occasions during the time between his arrival and Mrs Williamson’s arrival on the property the water ran out but the problem was rectified once he replaced the toilet and said ‘it worked a little bit better’.[77]
[77] T264.
Mr Williamson said that he purchases 5,000 litres from a neighbour’s property for $200 and can access an unlimited supply of water for no charge from the council. He had been carting water (2,000 litres) from the council for six months and purchased water from his neighbour probably three times within six months.[78]
[78] T266.
Mr Williamson said that in the height of summer they would need about 6000 litres per week. Mr Williamson said the goats on the property belonged to his son. The Williamsons receive no payment for keeping the goats other than occasionally their son provides them with a few hundred dollars for water. The eighty goats on the property were intensively farmed. In summer goats need five or six litres per day each. Mr Williamson said that he knew from his experience that sheep in summer can need up to two gallons. If the water is salty it would be more. Before the goats they were not carting water but were relying on rain water.[79]
[79] T271.
Mr Williamson agreed that they had managed to survive over the three years by watching what they do with the water. He agreed that he was frugal with the water as all farmers are.[80]
[80] T272.
When asked about options available as regards the bore, Mr Williamson said he was told it would cost $30,000 to sink a new shaft in another area but although the contractor had not sunk any test bores, said there was no hope of re-boring on any other area of their property.
Mr Williamson was asked about the advertisement. He agreed he liked the character of the old buildings and that in the photograph the homestead looked very pretty. He said that while it looked a bit different in real life, it had to be remembered that they were only paying $150,000. He agreed that a couple of hundred acres was ideal for them and that if you were intensively farming, 200 acres is enough. He said a few thousand sheep could be put within that small area if they were hand fed and watered. Mr Williamson said they had not made exact plans for the property, suggesting that it could have been the case they would purchase ‘under done lambs’ which could be fattened to ‘finish them off’.[81]
[81] T276.
He said that the word ‘stock’ in the advertisement could be a variety of things. That is, cattle, horses or sheep.
At the inspection Mr Jones said something about having enough water for 10 or 15 years.[82] Mr Williamson insisted that Mr Jones had told them that if they ran low they could put on an extra pipe. He did not recall Mr Jones actually pointing out pipes running from the windmill to the house. He agreed Mr Jones had said there was rainwater supplied to the house for the appliances. He did not hear the conversation about bore water for the toilet. He was either not present or could not remember if Mr Jones said the bore could be used as a backup. He said that doing this, that is, providing another piece of pipe on the line and putting in a tank, was not surprising to him. The fact that the bore could be used as a backup did not mean much to him.[83]
[82] T278.
[83] T279.
Mr Williamson described the process where windmills can be regulated by reducing the movements of the shaft up and down. He said that in windy conditions any good bore can over pump simply because it is rotating too fast.
He was certain that Mr Jones did not take the handful of water from the trough.[84] He was not sure exactly what words were used but agreed that Mr Jones may have said at the time ‘this is good stock water’.[85]
[84] T282.
[85] T282.
Mr Williamson said he did not speak to Mr Jones at all about their plans for the property and did not read the contract.
When he arrived in September 2011 the windmill was operating. The concrete tank was no longer full and was in disrepair, having fallen to pieces. Mr Williamson added that if the bore was operational and going well the tank should have been overflowing with water by the time that they went there. Mr Williamson agreed that explanations for the lack of water in the tank were the tank was leaking, there had been a blockage, or the bore had stopped pumping water into it.[86]
[86] T286.
Mr Williamson said he recalled seeing pooling water after settlement near the homestead indicating a leaking pipe but that it was only a small amount of water.[87]
[87] T326.
He agreed that Mr Hilder’s cousin, Andrew Hilder was the first person from Hildabuilt going to the property to investigate the bore and agreed it was possible Andrew and Mr Hilder attended on 8 November 2011, soon after Mr Williamson had called Hildabuilt. The men attended, saw that the windmill was not working[88] and removed pipes and the pump from the bore, discovering a hole in one of the pipes. There was a discussion about the best way to fix the problem and it was agreed that the best long-term solution was to replace all of the pipes, rods and the pump. Mr Williamson said he did not believe he told Mr Hilder he intended to run 30 or 40 sheep on the property. Andrew and Charlie Webb from Hildabuilt went to the property and did the work of pulling up the bore on 22 December 2011. Mr Williamson and his wife left for Streaky Bay the next day. He said the bore was working at the time they left. He described it as ‘perfect’.[89]
[88] T329.
[89] T333.
Mr Williamson said they contacted Mr Hilder after four or five days away when they returned from holiday and after a few weeks Andrew Hilder and another associate arrived and rattled the bore shaft. What they did only lasted a couple of days and it stopped again. Mr Williamson said it could have been early March when this occurred.[90]
[90] T335.
Mr Williamson said he did not recall contact with Mr Hilder regarding very high winds. He disagreed that around early March 2012, Andrew Hilder and an associate climbed the windmill and screwed the rods in again. He was with them and would be aware of that.[91] Mr Williamson said they only shook the shaft. He agreed that the bore was pumping again but it went only for a couple of days. He said it could be quite possible that Mr Hilder was contacted again by Mr Williamson’s wife saying that the pump had stopped working again after a big wind.
[91] T337.
Mr Williamson recalled Charlie and Mick Webb coming and pulling the bore in early April 2012. They told him that the pump rod had become unscrewed at the pump. Mr Williamson said there were gouge marks at the end of the shaft and given the pipes were virtually brand new he was concerned that they were not going to last very long. Mr Williamson said that he had a discussion with Mick Webb who said that if it was his bore, he would not put it down again. He spoke to his wife and they made a decision not to. Mr Williamson accepted that Charlie and Mick Webb had said that they could draw the bore back up and put it back and everything would be okay. Mr Williamson said:[92]
Given the run we had for the last four months, no because yes. I mean, we were desperate for water. We would have considered anything at that stage but, yeah, that wasn't the solution.
[92] T340.
Mr Williamson said he did not recall Mr Hilder ringing them a few days later to ask why they did not want the bore repaired. Mr Williamson said he refused to pay Hildabuilt’s account because he was not happy. He agreed that Mr Hilder had told him there were ways to overcome the problem and that there are thousands of bent bores. When asked whether he had refused to talk to Mr Hilder about how to fix the bore, Mr Williamson said ‘we had been there and done that with him’. [93] Mr Williamson agreed that Mr Hilder had offered to come and fix the bore and to do so at no expense to him.[94] He agreed that he argued at a later date with Mr Hilder when he rang asking for his account to be paid. The issue between them was not resolved and Mr Hilder attended and collected the pipes. Since April 2012 the bore has not been in operation and they have been in part relying on rainwater.
[93] T340.
[94] T341.
David Ellis
Dr Ellis prepared a report[95] dated May 2016 concerning the Tyeka water supply. In that report, he described himself as having over 20 years’ experience working in the water sector designing water systems in a rural and urban environment. He is an engineer.
[95] Exhibit P11.
Dr Ellis based his opinions on the information he had been provided by the Plaintiffs’ solicitors, Mrs Williamson, and the report prepared by Mr Reynolds.
Dr Ellis had been asked two questions by the Plaintiffs’ solicitors namely:
(1)Would the bore and windmill be physically capable of supplying sufficient water to fill a 10,000 gallon tank and trough for stock use approximately 300 metres from the bore?
(2)Would the bore and windmill have provided water to a tank 300 metres from the bore on a consistent basis?
With respect to the first question, Dr Ellis said that if the pump, windmill, air chamber and pipe work were in good working order, the bore and windmill would theoretically be capable of filling the tank over a period of 15.5 days if the windmill operated in a repetitive cyclic manner for an average of 8 hours per day. He said that wind data from March 2016 indicated that the windmill at the property had sufficient wind speed to operate a windmill approximately 30% of the time.
With respect to the second question, Dr Ellis concluded that the size of the pump (75mm) would over pump the bore resulting in the pump drawing in air, reducing the efficiency of the pump and therefore a reduced flow. This would lead to a drop in the standing water level and the pump would run dry, resulting in a temporary cessation of flow to the tank and increased wear to the pump seals (boots) leading to a further loss of efficiency of the pump and reduced flow and head. Dr Ellis said he thought it most unlikely that the wind pattern would be such that the windmill operated in short minute bursts with sufficient time for the standing water level to recover so as to avoid the pump running dry.
If a smaller pump (44mm) were in use, the recommended inflow from the manufacturer is 11 L/min. The inflow of the Tyeka bore measured only 6.1 L/min. As a consequence, the bore and windmill would not have provided a consistent water supply to a tank 300 metres away because the water level would repeatedly be pumped down to the level of the inlet due to the pump discharge rate being greater than the replenish rate, resulting in inefficient pumping and cyclic cessation of flow to the tank, which may also result in excessive wear of the pump boots.
In cross examination, Dr Ellis said that it was not possible to say categorically that methods available to reduce the flow rate from a bore would be sufficient to avoid the bore from being over pumped. Dr Ellis was prepared to accept that the flow rate could be retarded.
John Reynolds
Mr Reynolds has extensive experience with well characteristics and construction. He had prepared a report following his inspection of the bore on 5 September 2015. He checked the standing water level which he said was 21.85 metres, conducted a bore capacity test and sampled water from the well which was sent to Veolia and DEWNR for testing. Mr Reynolds had not inspected the polypipes that Mr Hilder had installed. His measurements related to the original steel pipes that had been removed.
When he inspected the bore, he noted the casing was in very poor condition. It looked liable to collapse.
The depth of the well was measured at 32.4 metres. He measured a flow rate that stabilised at 6.1 L/min. When tested, the bore did not refresh to its original standing water level. Mr Reynolds said that the longer the test the better. His test was taken over a two hour period. The pipes that he examined, which he understood had been removed, were in very poor condition. Mr Reynolds agreed that pipes removed from the bore and left in the open would rust as a result of being rained on. Mr Reynolds agreed that theoretically this bore generated a water flow which can go into a tank at 6.1 L/min. Mr Reynolds agreed that 6.1 L/min is 366 litres per hour or a little less than 80 gallons per hour. He said that because the bore did not recover to the standing water level raised a concern there could be deep watering of the area. Mr Reynolds agreed that the failure to recover gives an indication of recovery rate but was by no means certain.[96]
[96] T316.
Four samples of the water were taken. Three were tested by DEWNR and a fourth by Veolia Environmental Services. The highest reading from the department was 4,417 TDS (total dissolved salts) and the sample sent to Veolia came back at 5,190 TDS.
Mr Reynolds had been shown the photograph taken by Mrs Williamson of the length of pipe removed from the bore which showed a hole. He said that the windmill whilst operating would not have been delivering water to the top of the bore because of the hole in the lowest lengths causing or allowing water to drain back to the standing water level. In cross examination, Mr Reynolds accepted that pipes left in the open are liable to rust from rain water.
Mr Reynolds said that based on the information he had at the time he wrote his report, if the size of the pump was reduced from three inches to two inches, the bore would supply an average of 1115 gallons per day or 46 gallons an hour over a 24 hour period, this being well matched to the bore capacity combined with a spill pipe for the supply to the tank. Mr Reynolds added that there was still a risk that a two inch pump in certain conditions could over pump the bore. While he agreed ‘it was getting close to what was okay’,[97] Mr Reynolds said in re-examination that he would have left this comment out of his report if he had read the report Dr Ellis had written.[98]
[97] T323.
[98] T325.
The water quality was not suitable for vegetables, flowers or shrubs or fruit or crops and pastures. He said he was not qualified with respect to the issue of livestock.[99]
[99] T323.
Mr Reynolds said that by reducing the pump size from three inches to two inches was one way of reducing the flow from the bore. Another way would be to regulate the mechanism on the windmill itself so as to retard the action, that is, the up and down motion of the rod.
Robert Brooke
Mr Brooke is an experienced valuer. He prepared a report following his attendance at the property in May 2016.[100] In his view, the value of the property as it was allegedly represented in March 2010, was $150,000. In his opinion, the value of the land without the water supply from its own established sources was $13,500.
[100] Exhibit P17.
In cross examination, Mr Brooke was asked about his reliance on the information contained in the report of Mr Reynolds as regards the suitability of the water that was available from the bore for livestock. It was apparent that he considered the salinity was ‘beyond the reasonable limits of salt in water for livestock generally’,[101] but then said he did not claim expertise in water quality.
[101] T412-413.
When asked to assume that the rainwater capacity on the property was sufficient for a family to live there, and that the bore produced sufficient water to run 44 sheep, Mr Brooke said the price paid for the property of $150,000 was probably reasonable.[102]
[102] T417-418.
He was not aware that there was another 5,000 gallon rainwater tank on the premises and said that the additional tank may affect his valuation.[103]
[103] T418.
James Clarke
Mr Clarke said that he was born and bred at Pamatta which is located near Tyeka. He worked on other properties in South Australia and New South Wales before returning to the family property at Pamatta where he has worked on that and other properties his family owned.
He said that in the early 90s a couple who managed Pamatta resided at Tyeka until 1993. They had lived there since 1978. Another couple moved in some six or eight months later in 1994, residing at Tyeka homestead until 1999. Mr Clarke said he had helped maintain the bore on occasion. He described the various configurations of piping that had occurred over the years. In the early 90s the maintenance of numerous bores was time consuming and expensive so pipelines were installed to cut down on the maintenance issues. Originally a line ran from Lithgoe’s bore and conveyed water to the tank where there was a trough which supplied water to a few rams on the property and connected to the house supplying the garden and toilet. It was decided that the Tyeka house bore was more suitable for the house so that is when the house bore was returned to service, to service only the house.
The black poly tank replaced the tank probably in the early 2000s because the tank had become cracked and leaked. A livestock watering point outside of the property, was serviced by a line from Lithgoe’s bore. After the Williamsons purchased the property, the route had been re-directed around the boundary.[104]
[104] T365.
Mr Clarke engaged Mr Jones to sell the property. He and his wife met with Mr Jones to show him the property. He indicated to him that there was a bore on the property but it had not been used for a few years but that he could quite easily get it back to working order.[105] He gave Mr Jones the information to put together a flyer, had a general discussion with him about what preparations should be made for sale, and authorised the advertisement to be placed.
[105] T366.
Mr Clarke started to work on the bore in February-March 2010 with Mr Sunners, his senior station hand, overseer.[106] He said he could not recall how long before Mr and Mrs Williamson inspected the property that they commenced working on the bore. They pulled the pipes, rods and pump from the bore hole.[107] They inspected what had been pulled up, pulled it apart and made necessary servicing to the parts. He said they had to replace two or three pipes with second hand bore pipes from a bore which had been replaced with polypipes.[108] They were still serviceable pipes even though they were second hand. They put the pipes together, serviced the pump and returned them down the bore hole and installed a spill pipe. Within a short time, easily within ten minutes, they found it was pumping.[109] The intention Mr Clarke said, was to monitor it over the time they were working at the property. They then began to restore the concrete tank which had not been in use from about the early 2000s, fitting a polythene liner and applied cable banding.[110]
[106] T371.
[107] T373.
[108] T374.
[109] T375.
[110] T376.
Mr Clarke described the work to connect the tank to the bore. They did not at that time disconnect the Lithgoe’s pipe that ran to the watering point. It took around two days to restore the concrete tank. On checking the floor of the tank they found it was covered with water. He said they monitored the complete system while they were working at Tyeka and noticed it filling up.As to how long the tank took to fill, Mr Clarke said it ‘could have been ten to twelve days, I’m not sure’.[111]
[111] T378.
Mr Clarke said he felt pressure from Mr Jones to get the work done, not particularly for an inspection, but rather because Mr Jones would ring up and check how they were going.[112] Mr Clarke said that the layout of the pipes shown in the map he had drawn[113] is as they were on the day of the inspection.
[112] T379.
[113] Exhibit D10.
Mr Jones provided him with an update after he had met with the Williamsons. Mr Jones seemed positive about the day.
Lithgoe’s bore is approximately four kilometres from the property and has been used for a long time. He said that the salinity of Lithgoe’s is similar in salinity to the Tyeka bore, but perhaps even higher.[114]
[114] T381.
After entering into the contract to sell the property to the Plaintiffs and before settlement, he did further work at Tyeka, reconfiguring the pipework to facilitate getting the Lithgoe’s water to their stock trough across the road. They cut the pipe where the Lithgow’s pipeline comes across North Range Road and attached a new pipe which ran along the outside of the boundary fence to Tyeka.[115]
[115] T382.
Mr Clarke said that when they finished at Tyeka they simply secured the property by ensuring the house was locked, turned the windmill off and maintained a watch over the property from that time.[116]
[116] T383.
The poly tank was excluded from the sale because they wanted to use it across the road from the property.[117]
[117] T384.
Mr Clarke said he had contact with Mr Williamson on two occasions after settlement. On the first occasion Mr Clarke called in with his wife and children. He had a brief chat to Mr Williamson to see how they were settling in. He thought it was soon after settlement. Shortly thereafter he again met with Mr Williamson. Mr and Mrs Williamson had never told him they had a problem with the bore. He first became aware of the problem during a phone conversation with Mr Hilder concerning work to a bore at Pamatta and soon after, threats of legal proceedings were made.[118]
[118] T386.
Mr Clarke said that any windmill, pipeline and tank system needs to be checked often. Depending on wind conditions, you need to let the windmill into or out of the wind. On his property bores and windmills in summer are checked at least twice per week. He said that if there are problems identified it often has something to do with the bore equipment such as a broken rod, a hole in the pipe or a pipe becoming loose.[119]
[119] T387.
Mr Clarke described the rainwater supply at Pamatta as a total of 12,000 gallons which supplied the house. He said that this was sufficient for his needs and those of his wife and four young children.[120]
[120] T388.
In cross‑examination, Mr Clarke agreed that it was his intention for prospective purchasers to believe that the water in the tank came from the bore on the property.
Mr Clarke agreed that from 1991 the stock water on the property came from the Lithgoe’s pipeline supplied to the trough near the tank. The windmill was also pumping into the overhead tank supplying the house. It supplied the toilet and a small garden.
With respect to the issue of whether water from Lithgoe’s bore could, prior to inspection, have been directed to somewhere on the property, Mr Clarke said he could not be sure because he was not sure whether the Lithgoe’s bore was pumping at that time. It needed work as the windmill head had fallen off.[121]
[121] T402.
Mr Clarke remained adamant that the windmill was pumping into the tank. He was unable to say how long it took to fill.[122]
[122] T425.
Mr Clarke was referred to a letter from his solicitors wherein reference was made to the statement ‘over the next few days our client observed that the windmill filled the header tank’. Mr Clarke said that the tank was filled a little quicker than he expected but it would have been a matter of days. He did not know how many.[123] Mr Clarke agreed that the pumping capacity on Lithgoe’s bore is a lot more than 32 L/min.[124] At the time of that letter he was aware of the allegation that the water in the concrete tank had come from Lithgoe’s. Further in the letter it reads:
Our client states that it would have been a general service which would have involved checking the plunger valve and the bottom valve as well as replacing leather buckets and/or seals inside the plunger. This is given in relation to ‘we advise that our client is now unable to recall the exact nature of the servicing that was carried out to the water well on about 5 March 2010’. [125]
[123] T438.
[124] T439.
[125] T442, Exhibit P19 Letters from Voumard Lawyers to DiRosa Lawyers dated 11 March and 17 September 2015.
Mr Clarke said he had no recollection of seeing a pile of pipes, one of which showed a hole.[126]
[126] T444.
Mr Clarke agreed that he had communications with Mr Jones authorising the email brochure and advertisement for the Northern Argus via email and telephone. Mr Clarke agreed that at the time the advertisement was placed on the internet from October 2009, the bore was not in operation.[127]
[127] T452.
Mr Clarke said that Mr Sunners is his manager who has worked for him for 10 years. He said he last spoke with Mr Sunners about the case probably 12 months prior.[128]
[128] T454.
Mr Clarke said that he gave instructions for the internet advertisement wherein it was described as having a good stock water supplied, based on his recollection of the bore when it was used in earlier years. When the managers left in 1999 the bore had been used to water sheep, cattle, horses, even poultry. It was used in conjunction at that time with the bore across Yednalue Road that is now disused.
Mr Clarke said that there had been two other inspections prior to the Williamsons when the homestead bore had not been in operation.
Graeme Jones
Mr Jones is a real estate agent based in Port Augusta working for Elders. He has been with Elders for 17 years. He sells rural real estate ranging from south of Broken Hill to Coober Pedy and out onto the West Coast of South Australia. He was rung by Mrs Julia Clarke and informed that she and her husband were going to sell Tyeka, asking if he would be interested in handling the sale. He met with Mr Clarke at Tyeka and was shown around the property. Mr Clarke told him that the bore was not currently operating but he would get it going for a settlement.[129] It would be a good back up supplement if someone wanted to run a few sheep and also it could supply the house for washing purposes or the toilet. He said that the bore supplied the house and the top tank and trough. He was asked to market the property at a price of between $145,000 to $150,000. He sent a copy of the proposed advertisement for the property to Mr and Mrs Clarke. The words ‘ideal as a hobby farm, weekender or holiday rental proposition’ were his own words. He agreed that 220 acres is a relatively small landholding to be offered in the area. The term ‘grazing land’ is one used by the Government and were his words. The rating of the property as one sheep per five acres by the locals is something he arrived at based on his experience. The 200 feet deep would have come from Mr Clarke as did ‘good stock water supply’. The house being on rainwater came from Mr Clarke. Mr Clarke would have told him that the bore could be used as a backup for the supply of water to the house. When he initially visited the property with Mr Clarke he noted that the tank and trough were not filled. Mr Clarke told him that he would get the bore going and it would be supplying that tank and trough and it would also be hooked into the house.[130]
[129] T459.
[130] T465.
Mr Jones said that he had quite a bit of interest in the property from people in Queensland. They had not inspected the property but were very keen and he prepared a contract in the sum of $150,000 for them. They decided not to go ahead with the purchase. Other people also had a look and for various reasons decided not to go ahead with purchase. He said he had people that could not get finance. He believed that he did nine or ten inspections.
As the Williamsons’ son works for Elders, approval had to be obtained so that Elders could sell the property to the Plaintiffs. From his notes, Mr Jones gave evidence about the various contact he had received from other interested purchasers.
About two or three weeks prior to the inspection he visited the property with the Elders branch manager from Peterborough. At that time Mr Clarke was at the property with his workmen and Mr Jones observed ‘quite a bit’ of water coming out of a poly pipe from the bore. Mr Clarke explained that he had got the bore going, it had been pumping for three days and he was going to hook the pipe up to the tank and trough in the paddock and house. Mr Clarke explained that he wanted to pump it for the three days to ensure that it was sound.[131]
[131] T471.
Mr Jones described the inspection. He observed the liner in the tank and the trough. Both tank and trough had water. He went over and tasted the water from the trough. He came back to the Williamsons and said ‘that’s good stock water’. He said he thought the water tasted ‘okay’. [132]
[132] T471.
He said:[133]
Acertainly the water I tasted was quite okay for sheep to, in my opinion for sheep to tolerate and I’ve been doing it for a while, I don’t know whether it’s a proven, but a lot of people do it.
QSo when you say a lot of people do it, a lot of people scoop their hand in the water and test the water.
AYes, they do, when they’re doing property inspections, especially pastoral people, people that understand the waters, and it’s a good idea to get a bit of a taste, and it if it is salty you will soon know.
[133] T472.
The water did not taste salty to him and adding ‘I didn’t think it tasted too bad personally’. He thought the Williamsons stayed in the car when he pulled up at the tank and trough. He did not recall Mr Williamson climbing up the side of the tank. He specifically recalled scooping the water from the trough and not the tank. Mr Jones said that the Williamsons told him they wanted to use the property to retire.[134] He could not recall them telling him they might run some stock. He left the inspection feeling that an offer was going to be made. An offer was made for the full purchase price and was approved by the defendant.
[134] T473.
Mr Jones recalled the conversation he had with Mrs Williamson prior to the inspection. He recalled she asked a few questions about the property. He did not recall whether they spoke at that stage about the water being hooked up. He did mention that the quality of the water was ‘good stock water’. Reference in the contract to plant and equipment that was to be excluded from sale came from instructions received from Mr Clarke.
In cross-examination Mr Jones estimated that the inspection of the property took about an hour and a half. He recalled walking over to the tank but could not recall climbing up and looking in.[135]
[135] T478.
Mr Jones said that the ‘massive’ selling feature for the property would he thought, be the house rather than the availability of clean water because of the good supply of rainwater for the house.[136] Mr Clarke had told him that the bore water would be quite suitable as a backup for washing, toilet, washing in and showers.[137]
[136] T479.
[137] T481.
Mr Jones said that he did not put gentle pressure on Mr Clarke to get the bore working. Mr Clarke said he was going to get it going and anyone that he showed around he explained it to them and they accepted that it would be going, it would be hooked up, and it was. Mr Jones said that it did not seem to be an issue and people did not put the matter forward as a complaint or a suggestion.[138] He agreed that the house was very run down and in a dilapidated state.[139]
[138] T482.
[139] T487.
Mr Jones agreed that he had told the Williamsons that it was a well because he thought Mr Clarke had said that to him at some stage.[140]
[140] T489.
Mr Jones disagreed that he had said to the Williamsons something to the effect of ‘so the good thing about that is if you run out of water all you have to do is screw another length of pipe onto the bore and you can take water from further down’. He said he would not have said that as he is not an expert on water and certainly not an expert on bores.[141]
[141] T489.
He agreed he told the Williamsons that there were other people interested.
Mr Jones was asked in detail about the issues addressed in the conversation he had with Mrs Williamson prior to the inspection and agreed that she told him they were looking to retire to a property to run a few animals. He said with a property that size you would not be making a living out of it but could get some income by running stock on the property and be partly self-sufficient with animals and vegetables.[142]
[142] T494-5.
Mr Jones did not recall saying anything about the need for a bore because of ‘the rabbit problem’.[143]
[143] T495.
Kevin Sunners
Mr Sunners is the manager, working at Pamatta Station, and living there for 10 years.
He did work in preparation for the sale of the property, sometimes on his own and sometimes with Mr Clarke. He could not recall when the work in preparation started. In relation to the bore he said:[144]
The bore was - all the pipe work was taken out of the bore hole and inspected and the pump was reconditioned and I think at the time several lengths of pipe were replaced with steel pipe and then it was put back down and hooked back up and was pumping.
[144] T500.
When asked how long the process would have taken, Mr Sunners said it would have taken one day. He did the work with Mr Clarke. He said the bore was plumbed into the tank. Steel cabling was placed around the outside of the tank and the plastic liner similar to a swimming pool liner was installed. He said that work probably took several days to get the equipment and to put it all together. The work on the tank was carried out after the work on the bore and he described plumbing of the tank.
Mr Sunners said there are probably eight or ten other bores at Pamatta Station. Part of his job is to maintain those bores. While he had no recollection of getting water immediately out of the bore after it had been refitted, he said that it is usually one of the jobs of fixing the bore, to see if it has water coming out of it. He had a recollection of checking that water from the bore was going into the tank but no recollection of how long it took to fill. He would expect it to be full within about five to seven days.[145] He gave this estimate based on his experience with other bores. He said he remembered the last time he looked at the tank it was full and did not wonder whether it was wrong or right or whether it took too long to fill it or not. Mr Sunners described other work that was carried out around the property to prepare it for sale.
[145] T503.
Mr Sunners said that in March 2010 when he was working on the Tyeka property, the Lithgoe’s bore was connected to the black poly tank on the Tyeka property. There was pipe then leading down the paddock across the road to another property on the other side of the road. He could not recall whether the pipe was in operation as at March 2010. He said he had no reason to believe that it would not be. Mr Sunners had no recollection about how the outlet from the poly tank was sealed off.
In my view, having found that Mr Clarke’s conduct was in trade or commerce, his liability extends to any misrepresentation (if there is any) by his agent Mr Jones. As to whether that is limited to the representations made by way of telephone or through the internet, as discussed above, the TPA will only apply to the defendant by virtue of s 6(3) and only in respect of engaging in conduct to the extent to which the conduct involves the use of the internet or telephone services.[177]
[177] See Smolonogov v O’Brien (1982) 44 ALR 347; O’Brien v Smolonogov (1983) 53 ALR 107 at 108.
In Morton v Black[178] Burchett J found misrepresentations were made by telephone but were repeated in face to face meetings. His Honour said:
Those repetitions are of course available under the common law count, and are of evidentiary value in respect of the question whether the statements by telephone were in fact made. In such a case, subsequent statements may also bear whether or not a misrepresentation has been qualified or corrected, and whether it has continued to have an operative influence. I do not think it can be right to say, however, certainly in the circumstances of this case, that the repetition of a misrepresentation deprives the original misrepresentation of its effect and substitutes that of the later one.
(emphasis added)
[178] Ibid at 183 – 184.
While it is appropriate to have regard to the discussion between Mr Jones and the Plaintiffs at the inspection in the manner Burchett J has described, the relevant conduct for the purposes of s 52 as it applies to an individual, must be limited to Mr Jones’ conduct involving the use of the internet or telephone. However, given the apparent concession by Mr Britten-Jones that I would not be in error if I considered all of the representations by Mr Jones, including those made at the inspection,[179] I will assess all aspects of Mr Jones’ conduct.
[179] T667.
Did the defendant engage in misleading or deceptive conduct?
Mr Riggall, on behalf of the Plaintiffs, submitted that if the Plaintiffs can satisfy me of four things, they will be successful in their claim. He listed those four things as:
1.Mr Clarke intended the Plaintiffs to believe that the water in the concrete tank that they saw at the inspection came from the bore;
2.The Plaintiffs believed the water came from the bore;
3.The Plaintiffs would not have bought the property but for the belief that the water in the tank came from the bore on the property; and
4.The water in the tank in fact came from a remote location.
With respect to Mr Clarke’s intention and Mr and Mrs Williamson’s belief, there is no dispute that the water in the tank was represented as having been sourced from the bore. It goes without saying, that had the Williamsons known that the water they saw in fact came from a source outside the property and over which they had no right, they would not have bought the property in the manner they did. That is, even if they remained interested in the property after being told that the water would not be theirs, they would not have gone ahead with the purchase until they made proper inquiry as to what water was available to them. I do note Mr Williamson’s evidence that he was aware the water in the tank was ‘recent’,[180] and that Mrs Williamson was aware the tank had been filled in because of a rabbit problem ‘years ago’.[181]
[180] T241.
[181] T65.
While the Plaintiffs’ case has been based on deceit, assuming that the water in the tank did come from the bore, what if anything arises from the representations made by Mr Clarke through Mr Jones about the quality and quantity of the water from the bore?
Clearly the depth of the bore as advertised was incorrect. Mr Reynolds in his report recorded the depth as 32.4 m, or 106 feet. Mr Williamson in his evidence said that he had been ‘impressed’ by the fact the bore was 200 feet deep. The advertisement described the bore as supplying ‘good stock water’, which at the time the advertisement was prepared, was yet to be established. The property was marketed as ‘a hobby farm, weekender or holiday rental proposition’ and capable of sustaining around 44 sheep.
There is little if any dispute about what was discussed over the telephone between Mrs Williamson and Mr Jones as recorded in Mrs Williamson’s notes. Mr Jones said that the bore water was good for stock and washing but said he would use rainwater for drinking. Given that both Mr and Mrs Williamson were shown the homestead where all the appliances ran off the rainwater tank except for the toilet, there was nothing said by Mr Jones that could be misleading or deceptive as regards these representations.
With respect to the inspection, Mr Jones said he drank from the trough and said ‘that’s good stock water’. He denied having spoken in terms representing an abundance of supply or suggesting another length of pipe could be added. In cross examination, Mr Jones was adamant that he would not have spoken in such terms. He agreed he had told the Williamsons that the bore was really a well, having been told that by Mr Clarke, but was, he said, not an expert on water and certainly not an expert in bores.[182] He readily accepted what he had said as regards the use of the bore as a backup to the water supply to the house and I am satisfied he spoke about the water in positive terms. Clearly Mr Jones is very experienced in selling rural property, and someone well aware of the pitfalls. He impressed me as someone who is careful about how he goes about his work. He gave his evidence in a straightforward manner and I accept his evidence as credible and reliable.
[182] T489.
Mr Jones was aware the Williamsons planned to retire to the property and that they intended to be partly self-sufficient, running a few animals and growing some vegetables. His knowledge could not have been any more detailed given that the Williamsons had not arrived at a fixed plan themselves.[183] Certainly he was not aware of plans to farm animals intensively in the manner Mr and Mrs Williamson have each described.
[183] See Mr Williamson’s evidence T276.
Both Mr and Mrs Williamson said Mr Jones drank from the tank. Mrs Williamson agreed in cross examination that she had exaggerated by saying in her evidence that Mr Jones had described the water as ‘brilliant’. He had, she said, used a positive adjective when describing the quality. Mr Williamson’s evidence was that while he did not recall what Mr Jones had said, Mr Jones could have said ‘this is good stock water’.
I cannot accept the evidence, particularly of Mrs Williamson, as regards what she was told at the inspection. At times throughout her evidence, Mrs Williamson seemed to have difficulty distinguishing between what was actually the real position and what she hoped it had been or was. That is not to say that I thought she was deliberately intending to mislead the court. I have no doubt that Mrs Williamson’s disappointment in her apparent failure to approach the purchase of the property with more care, has caused her to reconstruct the events such that they explain the decision she and her husband made. Mr Williamson was, in contrast, not prone to exaggeration and in my view did his best to recall the events in a balanced and careful way.
I find the Williamsons were told that it was ‘good stock water’.
Despite the reports she had received, Mrs Williamson had maintained that the water was too saline even for sheep, only reluctantly agreeing with what Dr Ellis had said in his report when she was in cross examination. While the water may not have been of a suitable quality for the plan that she and her husband ultimately arrived at, whatever that plan was, it was not conveyed to Mr Jones. The quality of the water would not prevent the property being used for the purpose of running sheep, as was referred to in the advertisements. There was no plan identified for any other ‘stock’. The evidence from Mr Reynolds was to the effect that the depth of the well was measured at 32.4 metres. He measured a flow rate that stabilised at 6.1 L/min or 366 L/hour, enough for 40 sheep. I do not accept the Plaintiffs’ submission that the water was not ‘good stock water’ given the context in which the representation was made. There was no misrepresentation as to the quality of the water.
The advertisement and what was said by Mr Jones during the telephone discussion and the inspection, informed an intending purchaser that the source of water on the property was the Tyeka bore. The Plaintiffs seek a finding that both the defendant and Mr Sunners are lying and that the tank and trough had been filled using water from the Lithgoe’s bore. Allegations described by Mr Britten-Jones as ‘wild and unsubstantiated speculation’.
Mrs Williamson had done a good deal of ‘detective work’ as regards the true source of the water in the tank. There is no doubt she is convinced that the tank she saw at the inspection was filled from the Lithgoe’s bore. The rusted pipes, one of which showed a hole at its base, which had somehow disappeared, added to her concerns. In my view this evidence takes the matter nowhere given that the time between the tank having been filled for the sale and the time the pipes were removed from the bore, would allow for deterioration as seen in the photographs, as would the elements.
I agree that the factual circumstances, and the difficulties the Plaintiffs have had with the water supply adds fuel to their theory and belief they have been deceived. I have however, found it difficult to understand why, given their apparent desperation, they made no attempt to contact Mr Clarke to inform him of the difficulties they were having with the bore or why they did not take up the offer that Mr Williamson agreed Mr Hilder made, to fix the bore at no cost to them.[184]
[184] T341.
While I accept all of the expert evidence as credible, I found the evidence of Mr Hilder particularly helpful as he has a good deal of practical experience. I cannot conclude, as Mr Riggall submits, that Mr Hilder was in the defendant’s camp, maintaining some sort of anger or vendetta against the Williamsons because they had not paid his account. Indeed that was completely contrary to Mrs Williamson’s evidence that Mr Hilder agreed to forego his account and he and her husband left on friendly terms. Mr Hilder presented, in my view, as someone who had genuinely tried to be of assistance to the Plaintiffs and none of the witnesses who are said to have had views about the worth of making further attempts to get the bore working properly were called. The apparent reticence of the Plaintiffs to take the matter further does, in my view, raise concern that they simply changed their minds and were regretful of their decision to purchase, instead putting all of their energies into proving that Mr Clarke had deceived them.
The uncertainty as to exactly when and how the bore was operating successfully adds to this assessment. Mr Williamson, who was present on the property for a period of time before Mrs Williamson arrived, said the bore was operating at the time of his arrival in September 2011.[185] Mr Williamson said that after the toilet cistern was replaced, the toilet was flushing, the windmill was operating and the reason for the tank not being full was possibly a leak in the pipe.[186] This is to be contrasted with the evidence of Mrs Williamson that the bore did not work on her husband’s arrival at the property and the toilet would not flush. Furthermore, Mr Hilder was very clear in his recollection that there was no contact by the Plaintiffs between December and March and I prefer his evidence.
[185] T264.
[186] T286.
Both Mr Clarke and Mr Sunners gave evidence that they had seen the tank fill after they had refitted the bore. I have carefully scrutinised the evidence of both witnesses. I did not find Mr Clarke a particularly impressive witness with respect to his recollection of the timing of the work that he and Mr Sunners carried out on the property prior to the inspection and I note the matters in his solicitor’s letters and the answers in the Notice to Admit do not sit well in terms of the time available to fill the tank. Some explanation for these issues might arise from the delay between those events and giving evidence, or in not having paid any particular attention at the time the bore was filling. The instructions he is assumed to have given in respect of the timing and his answers to the questions in the Notice to Admit, may also suffer similarly.
Mr Riggall asked me to conclude that Mr Sunners’ evidence that it took five to seven days to fill the tank, was more consistent with the water having come from a source other than the Tyeka bore. The expert evidence called by the Plaintiffs left me with difficulty in concluding with any real certainty whether the bore was capable of filling the tank within any particular time frame. Dr Ellis, in his report,[187] concluded that theoretically, the bore and windmill were capable of supplying sufficient water to fill a 10,000 gallon tank and trough in 15.5 days. Mr Hilder thought 13 days. In any event, Mr Sunners was rather imprecise in recalling the events and I bear in mind that he gave his evidence in the presence of his employer, Mr Clarke. Certainly it was my impression that Mr Sunners had no particular interest in the time it took to fill the tank. Given the evidence of Dr Ellis, Mr Sunners must either be mistaken in his recollection, or untruthful. I accept Mr Jones had initially seen the tank empty, saw the water coming from the bore some two or three weeks before the inspection, and had been told the bore had been pumping for three days and would be connected to the concrete tank and trough. If Mr Clarke was intending to deceive any prospective purchaser, I would expect he would have done so well before Mr Jones became involved. Given that the bore could at least ‘theoretically’ have filled the tank over many days, the concerns I have about Mr Clarke’s evidence are not sufficient to satisfy me that he has deliberately filled the tank from another source for the purposes of display. I accept both Mr Clarke and Mr Sunners as witnesses of truth in particular as regards their recollections they observed the tank filled with water sourced from the bore. Furthermore, I reject the Plaintiffs’ claim that as at the date the Plaintiffs entered into the contract, there was not adequate ‘good quality stock water’ to run the 44 or so sheep as advertised. There has been no misrepresentation or deception. In the event I am wrong about that, the question arises as to whether, because Mrs Williamson said she placed no reliance on the representations, remedy is not available under the TPA.
[187] Exhibit P11.
While a purchaser who acknowledges that it has not relied on any representation made or given by a vendor, and relied only on their own inquiries, cannot be excluded from a claim pursuant to the TPA, such an acknowledgment may provide some evidence bearing on the issue of reliance on the representation.[188]
[188] See Netaf Pty Ltd v Bikane Pty Ltd (1990) 92 ALR 490 at 502 – 503.
Mrs Williamson said in evidence that she read through the conditions and understood there could be no warranty about how profitable the property was,[189] how long the water would last or as to the capacity or extent of the bore. She said she relied on the inspection.[190] In those circumstances I accept that the special condition clause is in the nature of a ‘contemporaneous disclaimer’ as identified in Campbell v Back Office Investments Pty Ltd[191] and goes to the question of causation, where French CJ said:
A person accused of engaging in misleading or deceptive conduct may claim that its effects were negated by a contemporaneous disclaimer by that person, or a subsequent disclaimer of reliance by the person allegedly affected by the conduct. The contemporaneous disclaimer by the person engaging in the impugned conduct is likely to go to the characterisation of the conduct. A subsequent declaration of non-reliance by a person said to have been affected by the conduct is more likely to be relevant to the question of causation.
[189] T62.
[190] T171-172.
[191] (2009) 238 CLR 304 at [29].
I indicate that had I been satisfied the water seen on inspection had been sourced from another bore, the conditions of sale imposed by Mr Clarke, would have afforded him no protection however I find that the acknowledgment by Mrs Williamson prevents the Plaintiffs from a remedy as regards any misrepresentation brought about through the advertisement or by Mr Jones.
In its Fourth Statement of Claim the Plaintiffs seek to rely on s 8 of the Misrepresentation Act 1972 and the Land and Business (Sale and Conveyancing) Act 1994 as follows:
16A In so far as the defendant may seek to assert that the representations set out in:
(a) The advertisement pleaded at paragraph 5 of this pleading; and
(b) The telephone conversation pleaded at paragraph 6 of this pleading; and
(c) The representations made by Mr Jones at the property on 14 March 2010 pleaded at paragraph 9 in this pleading; then are not binding on him by reason of any contractual exclusion clause; then the plaintiffs rely upon section 8 of the Misrepresentation Act 1972 and section 35 of the Land and Business (Sale and Conveyancing) Act 1994.
The Misrepresentation Act 1972 provides:
8—Exclusion clauses
If any contract contains a provision that would, but for this section, exclude or restrict—
(a) any liability to which a party to a contract may be subject by reason of any misrepresentation made by that party before the contract was made; or
(b) any remedy available to another party to the contract by reason of such a misrepresentation,
that provision has no effect except to the extent (if any) to which, in any proceedings arising out of the contract, the court may allow reliance on it as being fair and reasonable in the circumstances of the case.
The Land and Business (Sale and Conveyancing) Act, 1994 provides:
35—Misrepresentation
No term or provision of an agreement for the sale and purchase of land or a business prevents a party from claiming or being awarded damages or other relief in respect of misrepresentation in connection with the sale or purchase of the land or business.
I have been referred by Mr Britten-Jones to Commercial Management Services (SA) Pty Ltd v Glen Searles Real Estate Pty Ltd[192] where Kitchen DCJ held that where a plaintiff could not assert a cause of action against the defendants in misrepresentation, it followed:
… that there was no issue giving rise to an action based upon the Misrepresentation Act and no reliance on s 8 of that Act; the section does not come into play until it is determined a person has a liability in misrepresentation for the purposes of that Act. Similarly, s 35 of the LBA has no effect until an issue of damages or other relief for a fraudulent representation is before the Court. There is no such issue in this case, therefore, s 35 is irrelevant.
[192] [2005] SADC 8 at [86].
It would follow that as I have found against the Plaintiffs with respect to their claim for misrepresentation and deceptive conduct, the matters pleaded in paragraph 16A are of no assistance to them.
If I am wrong as regards my findings, I note the Plaintiffs argue that s 87 of the TPA would provide for orders declaring the contract with Mr Clarke void ab initio. With respect to both counsel, the issue was not argued sufficiently to enable me to come to a concluded view, and would require further submissions.
As regards damages, the Plaintiffs have struggled and, in fact, made limited attempts to demonstrate they have incurred the loss that has been claimed in their pleadings. As regards loss of opportunity, no evidence was given concerning any profitable opportunity they had to forego. While copies of the Plaintiffs’ taxation returns were tendered, no evidence of an alternative opportunity to earn income has been provided. Furthermore, there has been no evidence to support Mrs Williamson’s claim that approximately 60% of her grocery bill could have been saved had she had sufficient water to be self-sufficient in produce. Given the evidence of Mr Brooke, there is no capital loss.
Doing the best I can on the evidence, I would have allowed damages at $25,967 made up as follows:
Transaction costs $ 6,271
Stamp duty $ 4,830
Land titles registration fee $ 866
Wasted expenditure $ 5,000
Wasted labor $10,000
Costs to sell the land $ 7,000
Less use of cost of accommodation ($ 8,000)The Plaintiffs’ claim is dismissed. I will hear the parties as to consequential orders and in particular with respect to costs.
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