Walsh, J.S. v A.C. & C.C. Adcock Pty Ltd

FEDERAL COURT OF AUSTRALIA

........ .......

A&L&44

District Registry

........ ....... Division

No. of Action ........ .

/S6

Date(s) of hearing

Date judgment

+ p 3

delivered

R . M

YlJ-y

Counsel and	(	........ ........ ........ ...
(

solicitors

for

(

........ ........ ........ ....

(

A&?+.

(

........ ....

j...t?;.+4.p-acc,

t'tr

A =

U-

Counsel	and	(	........ ........ ........ ...
(

solicitors

for

........ ........ ........ ...

V:.?..&.\.

........ ......

L q]L

Signed

(Asso

Date

CATCHWORDS

TRADE PRACTICES - consumer protection - misleading or deceptlve conduct - sale of house omissions and false representation - assessment of damages

Trade Practices Act 1974

Metropolitan Adelaide Road Wideninu

Flan Act

( S . A . ) 1972

Land & Business Aqents Act

( S . A . ) 1972

No. G15 of 1986

JAMES STEF'HEN WALSH and ELIZABETH ANN WALSH V. A.C. & C.C. ADCOCK

PTY LTD and BRENTON CHARLES ADCOCK

FORSTER, J.

ADELAIDE

7 APRIL 1987

IN THE FEDERAL COURT OF AUSTRALIA

SOUTH AUSTRALIA DISTRICT REGISTRY )

No. G15 of 1986

)

GENERAL DIVISION

)

B E T W E E N :

JAMES STEPHEN WALSH and

ELIZABmH ANN W I S H

Applicants

- and -

A.C. & C.C. ADCOCK PTY LTD and

BRENTON CHARLES ADCOCK

Respondents

MINUTE

O R D E R

JUDGE MAKING	O R D E R	FORSTER J .
WHERE MADE	ADELAIDE

DATE OF ORDER	7 APRIL 1987
THE COURT ORDERS THAT:

1.	Judgment	be	entered	for	the	applicants	in the sum of
$6,000.

2 .

The

applicants

receive

the

costs

of their

action,

such

costs to be taxed.

Note:	Settlement and entry of orders is dealt with in Order 36
of the Federal Court Rules.

114 THE FETEPJIL COUET CIF AUSTF.ILLIA i

)

SOUTH AUSTFALIA DISTRICT REG1STF.P )

1810.

G15 of 1986

IGENEFAL DIVISION

B E T W E E N :

J M E S STEPI-EN W S H and

ELIZABETH ANN

W S H

Applicants

- and -

A.C. 6. C.C. ADCOCK PTY LTD and

BRENTON CHARLES ADCOCK

Respondents

REASONS FOR JUDGMENT

C O W : Forster, J.

This action arises from conduct which it is claimed

constitutes

breach of s.52(1) and s.53A(1) of the

Trade

Practices Act

and

the

applicants

claim

damages

pursuant

s.BZ(1) of that Act.

The dispute concerns the sale by auction

of land and

improvements

situated at 428 Glynburn

Road,

Erindale

("the

property") on 16 November 1984 for a purchase price of $363,000.

Settlement took place on 28 February 1985.

The first respondent, A.C.

and C.C. Adcock Pty Ltd, was

the real estate company responsible

as agents of the vendors for

the promotion and sale of the property.

The second respondent,

Brenton Charles Adcock ("Adcock"), was at

all material times

licensed manager ln the employ

of the first respondent.

2 .

At the auction of the property the applicants, James

Stephen Walsh and

Elizabeth Ann Walsh, made the successful bid

for the property and signed the contract of sale and purchase on

that day.

The property was at

all material times affected by

the

Metroaolitan Adelaide Road Widenins Plan Act (S.A.) 1972 (as

amended) to the

extent that there was a strip

of land up to 2.14

metres in

width along the western boundary

the property

abutting Glynburn Road which might be compulsorily acquired for

the purpose of

road widening and which might not be built upon

without

consent

of the

Commissioner of Highways.

The

evidence of Clemens whom I mention below satisfies me that on the

balance of probabilities if the applicants sought

consent from

the Commissioner to erect fencing and appropriate surrounds for a

tennis court on the strip

t would be granted.

The first respondent failed to disclose to either of the

applicants that the

property was so affected.

The statement

pursuant to s.90(4)

of the Land and Business Auents

Act

(S.A)

1972 (as amended) and

signed by Rodney Adcock as an

agent of the

first respondent neglected to disclose that the strip of land

mention appeared on the Metropolitan Adelaide Road Widening

Plan.

On 14 November 1984

the respondents conducted an open

inspection of the property.

Both applicants attended this open

inspection.

A sales brochure was distributed

which was headed

and endorsed with the

name

of the first respondent and

listed

Adcock as one of the company's agents responsible for the sale

the property.

The brochure described the property as "a huge allotment

measuring 159' X 200' with room for a n/s tennis court".

A site

plan on the

rear of the brochure suggested the position

the

tennis court to be in the north

west corner. of the property

adjacent to the northern boundary and Glynburn

Road.

At the open inspection on 14 November 1964 Adcock

made

representations to both applicants

that there was

sufficient

space on the land to construct a northlsouth tennis court in the

north-western corner of the property.

While

Adcock had no

specific recollection of the applicants, he admitted that

it was

highly unlikely that

the applicants would not have been presented

with a sales brochure.

He did not deny that the representations

as to the tennis court had

been made.

I have no reason not

accept the evidence of the applicants in this regard.

On the day of, and immediately prior to, the auction of

the

property on 16 November 1964, the

applicants

allege

conversation took place between the applicants, Adcock and

Bruce

Corbet Whittem

("Whittern") who was assisting the applicants

the purchase of a suitable property.	Adcock denies that he was
involved in such a conversation.

The evidence of

the applicants and

of Whittem was for

the most part consistent, particularly with respect to the

salient points and I have

no reason to

disbelieve

them.

Whittem, although assisting the Applicants, was to some extent

dlsinterested party and his recollection

of the dialogue was

steadfast and credible.

Whittem, who is

a land agent, had no

doubt in regard to

h16

identification of Adcock as the

person

wlth whom he had a conversation.

Whittem had been involved in the sale

a nearby

property on Glynburn Road.

Durlng the conversation, and in

the

presence of both

applicants, he made enquiries

of Adcock about

the road widening scheme and

its

effect

the property.

Whittem said in evidence that

he said to Adcock "Are you

sure

that there is not road widening on Glynburn Road?"

He said that

Adcock replied "No there is no road widening on Glynburn

Road any

more.

Whlttem said that he then said "Are

you sure Brenton

there is not because I sold one previously down the road about a mile just twelve months prior and there is road widening on that property?" Whittem says that Adcock replied "No there is not any road widening in fact the Highways Department are now giving

the land back to the

owners - or selling it back." Adcock

denies that this conversation

any conversation with

Whittem

took place

but I believe Whittem

as to the substance

this

conversation to which the male applicant also

attests.

The applicants according to their own evidence and that

of Whittem were looking for a substantial property with a tennis court or the potential for a tennis court. I accept that this

was

primary

consideration

in their

acquisition of a new

property.

In so far as they were not informed and deliberately

or negligently misled

as to the

effect of the road widening

scheme on the property and, in particular,

the possibility of

interference with the positioning

a tennis

court

in the

north-west corner of the property, the applicants were induced

the conduct of the respondent into the purchase

of the property.

The first respondent and the second respondent as

agent

of the

first respondent and a "person involved" have breached

s.52(1) and s.53A(l)(b) of the Trade Practices

Act

and

are

therefore liable	for	the	loss and	damage	suffered	by the
applicants.

The applicants became aware

the application of

the

road widening scheme

to the property between the time

of the

auction and the date of settlement.

One option available

them was to rescind the contract, but

they chose to proceed

settlement after an unsuccessful attempt	to	negotiate a lower
price.

What loss have the applicants suffered as

a consequence

of the contravening conduct of the first respondent?

This is I

think to be

measured by comparing the real value

of the property

bought with the price they paid for it.

Acquisition of any of the strip has

not taken

place,

and, in

the opinion of Gerald

William

Clemens,

supervising

engineer

charge

of the

planning

liaison

section

of the

Highways Department, it is "unlikely ever" to take place. The applicants have not endeavoured to construct a tennis court on

the property.

Neither

have

they

approached

the

Highways

Department with a proposal to construct a tennis court and

associated structures on this part of the property, elements

which would require the consent of the Commissioner of

Highways.

It is also relevant

that extenslve roadworks were undertaken on

the relevant part of Glynburn Road in 1984 and that	road widening
is highly unlikely in the future.

Evidence in regard to the value

of the property and the

quantification of the loss suffered by the

applicants

was

advanced on behalf of the applicants by Peter Maxwell Woon and on

behalf of

the respondents

Robin Graham Turner ("Woon and

Turner"). Both these

men have had considerable experience.

I found the evidence and opinions of Turner to be

convincing than those of Woon not least because Turner addressed

himself directly to the question which, in my view, requires

answering which is the real ralue of the property at the date of

the sale bearing in mind the effect of the possible

road widening.

Woon addressed himself to

a somewhat different

question, i.e.

the loss suffered by the applicants because of the

non-disclosure of possible road widening which he treated as being the loss of the possibility of having a tennis court which,

in my

view, because

of the evidence

of Clemens was the wrong

question.

To be fair to Woon he was

probably not asked

the

appropriate question and on his instruction assumed that there

was no possibllity of constructing a tennis

court on the land.

Turner in h16

written valuation assessed the value

the property on the day

of the sale assuming knowledge

the

plan prepared pursuant to the Metropolitan Adelaide

Road Wideninq

Plan Act 1972 at $360,000 which is $3,000 less than was

paid.

In hls oral evidence he altered this opinion somewhat and assessed the effect of the non-disclosure of the possible road widening as $5,000.

Woon on the

other hand gave

it as his written opinion

that the applicants "have paid in my opinion $55,000 more for the

property than they would have if the property had

not been

promoted as having a northlsouth tennis court potential". Apart

from asking himself the wrong question Woon fell into

error in my

opinion by

assuming

that

the applicants were prevented from

building a tennis court which, in

view, bearing in mind the

evidence of Clemens was an incorrect assumption.

Mether or not

an eastlwest tennis court

now

regarded as acceptable for

social tennis

Turner

says

and

this would readily be

accommodated on the land, Woon did not even consider the possibility of obtaining consent to the erection of a northlsouth

tennis court.

I consider

that Woon's valuation of the

loss

suffered is an extravagent one and proceeded on wrong principles, possibly, as I have said because of the instructions he received.

Doing the best I can and making use of the evidence

both valuers but principally that of Turner, I assess the real value of the property at the time of the sale at $357,000 and the applicants' damages at $6,000.

There will be judgment f o r the applicants in the sum of

$6.000 and costs to be taxed.

I certify that this and the ?preceding pages are a true copy of the Reas

Counse l

for

t h e A p p l l c a n t s

M r B.M.

B u r l e y

S o l i c l t o r s f o r t h e A p p l l c a n t s

N ie ld and

C o .

C o u n s e l f o r

t h e R e s p o n d e n t s

M r A . J .

Besanko

S o l l c l t o r s fo r

the Responden t s

R . R .

B e n t l e y

Co.

P t y L t d

[1987] FCA 160

31 Mar 1987