Wildsmith, John & Anor Dainford Ltd

[1983] FCA 343

Re: JOHN WILDSMITH; PAMELA JOAN WILDSMITH
And: DAINFORD LIMITED (1983) 72 FLR 235
VG No. 6 of 1983
Trade Practices Act - Trade and Commerce

COURT

IN THE FEDERAL COURT OF AUSTRALIA

VICTORIA DISTRICT REGISTRY
GENERAL DIVISION
Smithers J.(1)

CATCHWORDS

Trade Practices Act - whether representations made by the respondent to the applicants constituted misleading and deceptive conduct - whether such representations falsely represented that services were of a particular kind - whether such representations constituted false or misleading statements concerning the characteristics of land, the use to which it was capable of being put or the existence or availability of facilities associated with the land - whether loss or damage suffered pursuant to s.87 of the Trade Practices Act - what is the time with respect to which loss or damage should be ascertained for s.87 relief to be available.

Trade Practices Act 1974 ss.52, 53(aa), 53A and 87

Trade and Commerce - Trade practices - Whether representations made by the respondent to the applicants constituted misleading and deceptive conduct - Whether such representations falsely represented that services were of a particular kind - Whether such representations constituted false or misleading statements concerning the characteristics of land, the use to which it was capable of being put or the existence or availability of facilities associated with the land - Loss or damage - Time with respect to which loss or damage should be ascertained for s. 87 relief to be avaiable - Trade Practices Act 1974 (Cth), ss 52, 53(aa), 53A and 87.

HEADNOTE

By an agreement in writing the applicants agreed to purchase from the respondent a unit in a high-rise building at Surfers Paradise, Queensland for the sum of $375,000 and paid a deposit of $37,500.

It was agreed between the solicitors for the parties that the date for settlement should be 4 February 1983.

On 25 January 1983 the applicants filed an application and a statement of claim in the Federal Court claiming a declaration that the conduct of the respondent prior to the agreement being signed was misleading or deceptive or likely to mislead or deceive in contravention of s. 52 of the Trade Practices Act 1974 (Cth) and in contravention of the provisions of sections 53(aa) and 53A of the Act.

It was also alleged in the statement of claim that, acting on the faith and truth of the representations and warranties made prior to the agreement being signed and induced thereby, the applicants entered into the said agreement and that the applicants were entitled to rescind the agreement and to recover from the respondent the moneys paid to it and damages pursuant to the said Act.

Held: (1) There is nothing misleading in informing a potential purchaser what a proposal regarding amenities is. A person so informed knows that all there is is a proposal, and not a promise.

(2) In circumstances similar to those in this case, in order to obtain relief under the statutory provisions of s. 87 it would be necessary for the party to establish that, apart altogether from entering into the contract under some wrongful inducement, he had made the decision not to dispose of his rights under the contract promptly but to retain them during the relevant period by reason of misleading or deceptive conduct engaged in in contravention of Pt IV or Pt V of the Act so that it could properly be said that the loss resulting from the decision to retain such rights was suffered by reason of that conduct.

Brown v. Jam Factory (1981) 53 FLR 340; Potts v. Miller (1940) 64 CLR 282; Waddell v. Blockey (1879) 4 QBD 678, applied.

Brown v. Southport Motors Pty Ltd (1982) ATPR 40-306; Mister Figgins Pty Ltd v. Centrepoint Freeholds Pty Ltd (1981) 36 ALR 23 and Toteff v. Antonas (1952) 87 CLR 647, referred to.

HEARING

Melbourne, 1983, September 29, 30; October 3-5; November 11.

#DATE 11:11:1983

D. G. Graham Q.C. and J. D. Lowenstein, for the applicants.

C. Hampson Q.C. and R. Stanley Q.C., for the respondent.

Cur. adv. vult.

Solicitors for applicants: Rigby & Fielding.

Solicitors for respondent: McLaughlin, Gordon & Lennon.

M.P.S.

ORDER

1. The application to be dismissed.

2. The costs of and incidental to the application be paid by the applicants.

Application dismissed with costs.

JUDGE1

By a contract bearing the date 18 August 1981 but signed shortly afterwards, the applicants and the respondent entered into an agreement in writing whereby the respondent agreed to sell to the applicants and the applicants agreed to purchase from the respondent a property known as Unit No. 32G being Lot 147 on a proposed building units plan and situated on level 32 of a high rise building known as "Imperial Surf", yet to be built, on The Esplanade, Surfers Paradise, in the State of Queensland for the sum of $375,000. Construction of Imperial Surf actually commenced in September 1981. In circumstances hereafter described the applicants paid a deposit to the vendor's agents PRD Realty Pty. Ltd. (PRD) on 31 July 1981 in the sum of $37,500. The contract provided for the payment of the balance of purchase money within 30 days after a notice from the respondent that the relevant building unit plan had been registered at the Real Property Office, Brisbane in the State of Queensland. Notice to that effect was given by the respondent to the applicants on 31 December 1982 and it specified 1 February 1983 as the date for settlement. In response to representations made by the then applicants' solicitors on 6 January 1983 it was agreed between the solicitors for the parties on 19 January 1983 that the date for settlement should be 4 February 1983.

On 25 January 1983 an application accompanied by a Statement of Claim was filed in this Court on behalf of the applicants claiming a declaration that the conduct described in para.7 of the Statement of Claim was misleading or deceptive, or likely to mislead or deceive in contravention of s.52 of the Trade Practices Act 1974 (the Act) and that the representations described in para.7 of the Statement of Claim were made in contravention of the provisions of s.53 (aa) of the Act, and that the statements described in para.7 were made in contravention of the provisions of s.53A of the Act. The relief claimed in the application includes:

(a) an order declaring the agreement in writing dated 18 August 1981 to be void and to have been void ab initio;

(b) an order that the applicants are entitled to avoid the agreement in writing;

(c) an order directing the respondent to return all monies paid to it pursuant to the said agreement in writing;

(d) an injunction restraining the respondent from taking any steps in order to bind the applicants to the said agreement;

(e) an order directing the respondent to pay to the applicants any damages suffered by the applicants as a result of the matters referred to in the Statement of Claim.

It was alleged in para.7 of the Statement of Claim that in order to induce the applicants to make and enter into the contract, the respondent represented to the applicants and in consideration of their so doing warranted that:

(a) there would be a squash court in the north-west corner of the development;

(b) there would be no fence along the frontage of the property to The Esplanade;

(c) there would be four lifts in the said high rise building;

(d) in respect of the unit:

(i) the balcony would extend to include the second bedroom which would have a sliding door opening on to such balcony;

(ii) the eastern and northern balconies would be totally separate without access to each other;

(iii) there would be a means of egress and access from the living room to the the northern balcony;

(iv) that there would be a separate private balcony to bedroom No. 1;

(v) that there would be a storeroom off bedroom No. 1;

(vi) the eastern balcony would be of a specified size and layout.
By paragraph 10 of the Statement of Claim it was alleged that the applicants had discovered that each of the representations was false and untrue and each of the said warranties broken in that:

(a) there was a front fence approximately 6' high running along the eastern boundary of the property;

(b) there was no squash court on the north-western corner of the property or at all;

(c) there were only three lifts in the highrise development;

(d) (i) the northern balcony had been shortened so as not to include the second bedroom which had a fixed window rather than sliding doors;

(ii) the eastern-northern balconies were now joined and continuous;

(iii) there was no method of egress to and from the living room directly onto the northern balcony;

(iv) the balcony adjacent to bedroom No. 1 was no longer a separate and private balcony but was part of the main eastern balcony;

(v) there was no storeroom adjacent to the dressing room off bedroom No. 1 or at all;

(vi) the eastern balcony was totally different in size and layout to that represented;

In para.14 it is alleged that acting on the faith and truth of the said representations and warranties and induced thereby the applicants entered into the said agreement in writing in August 1981.

By para.15 it is alleged that by reason of the matters aforesaid the applicants became, and are entitled to rescind the contract and to recover from the respondent the monies paid to it and to seek damages pursuant to the Act. The applicants claim the relief as specified in the application.

The applicants are husband and wife. John Wildsmith is an insurance broker carrying on business in Melbourne in the State of Victoria. His wife is engaged in home duties. Before the events relevant to these proceedings commenced the applicants were accustomed to spend portion of the school holidays and other periods on the Gold Coast at Surfers Paradise where they were owners of a unit in a high rise development known as "Highsurf". They would be accompanied by their son and daughter who at this stage are ages 16 and 12 respectively. They were well acquainted with one Mr. Lang, a representative of PRD, who had sold them their unit in Highsurf and they had become in effect personal friends of his and from time to time met socially at restaurants and on his boat.

Mr. Wildsmith said that early in 1981 he had some discussion with Mr Lang in relation to the possibility of his acquiring a new unit. From these discussions with Mr. Lang he became aware of, inter alia, the proposed development of Imperial Surf. Mr. Wildsmith told Mr. Lang that he would be interested in updating his existing unit into something better and asked whether the building offered anything along those lines. Mr. Lang said that the only units that would compare with what he had were the penthouses at the Imperial Surf development. Mr. Wildsmith said that he visited the site of the proposed Imperial Surf building where there was a signboard advertising the project. He inspected that signboard and observed that the estate agent specified on it was PRD. His recollection of the sign was that it had an artist's impression of the proposed development and that it advertised certain facilities that Imperial Surf would offer such as an indoor and outdoor swimming pool, tennis court and squash court. It was to have forty-one levels. The reference to squash courts was, according to Mr. Wildsmith, of significance as he and his son played squash and the family was interested in it as well as tennis. They played regularly when they went to Surfers Paradise at hired court.

After seeing the sign on the land Mr. Wildsmith said he had further discussion with Mr. Lang concerning the possible purchase of a unit and Mr. Lang said that the units were not then released for sale. Mr. Wildsmith explained, "You could not buy one at that stage, but as we had done business before he would be in touch with me when the units were released and hopefully we would get a chance of buying one if we wanted". Mr. Wildsmith said that he received a brochure about the proposed development from Mr. Lang. He thought that he collected it from Mr. Lang in May 1981. He said that the building as erected looks basically like the building delineated on the brochure. He said that he and his wife studied the floor plans of the units carefully as shown on the brochure. He said that on 30 July 1981 Mr. Lang rang him in Melbourne to tell him that the units were released for sale and he could have the choice of one of two penthouses and said "if I was to buy one I would have to send a deposit immediately by telegraphic transfer". This Mr. Wildsmith did on 31 July 1981. He said he and his wife signed the contract in Queensland in August 1981 at the "Beachcomber" which is where PRD had a display unit at that time. They had been given the contract a day or two before, read it, and took it back to sign. They have made no further payment under the contract.

When the applicants visited Surfers Paradise on the Melbourne Cup weekend in 1982, much of the building work had been done and they were able to go to the thirty-second floor and inspect the unit they had purchased. They had obtained access by going up in the builder's cage and did not notice how many lifts there were. The unit was filled with building materials. But the applicants did notice that the balconies were not built as they were originally represented to them. The balcony was the main thing that stood out in their minds as a result of the visit. Mr. Wildsmith was not happy nor was his wife but they did not say anything to Mr. Lang about it. Mr. Wildsmith said "I guess we thought we could live with it or it would be better at Christmas time". He also said in evidence that he felt that many of the defects would be rectified by the time the finished product was ready.

The applicants inspected the unit again in December 1982, probably on the 27th. At that stage the basic unit was built. Cupboards were yet to be installed, painting to be done and carpeting to be laid. The applicants observed that there was no access from No. 2 bedroom to any balcony because the balcony did not extend to that part of the building. The balcony on the east side, i.e. the ocean side, was approximately double the width of the balcony delineated on the brochure. The applicants say the result was that the balcony dominated the room and if you sunbaked on its extremity you might be observed by occupants of balconies higher up. There is no access to the balcony on the north side. The applicants observed there was access to the balcony from bedroom No. 1. They observed also that the balcony as built was continuous, whereas according to the brochure it was divided so that the balcony on the north side was separated from the balcony on the east side and the balcony outside the living room on the east side of the unit was separate from the balcony on that side of the unit outside bedroom No. 1. They observed also that in the unit as erected there was no store room. There was a dressing room using up part of the space shown on the brochure as a store room.

Having noted the discrepancies between the building on the brochure and the building as erected, the applicants spoke to Mr. Chipman, an employee of PRD, at the display unit in Imperial Surf. They complained particularly about the balconies. Mr. Chipman's attitude was that the alterations were "terrific" rather than detrimental. Mr. Chipman said "if you are not happy you really should refer it to the developers, Dainford". Between 27 December 1982 and 10 January 1983 the applicants went to the unit a number of times, took some friends to see the unit to get their opinions, but did not complain to any other representatives of PRD or to Dainford.

It is to be noted that on 5 October 1982 Mr. Wildsmith wrote to Mr. Kiernanda of PRD, accepting an offer of finance whereby the applicants would pay 25% of the total purchase price and the rest be provided by PRD on mortgage at an interest rate of 14.0%. It is to be noted also that on 29 November 1982 the applicants wrote to Mr. Douglas of PRD a letter in the following terms:-

"Dear Sir,

Re: Unit - 32G Imperial Surf, Surfers Paradise

Having purchased the above mentioned unit, being one of the penthouses on the north east corner of Imperial Surf, due to various commitments we would be anxious to dispose of the unit prior to settlement, and whilst I appreciate sales are difficult in the current climate I would submit the following proposition for consideration.

Providing the unit can be sold prior to settlement I would be prepared to discount $24,000 off the original purchase price, thereby reducing the cost from $375,000 to $350,000. If you are unable to find a buyer prior to settlement this offer will be withdrawn accordingly.

It would be appreciated if you would pass on a copy of my letter to Geoff Chipman for his information.

Should you have an interested client I would be pleased to hear from you.

Yours faithfully

J & P J Wildsmith"

In response to that letter the applicants were advised that PRD's re-sale division would contact them and it would give priority for the re-sale of the unit.

Throughout December 1982 and until 21 January 1983 there was correspondence between the solicitors for the respondent and the Brisbane solicitors acting for the applicants. A vigorous debate was conducted as to whether the correct date for settlement was 1 February 1983 or 4 February. Ultimately by letter dated 19 January 1983 the respondent's solicitors indicated that settlement on 4 February 1983 would be accepted. On 21 January 1983 a number of documents including the mortgages to secure the finance being provided by PRD and other documents were sent by the respondent's solicitors to the applicant's Brisbane solicitors.

But by letter of 26 January 1983 Messrs Rigby & Fielding, Solicitors of Melbourne advised the respondent's solicitors in Brisbane that they were acting for the applicants and stated:-

"Dear Sirs,

Wildsmith v Dainford Limited

Property - Lot 147 (Unit 32G) Imperial Surf

We act for the above named Purchasers. We enclose by way of service sealed Federal Court Application dated 25th January, 1983 together with Statement of Claim in support thereof.

Kindly acknowledge receipt and also arrange for a Notice of Address for Service to be filed in the Court as soon as possible with a copy to be served on ourselves.

Please note that the hearing of the injunction is to take place on Friday 18th February, 1983 - the same date as for the other two actions instituted by us.

Please note that this hearing is for an injunction to prevent the Vendor from taking any steps under the alleged contract pending the outcome of the Federal Court Application.

If your client intends to take any such steps prior to 18th February, 1983 kindly advise us as we shall then obtain an immediate hearing of the injunction."

Following this communication these proceedings were conducted with reasonable despatch and came for trial on 29 September 1983.

Four Lifts

Turning now to the alleged misleading and deceptive conduct, I direct attention first to the allegation that a representation had been made to the applicants by or on behalf of the respondent that there were to be four lifts in Imperial Surf.

I say at once that I do not accept the evidence of either of the applicants that he or she was ever informed by Mr. Lang that Imperial Surf would have four lifts.

Particulars of the conduct constituting the misleading conduct were not sought or delivered in the course of the proceedings prior to trial. But it is clear that until shortly before the trial, at least, there was no suggestion that any oral representations were relied upon. Yet there was an allegation that part of the misleading conduct was a representation that Imperial Surf would have four lifts. Not only was there no suggestion that there was any oral representation on the subject, but Mr. Holt, the solicitor in charge of the litigation on behalf of the respondent was told by Mr. Niall, the solicitor in charge of the litigation for the applicants early this year that it would be convenient for the case to be tried in Melbourne because "it was not necesary for the agents responsible for the sale of the units to be present as his clients would be relying only on comparison of the Imperial Surf sales brochure". On 7 February 1983, Messrs Rigby & Fielding confirmed by letter that "it seems to us the only oral evidence which would be needed in this case would be the oral evidence of our client proving receipt of the relevant brochure material and the contract of sale." Again, in April of this year there was a further conversation between Mr. Holt and Mr. Niall in which Mr. Niall said there would be no need for the agents responsible for the sale to give evidence in Melbourne as his clients would only be relying on a comparison of the various matters in the brochure.

There was no reference to four lifts in any brochure. The only document in which four lifts were mentioned was the contract, and on the evidence it appears that neither of the applicants saw that reference in the contract before or when it was signed. The probabilities are that they did not know of that reference for a considerable time thereafter. The contract was a document of sixteen pages, mostly printed in small print. The reference to the lifts appears on p.13 in the sixth schedule which is headed "Schedule of Finishes and Chattels". It refers to various aspects of the building, such as floor, walls, ceilings, etc. of each room and gives a specification of the same. Under the general heading "Lifts Lobbies" there is a reference to "Lifts (4)" with a specification "time of travel 600 ft. per minute. High speed opening doors. Cars finished with transparent ceilings, rails and carpet or tiled floor".

Once it appeared that the applicants could not and did not rely on any documentary representation concerning the four lifts the allegation concerning it had to be abandoned unless there was some oral representation. It was presumably in these circumstances that the applicants searched their memories and discovered a recollection that Mr. Lang had said early in 1981 that there were to be four lifts in Imperial Surf. Against this there is the evidence of Mr. Lang that he did not ever say anything about four lifts. I believe Mr. Lang. Not only do I do this because of the general demeanor and character of the evidence given by Mr. Lang, but also because it is improbable that Mr. Lang would have said anything of the kind. The reference in the contract to four lifts arose out of the fact that the contract was constructed as an over-flow from that in relation to "Peninsula Surf", a building which had been disposed of by the respondent, some six weeks before the settling day for "Imperial Surf". That building did have four lifts, but it was a building 50 stories high. So far as Mr. Lang was concerned he believed that the building would have the number of lifts required by the building regulations, and the number reasonably required for this particular building of 41 stories. The precise number of lifts was of no other concern to him. He did not know precisely how many lifts there would be. There never was any proposal that Imperial Surf would have four lifts. I have no hesitation in finding that there never was any representation that Imperial Surf would have four lifts.
The Squash Court

I do not accept the evidence that a squash court was referred to on any sign on the land. However, Mr. Lang told the applicants early in 1981 that it was proposed to include a squash court in the Imperial Surf project. To my mind a statement by a person in the position of Mr. Lang some months before the actual content of the project had been finalised, as to what the final content would be, is in essence a statement of what he believes will be the situation if the current intentions of developer are realised. It is not a promise that the project will take the particular shape described by him. Everything about the project was but a proposal, or an intention. I do not doubt that Mr. Lang spoke about the whole project in terms of proposal; that was all there was. It was a proposal so far as he spoke of amenities such as the tennis court and the swimming pools. It is only in relation to the squash court that that aspect of what was said to the applicants is of importance because all those other amenities became realities. But, in respect of them all, the proper inference is that the statements made were not promises and would be understood as Mr. Lang's description of the project as he believed the developers intended to construct and present it.

When Mr. Lang spoke about the squash court what he said was true. There would have been a squash court in the north-west corner of the property had not the local municipal council rejected the proposal on 17 July 1981 for noncompliance with building regulations. It is not clear when Mr. Lang became aware of this. He cannot say whether it was before or after the contract was signed. But it is possible that when they signed the contract to purchase their unit the applicants were under the impression that a squash court was to be provided. The question is, however, whether in connection with this matter the respondent's conduct was misleading or deceptive or likely to be so. If there was a misleading or deceptive element in the respondent's conduct it must lie in a failure of the respondent to inform the applicants that although a squash court had been proposed the respondents were prevented from carrying out their proposal. There is nothing misleading in informing a potential purchaser what the proposal is. And a person so informed knows that all there is is a proposal, and not a promise. If when the time for decision comes he relies on what he was told he is not necessarily misled if the proposal has been abandoned. It would depend upon whether or not it would have been understood between the applicants and the respondent, or its representatives, that the applicants would be informed if, before the contract were signed, any major item of what had been proposed were abandoned and not included in the project. I think it likely that it would have been understood between Mr. Lang and the applicants that Mr. Lang would advise the applicants if, before the contract was signed, he became aware that there was a major change in the project as proposed or that an amenity had been abandoned and not included in the project. But it would seem that liaison between the respondent and its agent was not organized sufficiently to draw Mr. Lang's attention to the abandonment of the squash court before the contract was signed.

If the proper understanding was that Mr. Lang would inform the applicants if any major change in the respondent's intentions in relation to the project from that described by him to the applicants should in fact occur, then Mr. Lang would have known that to ensure that the applicants would not be under any false impression he should take steps to be aware of any such change and inform the applicants accordingly. But in this respect it is necessary to have in mind the vendor purchaser relationship arising from the circumstances. In 1981 it was not a case of purchasers laying down or having a voice in their requirements in relation to the details of units they might purchase, but of regarding themselves as fortunate to secure a unit at all. The competition was between purchasers to get a share of the limited number of units available. So that, although it might well be understood that Mr. Lang would inform the applicants of changes of which he became aware it would not be regarded, as between him and the applicants, as his obligation actively to take steps to ensure that he was aware of any changes which might have occurred in the respondents' intentions between the time when he had informed them that it was proposed to include a squash court in the proposal and the time when they had to make up their mind about entering into the contract. So far as the squash court was concerned, he had only said it was proposed, and although the squash court would be a pleasant amenity its presence or otherwise was, in my opinion, not regarded by Mr. Lang or the applicants as an item upon which the applicants' decision to purchase or not to purchase would depend. Mr. Wildsmith's reaction when he learned of the exclusion of the squash court is consistent with this.

Thus, when Mr. Lang told Mr. Wildsmith, truthfully, that he must decide forthwith whether he desired to take the available unit Mr. Wildsmith made a decision about a unit of the dimensions and particulars of which he had only the most general idea. He did not ask if the project had changed from that previously described by Mr. Lang, and Mr. Lang not knowing of any changes, assumed there were none. I do not believe the presence or absence from the project of the squash court was specifically present to the mind of either of the applicants. No doubt at that stage the general picture in their minds of what they were going to obtain was of the unit with all the amenities as had been described to them, but the motivation was not to obtain that unit with every one of those amenities but to obtain a unit in that project as it would turn out to be. There was plenty of confidence that it would turn out to be a first class high rise unit.

In these circumstances I think that the applicants would have understood that Mr. Lang would have informed them of any changes of which he became aware, but would not have expected Mr. Lang to be actively on the watch in case any particular amenity, or in particular the squash court, might for some reason have been omitted from the project when units were finally "released".

The elimination of the squash court was a change of sufficient importance to have come within the requirement that Mr. Lang should report it to the applicants if he learned of it. I think Mr. Lang would have mentioned the abandonment of the squash court if he had become aware of it. But, as indicated above, I am not satisfied that, before the contract was signed, Mr. Lang did become aware that the squash court would not be included in the project.

However, Mr. Lang did treat the brochure as important and as something to which the applicants, as intending purchasers, were entitled. Accordingly he delivered the brochure to the applicants as soon as he received it, some two days before the contract was signed. That brochure contained a site plan and plan of the various floors. The site plan showed areas designated as tennis court, outdoor and indoor paved sundeck, landscaped podium and landscaped areas, but no squash court. The north-west corner, the site of the proposed squash court was marked "landscape area". To my mind the delivery of the brochure was a statement of an unambiguous kind by the respondent to the applicatns of what was actually being offered by the respondent. It was a definitive identification and description of the unit and the amenities offered in association therewith. Reference to that brochure would have indicated that there was no squash court and that the proposal to have one had not materialised.

It is not to the point whether the applicants or either of them examined the brochure in full. The delivery of the brochure was a formal communication from the respondent stating the nature and extent of the project and what was offered. The delivery of the brochure to the applicants was an invitation to them to read it so that they would be acquainted with what they would acquire as purchasers of a unit in Imperial Surf. On a fair reading of the brochure an intending purchaser would draw the inference that a squash court was not included in the project. To my mind the delivery of the brochure discharged whatever was required of Mr. Lang, or the respondent, under the understanding between him and the applicants, to intimate to them any change in the project from what had been previously intended or proposed. In the circumstances therefore I do not consider the allegation that the respondent's conduct in relation to the squash court was misleading or deceptive is established on a balance of probabilities.

The Balconies and Access Thereto

I accept the evidence of Mr. Lang that no brochure had been handed to Mr. Wildsmith before August 1981 and that at the end of July 1981 when the applicants agreed to buy the unit and sent their deposit, they had no document of any kind before them. At that stage, beyond having a general idea of the class of unit being erected, gained from conversations with Mr. Lang and their own knowledge of the kind of highrise accommodation being erected in Surfers Paradise and that a penthouse might be available to them, the applicants did not know anything about the arrangement of rooms or balconies of the unit they were purchasing. However, on an occasion during August 1981 when Mr. Wildsmith, then in Melbourne, had received the contract from Mr. Lang by post, a unit on a floor above the 32nd floor became available. Mr. Lang telephoned Mr. Wildsmith to know if he would prefer that particular unit on the 34th floor. In that conversation Mr. Wildsmith said he would not change his unit on the 32nd floor for the one higher up largely because he preferred the layout of the balcony of unit 32G. He preferred the layout with the balcony extending past the bedroom on the north side.

It is clear from the sketch of the unit attached to the contract that the balcony of unit 32G is in three separated sections, one on the northern side extending along the whole of that side; one at the northern end of the eastern side, and another at the southern end of that side. Substantially the same arrangement of balconies is shown on the floor plan of the brochure in relation to the applicants' unit, No. 32G. There is no doubt that before he signed the contract Mr. Wildsmith had indicated that he understood the balcony arrangement would be that delineated on the sketch of the contract and that that was a matter of some significance to him. Except in the most general way the sketch on the contract gives no indication of the width of the balcony. But assuming that the living room dimensions were something like 20ft. x 20ft. a guess could be made from the drawing on the brochure that the balcony was about three to four feet wide. It appears to me therefore, that a representation was made to the applicants by the respondent that it intended to build the balconies substantially in accordance with the sketch in the contract and as shown on the brochure.

The departure of the actual balcony arrangement from that in the brochure and in the contract is manifest in the following respects. There is no balcony outside bedroom No. 2. There is no access from the living room to the balcony on the northern side. The northern and eastern balconies are not separate. The eastern balcony is not divided into two separate balconies so as to provide a separate and private balcony to bedroom No. 1. On the eastern side, the balcony is, for most of its distance, about eleven feet wide instead of about four feet. It is this feature which permits an unseparated continuation of the balcony along the front of the living room and kitchen and bedroom No. 1. The discrepancies are said to be a matter of considerable importance to the applicants.

I do not accept the evidence of the applicants that the additional balcony width is of importance. The reasons given are to my mind quite specious. First it was said that the width of the balcony spoils the atmosphere in the living room. Next it was said it excludes from the living room a view of the actual beach which would otherwise be available. It was then said that if one were to sunbathe on the part of the balcony beyond the line of the balcony as shown on the brochure one might be overlooked from above. I do not accept that there is any substance in the first reason. The second is plainly not in accordance fact. As to the third it is obvious that one is not compelled to sunbake further out than the line of the balcony as shown on the brochure. The balcony up to that line is just as much there and available to the sunbather as it ever would have been according to the brochure.

Nowhere in the evidence do either of the applicants say that they would not have entered into the contract had they not believed that the balcony arrangements would be in accordance with the indications concerning the contract and the brochure. It would be very difficult to draw an inference that this was so. The applicants had decided to buy a unit and had paid a deposit before they knew what kind of balcony there was going to be or how it was going to be laid out or what access there would be to it. Presumably they would contemplate there would be some balcony. The transaction was not of the kind in which the details to suit individual tastes were really open to negotiation. On the whole it was a package deal of a unit as the developer was going to make it. The contract provided that the unit sold was lot 147 "as outlined on the plan marked "A" annexed hereto and hereinafter referred to as 'the said unit'". There was little in the way of detail. The contract recited that, inter alia, the vendor intended to construct a multi story building to be called "Imperial Surf" on the land in accordance with specifications to be prepared by the vendor's architect. The contract contains the following note - "Please outline unit sold and car space on annexed plan and mark plans with correct levels".

But both the contract and the brochure do show various details of the intended balconies. Neither the contract nor the brochure shows what access there was to be to the northern balcony. On both documents the northern balcony is nowhere divided and access to it all would be available if provided from bedroom No. 2 or from either of the spaces shown as open walls of the north side of the living room. As built, there is no access to a balcony from bedroom No. 2. There is no access from the living room to the balcony on the north side. But there was an implied representation that there would be access to the balcony on the north side.

Practically all these discrepancies were noticed by the applicants in the first week of November 1982. They were the main things that stood out in their mind. They did not say anything to anybody about them. When asked why no complaint was made Mr. Wildsmith said "I was not happy, my wife was not happy with the unit. We were coming back at Christmas time some four or five weeks later. I guess we thought we could live with it, or it would be better by then." He added, "The contract I had - I made efforts to try and sell it. I thought if I could get rid of it and start again I would. That was the only contact. That was by letter, I think." The notion that "it would be better by then" is difficult to understand. If anything was to be done to make it better it had to be done then before the work was complete and while the workmen were around, yet no complaint was made.

The applicants said that when they saw the unit on 27 December 1982 they did make a complaint to one Mr. Chipman, who was an employee of PRD in a display unit on the third floor of Imperial Surf. They asked what had happened to the units and Mr. Chipman asked what was the problem. The applicants made reference to the balconies. Mr. Chipman asserted the changes were for the better, but if the applicants were not happy they should refer it to the developers. But the applicants did not refer it to anybody.

The question is whether, in respect of the statements in the contract or the brochure considered as containing representations, perused prior to the contract being signed, the respondent's conduct was misleading or deceptive. On the evidence I think it is quite clear that none of such conduct was misleading or deceptive so far as the balconies and access thereto is concerned. What occurred was that mistakes were made by the builder in the actual construction of the unit. The delineation of the balconies on the contract and certainly on the brochure no doubt constituted a representation that the respondent intended to construct the unit with the balconies as delineated thereon. There is no evidence that this was not true. And at the hearing of this case, the respondent expressed its willingness to correct the errors.

The plan marked Exhibit D in this proceeding is the architect's drawing for the builder to work from. That plan shows three separated balconies just as do the contract and the brochure. The relevant plan was of floor 32 with floor 33 superimposed. This apparently misled the builder, causing him to extend the width of the balcony and as a consequence construct the balconies as one continuing around the unit. There is no explanation why, although he continued the concrete ledge of the balcony width past the second bedroom he did not complete it with tiles and balustrades. So far as the respondent was concerned it intended to construct the narrow balconies separated between the north side and eastern side and with the balcony on the eastern side outside the living room being separate from that outside the kitchen and first bedroom, and to supply reasonable access to each. It would appear that in the contract the respondent has, in substance, undertaken to carry out such intention, and, as indicated, is willing to do so and is responsible in contract if it has failed or does fail to carry it out.

The Store Room

It was, at the times when the contract and the brochure were delivered, the intention of the respondent that the unit would include the store room shown on the brochure. Its conduct in this respect was not misleading. Indeed, notwithstanding the red line on the inside of the outline of the unit on the contract, there is much to be said for the view that the contract provides for the inclusion of the store room in the property sold to the applicants. In any event possession of it would have been delivered to the applicants, according to its boundaries as shown on the brochure, had it not been for directions of the fire authorities to change the position of certain pipes so that they took up a large part of the area which was to have been the store room.

Whatever remedies the applicants may have for breach of contract because the respondent is unable to deliver the store room are not the concern of this court in this case. No claim is made in respect of alleged breach of contract. However, under Part V of the Act there is no claim because in respect of the store room there has been no misleading or deceptive conduct.

The Fence

The allegations concerning the representations relating to the erection of a fence on the beach boundary of the property were not pursued.

The Applicants' General Approach

One has to go back to the general approach of both Mr. Lang and the applicants in relation to the purchase of the unit. It must have been known to the applicants that at the time of negotiations the market was strong and that it was a privilege to be able to buy one of the units. That situation remained for some time. It was not the kind of transaction in respect of which the details of the floor layout and such things were at the forefront of anybody's mind or were open to negotiation. The important thing was to obtain a unit. Nobody doubted it would be a first class unit appropriate to the requirements of potential occupants and purchasers of the units in their unique locality.

The applicants engaged Messrs Heiser, Bayley & McDonald to act for them when the deposit was paid in July 1981. They did not consult them about alleged discrepancies. They left them taking steps to arrange for settlement until apparently the last week in January 1983. Then the applicants changed their solicitors. One of their friends who had himself had problems with a purchase in Surfers Paradise told them that Messrs Rigby & Fielding were experienced in relation to such problems and that they should talk to them. He knew, said Mr. Wildsmith, that "I had problems just as he had problems". Mr. Wildsmith agreed that until 26 January 1983 he had allowed the respondent to believe that everything was going along satisfactorily towards settlement on 4 February 1983, and that he was not only going to settle but going to resell the unit and resell it at a loss. He never mentioned to the respondent or his solicitors of long standing any of his misgivings concerning any of the matters raised in this case, save for his few words with Mr. Chipman.

To my mind it is a reasonable inference that the applicants regarded themselves as buying the unit that the developers were going to give them, they knowing and expecting that it would be of a high quality and growing in value. They were satisfied purchasers until values began to fall. When this happened they determined to re-sell the property and to take a loss of $25,000. And they decided to do this without one word of complaint to the developers, except for their conversation with Mr. Chipman.

That a businessman who had really been misled and had acquired such a disappointing investment would calmly contemplate losing $25,000 without a whimper is to my mind incredible. That his wife, who acccording to him was aware of the respondent's misleading conduct did not spur him on to try to seek some redress is to say the least surprising. When asked about the commitments to which he referred in his letter of 29 November 1982 Mr. Wildsmith indicated he had no commitments other than the one to buy the unit in Imperial Surf. At one stage of his evidence Mr. Wildsmith said he did not complain about the deficiencies of the unit because he wanted to sell it and if he complained his complaints might spoil the sale. To my mind this is quite beyond belief.

I think that in the situation in which the applicants have found themselves because of the decline in values on the Gold Coast they have persuaded themselves that they were falsely dealt with by Mr. Lang and the respondent. In pursuing this belief they have developed a distorted recollection of what really occurred and what their true attitude and motivation was.

Relief Under Section 87 of the Act

Relief under s.87 of the Act may be obtained by a person who has suffered or is likely to suffer loss or damage by conduct of another person which is engaged in contravention of Part IV or Part V of the Act. The misleading conduct alleged in this case is conduct in contravention of Part V. On the evidence the proper inference is that at the date of entering into the contract the applicants had acquired rights of greater value than had to be paid for them. There is, therefore, a real question whether, even if inducement to enter into the contract by wrongful conduct on the part of the respondent were proved, relief could be obtained under the section, even although, at some later stage the value of the rights obtained under the contract had declined so that, at that stage, there was a loss situation.

The submission was made that the date with respect to which the financial position of the applicants in relation to the transaction should be taken into account for the purpose of ascertaining whether by reason of their being wrongfully induced to enter into the transaction they suffered a loss, was the date of action brought. Clearly this submission cannot be accepted. In the alternative it was submitted that the date was the date provided by the contract for the completion of the transaction by the payment of the balance of purchase money and delivery of possession of the unit the subject of the contract. No authority was cited in support of this submission and I do not think it is sound. Had the applicants ascertained within a day of entering into the contract that the conduct of the respondent which induced them to enter into it had been misleading and deceptive they would have been entitled to bring an action under the Act forthwith. They would have been able to claim the remedies under the Act forthwith. But they would have had to show that by taking the action they did, namely entering into the contract under the inducement of the respondent's conduct, they had thereby suffered loss or damage. The damage, if damage were suffered, would be the difference between the value of what they had acquired under the contract and what was the cost to them of such acquisition. The principles enunciated by Fox J. in Brown & Anor v. Jam Factory (1981) ATPR 40-213 at 42,929-42,930 are applicable. See also the observations of Fitzgerald J. in Brown v. Southport Motors Pty. Ltd. (1982) ATPR 40-306 at 43776 and those of Northrop J. in Mister Figgins Pty. Ltd. v. Centrepoint Freeholds Pty. Ltd. (1981) ATPR 40-226. In his observations Northrop J. likened the situation to one of deceit and referred to the judgment of Dixon J., as he then was, in Toteff v. Antonas (1952) 89 CLR 647 at 651.

It is a possible view that the relevant date is the date at which the applicants discovered that the conduct by which they had been induced to enter into the contract had been misleading or deceptive. There is attraction in this, but again, I do not consider that it is sound.

On entering into the contract the applicants acquired the promise of the respondent to complete the project and deliver possession of the unit. That had an immediate value. It was transferrable, the respondent was financially able to perform its promise and there was a market. It would have been for the applicants to decide to retain the benefits of the contract or to assign the contract to some person willing to buy it. But the answer to the question whether a loss had been made, and thus damage suffered, would not depend on which course the applicants might determine to take. Once the contract had been entered into the question was whether then and there the cost to the applicants to complete the contract exceeded the value of the promises of the respondent to complete the project and deliver up the unit: Potts v. Miller (1940) 64 CLR 282; Waddell v. Blockey (1879) 4 QBD 697.

However, where there is a contract, induced by wrongful conduct, which provides for performance by both parties of obligations thereunder in the future, and there is, before the time for completion, a decrease in value of the rights acquired by the party wrongfully induced to enter into it, so that at that stage, so far as he is concerned, a loss has been suffered, it might be thought that the situation is different. But notwithstanding that obligations of the parties to the contract would be performed in the future, the reciprocal rights and obligations under the contract were established when it was entered into. From that time the decision to dispose of or retain or otherwise deal with his rights under the contract was that of the party entitled to them. The loss, if any, suffered by retaining such rights, is the consequence of that decision. That is not to say that such a loss would never constitute a loss which would qualify the person concerned to seek relief under the statutory provisions of s.87. But to do so, it would be necessary for him to establish that, apart altogether from entering into the contract under some wrongful inducement, he had made the decision, not to dispose of his rights under the contract promptly but to retain them during the relevant period by reason of misleading or deceptive conduct engaged in in contravention of Part IV or Part V of the Act so that it could properly be said that the loss resulting from the decision to retain such rights was suffered by that conduct. That would involve an enquiry different from that as to whether the person concerned suffered loss or damage by reason of entering into the contract. No such case is made in these proceedings, nor to my mind, would the evidence support such a case.

Accordingly, in my opinion, assuming contrary to the foregoing that the applicants were induced to enter into the relevant contract by misleading or deceptive conduct of the respondent the question whether they suffered loss or damage thereby must be answered by comparing the value, as at the date of entering into the contract, of what they acquired under the contract in the way of rights against the respondent with the cost payable by them of acquiring such rights. In this case there is no evidence that the latter exceeded the former.

Sections 53(aa) and 53A

Having regard to the foregoing I do not consider that a case for relief for contravention of these provisions of the Act has been established. Relief under s.53(aa) depends upon falsity. I am satisfied that no false representation was made. The relief claimed under s.53A according to para.13 of the Statement of Claim relates to alleged false or misleading statements as to the characteristics of the land, the use to which it was lawfully capable of being put, and the availability of facilities associated with it. I am not satisfied that any such false or misleading statements were made by or on behalf of the respondent.

Warranties

It is to be observed finally, that the misleading and deceptive conduct alleged was said to include warranties as well as representations. The alleged warranties concern the subjects of the alleged representations discussed above. They are pleaded not as warranties calling for a remedy as such but as warranties constituting misleading conduct. The observations above concerning the validity or otherwise of the allegations concerning the representations alleged are applicable to the substance of the conduct alleged to have constituted warranties to the same extent and in the same way as they are to that conduct considered as alleged representations. It is my view that there was no conduct on the part of the respondent or any of its representatives constituting any of the alleged warranties. Nor is there evidence of any conduct in the nature of the giving of a warranty which constituted the engaging by the respondent or any representative of the respondent in any misleading or deceptive conduct towards the applicant.

In the result there must be judgment for the respondent with costs.