WERE THE REPRESENTATIONS MADE?
Respondent's submissions
65 The respondent points out that all the representations pleaded are directed to the selling price of the Property: the price at which the vendors would sell, the price at which they were prepared to sell, the price at which they had instructed the respondent to sell, the opinion of the respondent as to the price at which the Property would be sold, the grounds the respondent had for its opinion as to the price at which the Property would be sold, and its market value. The first three representations relate to the vendors' position as to the selling price, and the next two to the respondent's opinion as to that price.
66 The respondent contends that the advertisements, read as a whole, are not directed to the selling price of the Property, the vendors' position on that price, the respondent's opinion as to that price or the market value of the Property. Rather, they are directed to the class of persons who are invited to inspect the Property, namely those who have more than $600,000, or more than $650,000, to spend on a dwelling. The respondent submits that the words "PRICE GUIDE $600,000 Plus Buyers Should Inspect" are to be contrasted with the device employed in another of the respondent's advertisements. This one contains a bar chart divided into parts showing a price range from 290 through 310 and 330 to 350 with the 310 to 330 range coloured black so as, presumably, to indicate the most likely selling range. That, it is said, is plainly an indication of the vendor's/agent's opinion as to the total range of selling prices ($290,000 to $350,000) and the most likely range ($310,000 to $330,000).
67 Another contrast is said to be provided by a private sale advertisement for five apartments in a single complex. The price guide is "From $725,000", indicating the vendor's asking price for the lowest priced apartment.
68 The first of these contrasting advertisements is directed to the price, albeit within a range, at which the vendor and the agent expect the property to be sold. The second, in so far as it relates to the lowest priced apartment, is directed to the price at which the vendor would sell, was prepared to sell, or had instructed the agent to sell the apartment.
69 The orientation of the advertisements of the Property is said to be different. They are directed not to the vendors' selling price or to the respondent's belief as to that price, but to the class of potential purchasers who should inspect. Apart from that express and distinct message, it was said that the only other thing one could derive from the language is that the minimum for which the Property could be expected to be sold was $600,000 or $650,000.
70 Thus far the respondent's submissions focus on the language of the particular part of the advertisement. But the respondent contends that the context in which that part appears, namely in connection with a proposed auction, is vital to its characterisation. As indicated at [54], in determining whether words convey a particular representation, attention must be directed not only to the words themselves, but to the words in their whole context. The nature of an auction, as opposed to a private sale, is said to be important. In a private sale, the vendor discloses the price that is sought for a property. Someone interested in purchasing it may simply agree to pay the asking price. Or the interested party may offer a lower amount, and the parties may negotiate until they reach agreement. But the interested party knows that it is unnecessary to offer more than the asking price, because the vendor has announced that that is the maximum asked.
71 On the other hand, an owner who chooses the auction mode of sale will rely on the market to set the price. The selling price is determined by the bidders, not by the vendor. Disclosure of the vendor's likely selling price is said to be alien to the auction process. The vendor remains mute throughout the bidding. When all but the final bidder are exhausted, the fate of the auction depends on the vendor. If the vendor has fixed a reserve, which the last bid exceeds, there will be a sale. If there is no reserve, there will be a sale only if the vendor is satisfied with the last bid. There may be a reserve below which the auctioneer will not be at liberty to sell. But that will be a matter between the owner and the auctioneer. It would, it is said, frustrate the selected mode of sale for the reserve to be disclosed. It was submitted that this difference between a private sale and an auction is well understood by those interested in purchasing residential property. If evidence to this effect were necessary, it was given by Ms Wong. See [18]. She was the means her parents used to communicate with the respondent. Acting for her parents, she was plainly a member of the class of persons to whom the advertisements were directed. The importance of the context provided by the fact that the advertisements relate to an auction of the Property is that it would be unnatural to read into them the statement of a likely selling price. Further, the disclosure of such a price would be a departure from the obligations of the agent to the vendors to let the bidders establish the selling price and not to disclose the likely selling price (or even the reserve).
72 The respondent also submits that the invitation to potential purchasers possessing the attribute or quality of having more than $600,000 or $650,000 to spend, is in the nature of an introductory feature or preliminary information referred to in some of the cases as inappropriate to be elevated to the status of a representation. Reliance was placed on the observation of Fisher J in Pappas v Soulac Pty Ltd (1983) 50 ALR 231 at 234, in relation to statements made by a real estate agent about the commercial viability of a shopping centre. His Honour said:
"Many of the statements … were also essentially the types of introductory comments, in the nature of puffery, made at the start of negotiations, for the purpose of attracting the interest of a possible purchaser. … To the extent that they are essentially puffery, it is proper to be reluctant to elevate them to the status of potentially misleading conduct."
73 Reference was also made to what was said by Young J in Eighth SRJ Pty Ltd v Merity (1997) NSW Conv R 55‑813, at 56,392, speaking of a newspaper advertisement:
"It seems to me very difficult to allege that a newspaper advertisement which is designed primarily to tell people that a house is open for inspection should be construed as giving information other than preliminary information upon which a person should rely in order to enter into a contract. If one expects puffery anywhere, it would be in such a newspaper advertisement. … I think ordinarily an advertisement which merely directs someone to enquire about the product is not expected in trade and or commerce to be relied upon as a quasi representation."
74 The respondent did not in reliance on these passages make a puffery submission, but used them to support the view that introductory comments which seek to attract interest are not of their nature representations going to the ultimate subject matter of a negotiation. Here, it was said, the subject matter of the information in the advertisement (namely an inspection) is remote from the subject matter of the ultimate transaction (namely the price at which it was sold).