[1998] HCA 55
Como Investments Pty Ltd (in liq) v Yenald Nominees Pty Ltd (1997) ATPR 41-550
Dalton v Lawson Hill Estate Pty Ltd [2005] FCAFC 169
Source
Original judgment source is linked above.
Catchwords
[2004] HCA 60
CH Real Estate Pty Ltd v Jainran Pty LtdBoyana Pty Ltd v Jainran Pty Ltd [2010] NSWCA 37(2010) 14 BPR 27,361
Chappel v Hart (1998) 195 CLR 232[1998] HCA 55
Como Investments Pty Ltd (in liq) v Yenald Nominees Pty Ltd (1997) ATPR 41-550
Dalton v Lawson Hill Estate Pty Ltd [2005] FCAFC 169(2005) ATPR 42-079
Gould v Vaggelas (1985) 157 CLR 215
[1985] HCA 75
Henville v Walker (2001) 206 CLR 459
[2001] HCA 52
House v The King (1936) 55 CLR 499
(2007) 13 BPR 24,579
Yorke v Lucas (1985) 158 CLR 661
Judgment (22 paragraphs)
[1]
Solicitors:
Neville & Hourn Legal (Appellant)
Colin Biggers & Paisley Pty Ltd (Respondent)
File Number(s): 2017/385209
Decision under appeal Court or tribunal: Supreme Court of NSW
Jurisdiction: Equity - Commercial List
Citation: [2017] NSWSC 1647
Date of Decision: 30 November 2017
Before: Parker J
File Number(s): 2016/107772
[2]
[Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.]
[3]
HEADNOTE
[This headnote is not to be read as part of the judgment]
In February 2015, Mrs Amy Hyder, the appellant, completed the purchase of a large residential property in Sydney for $9.4 million. She acquired the property as a new home for her family. Her husband provided the purchase monies, conducted the purchase negotiations and made the decision to proceed.
In April 2016, Mrs Hyder commenced proceedings in the Commercial List of the Equity Division of the Supreme Court against the vendor's real estate agent, the respondent ("McGrath"), claiming damages for misleading and deceptive conduct in relation to alleged pre-sale misrepresentations concerning the availability of parking at the property.
By judgment dated 30 November 2017, Parker J dismissed the proceedings. His Honour concluded that, whilst McGrath's misrepresentations constituted misleading and deceptive conduct in contravention of s 18 of the Australian Consumer Law, he was not satisfied that that conduct caused Mrs Hyder any loss. If he had concluded otherwise, the primary judge would have assessed damages at $150,000, plus the amount of stamp duty paid on the excess purchase price. His Honour would however have reduced those damages by two-thirds to take account of contributory negligence on the part of Mrs Hyder.
On appeal, the principal issues were whether the primary judge erred in his conclusions as to: first, causation; secondly, valuation of the subject property; and, thirdly, contributory negligence.
Moreover, by a Notice of Contention, McGrath sought to support the primary judge's dismissal of the proceedings on the alternative ground that a reasonable purchaser in Mrs Hyder's position would have understood that McGrath's representations concerning parking merely amounted to the passing on by it of information provided by the vendor, and that McGrath did not therefore engage in misleading or deceptive conduct. The primary judge had rejected this "mere conduit" argument.
The Court held, upholding the Notice of Contention and dismissing the appeal:
In relation to the Notice of Contention and "mere conduit" argument
Per Macfarlan JA, McColl JA and Emmett AJA agreeing
(i) Reasonable purchasers in the position of the Hyders would have taken from their inspection of the property, the relevant marketing material and their oral communications with McGrath that the information that it provided in respect of parking was obtained from the vendor and that McGrath was not guaranteeing its accuracy. They would have understood that McGrath was merely passing on information from the vendor. As a result, McGrath did not engage in misleading or deceptive conduct: [1], [75], [111].
Butcher v Lachlan Elder Realty Pty Ltd (2004) 218 CLR 592; [2004] HCA 60; Dalton v Lawson Hill Estate Pty Ltd [2005] FCAFC 169; (2005) ATPR 42-079; John G Glass Real Estate Pty Ltd v Karawi Constructions Pty Ltd (1993) ATPR 41-249; CH Real Estate Pty Ltd v Jainran Pty Ltd; Boyana Pty Ltd v Jainran Pty Ltd [2010] NSWCA 37; (2010) 14 BPR 27,361; Borzi Smythe Pty Ltd v Campbell Holdings (NSW) Pty Ltd [2008] NSWCA 233, considered.
In relation to causation
Per Macfarlan JA, McColl JA and Emmett AJA agreeing
(ii) In determining causation, the question that needed to be addressed was whether Mr Hyder would have decided not to proceed with the purchase of the subject property for $9.4 million if he had known the factual and legal reality of the availability of parking, rather than believed what he was told by McGrath: [1], [84], [111].
Gould v Vaggelas (1985) 157 CLR 215; [1985] HCA 75, applied.
Henville v Walker (2001) 206 CLR 459; [2001] HCA 52; Como Investments Pty Ltd (in liq) v Yenald Nominees Pty Ltd (1997) ATPR 41-550, referred to.
(iii) The primary judge did not err in finding that the appellant failed to establish that McGrath's conduct caused her loss. The Hyders' evidence failed to establish that the difference between, on the one hand, what they were told by McGrath and, on the other hand, the legal and factual reality of the parking situation would have been enough to cause them to withdraw from the negotiations for purchase: [1], [92], [94], [111].
Trewin v Felton [2007] NSWSC 851; (2007) 13 BPR 24,579; Pettey v Parsons [1914] 2 Ch 653; Peter Butt, Land Law (7th ed, 2017, Thomson Reuters), referred to.
In relation to valuation
Per Macfarlan JA, McColl JA and Emmett AJA agreeing
(iv) The primary judge did not err in accepting the respondent's valuation evidence over that of the appellant: [1], [100], [111].
In relation to contributory negligence
Per Macfarlan JA, McColl JA and Emmett AJA agreeing
(v) The primary judge did not err in finding that Mr Hyder, and therefore Mrs Hyder, was contributorily negligent to a significant extent: [1], [105]-[106], [111].
House v The King (1936) 55 CLR 499; [1936] HCA 40; Tarabay v Leite [2008] NSWCA 259, referred to.
[4]
Judgment
McCOLL JA: I agree with Macfarlan JA's reasons and the orders his Honour proposes.
MACFARLAN JA: On 24 February 2015 Mrs Amy Hyder, the appellant, completed the purchase of a large residential property in Bellevue Hill, Sydney, for $9.4 million. She acquired the property as a new home for herself, her husband (Mr Elton Matthew Hyder IV) and their three children. Mr Hyder provided the purchase monies.
On 8 April 2016 Mrs Hyder commenced proceedings in the Commercial List of the Equity Division of the Court against the vendor's real estate agent, the respondent ("McGrath"), claiming damages for misleading and deceptive conduct in relation to alleged pre-sale misrepresentations concerning the availability of parking at the property.
The proceedings were heard by Parker J who dismissed them by judgment dated 30 November 2017 ([2017] NSWSC 1647). His Honour concluded that, whilst there had been misrepresentations by McGrath that constituted misleading and deceptive conduct in contravention of s 18 of the Australian Consumer Law (see Schedule 2 to the Competition and Consumer Act 2010 (Cth)), he was not satisfied that that conduct caused Mrs Hyder any loss. His Honour noted that Mr Hyder, rather than Mrs Hyder, undertook the negotiations for purchase and made the decision to purchase. Mr Hyder had had more than 15 years' experience in the property development field. His Honour was not satisfied that, but for McGrath's conduct, Mr Hyder would not have proceeded with the purchase or at least would not have offered the amount that he did.
As was appropriate, the primary judge nevertheless proceeded to assess the damages to which Mrs Hyder would have been entitled if she had succeeded on liability. After considering valuation evidence, his Honour found that at the date of purchase the property had a value which was $150,000 less than the price that Mrs Hyder paid. As a result his Honour would have assessed Mrs Hyder's damages at $150,000, plus the amount of stamp duty she paid on the excess purchase price. His Honour would however have reduced these damages by two-thirds to take account of contributory negligence on the part of Mrs Hyder in failing to seek specific professional advice about the property's parking entitlements (see s 137B of the Competition and Consumer Act).
On appeal Mrs Hyder challenges the primary judge's conclusions on causation, valuation and contributory negligence. By a Notice of Contention, McGrath seeks to support the primary judge's dismissal of the proceedings on the alternative ground that a reasonable purchaser in the position of Mrs Hyder would have understood that any representations made by McGrath concerning parking merely amounted to the passing on by it of information provided by the vendor, and that McGrath did not therefore engage in misleading or deceptive conduct. The primary judge had rejected this "mere conduit" argument.
[5]
The property
The subject property is situated at 24 Ginahgulla Road, Bellevue Hill, opposite part of Scots College. It is Lot 4 in Deposited Plan 304309. The property is a battle-axe block, with a two car garage and an area in front of the garage on which two further cars can be parked. If cars are so parked, it seems, at least on the configuration of the property at the date of purchase, that they would block access to the garage. Public parking is not permitted in Ginahgulla Road.
A driveway gives access to Lot 4 and two other properties (Lots 6 and 7). Lot 4 includes a strip of land which comprises one-third of the width of the driveway and has rights of way over the other two-thirds. The two-thirds are of ample width for vehicles to travel on the driveway without using Lot 4's strip. The owners of Lots 6 and 7 have the benefit of rights of way over Lot 4's portion of the driveway. The rights of way are each in conventional terms, entitling those associated with the dominant tenements "to pass and repass" over the servient tenement, with or without cars or other vehicles.
Prior to the purchase, Lot 4's strip had been treated as available to Lot 4's owners for parking. The strip has sufficient length and width to accommodate three vehicles parked end to end. At the time of purchase, there were two signs present on a wall abutting the strip stating "Private parking space 24", with "24" being a reference to the street number of Lot 4. The signs did not appear to be new.
[6]
The sale of the property
On 12 September 2014, McGrath signed an Exclusive Agency Agreement with Mr Edward Jewell-Tait, the owner of the property. Lot 4 was to be sold by auction on 1 November 2014.
Prior to the purchase, the Hyders viewed online advertising for the property as well as a printed brochure. McGrath was responsible for both.
Amongst the features of the property described online was the "Double garage plus private off-street and driveway parking" (emphasis added). The online advertising included a detailed site plan showing images of three cars parked end to end on Lot 4's strip which was subject to rights of way. The following notation appeared beneath the plan in small print:
"Scale in metres. Indicative only. Dimensions are approximate. All information contained herein is gathered from sources we believe to be reliable. However we cannot guarantee its accuracy and interested persons should rely on their own enquires."
The printed brochure stated that the property had "plentiful parking" and included the same site plan. The disclaimer quoted above also appeared on it.
Between 10 and 22 October 2014, the Hyders, either together or individually, inspected Lot 4 on at least four occasions. Mr Hyder then obtained the draft contract of sale from McGrath some time between 11 and 18 October 2018.
The contract of sale was prepared by solicitors acting for Mr Jewell-Tait. It was in a standard form with attachments that included copies of a title search of the property (noting the relevant rights of way), the relevant deposited plan and the memoranda of transfer creating the rights of way. Special conditions were also attached. They included the following:
"9.4 The purchaser acknowledges that the purchaser, when entering into this contract, relied exclusively on the following matters independently of any statements, inducements or representations made by or on behalf of the vendor (including by any estate agent acting on behalf of the vendor):
(a) the inspection of and investigations relating to the land made by or on behalf of the purchaser;
(b) the warranties and representations expressly contained in the contract;
(c) the skill and judgment of the purchaser, its consultants and representatives;
(d) opinions or advice obtained by the purchaser independently of the vendor or of the vendor's agent or employees.
9.5 The purchaser acknowledges that other than expressly contained in this Contract, no representations, inducements or warranties have been made by the vendor or its agents or representatives relating to the suitability of the property for the purposes of the purchaser or any contamination relating to, caused by, or affecting the property."
[7]
Mrs Hyder's evidence
In her affidavit Mrs Hyder said that when she and her husband decided to purchase a new family home they agreed on a "list of prerequisites". She continued:
"One of these prerequisites was having multiple parking, having regard to the fact that both Matthew and I had cars and we had a large extended family who visit us often. We also had a cleaner who attended regularly who required a car spot and three children who would eventually require car spots. We also had regular guests over who we entertained, which required greater carpark availability."
Mrs Hyder observed the depictions on the brochure plan of cars parked on Lot 4's side of the driveway strip and said that, on a private inspection of the property, she and Mr Hyder were told by Mr Benjamin Collier, who with Mr Nicholas Bordin represented McGrath, that Lot 4's owners had exclusive use of the "private parking" area (that is, Lot 4's one-third strip of the driveway).
She concluded as follows:
"If I had known that we could not park on the area described to me as private parking, the house would not have been a suitable property as we required greater parking spots. Alternatively, I would not have purchased the property for the price that it was bought for as the parking was a valuable aspect of the property."
Mrs Hyder was extensively cross-examined. She rejected a proposition put to her that at the time that she purchased the property the issue of parking was not as important to her as she contended in evidence.
[8]
Mr Hyder's evidence
In his affidavit Mr Hyder gave similar evidence to that given by Mrs Hyder concerning their car parking requirements. He said that he saw the online advertising and the printed brochure, and that both real estate agents told him that Lot 4's owners had the right to park on the "private parking" strip. He said that Mr Collier stated that it was for the property's "exclusive use" and pointed to signs which stated "private parking". He concluded as follows:
"I would not have agreed to Amy offering to purchase the property at the purchase price of $9,400,000 if I was not told that the strip could be used for parking. If the strip was not available for parking, the property would not have been suitable to be our family home."
In cross-examination, Mr Hyder indicated, as was obvious, that by the strip not being "available for parking", he was referring to "our private parking".
It was put to Mr Hyder in cross-examination that he had not stated in his affidavit that it was necessary for him to be able to "use the strip exclusively for parking". Mr Hyder disagreed and said "I do in fact refer to it being important to us and it being a requirement". He appears to have been referring to the passage from his affidavit quoted immediately above.
In the course of what was also extensive cross-examination, Mr Hyder agreed that he knew that anything that the real estate agents said to him was said in their capacity as such and was not said by them as lawyers or professional valuers. Mr Hyder said that he understood that the information upon which the printed brochure was based did not originate with McGrath but had been obtained by it "[i]n discussion with the vendor".
Mr Hyder also gave evidence that prior to agreeing to purchase the property he obtained a valuation of it from Mr Jason Field. Mr Hyder said that he was prepared (as he did) to offer to the vendor $400,000 more than Mr Field's valuation of $9 million "[b]ecause my wife loved the property".
Mr Field's valuation included the following statements:
"The property features a right of way which provides open parking for up to four cars, tandem style."
…
Features:
…
Right of way which provides additional parking for up to 4 cars tandem style …"
Orally, Mr Field told Mr Hyder that the "private parking" on the strip "adds value".
Mr Hyder also gave evidence that before the purchase he had asked Mr Ross Neville, solicitor, to review the proposed contract of sale. Mr Hyder said that he did not discuss the question of parking with Mr Neville.
[9]
Mr Jewell-Tait's evidence
Mr Jewell-Tait was the person from whom Mrs Hyder purchased the subject property. In his affidavit Mr Jewell-Tait gave the following evidence concerning the "private parking" strip:
"I acquired the Property on 15 July 2011 for the sum of $8.5 million from Mrs Judy Joye. From my discussions with Mrs Joye, prior to that acquisition, it was my understanding that we had access to park cars on the strip, which had been used for that purpose for many years. This understanding was reinforced by the fact that, throughout the time I was initially viewing the Property and later living there, 'no parking signs' were affixed to the neighbour's boundary wall indicating the parking spots were for our use. Parking on the strip does not, in my experience, affect access to or from the neighbouring properties along the remainder of the driveway.
After I acquired the Property, the neighbours used the strip to park from time to time. Generally, it was not necessary for the neighbours to park on the strip and friends of ours sometimes used it for parking when they came to visit. The use of the strip was never an issue as between the neighbours and me. I was never really bothered about it. The property already had parking spaces for up to four cars, in the double garage and on the driveway area inside the driveway gates."
Mr Jewell-Tait also gave evidence that if the Hyders had not offered $9.4 million to purchase the property, he would not have sold it to them privately but would have proceeded with the auction that had been scheduled to take place on 1 November 2014.
[10]
The real estate agents' evidence
In his affidavit Mr Collier said the following:
"I do not recall the specific words used during my conversations with the Hyders. It is likely I would have used words to the effect that the strip was available for parking and had been used for this purpose for a considerable period of time. As mentioned above, this is what I understood from the vendors, from my personal experience when visiting the property and from what I had observed the strip was used for (i.e. parking cars). I did not say anything about any financial value to be attributed to the strip. It was more about convenience for guests when visiting the property."
Mr Collier added:
"During my discussions with the vendors, Mrs Tait [the vendor's wife] told me that the strip along the side of the brick wall from the gateway of the property and leading out to Ginahgulla Road was their land and was used for parking … Mrs Tait said to me, while standing on the strip that it was available for parking for friends and guests."
In cross-examination, Mr Collier agreed that, if the garage and driveway were occupied by cars and it was not possible to park on the "private parking" strip, the nearest car parking for the property would be 200 to 250 metres away in Kambala Road or less than that in Victoria Road, but he said that in Victoria Road the parking was "dominated often by Scots College patrons". He accepted that parking on the "private parking" strip "was a considerably attractive feature in marketing the property".
In his affidavit Mr Bordin said:
"I was not aware that the strip was subject to rights of way until the issue was raised in these proceedings. It was obvious to me that people parked their cars there and they did so during the open for inspections. Whenever Ben and I went to the property, each of us parked on the strip. No one ever complained about this conduct. The same was true when we attended the property to meet the vendors."
He could not recall whether he had made the statements concerning the "private parking" strip which were alleged to have been made, but said:
"When I first visited the property to meet with Mrs Hyder and on subsequent visits I saw the signs on the wall by the strip which said that there was private parking for 24 Ginahgulla Road. If I did say the words that Mr Hyder alleges I said, then those words were true. There was nothing that would have caused me to think otherwise."
[11]
The valuers' evidence
Mr Field's valuation report and a report obtained by the Hyders' mortgagee from Mr Andrew Parkinson, in each case prior to the exchange of contracts, were found by the primary judge to be of little value in resolving the issues before him. As this conclusion was not challenged on appeal, it is sufficient to note that Mr Parkinson valued the property at $9.4 million and, as indicated above, Mr Field valued it at $9 million.
At the hearing before Parker J, Mrs Hyder tendered two expert valuation reports of Mr Peter Kempthorne, prepared on the basis that the property did not have the benefit of car parking spaces on the "private parking" strip. Mr Kempthorne valued the property at the date of purchase at $8.5 million. He identified six prior sales that were of assistance to him in valuing it. In his second report, he identified, in numerical terms, the positive and negative notional adjustments he made to the sale prices of those other properties to assist him to determine the value of the subject property.
One of the other transactions was the sale of 48 Kambala Road, Bellevue Hill, in September 2014, for $8.3 million. Mr Kempthorne considered that that price should be adjusted upwards by a net percentage of 2.5% to render the price comparable to that paid for the subject property. By doing this, he derived a value for the subject property of $8,507,500.
McGrath tendered an expert valuation report of Mr Gregory Rowe, also prepared on the basis that the subject property did not have exclusive rights to park on the "private parking" strip. After examining a number of relevant sale transactions, including the sale of 48 Kambala Road, Bellevue Hill in September 2014, Mr Rowe concluded that:
"[A]n appropriate market range for the property as at 23 October 2014 would have been within the range of $9,000,000 to $9,500,000. On that basis, the purchase price of the property at $9,400,000 … is considered to represent fair market price in the circumstances."
Mr Rowe described the respects in which the other properties that he considered were superior or inferior. Unlike Mr Kempthorne, he did not however quantify the differences to the subject property in numerical terms.
In the course of oral evidence, given concurrently with that of Mr Kempthorne, Mr Rowe said that if he were asked to put a single figure on his valuation of the property, rather than a range, he would adopt the mid-point of his range (that is, $9.25 million).
[12]
Whether misleading and deceptive conduct
The primary judge took the view that Mrs Hyder had "little or no actual recollection of the relevant events" (Judgment [12]). As a result he was not satisfied that her evidence was reliable and therefore approached it with caution. His Honour considered that Mr Hyder did "his best to assist the Court with what he could recall", but his Honour was not satisfied that his evidence was "reliable on matters of detail" (Judgment [13]).
His Honour concluded that "Mr Collier and Mr Bordin both believed, as a result of the signs and what they were told by Mr Jewell-Tait, that the owners of lot 4 were entitled to the exclusive use of the 'private parking' area" (Judgment [26]).
His Honour made the following findings concerning the alleged oral representations:
"60 … I am prepared to accept that Mr Collier or Mr Bordin said to Mr Hyder at one point words to the effect that the 'private parking' area was exclusive to lot 4. I am not persuaded that Mr Hyder or Mrs Hyder correctly recalled the context of the conversations in their affidavits or their oral evidence; in particular, I do not accept that Mr Collier said that the 'private parking' area added value to the property. However, it was a selling point for the property even if, in my finding, it was not the most important one. It would have been natural for Mr Collier or Mr Bordin, had the issue been touched on, to have reminded the Hyders of this feature, especially as it was specifically referred to in the advertising copy."
His Honour recorded that Mr Hyder had had more than 15 years' experience in the property development field but noted that his background appeared to be "on the financial side". His Honour continued:
"77 … Mr Hyder would of course be well aware of what a right of way is, but I accept that if he read the references to rights of way at all, he did not consciously consider the impact which such rights of way might have had on the use of the 'private parking' area."
The primary judge accepted that, by the online advertising, the brochure and the oral representations, McGrath represented, and the Hyders believed, that Lot 4's owners were entitled to exclusive use of their strip of the driveway for parking. His Honour continued:
"90 … In my opinion, the effect of the various easement and cross easements over the driveway area is to give the three lot owners equivalent rights over the whole area. It is no doubt open to the lot owners to park in the 'private parking' area where that does not interfere with access to the properties served by the driveway. But, in my view, the owners of lot 4 have no greater legal right to park there than any other lot owner. Even if in practice the other lot owners may have tolerated the appropriation of the area by the owners of lot 4, its description as a 'private parking' area was still misleading and deceptive."
[13]
Whether McGrath was a "mere conduit"
For the following reasons, the primary judge rejected McGrath's argument that it was a "mere conduit" and therefore did not engage in misleading or deceptive conduct:
"91 Counsel for the defendant also suggested that McGrath was a 'mere conduit' and that the representations should be seen as coming from the vendors of the property. In fact, it does appear that McGrath got the idea that the 'private parking' area was exclusive to the owners of lot 4 from the signs or from being told by Mr Jewell-Tait. But there was nothing in the representations to suggest that they came from a third party and McGrath was merely passing them on for what they were worth: cf Yorke v Lucas (1985) 158 CLR 661 at 666. The representations about the 'private parking' area would, in my opinion, have been understood by a reasonable representee to have come from McGrath.
92 Counsel for McGrath also relied on the disclaimer … But I do not think that the language of the disclaimer is sufficient to deprive McGrath's statements of their misleading and deceptive quality. The language of the disclaimer would naturally be understood as relating to boundaries. It does not deal with the use of the land at all. In my opinion, a reasonable reader would not see the disclaimer as undermining the representation of exclusivity which arose from the placement of the cars on the diagram."
[14]
Causation
For the following reasons, the primary judge was not satisfied that the misleading and deceptive conduct that he found to have occurred caused Mrs Hyder loss:
"98 I accept that the parking was a positive factor for the Hyders. However, the evidence does not establish that it was essential that they have five car parking places. Mrs Hyder's evidence was that in conducting her internet searches she made it a requirement that the property have parking, but did not specify any particular number of car parking spaces which the property had to have. I think that if the parking entitlements of the property had been accurately stated in McGrath's advertising, they would have made the property somewhat less attractive but would not have prevented the Hyders from considering it.
99 The question … reduces to whether Mr Hyder would not have made the offer he made to purchase the property had he understood the parking position correctly. There was little evidence which bore directly on this question. The Hyders said that they had considered a number of properties, some of which had more parking than the subject property, but had not proceeded with the purchase of those other properties. Mrs Hyder also stated that there was no particular urgency in acquiring the property and denied the fact that one of her children's attendance at the nearby Scots College was a relevant factor in the purchase. But there was no evidence as to the particular reasons why the Hyders had rejected the other properties.
100 Nor was there any evidence as to the specific factors which the Hyders found attractive about lot 4 which might have allowed the Court to weigh those factors against a correct understanding of the parking available. What is clear is that Mr Hyder appreciated that he was paying more for the property than it was worth, according to the valuation that he had obtained. When asked about why he did this he said:
Because my wife loved the property.
101 In these circumstances, I am not satisfied that a correct understanding of the parking available at lot 4 would have made a crucial difference to Mr Hyder. It appears to me that the real reason why Mr Hyder bought the property is because of Mrs Hyder's emotional reaction to it. That emotional reaction would have derived from features such as its aspect and its potential as a family home rather than the number of parking spaces. It must be remembered that the 'private parking' area was not, and was not represented to be, equivalent to garage parking: it was not under cover and it was not secure. It must also be remembered that the area is of some utility to the owners of lot 4 for parking even if they do not have rights which exclude the other lot owners. The exclusive right to park in the area may have been perceived as an advantage, but I am not satisfied that it was perceived as a sufficiently great advantage to make a difference to the purchase. It seems to me to be at least equally, if not more, likely that had the Hyders correctly appreciated the position they would still have gone ahead because of other features of the property which they found attractive."
[15]
Valuation
The primary judge reached the following conclusions concerning the differences in views expressed by the expert valuers:
"115 I was impressed with both of Mr Rowe's and Mr Kempthorne's evidence. Neither of them was really challenged nor was one methodology shown to be more accurate or reliable than the other. I also do not think that the exercise of comparing different features of different properties can be reduced to a mathematical formula. I was left with the clear impression that the evaluation of the degree of superiority was very much a matter of judgment based on the experience of the expert. This is supported by the differences in opinion with respect to the parking at the Kambala Road property, with Mr Rowe and Mr Kempthorne coming to opposite conclusions as to its relative superiority/inferiority. Ultimately, I am not able, on the evidence before me, to form any view that one or other approach is to be preferred. Accordingly, I cannot be satisfied that the lower value for lot 4 put forward by Mr Kempthorne is necessarily correct."
As noted earlier, his Honour concluded that, subject to the issue of contributory negligence, Mrs Hyder's damages would have been $150,000, representing the difference between the purchase price and Mr Rowe's assessment of $9.25 million as the value of the property at the date of purchase, together with the amount of stamp duty paid on the excess purchase price (Judgment [117]-[118]).
[16]
Contributory negligence
The primary judge gave the following reasons for concluding that any damages payable by McGrath to Mrs Hyder should be reduced by two-thirds to take account of her contributory negligence (including of course that of Mr Hyder who acted on her behalf) (Judgment [126]):
"123 If I had been of the view that the Hyders' loss was caused by misleading or deceptive conduct by McGrath, I would have concluded that it was also caused by the Hyders' failure to take reasonable care in their own interests in conducting their pre-contractual enquiries and negotiations. This was not the responsibility of Mr Neville. His advice on the easements was sound so far as it went. But he was not asked to consider whether cars could be parked in the 'private parking' area. The terms of special conditions 9.4 and 9.5 were a clear warning to the purchaser. From the instructions Mr Hyder gave to Mr Neville … and the insertions and amendments he made to the contract … it appears likely that Mr Hyder would have read the special conditions. If he did not, he should have.
124 Furthermore, the right of way was clearly disclosed in the title search annexed to the contract and the relevant Memoranda of Transfer were also annexed. Both Mr Neville and Mr Field expressly reported that the driveway was subject to a right of way, but Mr Hyder did not stop to think about the implications of this. Although I have accepted that Mr Hyder may not have had detailed knowledge or experience in dealing with easements, one does not have to be an expert to appreciate that a right of way can interfere with the use of land.
125 In my opinion, a reasonable purchaser of property, particularly of this value, who was purchasing because of supposed rights to park in the 'private parking' area would have sought specific advice on his entitlement to do so. Had, contrary to my view, the evidence established that this was of critical importance to the Hyders, then, in my opinion, reasonable care for their own interests demanded that they should have obtained specific advice on the question from Mr Neville. Had they done so, I am satisfied that the correct position would have become clear to them, namely, that although in practice they might use the area for parking, they had no absolute right to park there at any and all times."
[17]
Misleading and deceptive conduct - whether McGrath was a "mere conduit"
In challenging the primary judge's conclusion that "there was nothing in the representations to suggest that they came from a third party and McGrath was merely passing them on for what they were worth" (see [51] above), McGrath relied first on the following statement of the plurality in Yorke v Lucas (1985) 158 CLR 661 at 666; [1985] HCA 65:
"If the circumstances are such as to make it apparent that the corporation is not the source of the information and that it expressly or impliedly disclaims any belief in its truth or falsity, merely passing it on for what it is worth, we very much doubt that the corporation can properly be said to be itself engaging in conduct that is misleading or deceptive."
McGrath then relied upon the decision in Butcher v Lachlan Elder Realty Pty Ltd (2004) 218 CLR 592; [2004] HCA 60, in which a suburban real estate agent provided to prospective purchasers a sale brochure which reproduced a survey diagram that inaccurately depicted a swimming pool as being wholly within the property that was to be auctioned. The brochure included a disclaimer stating that the information on which the brochure was based had been obtained from sources which the agent believed to be reliable but that its accuracy could not be guaranteed, and interested persons should rely on their own enquiries.
The High Court found that the agent had done no more than communicate what the vendor was representing, without either adopting or endorsing it. The majority at [39] held that when applying the Yorke v Lucas principles, "it is important that the agent's conduct be viewed as a whole", and emphasised at [40] that "the agent's conduct" was to be characterised by considering the "nature of the parties, the character of the transaction contemplated, and the contents of the brochure itself".
As to the nature of the parties, their Honours noted at [41] and [42] that the purchasers were wealthy, "intelligent, shrewd and self-reliant", and that the respondent was a suburban real estate agent not holding itself out "as possessing research skills or means of independently verifying details" about properties. The character of the transaction was a purchase of "very expensive property, to be used as an investment". As well, the brochure contained the disclaimer referred to above and it was plain that the survey included in the brochure had not been prepared by the agent. Their Honours concluded at [51] that "[t]he agent did not purport to do anything more than pass on information supplied by another or others" and "both expressly and implicitly disclaimed any belief in the truth or falsity of that information". It did not therefore engage in misleading or deceptive conduct.
[18]
Causation
By reason of the success of the Notice of Contention, the issue of causation does not strictly arise. Nevertheless, I address it as follows.
Mrs Hyder relies on s 236 of the Australian Consumer Law to claim damages for McGrath's alleged misleading and deceptive conduct in contravention of s 18 of that Law. Section 236 provides that, if a person suffers loss or damage "because of" conduct in contravention of, inter alia, s 18, the person may recover that loss or damage from the other person.
On appeal Mrs Hyder did not contend that the primary judge erred in defining the question to be answered in the present case, regarding causation, as "whether, had McGrath not engaged in the conduct which I have found to be misleading or deceptive, Mr Hyder would have ended up purchasing the property in Mrs Hyder's name" (Judgment [94]). Nor did Mrs Hyder challenge his Honour's statement that "it is necessary for the Hyders to establish that had they correctly understood the parking position, they would have either not have considered the property at all, or, at least would not have been prepared to offer $9.4 million for it" (Judgment [97]).
Mrs Hyder also accepted that the primary judge correctly had regard to "the subjective state of the Hyders' minds, not the attitude of the reasonable and ordinary purchaser" (Judgment [95]).
Mrs Hyder relied on the following oft-cited principles that Wilson J stated in Gould v Vaggelas (1985) 157 CLR 215 at 236; [1985] HCA 75:
"If a material representation is made which is calculated to induce the representee to enter into a contract and that person in fact enters into the contract there arises a fair inference of fact that he was induced to do so by the representation.
… The representation need not be the sole inducement. It is sufficient so long as it plays some part even if only a minor part in contributing to the formation of the contract."
See also Henville v Walker (2001) 206 CLR 459; [2001] HCA 52 at [60]-[61], [106]-[111], [152] and [163].
In Como Investments Pty Ltd (in liq) v Yenald Nominees Pty Ltd (1997) ATPR 41-550 at 43,619, the Full Federal Court said on this topic:
"Where a representation is relevant to the decision in question, and in its nature persuasive to induce the making of that decision, it accords with legal notions of causation to hold that it has a causative effect."
This is the concept of a representation being "material" and being "calculated to induce" the entry into a contract to which Wilson J referred in Gould v Vaggelas.
[19]
Valuation
As I have found that Mrs Hyder's proceedings fail on both the "mere conduit" and causation grounds, her challenges to the primary judge's contingent views on the assessment of damages and on contributory negligence do not arise. Nevertheless, I make the following brief observations on those challenges.
As Mrs Hyder's submissions recognise, the two valuers called to give expert evidence both treated the sale of 48 Kambala Road, Bellevue Hill in September 2014 as the best guide to the value of the subject property. They differed as to the extent to which the Kambala Road property should be regarded as inferior to the subject property. Subject to Mrs Hyder's specific arguments which I address below, the differences between the valuers in this regard arose out of subjective evaluations of features of the properties in relation to which this Court is, like the primary judge considered he was (see [53] above), in no position to prefer one rather than the other.
Turning to Mrs Hyder's specific arguments, first, she contended that Mr Rowe erroneously "adopted a measure of valuation that was connected to the purchase price". I do not accept this criticism as in my view Mr Rowe made it clear in his report that he relied upon identified "comparable" sales in reaching his conclusion. Thus, he stated that his conclusion was founded "[o]n the basis of my analysis and consideration of the sales outlined and detailed above", being seven transactions (not including the subject sale) of which he gave detailed particulars.
Mrs Hyder relied in this context on Mr Rowe's statement in his oral evidence that, unless there is a good reason to indicate otherwise, the purchase price under consideration (in this case of Lot 4) was "the best indicator of value". This evidence did not qualify his description of how he arrived at his valuation for the purposes of his report (that is, by reference to "comparable sales"). In any event, he did not err in referring to this sale because, subject only to the issue of parking entitlements (to which Mr Rowe did not attribute great significance), the property, being the same property, of course had precisely the same attributes as that which he was required to value and it had been sold under an arm's length transaction on the exact date in question. Clearly, its sale was capable of being of some assistance in the valuation process, albeit subject to a notional adjustment of the sale price in respect of the parking issue.
[20]
Contributory negligence
In support of her challenge to the primary judge's conclusion on contributory negligence, Mrs Hyder submitted, first, that any need to seek the "specific advice" to which the primary judge referred in relation to an entitlement to park on the "private parking" strip was "subverted by the very contravening conduct of which complaint is made". Secondly, she effectively submitted that the strength and authority of McGrath's representations were such that the Hyders had no need to go behind them.
I do not accept these submissions. Even if the matters to which I have referred in considering whether McGrath was a "mere conduit" do not, contrary to my view, lead to the conclusion that McGrath did have that character, they are relevant to the issue of contributory negligence (see [67]-[75] above). The Hyders were sophisticated people buying an expensive property to live in as their new family home. On their evidence, the property's parking entitlements were of considerable importance to them and, if the question of contributory negligence arises in the proceedings, it has to be assumed that those entitlements were of such significance to them that, but for McGrath's representations about them, the Hyders would not have proceeded with the purchase of the subject property.
If the entitlements are assumed to have been of that level of importance, reasonable people in the Hyders' position would have gone beyond what the real estate agents said to obtain the "specific advice", to which the primary judge referred. The need for such advice was emphasised by the fact that the "private parking" strip was outside the apparent boundaries of the subject property. As well, Mr Hyder knew that McGrath did not profess any legal or valuation expertise and would have been likely to have obtained the parking information from the vendor. Furthermore, Mr Hyder knew or should have known, first, of the existence of the disclaimer in the relevant marketing material, secondly, of the provisions of the purchase contract relieving the vendor of liability for McGrath's statements (see [16] above), thirdly, of Mr Neville's description of the access way as "a common driveway" (see [28] above), fourthly, of Mr Field's and Mr Neville's references in their advices to the driveway being subject to rights of way (see [26] and [28] above) and, fifthly, of the inclusion in the purchase contract of copies of transfers creating rights of way. As the primary judge said "one does not have to be an expert to appreciate that a right of way can interfere with the use of land" (see [55] above).
[21]
CONCLUSION
McGrath did not engage in misleading or deceptive conduct. The erroneous information concerning parking that it conveyed to the Hyders was information that it did not endorse but rather expressly or impliedly disclaimed responsibility for. In any event, Mrs Hyder failed to establish that she suffered loss as a result of the alleged misleading or deceptive conduct. In these circumstances her appeal must be dismissed with costs.
EMMETT AJA: The principal question in this appeal is whether the respondent, McGrath Sales Pty Ltd (the Agent), engaged in conduct that was misleading or deceptive in contravention of s 18 of the Australian Consumer Law by making representations to the appellant, Mrs Amy Hyder, concerning the availability of parking at a residential property situated in Bellevue Hill (the Property). The Agent acted on behalf of the seller of the Property, which Mrs Hyder bought for the sum of $9.4 million. Mrs Hyder subsequently commenced proceedings against the Agent in the Commercial List of the Equity Division claiming that she suffered loss by the alleged misleading and deceptive conduct of the Agent. She asserted that she would not have bought the Property at that price if the alleged representations had not been made by the Agent.
On 30 November 2017, for reasons published on that day, a judge of the Equity Division (the primary judge) dismissed Mrs Hyder's claim. The primary judge concluded that the Agent had engaged in misleading and deceptive conduct but concluded that the purchase would have proceeded in any event. Thus, his Honour was not satisfied that Mrs Hyder suffered any loss or damage by that conduct.
Mrs Hyder appealed to this Court from the orders made by the primary judge. She contended that his Honour erred in concluding that she would have proceeded at the same price. The Agent, on the other hand, contended that the primary judge erred in concluding that it had engaged in contravening conduct.
I have had the opportunity of reading in draft form the proposed reasons of Macfarlan JA for concluding that the appeal should be dismissed. I agree with Macfarlan JA, for the reasons proposed, that the Agent's notice of contention should be upheld in that a reasonable purchaser in the position of Mrs Hyder would have understood that the statements made by the Agent about which Mrs Hyder complained constituted no more than merely passing on information from the seller regarding parking on the Property. I also agree with Macfarlan JA that Mrs Hyder has failed to establish the grounds of appeal upon which she relies. I agree with the orders proposed by Macfarlan JA.
[22]
DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.
Decision last updated: 04 October 2018
For the reasons that appear below, I consider that McGrath's argument on its Notice of Contention is correct and that the primary judge's dismissal of the proceedings is supportable on that basis. In any event, I do not consider that the primary judge's decision on causation has been shown to be incorrect. As a result the appeal should be dismissed on that basis also.
Following a valuation of the property (see below at [25]-[26]) and legal advice (see below at [27]-[29]), the Hyders made an offer by submitting to McGrath a completed counterpart of the contract of sale dated 23 October 2014, with the purchase price stated as $9 million. In response, Mr Collier informed Mr Hyder that the offer was not high enough and Mr Hyder increased his offer to $9.2 million. When informed that the offer was still not high enough, Mr Hyder increased it to $9.4 million. It was then accepted.
Mr Neville's email advice said that there were "[n]o major concerns" regarding the contract except a need to address one presently immaterial point. One paragraph of that advice however stated the following:
"The title records 2 easements that are basically dual facets of a single arrangement. The block of land is of the type known as 'battle axe' with the 'handle' (known in Texas as the 'panhandle') being the driveway to the street. Your strip of land to the street is 2.44 metres wide. Next to that are 2 more parallel strips both 2.44 metres wide owned by lots 6 and 7. Your strip has a right of way benefitting lots 6 and 7. It also has a right of way to use the 2 strips belonging to lots 6 and 7. So there is a common driveway 7.32 metres wide."
In his affidavit Mr Hyder said that Mr Neville's advice did not cause him to question what he had been told about the use of the parking strip. During cross-examination, Mr Hyder added that Mr Neville's statement that there were "no major concerns" in the purchase contract resulted in him not questioning what he was told, or seeking more specific advice, in respect of the rights of way. Moreover, Mr Hyder said that he only "scanned" the paragraph of the advice relating to rights of way because he considered that "there was nothing of interest about it."
In cross-examination, Mr Hyder also gave the following evidence in relation to rights of way:
"Q. Do you know what a right of way is?
A. Yes.
…
Q. You understand that rights of way, for example, can give a neighbouring property the right to do things on the land subject to it, such as drive or walk across it?
A. Yes.
Q. You understood that in 3 October 2014?
A. Yes.
…
Q. … You understand, don't you, in your personal life when buying a property that it's critical to understand the full effect of encumbrances on a property title before purchasing it?
A. No, I do not think it's critical.
Q. So it's not a matter that would concern you that there were encumbrances on a property title?
A. It might be a matter of interest but you said, 'Is it critical?' No, I do not think it's critical."
In oral evidence-in-chief, Mr Hyder said that he first became aware of a restriction on his family's ability to park on the "private parking" strip in late February 2016, when subcontractors working for one of his neighbours were parked there. The neighbour told him that Lot 4 did not have the exclusive right to park on the strip. Mr Hyder said in evidence that the neighbour's house had been under construction for almost 18 months at the time Mr Hyder gave evidence and that on many occasions his family's guests, including their housekeeper, had had to park on nearby roads.
Both real estate agents gave evidence that a draft copy of all of the marketing material for the property was sent to the vendor for approval before being published.
Both valuers also gave further evidence about the comparability of 48 Kambala Road to the subject property. Mr Kempthorne thought that it was only slightly inferior, whilst Mr Rowe thought it was more inferior than that. Mr Rowe rejected the suggestion put to him by counsel that, whilst 48 Kambala Road was slightly inferior to the subject property, it was not inferior to the extent that it had a $1.1 million lesser value.
Another case McGrath relied upon was Dalton v Lawson Hill Estate Pty Ltd [2005] FCAFC 169; (2005) ATPR 42-079, in which the Full Federal Court found at [86] that a reasonable purchaser would not have expected a real estate agent, who held himself out as having "local knowledge", to have "specific knowledge of the area of the plantation of vines on particular properties".
The Court observed at [87]:
"The Purchaser contended that the area of vine planting was 'one of hard physical fact' and that a prospective buyer was entitled to assume that a statement as to a 'hard physical fact' had been verified by the agent (see John G. Glass Real Estate Pty Ltd v Karawi Constructions Pty Limited [1993] ATPR 41-249…at 41, 359). However, if the expression 'one of hard physical fact' is intended to signify 'an uncontroversial matter, admitting of only one answer', it must be said that the question of how the area of land planted with vines is to be described is not a matter of 'hard physical fact'. Whether access areas (headlands and sidelands) or only the trellised areas are to be included was debateable. In any event, it would be unreasonable to attribute to an agent responsibility for every representation which can be correctly described as going to a matter of hard physical fact."
In John G Glass Real Estate Pty Ltd v Karawi Constructions Pty Ltd (1993) ATPR 41-249, a real estate agent included in a brochure (which featured the name and logo of Mr Glass's real estate agency) information, sourced from the vendor, that the net lettable land of the property in question was 180m2 when it was in fact less. Moreover, the brochure included the following statements:
"REAL ESTATE AGENTS SPECIALISING IN:
• Commercial and industrial sales, leasing and management
• Prestige residential properties
• Real estate consultants to Institutional investors and to developers of major properties
…
The information contained herein has been prepared with care by our Company or it has been supplied to us by apparently reliable sources. In either case we have no reason to doubt its completeness or accuracy.
However, neither John G Glass Real Estate Pty Limited, its employees or its clients guarantee the information nor does it, or is it intended to form part of any contract. Accordingly, all interested parties should make their own enquiries to verify the information…"
The Court found that as the real estate agents had held themselves out as, inter alia, "consultants to institutional investors", potential purchasers of properties would not expect them simply to be passing on information about the property "for what it is worth and without any belief in its truth or falsity" (at 41,359). Moreover, to use the language in Dalton (see [61] above), the Court held that the net lettable area of a building was one of "hard physical fact", that it was a factor essential to determining the profitability, and therefore value, of a commercial building, and that a purchaser would ordinarily expect, to quote the terms of the disclaimer, that the agent would have no reason to doubt the completeness or accuracy of the information provided (ibid). In all the circumstances, including that the agent was providing information in a persuasive form with a view to achieving a sale, the Court held that the agent had engaged in misleading and deceptive conduct and was no "mere conduit" (ibid).
In CH Real Estate Pty Ltd v Jainran Pty Ltd; Boyana Pty Ltd v Jainran Pty Ltd [2010] NSWCA 37; (2010) 14 BPR 27,361 Basten JA at [123]-[125] (Beazley JA, as her Honour then was, agreeing) found that where a real estate agent has held his or herself out as being a commercial agent, a reasonable purchaser would be entitled to assume that a representation in a brochure to the effect that a property was a "solid investment" was information being supplied by the agent, and not merely information being passed on.
In Borzi Smythe Pty Ltd v Campbell Holdings (NSW) Pty Ltd [2008] NSWCA 233, a purchaser had agreed to a purchase price of $920,000 after a period of negotiation, during the course of which the real estate agent informed the purchaser that higher offers had been made by a third party. That representation was made on the instruction of the vendor's son, and proved to be false. In making the representation, the agent however disclosed the source of the information. On this basis, the Court found at [56] (per Beazley JA, Handley AJA agreeing) that the agent was a mere conduit of information and that this would have been apparent to the purchaser.
In light of these authorities, the following matters are in my view relevant to a determination of whether in the present case McGrath was a "mere conduit" or alternatively engaged in misleading and deceptive conduct.
First, as in Butcher, the Hyders are apparently wealthy and intelligent people. Mr Hyder had had considerable experience and success in property development. On the other hand, McGrath is a suburban real estate agent which, as Mr Hyder acknowledged in his evidence, did not profess any legal or valuation expertise (Butcher; cf John G Glass Real Estate and CH Real Estate).
Secondly, the nature of the transaction was a purchase of an expensive residential property in relation to which a reasonable person would expect considerable care to be taken by the purchasers in verifying matters concerning the property that they considered to be of importance. In fact, as McGrath knew, Mr Hyder obtained advice from a solicitor and valuer in relation to the purchase. Mrs Hyder also provided a certificate under s 66W of the Conveyancing Act 1919 (NSW) (concerned with "cooling off" periods) stating that a lawyer had explained the effect of the contract to her. Lot 4's legal entitlement to parking spaces outside the property's apparent boundaries was a matter about which a prospective purchaser could reasonably have been expected to obtain legal advice, rather than relying upon statements of a vendor's real estate agent.
In addition, the nature of the information in question (that is, the entitlement to exclusive parking on the "private parking" strip) was, as in Dalton, not such as would be expected to be within the real estate agent's own knowledge or expertise but, rather, was something that it was likely to have obtained from the vendor. Mr Hyder confirmed in his evidence that he believed that the information would have been obtained by McGrath from the vendor (see [24] above). The "private parking" signs located on the strip tended to suggest that the vendor was a likely source of McGrath's information. The present case is thus distinguishable from CH Real Estate where the commercial agent represented that a property was a "solid investment" (see [64] above) and more like Borzi Smythe where the source of the information was disclosed (see [65] above).
Thirdly, all of the relevant marketing material contained a disclaimer comparable to that in Butcher. I do not agree with the primary judge that the language of the disclaimer "would naturally be understood as relating to boundaries" and not dealing with the use of land at all (see [51] above). To the contrary, I consider that the words "[a]ll information" in the disclaimer indicated its breadth and, relevantly to the present case, that it covered what was indicated in the diagram concerning parking.
It should be noted in this context that the disclaimer in John G Glass (see [62] above) was more limited than that in the present case. In John G Glass, the disclaimer contemplated that the information may have been either "prepared with care" by the agent itself or sourced from others. In the present case the disclaimer associated with the diagram (see [13] above) indicated that the latter was the case.
Fourthly, as the primary judge said when considering contributory negligence, special conditions 9.4 and 9.5 of the purchase contract were a "clear warning" to the Hyders not to rely on statements by McGrath (see [55] above).
In response to McGrath's Notice of Contention, Mrs Hyder emphasised that in Butcher the inaccurate survey diagram was contained in the same document as the disclaimer, whereas in the present case there were oral representations made without accompanying disclaimers. I do not consider this factual difference to be of significance. The disclaimer in the written material constituted a relevant part of the transactions between the Hyders and McGrath, notwithstanding that it was not repeated orally. As in Butcher and Borzi, it was part of the circumstances from which the conclusion could be drawn that the agent did not endorse the information that was conveyed.
Nor do I accept that, as Mrs Hyder submitted, there is a material distinction between the present case and Butcher because McGrath's logo appeared on the diagram which referred to parking whereas the professional surveyor's (and not the real estate agent's) name appeared on the diagram considered in Butcher. It was clear that in the present case McGrath was not providing the information as to parking from its own knowledge, or based on its own expertise, but rather was passing on information believed by Mr Hyder to have been obtained from the vendor.
For these reasons, I would uphold the Notice of Contention. Reasonable purchasers in the position of the Hyders would have taken from their inspection of the property, the relevant marketing material and their oral communications with McGrath that the information that it provided in respect of parking was obtained from the vendor and that McGrath was not guaranteeing its accuracy. They would have understood that McGrath was merely passing on information from the vendor regarding parking on the strip. As a result I conclude that McGrath did not engage in misleading or deceptive conduct and that Mrs Hyder's appeal from the primary judge's dismissal of her proceedings should itself be dismissed.
To apply Wilson J's principles, the matter represented must be compared with the true factual and legal position to ascertain whether the false or misleading element of the representation was "in its nature persuasive to induce" entry into the contract. For example, in the case of the sale of a business, if monthly takings were alleged to have been $10,000 per month rather than the true figure of $9,000 per month, the Court would need to consider whether the difference was material. The greater the disparity between the represented position and the truth, the more easily an inference of inducement can be drawn. The smaller the difference, the greater will be the attention required to be given to the particular facts of the case, rather than utilising an inference of inducement in accordance with Wilson J's principle.
On appeal Mrs Hyder's submissions focussed on the evidence of Mr Hyder because, first, he was found by the primary judge to be the decision-maker and, secondly, a finding was made below as to the reliability of Mrs Hyder's evidence that rendered it of limited utility (see [46] above).
Mr Hyder's evidence made it clear that he regarded the availability of parking as an important consideration. His evidence was that "[i]f the ["private parking"] strip was not available for parking, the property would not have been suitable to be our family home" (see [22] above). This was not however the premise that required consideration. The question that needed to be addressed was whether Mr Hyder would have refrained from proceeding with the purchase at $9.4 million if he had known the factual and legal reality concerning parking on the strip, rather than believed what he was told by McGrath (that the strip would be exclusively available to Lot 4 for parking). As McGrath submitted in oral argument on the appeal, neither the factual nor legal reality was, as Mr Hyder's affidavit postulated, that "the strip was not available [to Lot 4] for parking".
The factual reality, as indicated in the vendor's evidence (see [32]-[33] above), was that the strip had been used by Lot 4's owners for parking for many years, without difficulty. Moreover, the signs on the strip stating "No Parking", with the reference to "24" as the street number of Lot 4, had been in place for a considerable time. If the subject representations had not been made to the Hyders, they would have been left with the information conveyed by the signs or, if they had wanted to obtain more information, they would, presumably, have raised the question of parking on the strip with McGrath. If the latter had occurred, in all probability, McGrath would have obtained, and conveyed to the Hyders, the information referred to above concerning the strip's historical use.
What the Hyders were told by McGrath also needs to be compared with the legal position of which it can be inferred they would have been informed if the representations had not been made but they had enquired of a competent lawyer about their rights in respect of the "private parking" strip.
In this regard, it is relevant to refer, as did the primary judge, to the decision of Brereton J, as his Honour then was, in Trewin v Felton [2007] NSWSC 851; (2007) 13 BPR 24,579. In that case his Honour considered the extent to which owners of land burdened by a standard form of right of carriageway were entitled to park on that land. His Honour said at [85]:
"It is not to be overlooked that the servient owner is entitled to do as it pleases on the servient land, so long as it does not interfere with reasonable use of the right of carriageway. It is not every act of parking on the right of carriageway that constitutes an actionable obstruction: for example, to park on the right of carriageway in a manner and location that did not obstruct the passage of the dominant owner or his licensees would not be a nuisance. To park there for a short time in circumstances that, in the event of the dominant owner or his invitees requiring access or egress, the vehicle could be promptly moved would, I think, not be an actionable obstruction."
Brereton J was not persuaded that any parking that had occurred on the site of the carriageway constituted "a real and substantial obstruction" to the servient owner's reasonable use of the right of way. This is the test for determining whether an actionable interference with a right of way has occurred (Pettey v Parsons [1914] 2 Ch 653 at 662; Peter Butt, Land Law (7th ed, 2017, Thomson Reuters) at [9.710]).
In the present case, the one-third strip of the driveway, forming part of Lot 4, terminated at the entrance to Lot 4, whilst the remaining two-thirds, which are of ample width for a vehicle, or even two, continued on so as to give access to the other two lots that have the benefit of rights of way over Lot 4's strip. In these circumstances, it was exceedingly unlikely that the owners of those lots would have a reasonable need to pass over Lot 4's strip. Even if those owners wanted to bring a particularly wide vehicle down the driveway, and thus in part use Lot 4's one-third strip, they would be thwarted in taking that vehicle to one of their properties by the narrowing of the driveway once the entrance to Lot 4 was reached.
These observations indicate that an enquiry by the Hyders as to the legal position concerning parking by them or their invitees on their one-third strip would not reasonably have resulted in unqualified advice that it could not occur but rather advice that an actionable obstruction of the right of way was unlikely to occur if they did park there. The advice would also have indicated that, as it constituted part of Lot 4, Lot 4's owners and their invitees were entitled to park on the strip, subject only to not interfering in a substantial way with the other two lot owners' rights to pass along the strip in the unlikely event that they wished to. No-one else had the right to park on the strip - not the public, because the strip was privately owned land, and not the adjoining owners, because their rights of way only entitled them to pass and not to park. Lot 4's owners were thus entitled to prevent anyone not authorised by them from parking on the strip.
As the primary judge recognised, Lot 4's driveway strip therefore had utility, notwithstanding that Lot 4's owners did not have an unqualified right to it. For the reasons I have given, the qualification to their rights was minor. Moreover, at least arguably, an indication by Lot 4's owners to the Lot 6 or 7 owners of a willingness to immediately remove any parked cars in the unlikely event that those owners wished to pass over (as distinct from park on) the Lot 4 strip would have avoided the possibility of any "real and substantial obstruction" to the rights of way.
The Hyders' evidence did not assert that the difference between, on the one hand, what they were told by McGrath and, on the other hand, the legal and practical reality of the parking situation would have been enough to cause them to withdraw from the negotiations for purchase. Such a proposition would have been surprising in circumstances where the property clearly had considerable attractions for them and Mr Hyder agreed that he was prepared to buy the property for more than it was worth because Mrs Hyder "loved the property" (see [25] above). Neither the Hyders' evidence nor the objective circumstances in my view support the appellant's proposition that, if the representations had not been made, the Hyders would not have proceeded with the purchase.
More targeted evidence from the Hyders would in any event have been far from conclusive. Evidence of recollection is significantly different from evidence, such as this evidence would have been, of what the witness would have done in a hypothetical circumstance. As McHugh J pointed out in Chappel v Hart (1998) 195 CLR 232 at 246, fn 64; [1998] HCA 55, "[h]uman nature being what it is", most plaintiffs honestly believe that if the defendant's default had not occurred, the plaintiff would have taken an option which was available to avoid his or her loss. A plaintiff's evidence of the course that he or she would have taken is therefore of limited value in determining what the plaintiff would have done in a hypothetical circumstance. In the Civil Liability Act 2002 (NSW), the New South Wales legislature went so far as to prohibit the admission of evidence of that type in proceedings to which that Act applies (see s 5D(3)(b)).
For these reasons, I do not consider that Mrs Hyder established that the primary judge erred in failing to be satisfied that, but for the misleading and deceptive conduct, she would not have proceeded with the purchase, or at least would not have offered $9.4 million for the property.
Secondly, Mrs Hyder submitted that Mr Kempthorne's valuation was to be preferred to that of Mr Rowe because of Mr Kempthorne's indication in numerical terms of the extent to which "comparable" properties were inferior or superior to the subject property. Again, I do not accept this argument. Mr Rowe clearly identified the features of the properties that he found significant and whether they were superior or inferior to those of the subject property. He did not err in not attempting to quantify these inherently subjective considerations in a numerical fashion. Nor did the primary judge err in not regarding this difference in approach as a decisive consideration.
In these circumstances, Mrs Hyder has not made good her challenge to the primary judge's lack of satisfaction that Mr Kempthorne's valuation was to be preferred over that of Mr Rowe.
On the other hand, McGrath acted reasonably in passing on information it obtained, first, from the vendor, an apparently reliable source, and, secondly, from its representatives' observations of the apparently long-displayed signs confining the entitlement to park on Lot 4's strip to Lot 4. As well, McGrath knew that the Hyders had the benefit of legal and valuation advice in relation to the purchase.
In these circumstances, there was no error in the primary judge finding that Mr Hyder, and therefore Mrs Hyder, was contributorily negligent to a significant extent.
His Honour's assessment of the appropriate deduction for contributory negligence involved an evaluative decision of a type with which this Court will not interfere in the absence of an error of principle or fact, or manifest error as to percentage (House v The King (1936) 55 CLR 499 at 505; [1936] HCA 40; Tarabay v Leite [2008] NSWCA 259 at [31]). No such basis for interfering with the assessment has been established. As a result, Mrs Hyder's challenge to the primary judge's decision on contributory negligence fails.