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File Number(s): 2026/178666

Publication restriction: N/A

Judgment

1. On 18 February 2026, the plaintiffs (as purchasers) and the defendants (as vendors) entered into a contract for the sale and purchase of the property known as 25 Darling Street, Bronte, New South Wales (being the land in folio identifier X/XXXXXX) (the Property and the Contract). The plaintiffs paid a deposit of $310,000, being 5% of the purchase price of $6,200,000.

2. The plaintiffs claim to have been induced to enter into the Contract by misrepresentations made by or on behalf of the defendants. The alleged misrepresentations are not alleged to have been fraudulent in the legal sense, although it is said to amount to fraud as understood in equity for the defendants to seek to retain the benefit of the Contract allegedly induced by the misrepresentations. [1]

3. The defendants deny the alleged misrepresentations and further deny that any misrepresentation that may be found to have been made induced the plaintiffs to enter into the Contract.

4. The plaintiffs commenced these proceedings on 1 May 2026 seeking:

5. a declaration that the Contract is voidable for misrepresentation;

6. an order rescinding the Contract ab initio;

7. an order that the deposit paid by the plaintiffs be refunded by the defendants forthwith;

8. an order that the defendants do all things necessary to give effect to the rescission;

9. further or alternatively, an order that the Contract be rescinded in equity; and

10. costs.

11. The proceedings were heard on an urgent basis on 11 May 2026 – the date on which the Contract was due to be completed pursuant to special condition 45 – in circumstances where the defendants have given evidence that the plaintiffs’ failure to complete the Contract has caused the defendants to delay the completion of a contract they entered into for the purchase of another property, and that they are currently paying 7% daily interest on the purchase price under that other contract for the delay in completion of that purchase.

12. By the conclusion of the hearing, it was clear that the claims for relief pressed by the plaintiffs were the claim for an order rescinding the Contract (prayer 5 of the summons) and a claim for an order that the deposit paid by the plaintiffs be refunded by the defendants forthwith (prayer 3 of the summons). It was common ground between the parties that, if an order for rescission were made, the refund of the deposit to the plaintiffs was the only step required to be taken in order to achieve restitutio in integrum between the parties. The plaintiffs also sought an order for costs in the event that they were successful (prayer 6 of the summons).

13. For the reasons that follow, I have determined that some of the alleged misrepresentations were made and that the Contract should be rescinded and an order made requiring the defendants to refund the deposit to the plaintiffs. I have considered all of the parties’ written and oral submissions in arriving at that conclusion. Given the urgency with which the parties required this matter to be determined a final basis, I have not summarised those submissions comprehensively and have referred to them only to the extent necessary to explain the reasons for the decision.

Salient evidence

8. A multi-storey semi-attached dwelling is constructed on the Property.

9. There are currently ocean views from a bedroom at the rear of the first floor of the Property.

10. The land adjacent to the rear of the Property is known as 122-128 Hewlett Street, Bronte (the Adjoining Land) is the subject of development consent for the construction of nine units – DA 304/2022. That development was commenced, at least to the extent of demolition of the previous buildings and the Adjoining Land is a construction site, but work has been suspended since some time prior to February 2026. On 9 December 2025, the New South Wales Housing and Development Authority (HDA) recommended to the Minister for Planning and Public Spaces (the Minister) that a development proposal on the Adjoining Land comprising 100-120 dwellings with a part four storey and part nine storey built form outcome be declared a State Significant Development under s 4.36(3) of the Environmental Planning and Assessment Act 1979 (NSW) on the grounds that the proposal adequately satisfied the objectives and criteria of the HDA Expression of Interest Guidelines. On 18 December 2025, the Minister declared the development specified in EOI application 289312 dated 28 August 2025, as amended by additional information provided on 9 September 2025, including development for the purpose of a residential flat building with provision of affordable housing at 122-128 Hewlett Street, Bronte, a State Significant Development (the SSD Declaration and the Proposed Development).

11. According to the expert evidence of Ms Jillian Sneyd, a town planner called by the defendants, a declaration that a proposal is State Significant Development is an early stage in a planning process which requires, after the declaration is made: (1) detailed design of the proposed development; (2) the commissioning of reports addressing the industry-specific or project-specific Secretary’s Environmental Assessment Requirements (SEARs) by reference to the detailed design; (3) the lodgement by the applicant of an SSD development application and Environmental Impact Statement in respect of the proposed development together with a planning proposal; (4) the assessment of the development application on its merits against the planning proposal, including public exhibition and consultation; and (5) a determination by the Minister or the Independent Planning Commission. Ms Sneyd’s evidence about the process is consistent with the evidence of Mr David Rippingill, a town planner who gave expert evidence on behalf of the plaintiffs. It is common ground between the expert town planners that there is presently no publicly available information about the details of the Proposed Development save for the proposed range of number of units and the proposed part four storey and part nine storey built form.

12. The defendants learned of the SSD Declaration from a social media post in about mid-January 2026. They subsequently heard further information about it from neighbours and read an article about it in the local newspaper. The first defendant, Mr Barnes, gave evidence that, based on those sources of information, he understood that the SSD Declaration was merely a declaration and that a lengthy process would need to be undertaken by the developer on the road to any approval for the Proposed Development, and that community consultation would be part of that process. In cross-examination, Mr Barnes acknowledged that the impact of the Proposed Development on property values and views was a subject of the defendants’ discussions with neighbours about the SSD Declaration. Mr Barnes took the view that the Proposed Development was at an embryonic stage, but he was concerned that it would have an adverse impact on the Property if it ultimately proceeded, including an impact on the views from the window of the upstairs bedroom at the rear of the Property.

13. By early February 2026, the defendants were in the final stages of negotiating the purchase of a new home for themselves and their children in Coogee.

14. The defendants engaged PPD Real Estate as their agents to sell the Property (PPD). Mr Barnes and the second defendant, Ms Beck, had an initial meeting with Mr Alex Phillips of PPD concerning the sale of the Property in early February 2026. Construction work on the Adjoining Land had been suspended by that time. According to Mr Barnes’ evidence, he and Ms Beck discussed with Mr Phillips during this meeting that the Adjoining Land was a “hole in the ground”, that the SSD Declaration had been made in respect of the Proposed Development for up to 120 units, and that there were no designs available for the Proposed Development. As Mr Barnes put it, there were “a bunch of unknowns”. It was discussed during this meeting that this would affect the pool of potential purchasers for the Property and would have an adverse effect on the price. Mr Phillips said that interest in the Property would be tempered if the SSD Declaration was known. Mr Barnes gave evidence that they “factored those considerations into the price guide” for the Property.

15. PPD placed an advertisement for the Property on domain.com.au under the headline: “Pavilion Beach House with Ocean Views in the Sweet Spot Between Bronte and Tamarama”. The advertisement described the Property as being “saturated in light and air” and as having been “designed around an internal garden atrium with towering walls of glass bringing in the sunshine and framing sweeping ocean views from the upper level”. The defendants do not suggest that they did not instruct or approve the advertisement of the Property by their selling agent in those terms.

16. The plaintiffs first inspected the Property on 15 February 2026. The inspection was conducted by Mr Phillips of PPD.

17. According to the evidence of the second plaintiff, Mr Wallace, he and the first plaintiff, Ms Keci, spent about 30 minutes at the Property. He noticed the ocean views from the bedroom on the first floor of the property. He also noticed that the Adjoining Land was a construction site. He and Ms Keci had a conversation with Mr Phillips as they were exiting the Property. During that conversation, Mr Phillips said words to the effect that nine houses were being built on the Adjoining Land, but that they were not going to obstruct the views from the Property. This description alerted Mr Wallace to the fact that the Adjoining Land was the site of a development in respect of which he had received some marketing material from the developer, Fortis, in October 2025. Mr Phillips’ description of the development on the Adjoining Land accorded with Mr Wallace’s understanding based on that marketing information. Mr Wallace gave evidence that Mr Phillips then asked him and Ms Keci whether they were looking at any other properties. Either Mr Wallace or Ms Keci replied that they were looking at a particular property in Dudley Street. Mr Phillips said that the Property was much better value because of the size of the lot and the view.

18. In cross-examination, Mr Wallace acknowledged that he did not recall all of the details of the conversation that he and Ms Keci had with Mr Phillips on their way out of the inspection on 15 February 2026. He could not recall whether it was he or Ms Keci who asked Mr Phillips about the construction on the Adjoining Land. However, Mr Wallace maintained that he recalled the substance of most of the conversation, and that he specifically recalled Mr Phillips mentioning the nine houses being constructed and that they would not obstruct the views from the Property.

19. It was put to Mr Wallace in cross-examination that he did not expect that Mr Phillips would have conducted a detailed investigation about the dimensions of the construction on the Adjoining Land, that Mr Phillips was not a town planning expert, and that Mr Wallace must have taken anything said by Mr Phillips with a “grain of salt”. Mr Wallace agreed that Mr Phillips was not a town planning expert, but denied that he took what Mr Phillips said with a “grain of salt”. Mr Wallace regarded Mr Phillips as an Eastern Suburbs real estate expert, and assumed that he would have more insight into the development of the Adjoining Land than the average person. As will become apparent below, Mr Wallace did not rely solely on what Mr Phillips told him about the development, but Mr Wallace gave evidence that it was part of the information that he took into account about the development and that he gave Mr Phillips’ statement “a palpable amount of weight”.

20. It was also put to Mr Wallace in cross-examination that the conversation that he and Ms Keci had with Mr Phillips on their way out of the Property during that inspection on 15 February 2026 was “a casual conversation”. Mr Wallace described it as a “standard real estate agent conversation”, adding “casual, I guess, is how you could characterise it; yes”. I understood Mr Wallace’s answer to mean that the conversation was conducted in the friendly, informal tone in which a real estate agent selling a property typically engages with prospective buyers inspecting the property when providing them with information about the property and enquiring about their level of interest in the property.

21. Ms Keci gave evidence that, when she inspected the Property on 15 February 2026, she was immediately struck by how big the Property was, that its condition was better than she had expected from the photographs and that it had a big backyard which was an appealing feature to her. She and Mr Wallace discussed that, if they purchased the Property, they would use the bedroom with the ocean views upstairs as their bedroom, rather than using the master bedroom which did not have ocean views. They also discussed the construction site on the Adjoining Land which was visible from the bedroom window with the ocean views. Ms Keci asked Mr Wallace what would happen on that site and how it would affect the views. Mr Wallace told her that the developer was building nine houses on the site, and that he had made some inquiries about the houses as part of his search for properties to purchase but the developer’s price had been beyond their price range.

22. Ms Keci gave evidence that, after spending about 20 minutes in the Property, she and Mr Wallace spoke with Mr Phillips. Ms Keci does not claim to recall everything that was said during the conversation with Mr Phillips, but she gave evidence that she does clearly recall some things that were said. Ms Keci recalls Mr Phillips asking whether they were looking at any other properties, and they replied that they were also looking at a property in Dudley Street, Bondi. Mr Phillips expressed the view that Dudley Street was also a nice property, but that the Property was superior because it was larger and had views. Ms Keci recalls that either she or Mr Wallace asked Mr Phillips about the construction site on the Adjoining Land. According to Ms Keci’s affidavit evidence, Mr Phillips told them that what had been approved was very similar to what had been there previously. In cross-examination, Ms Keci gave evidence that she recalled that the conversation with Mr Phillips included a discussion about nine houses being developed on the Adjoining Land and the impact on views.

23. Neither party called Mr Phillips to give evidence. Each party had the opportunity to do so. Neither party submitted that a Jones v Dunkel inference should be drawn against the other by reason of the other’s failure to call him.

24. Mr Wallace and Ms Keci requested a copy of the contract for the sale of the Property, which they received later on 15 February 2026.

25. Mr Wallace looked at the Waverley Council development application tracker to see whether there were any applications in respect of the Property. He discovered that the Property had an existing development consent for alterations and additions – DA134/2025. Mr Wallace wanted to ensure that he and Ms Keci would have the benefit of that consent if they were to purchase the Property.

26. Mr Wallace also looked at the Waverley Council development application tracker for the Adjoining Land. Mr Wallace saw that the Adjoining Land had development consent for the construction of nine units – DA 304/2022. He reviewed the preliminary visual assessment advice for that development which had been prepared by Urbis on 7 June 2022. The Urbis advice identified the Property as one of several dwellings adjoining the proposed development site from which views were available but noted that the massing of the proposed development reaches the same height and scale as the then existing building on the Adjoining Land, and that the existing building appeared to limit access to views from the Property of scenic and highly valued features such as Bronte Park and Bronte Beach. The Urbis advice concluded:

“Private domain view loss is likely to be limited and restricted to some upper-level units that adjoin the subject site.

Views to be lost are unlikely to include scenic or highly valued items as defined in Tenacity.

The proposed development is unlikely to create any significant visual effects in close, medium or distant public domain views.

In our opinion based on the information available, the risks of significant visual impacts of this development on public and private views is low.”

27. Based on his view of the Urbis advice, Mr Wallace felt satisfied that any view loss caused by the construction of the nine units would not include scenic or highly valued items. As was put to Mr Wallace in cross-examination, the Urbis advice identified that the Property did not have views of scenic or highly valued items prior to the demolition of the building on the Adjoining Land to make way for the construction of the nine units. Mr Wallace acknowledged that the views from the Property at the time he and Ms Keci inspected it on 15 February 2026 were more expansive than they would be after completion of the nine units the subject of DA 304/2022 because the demolition had created a void.

28. Mr Wallace gave evidence that he was attracted to the Property because: (1) it had an impressive view from the first floor which he understood might be affected by the nine houses being built on the Adjoining Land, but only to a minor extent; (2) it was larger than the other property they were considering at the time in Dudley Street, Bondi; (3) it had similar proximity to the beach compared to the Dudley Street property; and (4) the Property was located close to Bronte Public School.

29. Ms Keci gave evidence that she was attracted to the Property because of: (1) the ocean views from the upstairs rear bedroom; (2) the large backyard; (3) the size of the house which was suited to starting a family; (4) the fact that the house did not require immediate renovation; (5) the two car parking spaces; and (6) the location which was close to the area where she and Mr Wallace were living in Tamarama.

30. Mr Wallace and Ms Keci instructed Ms Dani Rifkin of Rifkin Legal to review the contract for the sale of the Property.

31. On the morning of 16 February 2026, Ms Dani Rifkin wrote to the defendants’ licensed conveyancer MG Conveyancing requesting certain amendments to the contract and asking certain questions relating to the Property. Mr Wallace and Ms Keci had not given instructions to Ms Rifkin about the questions to be asked, and had relied on Ms Rifkin to use her professional judgment in deciding the questions to be asked. Mr Wallace described the questions as being standard questions asked by Ms Rifkin in her conveyancing practice when acting for purchasers.

32. The questions, and the answers provided by MG Conveyancing later that same day (in italics below), were in the following terms (the bold emphasis is mine):

“7. Has the vendor undertaken any renovations, building works and/or alterations to the property that required council approval, and if so, was such approval obtained? Please provide a description of any such works and when they were completed. Please also provide copies of any approvals, occupation certificates and homeowners warranty insurance where applicable. Works were carried out to widen the driveway in . Council approval was obtained. Please see attached documents.

8. Are all structures on the property compliant with the provisions of the Local Government Act and Environmental Planning Assessment Act and regulations? Yes, as far as the vendor is aware.

9. Is the vendor aware of any encroachments by or on the property? Not to the vendor’s knowledge.

10. Is the vendor aware of, or has the vendor received notice of, any issue adversely affecting the property such as an order/proposed order/notice from the Council or any other authority? If so, please provide details. No**.**

11. Is the vendor aware of, or has the vendor received notice of, any development applications affecting the property or neighbouring properties? If so, please provide details? The vendor is aware of a DA for the neighbouring property allowing construction of 9 units.

12. Is the vendor aware of any disputes with neighbours over the boundaries, fencing or any other issues? If so provide details. The vendor is not aware of any disputes with neighbours.

13. Has the vendor had any plumbing/water ingress issues to date? If so provide details. The vendor is not aware of any such issues.

14. Please confirm all inclusions are in working order. To the best of the vendors’ knowledge, the inclusions are in working order, except the Vintec fridge in the cellar which has not been functioning properly. The vendor is looking into the cause of issues with the Vintec fridge and whether repairs are needed.**”

33. Mr Barnes gave evidence that Julia Halloran of MG Conveyancing telephoned him on 16 February 2026 to discuss the questions asked on behalf of the plaintiffs and the answers to be given. Mr Barnes gave evidence that he did not understand question 10 as asking whether he was aware of any issue adversely affecting the Property. Mr Barnes recalls that Ms Halloran explained to him that question 10 referred to any orders or notices in respect of the Property, such as for non-compliant building works. Based on Ms Halloran’s explanation of question 10, Mr Barnes understood that it was asking whether there was any order on the Property. In cross-examination, Mr Barnes said that if he had understood question 10 be asking whether he was aware of any issue adversely affecting the Property, he would have sought advice from Ms Halloran as to whether that question called for an answer that disclosed the SSD Declaration. In relation to question 11, Mr Barnes recalls discussing the development consent for the Adjoining Land and the SSD Declaration with Ms Halloran. According to Mr Barnes’ evidence, Ms Halloran told him that question 11 only asked about development applications and that it was not necessary to include information about the SSD Declaration in the answer to question 11 because it was not a development application. The answers to questions 10 and 11 were prepared on Mr Barnes’ instructions following that discussion with Ms Halloran.

34. Ms Halloran was not called to give evidence.

35. Mr Wallace gave evidence that he read the defendants’ responses to the proposed amendments to the contract and their answers to Ms Rifkin’s questions when Ms Rifkin forwarded Ms Halloran’s reply email to him and to Ms Keci on the afternoon of 16 February 2026. Mr Wallace recalls that he was pleased that the defendants had agreed to a deposit of 5% rather than 10% of the purchase price. Mr Wallace also recalls that Ms Rifkin emphasised the importance of obtaining a building and pest inspection report for the Property in view of special condition 36 of the contract. Mr Wallace also recalls that the defendants’ answer to question 11 was in line with what he already knew about the development of the Adjoining Land and the discussion that he and Ms Keci had had with Mr Phillips the previous day.

36. Ms Keci gave evidence that she recalls reading the email containing MG Conveyancing’s responses at the time and noting that MG Conveyancing had confirmed that the development application for the Adjoining Land was for nine units. Ms Keci gave evidence that she was reassured by this because it was consistent with what she and Mr Wallace had been told by Mr Phillips during their inspection of the Property, and she was pleased because the view was one of the main things that attracted her to the Property compared to other properties that she and Mr Wallace had inspected. Ms Keci gave evidence that she understood that the answer to question 11 meant that there would only be “very minor effects” to the current view from the Property.

37. Mr Wallace and Ms Keci made an offer for the Property on the morning of 17 February 2026.

38. Ms Keci attended a further inspection of the Property on 18 February 2026. The inspection was conducted by Mr Tom Fuller of PPD.

39. Ms Keci took a number of photographs, including the following photograph of the bedroom at the rear of the Property on the first floor showing the ocean view from the window:

40. Ms Keci gave evidence, that as she was standing in that bedroom looking at the view from the window depicted in the photograph reproduced above:

“… Mr Fuller came in and asked me how I felt about the Property. I replied that it was a beautiful house and that it was very spacious.

From where we were standing, we could see the construction site. …

I said that I understood they were building nine new houses on the construction site and asked Mr Fuller how high they were going to be and whether the development was going to block our view at all. Mr Fuller replied saying something to the effect that everything would be the same as it was previously, that the developers could not go any higher and that Waverley Council was very strict about those rules.

I said OK but asked him whether any of the right side of the view would be covered. Mr Fuller said that we might get a bit of coverage on the right side but that we would still have beach views and that the height of the new buildings would be consistent with the existing building. He pointed to the grey building immediately to the left of the construction site (which is marked with a red cross in the photograph … he said that the development might block the front view with the grass and other houses, part of the view of the sand and maybe of the ocean pool at Bronte but it would not block the ocean views. I said that is fine, the most important to me was the water views that if those stayed, that was great.

I understood from what Mr Fuller had said that the development would be no higher than the existing building to the left of the development site and the view of the water from the bedroom would not be obstructed by the development.”

41. Ms Keci adhered to that evidence in cross-examination.

42. Neither party called Mr Fuller to give evidence. Each party had the opportunity to do so. Neither party submitted that a Jones v Dunkel inference should be drawn against the other by reason of the other’s failure to call him.

43. Mr Wallace and Ms Keci executed the Contract on the afternoon of 18 February 2026. There is no dispute that they paid the 5% deposit stipulated in the Contract.

44. The Contract includes the following special conditions 35 and 36:

“35. Whole Agreement

35.1 The parties acknowledge that the terms and conditions set out in this contract contain the entire agreement as concluded between the parties as at the date of this contact notwithstanding any negotiations or discussions held or documents signed or brochures produced or statements made prior to the execution hereof and the purchaser expressly acknowledges that it has not been induced to enter into this contract by any representation (verbal or otherwise) made by or on behalf of the vendor which is not included in this contract or any schedules or annexures hereto or documents identified in this contract.

36. Purchaser’s Acknowledgement

36.1 Prior to signing this contract the Purchaser has been given an opportunity to make an inspection of the Property and has inspected the Property or decided not to inspect the Property.

36.2 The Purchaser warrants that in entering into this Contract the Purchaser has not relied on any warranty or representation made by the Vendor or anyone representing the Vendor as to:

(i) the nature, quality and condition of the Property;

(ii) the suitability for any use or purpose of the Property;

(iii) the rights attaching to or affecting the Property;

(iv) any other matter having or which may have effect beneficial or otherwise on the Property or the yield from the Property.

36.3 The Purchaser accepts the Property in its present condition and state of repair and subject to all defects, dilapidation and infestations (if any) whether latent or patent.

36.4 The purchaser is not entitled to make any requisition or claim or rescind or terminate in respect of any of the matters referred to in clauses 36.2 and 36.3 including without limitation:

(i) any roof or surface water drainage being connected to the sewer; or

(ii) the existence or non-existence of any easement or right affecting or benefiting the property in respect of any service which passes through another property or any service for another property which passes through the property (“service” has the meaning given in clause 10.1.2).

(iii) the existence of any encroachments by or upon the property

36.5 The vendor makes no warranty or representation about any of the matters relating to the property description in clause 36.2, 36.3 and 36.4.

36.6 The inclusions (if any) are sold in their existing condition and state of repair and subject to normal wear and tear from the date of this Contract to the date for completion, and the vendor makes no representation as to the quality of any of the inclusions.

36.7 The vendor will not be required to repair or replace any of the inclusions which may malfunction after the date of this Contract and before the date for completion.

36.8 The vendor is not required to remove any picture hooks or other hanging devices from the walls or from other areas of the property, or to patch, paint or otherwise make good any marks or blemishes arising or remaining after the removal of any picture or other item removed from the walls or next to the walls.”

45. Mr Wallace and Ms Keci travelled separately overseas for several weeks from 25 March 2026. Mr Wallace saw an Australian Financial Review post on Instagram while he was away on 17 April 2026. The post read:

“Fortis proposes 120 apartments next door at 122-128 Hewlett Street, with 5 per cent affordable housing. On the Housing Delivery Authority’s (HDA) recommendation in December, Planning Minister Paul Scully granted the development state significant status. That doesn’t guarantee final approval, but it bypasses a council veto and improves the chances of success.”

46. This was the first occasion on which Mr Wallace had heard anything about a proposal of the kind referred to in the post. He forwarded the post to Ms Keci in a message which stated: “Probably something to monitor …”. This was followed by a further message to Ms Keci stating: “I think this article is old. They’re almost finished with the buildings, so”. Mr Wallace gave evidence that he thought the post “seemed like a mistake or out of date because it was against everything we knew about the approved development, the construction for which had already started”. Ms Keci does not remember seeing these messages from Mr Wallace at the time.

47. After returning to Australia, on 23 April 2026, Mr Wallace saw a further post on his Instagram feed about a proposed 120 apartment development on Hewlett Street, which he immediately brought to Ms Keci’s attention. This was the first time they became aware that there appeared to be a current proposal for a 120 unit development on the Adjoining Land. They immediately contacted their solicitor.

48. Mr Nathan Weinberger of Weinberger Lawyers wrote to MG Conveyancing on 29 April 2026 on behalf of Mr Wallace and Ms Keci claiming that they entered into the Contract in reliance on representations made on behalf of the defendants concerning the nature, scale and intensity of the development proposed on the Adjoining Land, and asserting that they were entitled to rescind the Contract at common law for misrepresentation or to an order for rescission in equity.

49. Watson Webb, solicitors, replied on behalf of Mr Barnes and Ms Beck on 30 April 2026 denying the alleged misrepresentations and noting that the development consent for the Adjoining Land still only permitted the construction of nine units.

50. As I have already mentioned, the plaintiffs commenced these proceedings on 1 May 2026.

51. Mr Wallace has given evidence that he would not have proceeded with the purchase of the Property if he had known of the possibility of the Proposed Development because, from his perspective, the view was the major selling point of the Property compared to other properties that he and Ms Keci had inspected at the time. The Proposed Development (if it proceeds) will take away those views and, in Mr Wallace’s opinion, significantly affect the privacy of the Property.

52. Ms Keci gave evidence that she would not have signed the Contract if she had known about the possibility of the Proposed Development because, for her, the view was a major selling point of the Property compared to other properties that she and Mr Wallace had inspected. The privacy of the Property was another “key positive” of the Property. If she had known about the Proposed Development, neither the view nor privacy would have been selling points for the Property. Ms Keci gave evidence in cross-examination that she was aware that Mr Wallace had looked at the Waverley Council DA tracker for the Adjoining Land. Mr Wallace had mentioned this to Ms Keci, and had told her that he was comfortable that what was being developed there was nine houses. This implicitly conveyed to Ms Keci that Mr Wallace was comfortable with the impact that that development would have on the Property, including the views. Ms Keci took great comfort from the fact that Mr Wallace felt comfortable, and was confident in his investigation without knowing the details of it. Ultimately, she was comfortable about proceeding with the purchase and signing the Contract based on Mr Wallace’s investigations, the defendants’ answers to Ms Rifkin’s questions, and the information provided by Mr Phillips and Mr Fuller of PPD during her inspections of the Property on 15 and 18 February 2026.

Applicable legal principles

53. It is common ground between the parties that a claim for rescission of a contract on the grounds of innocent misrepresentation requires proof of a representation that was a misrepresentation (in that it was false when made or, in the case of a continuing misrepresentation, false at the time it was acted on by the representee) which produced a misapprehension on the part of the representee that induced the representee to enter into the contract.

54. It is not necessary that the misrepresentation be the sole inducing cause of the representee entering into the contract. [2]

55. As the defendants submitted, a vendor of land does not have a positive duty to disclose to the purchaser all future possibilities known to the vendor that might affect the land if they come to pass. In Dormer v Solo Investments Pty Ltd, [3] it was held that the vendor did not have a duty to disclose a real possibility of permits and licences being granted and an easement being granted for a gas pipeline to pass through the land in the future. In Tsekos v Finance Corporation of Australia Ltd, [4] it was held that the vendor did not have a duty to disclose that the land might be resumed by the local council in the future.

56. A vendor of land does have limited statutory disclosure obligations, [5] but neither party submitted that those obligations were relevant to the facts of this case.

57. The lack of a positive general duty of disclosure is not a licence for a vendor of land to make misrepresentations, expressly or impliedly, concerning a matter about which they were entitled to remain silent. If the vendor chooses to make a statement about such a matter which is literally true, but omits further information about the matter which is known to the vendor, the express statement may constitute an implied misrepresentation. This will depend on the nature and content of the express statement, the context in which it was made, the characteristics of the representor and representee and the relationship between them, whether the statement had the character of a statement on which the representee was intended and entitled to rely, and the substance of the information known to the vendor that was not disclosed when the statement was made. The Court must consider what a reasonable person would have inferred was being implicitly represented by the express statement. One possibility is that a reasonable person would have inferred that the express statement was complete in the sense of covering everything material or relevant on the subject matter known to the representor. [6]

58. Dormer v Solo Investments Pty Ltd and Tsekos v Finance Corporation of Australia Ltd were cases of mere silence. The purchaser in each case did not rely on any alleged misrepresentation by the vendor of the land.

59. Rescission is available in equity for innocent misrepresentation. As I alluded to earlier in these reasons, the underlying principle is that equity regards it as unconscientious to insist upon a contract obtained by a misrepresentation that is known to be false when the contract is sought to be enforced, even if it was made innocently at the time. [7]

60. In equity, rescission is a discretionary remedy granted by the court, subject to equitable defences. [8]

61. As I have explained above, the defendants did not rely on equitable defences, but submitted that the alleged misrepresentations were not made or that, if they were made, they were not representations on which the plaintiffs were intended and entitled to rely and they did not induce the plaintiffs to enter into the Contract.

Consideration and determination

62. The plaintiffs plead that Mr Phillips made a representation to them during their inspection of the Property on 15 February 2026 to the effect that nine houses were being built on the Adjoining Land but that they were not going to obstruct the views from the Property (referred to in the Points of Claim as the First Representation). The plaintiffs plead that the First Representation was made on behalf of the defendants, and with the intention of inducing the plaintiffs to purchase the Property.

63. The plaintiffs allege that, by making the First Representation without disclosing the Proposed Development and the SSD Declaration, and without disclosing that the Proposed Development, if constructed on the Adjoining Land, would impede the ocean views from the Property, Mr Phillips made an implied representation to the plaintiffs to the effect that the defendants knew of no fact which would show that the ocean view from the bedroom on the first floor of the Property would be obstructed (referred to in the Points of Claim as the First Implied Representation). The plaintiffs plead that the First Implied Representation was made on behalf of the defendants, and with the intention of inducing the plaintiffs to purchase the Property.

64. The terms in which the First Implied Representation is pleaded are somewhat infelicitous (“which would show”). In my opinion, when the Points of Claim are read as a whole, and particularly when the pleaded terms of the alleged First Implied Representation are read in the context of the grounds on which it is pleaded that the First Implied Representation was misleading (see below), it is plain that the substance of the plaintiffs’ allegation is that the First Implied Representation was to the effect that the defendants knew of no fact at the time of the alleged representation which would give rise to a risk that the ocean view from the bedroom on the first floor of the Property would be obstructed in the future.

65. The plaintiffs allege that the First Implied Representation was misleading because: (1) the SSD Declaration had been made; (2) the Proposed Development, if constructed, will obstruct the ocean view from the Property; (3) the defendants knew of the Proposed Development; and (4) Mr Phillips did not disclose the SSD Declaration, the Proposed Development, or that the Proposed Development will obstruct the ocean views from the Property if it is constructed.

66. The defendants do not admit that the First Representation was made and say that, if it was made, it was not made on their instructions.

67. The defendants deny that the First Implied Representation was made and say further that they were not personally in attendance when the plaintiffs inspected the Property on 15 February 2026, that they did not instruct Mr Phillips to make the alleged First Implied Representation, and that Mr Phillips did not advise them that he had made the alleged First Implied Representation. The defendants do not admit that the alleged First Implied Representation (if made) was made with the intention of inducing the plaintiffs to purchase the Property or that it was misleading.

68. Although the defendants pleaded in their Points of Defence that the First Representation (if made) and the First Implied Representation (if made) were not made on their instructions, counsel for the defendants did not submit that those representations (if made) were outside the scope of Mr Phillips’ or PPD’s actual or ostensible authority as the defendants’ agent for the sale of the Property. Rather, the defendants submitted that, if the representations were made at all, they were made during a casual conversation and that it was not reasonable for the plaintiffs to rely on representations made during such a conversation and the defendants cannot be taken to have intended that the plaintiffs should be induced to purchase the Property by representations made during such a conversation.

69. Mr Wallace and Ms Keci both seemed to me to be doing their best to give accurate evidence of their recollection of the conversations and events about which they were asked in cross-examination. Neither of them had read the other’s affidavit prior to giving evidence. Each of them frankly acknowledged that they could not recall every detail of their conversation with Mr Phillips on 15 February 2026. I accept their evidence, to which they adhered in cross-examination, that they do recall the substance of what they discussed with Mr Phillips and the effect of what he said to them in relation to the development of the Adjoining Land and its impact on the future ocean views from the Property. It is inherently likely that the plaintiffs would recall the substance of what Mr Phillips said to them about that matter given that the construction site stood between the Property and the ocean views that they observed during their inspection of the Property, Mr Wallace was therefore conscious that the plaintiffs could not assume that those views would not be altered in the future when the development of the Adjoining Land was completed, and the ocean views were one of the key features that attracted them to the Property and made it more desirable to them than the alternative property they were considering at the time. In my opinion, the slight differences between the evidence of Mr Wallace and Ms Keci about the terms of their conversation with Mr Phillips on 15 February 2026 do not suggest that their evidence is unreliable, but are indicative of Mr Wallace and Ms Keci giving authentic separate accounts of their independent recollections of the conversation that occurred almost three months prior to the hearing. [9]

70. For those reasons, I accept the evidence of Mr Wallace and Ms Keci referred to at [17]-[22] above. On the basis of that evidence, I find that Mr Phillips did make a representation to the plaintiffs on 15 February 2026 to the effect that nine houses were being built on the Adjoining Land but that they were not going to obstruct the views from the Property. That is to say, the plaintiffs have established that the First Representation was made.

71. I reject the defendants’ submission that the First Representation was made in a casual conversation and therefore could not reasonably have been relied on by the plaintiffs and cannot be taken to have been made on behalf of the defendants with the intention of inducing the plaintiffs to purchase the Property. The representation was made by Mr Phillips in his capacity as the defendants’ agent for the sale of the Property in circumstances where the Property had been advertised for sale in terms promoting its ocean views and Mr Phillips also made statements to the plaintiffs encouraging them to consider the views from the Property as one of the features that made it superior to the other property which they were considering at the time. For the reasons explained at [20] above, Mr Wallace’s acceptance in cross-examination that the plaintiffs’ conversation with Mr Phillips could be characterised as “casual” does not have the significance that the defendants sought to make of it in closing submissions. I find that the First Representation was made by Mr Phillips on behalf of the defendants with the intention of inducing the plaintiffs to purchase the Property.

72. As the defendants submitted, and as the plaintiffs acknowledged, the First Representation was literally true.

73. I accept the plaintiffs’ submission that, in circumstances where the defendants were relying on the ocean views from the Property as a selling point in the marketing campaign being conducted by PPD on their behalf, and it was obvious from the location of the Property and the Adjoining Land and from the state of the Adjoining Land as a “hole in the ground” that the development of the Adjoining Land might impact on those views, a reasonable person in the plaintiffs’ position would have inferred that the First Representation made to them by Mr Phillips as they completed their first inspection of the Property on 15 February 2026 covered everything material that was known to the defendants about the subject matter of the future impact of the development of the Adjoining Land on the ocean views enjoyed from the Property. I therefore accept the plaintiffs’ submission that, by making the First Representation without disclosing the SSD Declaration and the Proposed Development, and without disclosing that the Proposed Development would impede ocean views from the Property if constructed, Mr Phillips made the First Implied Representation to the plaintiffs.

74. Contrary to the defendants’ submissions, it is not to the point that the Proposed Development was yet to pass through a planning process and may never proceed, either in the form in which it was then proposed in general terms, or at all. There was a risk (as opposed to mere speculation) that the Proposed Development would proceed and would adversely impact the ocean views from the Property. The First Implied Representation was directed to the defendants’ knowledge of facts that would give rise to a risk of future obstruction of the ocean views from the Property. The First Implied Representation was misleading because the defendants did know of facts giving rise to such a risk. [10] Contrary to the defendants’ submissions, the plaintiffs’ complaint is not one of mere non-disclosure of that knowledge. The First Implied Representation would not have been made if the defendants and their agent had chosen to remain silent about the subject of the impact of the development of the Adjoining Land on ocean views from the Property. They did not remain silent.

75. For the same reasons as I have explained above in relation to the First Representation, [11] I find that the First Implied Representation was made by Mr Phillips on behalf of the defendants and with the intention of inducing the plaintiffs to purchase the Property.

76. The plaintiffs plead that, by the answers to questions 10 and 11 which are extracted at [31] above, the defendants made a representation to the plaintiffs, with the intention of inducing the plaintiffs to purchase the Property, to the effect that they were not aware of any issue adversely affecting the Property, such as an order, and the only application they were aware of concerning the Adjoining Land was a development application allowing the construction of nine units (referred to in the Points of Claim as the Second Representation).

77. The plaintiffs plead that, by making the Second Representation without disclosing that the defendants were aware of the Proposed Development, that the SSD Declaration had been made, and that the Proposed Development would obstruct the ocean views from the Property if constructed, the defendants impliedly represented that they did not know of any fact which would adversely affect the Property (referred to in the Points of Claim as the Second Implied Representation). The plaintiffs plead that the Second Implied Representation was made with the intention of inducing them to purchase the Property.

78. The plaintiffs claim that the Second Representation and the Second Implied Representation were misleading by reason of the SSD Declaration, the defendants’ knowledge of the Proposed Development, and the defendants’ failure to disclose their knowledge of the Proposed Development and that it would adversely affect the Property if constructed by reducing privacy, creating traffic congestion and obstructing views from the upper level of the Property.

79. The defendants admit making the Second Representation but deny that it was made with the intention of inducing the plaintiffs to purchase the Property. The defendants admit that they did not disclose that they were aware of the Proposed Development, that the SSD Declaration had been made, and that the Proposed Development would obstruct the ocean views from the Property if constructed. The defendants deny making the alleged Second Implied Representation and say that the representations made in their conveyancer’s correspondence were express and that there were no implied representations. If the Second Implied Representation was made (which is denied), the Second Defendant denies that it was made with the intention of inducing the plaintiffs to purchase the Property.

80. The defendants deny that the Second Representation (which is admitted) and the Second Implied Representation (if made, which is denied) were misleading, and say that the SSD Declaration is neither a development application nor an issue adversely affecting the Property.

81. I accept the defendants’ submission that the terms of question 10 did not call for the defendants to disclose “any issue” of which the defendants were aware “adversely affecting the property”. The very wide reading of question 10 propounded by the plaintiffs seizes on those selected words rather than reading the question as a whole, pays no regard to the established law that a vendor of land does not have a general duty of disclosure, [12] and ignores the examples given within question 10 which inform the meaning of the terms of the question. I accept the defendants’ submission that question 10, properly construed, calls for disclosure of orders and notices, or proposed orders and notices, affecting the title to or rights and obligations in respect of the Property or the improvements on the Property.

82. I accept the defendants’ submission that question 11 was confined to development applications affecting the Property or neighbouring properties. It did not call for disclosure of development applications that may be proposed or contemplated, but not yet made, in respect of the Property or neighbouring properties. On the basis of the expert evidence referred to at [11] above, question 11 did not call for the disclosure of the SSD Declaration or the Proposed Development.

83. For those reasons, the plaintiffs have failed to establish that the alleged Second Representation was misleading and have failed to establish that the Second Implied Representation was made.

84. The plaintiffs plead that, during Ms Keci’s inspection of the Property on 18 February 2026 referred to at [38]-[42] above, Mr Fuller made a representation to Ms Keci on behalf of the defendants, with the intention of inducing the plaintiffs to purchase the Property, to the effect that the development of the Adjoining Land would not block the ocean views from the Property (referred to in the Points of Claim as the Third Representation).

85. The plaintiffs plead that, by making the Third Representation without disclosing the existence of the Proposed Development, the SSD Declaration, or that the Proposed Development would obstruct the ocean views from the Property if constructed, Mr Fuller, on behalf of the defendants and with the intention of inducing the plaintiffs to purchase the Property, impliedly represented that the defendants knew no fact which would obstruct the view from the Property (referred to in the Points of Claim as the Third Implied Representation).

86. The terms in which the Third Implied Representation is pleaded are somewhat infelicitous (“which would obstruct”). In my opinion, when the Points of Claim are read as a whole, and particularly when the pleaded terms of the alleged Third Implied Representation are read in the context of the grounds on which it is pleaded that the Third Implied Representation was misleading (see below), it is plain that the substance of the plaintiffs’ allegation is that the Third Implied Representation was to the effect that the defendants knew of no fact at the time of the alleged representation which would give rise to a risk that the view from the Property would be obstructed in the future.

87. The plaintiffs claim that the Third Implied Representation was misleading by reason of the SSD Declaration, the fact that the Proposed Development (if constructed) will obstruct the ocean view from the Property, the defendants’ knowledge of the existence of the Proposed Development, and the failure to disclose those matters.

88. The defendants do not admit the alleged Third Representation and deny the alleged Third Implied Representation. If the alleged Third Implied Representation was made (which is denied), the defendants do not admit that it was made with the intention of inducing the plaintiffs to purchase the Property, and say that they were not personally in attendance at the inspection on 18 February 2026, they did not instruct Mr Fuller to make the alleged Third Implied Representation and Mr Fuller did not advise them that he had made the alleged Third Implied Representation. The defendants deny that the alleged Third Implied Representation (if made) was misleading.

89. Although the defendants pleaded in their Points of Defence that the Third Implied Representation (if made) was not made on their instructions, counsel for the defendants did not submit that the representation (if made) was outside the scope of Mr Fuller’s or PPD’s actual or ostensible authority as the defendants’ agent for the sale of the Property.

90. I accept Ms Keci’s evidence of her conversation with Mr Fuller during her inspection of the Property on 18 February 2026, which was not successfully challenged in cross-examination. [13] On the basis of that evidence, I find that Mr Fuller made a representation to Ms Keci on that occasion to the effect that the development of nine units on the Adjoining Land would not block the ocean views from the Property, although it may block some parts of the view. My finding departs from the Third Representation as pleaded because it is plain from Ms Keci’s evidence that the representation was made by Mr Fuller in response to her questions about the building of nine new houses on the Adjoining Land and was not a representation in respect of development of the Adjoining Land generally.

91. To the extent that the defendants submitted that the Third Representation was made in a casual conversation such that it could not reasonably have been relied on by the plaintiffs and cannot be taken to have been made on behalf of the defendants with the intention to induce the plaintiffs to purchase the Property, I reject that submission. The Third Representation (in the terms which I have found that it was made) was made by Mr Fuller in his capacity as the defendants’ agent for the sale of the Property in circumstances where the Property had been advertised for sale in terms promoting its ocean views and Ms Keci was attending an inspection of the Property which was being conducted by PPD as part of the marketing and sale campaign for the Property. I find that the Third Representation was made by Mr Fuller in the terms which I have found above on behalf of the defendants with the intention of inducing the plaintiffs to purchase the Property.

92. As the plaintiffs acknowledged, the Third Representation (in the terms which I have found that it was made) was literally true.

93. I accept the plaintiffs’ submission that, in circumstances where the defendants were relying on the existing ocean views from the Property as a selling point in the marketing campaign being conducted by PPD on their behalf, and it was obvious from the location of the Property and the Adjoining Land and from the state of the Adjoining Land as a “hole in the ground” that the development of the Adjoining Land might impact on those views, a reasonable person in the plaintiffs’ position would have inferred that the Third Representation in the terms which I have found it was made to Ms Keci by Mr Fuller during her inspection of the Property on 18 February 2026 covered everything material that was known to the defendants and their agent about the subject matter of the future impact of the development of the Adjoining Land on the ocean views enjoyed from the Property. I therefore accept the plaintiffs’ submission that, by making the Third Representation (in the terms which I have found that it was made) without disclosing the SSD Declaration and the Proposed Development, and without disclosing that the Proposed Development would impede ocean views from the Property if constructed, Mr Fuller made the Third Implied Representation to the plaintiffs.

94. As I have said above in relation to the First Implied Representation, it is not to the point that the Proposed Development was yet to pass through a planning process and may never proceed, either in the form in which it was then proposed in general terms, or at all. There was a risk (as opposed to mere speculation) that the Proposed Development would proceed and would adversely impact on the ocean views from the Property. The Third Implied Representation was directed to the defendants’ knowledge of facts that would give rise to a risk of future obstruction of the ocean views from the Property. The Third Implied Representation was misleading because the defendants did know of facts giving rise to such a risk. [14] Contrary to the defendants’ submissions, the plaintiffs’ complaint is not one of mere non-disclosure of that knowledge. The Third Implied Representation would not have been made if the defendants and their agent had chosen to remain silent about the subject of the impact of the development of the Adjoining Land on ocean views from the Property. They did not remain silent.

95. For the same reasons as I have explained above in relation to the Third Representation, [15] I find that the Third Implied Representation was made by Mr Fuller on behalf of the defendants and with the intention of inducing the plaintiffs to purchase the Property.

96. For all of the reasons explained above, I reject the defendants’ submissions that the First Implied Representation and the Third Implied Representation were not material.

97. Mr Wallace gave frank evidence about his own inquiries concerning the development of the Adjoining Land before he and Ms Keci entered into the Contract. Because he did not know about the SSD Declaration and the Proposed Development at the time, those inquiries involved searches of publicly available records of Waverley Council, which is the relevant local government authority. [16] Ms Keci gave frank evidence about the comfort that she took from Mr Wallace’s inquiries. [17] I accept their evidence that the ocean views from the Property were a major selling point for them compared to other properties that they had inspected. I accept Mr Wallace’s evidence that he relied on what Mr Phillips told him and Ms Keci when they inspected the Property on 15 February 2026 (the First Representation, which carried with it the First Implied Representation), together with other information available from his own inquiries. [18] I accept Ms Keci’s evidence that she relied on what Mr Phillips told her and Mr Wallace when they inspected the Property on 15 February 2026 and on what Mr Fuller told her at the further inspection on 18 February 2026 (the First and Third Representations, which carried with them the First and Third Implied Representations), along with the information from Mr Wallace’s inquiries. [19] Although the First and Third Implied Representations were not the sole inducement for the plaintiffs to enter into the Contract, they were a material inducing factor, and that is sufficient. [20] In my opinion, having regard to all of the evidence given by Mr Wallace and Ms Keci about the reasons for their interest in the Property, and the questions they asked of Mr Phillips and Mr Fuller and the investigations that Mr Wallace made concerning the development of the Adjoining Land, the broad and general terms of special conditions 35 and 36 of the Contract were not sufficient to dispel the inducing effect of the First Representation, the First Implied Representation, Third Representation and the Third Implied Representation, and I reject the defendants’ submissions to the contrary. [21] I accept the evidence given by each of Mr Wallace and Ms Keci that they would not have entered into the Contract if they had known about the possibility of the Proposed Development. [22]

Conclusion and orders

98. For all of the foregoing reasons, the Court should exercise its discretion to make an order rescinding the Contract. It was common ground between the parties that, in those circumstances, an order for repayment of the deposit by the defendants to the plaintiffs would achieve restitutio in integrum between the parties.

99. The orders of the Court are:

100. Order that the contract for sale of land between the plaintiffs (as purchasers) and the defendants (as vendors) dated 18 February 2026 in respect of the property known as 25 Darling Street, Bronte, New South Wales (being the land in folio identifier X/XXXXXX) be rescinded.

101. Order that the defendants are to refund to the plaintiffs the sum of $310,000 paid by the plaintiffs as a deposit under the said contract.

102. Order that the Summons is otherwise dismissed, save in respect of all questions of costs which are reserved.

103. I am not aware of any reason why costs should not follow the event, but I will hear the parties in relation to costs.

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Endnotes

See Nadinic v Drinkwater (2017) 94 NSWLR 518; [2017] NSWCA 114 (Nadinic) at [22] (Leeming JA, Beazley P agreeing).

J D Heydon, M J Leeming, P G Turner, Meagher Gummow & Lehane’s Equity Doctrines & Remedies (5th ed, 2015) at [13-030].

[1974] 1 NSWLR 428.

[1982] 2 NSWLR 347.

Conveyancing Act 1919 (NSW), s 52A; Conveyancing (Sale of Land) Regulation 2022 (NSW).

N C Seddon and R A Bigwood, Cheshire & Fifoot Law of Contract (11th Australian ed, 2017) at [11.19]; Raiffeissen Zentralbank Osterreich v The Royal Bank of Scotland Plc [2011] 1 Lloyd’s Rep 123; [2010] EWHC 1392.

Nadinic at [23]-[25] (Leeming JA, Beazley P agreeing), referring to Tanwar Enterprises Pty Ltd v Cauchi (2003) 217 CLR 315; [2003] HCA 57 at [25] (Gleeson CJ, McHugh, Gummow, Hayne and Heydon JJ).

Nadinic at [28]-[33] (Leeming JA, Beazley P agreeing).

See [7]-[22] and [27] above.

See [12] above.

See [71] above.

See [55] above.

See [38]-[41] above.

See [12] above.

See [91] above.

See [25]-[27] above.

See [52] above.

See [19] above.

See [52] above.

See [54] above.

Campbell v Backoffice Investments Pty Ltd (2009) 238 CLR 304; [2009] HCA 25 at [31] (French CJ) and [130] (Gummow, Hayne, Heydon and Kiefel JJ).

See [51]-[52] above.

Amendments

14 May 2026

Typographical error on cover page