Sanrod Pty Ltd & Ors v Dainford Ltd [1984] FCA 170

Trade Practices Act 1974, ss. 82 and 87, sub-ss. 4(2) and 52(1)

Building Units and Group Titles Act 1980-1983 (Qld), s.49

SANROD PTY LTD (First Applicant) & HENRY JOHN JAGO and BEATRIC ELEANOR JAGO (Second Applicants) -v-

IN THE FEDERAL COURT OF AUSTRALIA QUEENSLAND DISTRICT REGISTRY ) QLD G10 of 1984 GENERAL DIVISION )

AND: HENRY JOHN JAGO and BEATRIC ELEANOR JAGO Second Applicants AND: DAINFORD LTD Respondent ORDER JUDGE MAKING ORDER: FITZGERALD J. DATE OF ORDER: 19 JUNE 1984 WHERE MADE: BRISBANE

The contract dated 24 August 1981 entered into between the first applicant as purchaser and the respondent as vendor for the sale of Unit No. 2B in "Imperial Surf" and the guarantee dated 24 August 1981 and signed by the second applicants in the Fourth Schedule to that contract both to be void.

1. The respondent pay to the first applicant $50,000.00 by way of damages.

. 3, The respondent pay to the applicants their costs, including any reserved costs, of the claim and cross-claim to be taxed.

IN THE FEDERAL COURT OF AUSTRALIA ) QUEENSLAND DISTRICT REGISTRY

AND: HENRY JOHN JAGO and BEATRIC ELEANOR JAGO Second Applicants AND: DAINFORD LID Respondent FITZGERALD J. 19 JUNE 1984

By aocontract in writing dated 24 August 1981 ("the contract"), the respondent agreed to sell to the first applicant Unit No. 2B in a proposed building to be known as "Imperial Surf" which was to be constructed by the respondent. The agreed purchase price was $220,000.00. The second applicants are directors of the first applicant and Mrs Jago is its secretary. A guarantee, also dated 24 August 1981 ("the guarantee"), by

which the second applicants jointly and severally guaranteed the

performance by the first applicant of all the terms and

conditions of the contract, including the payment of all monies

payable under the contract by the first applicant, was signed by the second applicants. On the same day, 24 August 1981, the first applicant also agreed to purchase Unit 1B in "Peninsula", another building to be constructed by the respondent. The negotiations in respect of each purchase had occurred on 11 and 12 August 1981 and, on 12 August 1981, an amount of $2,000.00 had been paid as a "holding deposit" in respect of each purchase. Subsequently, further deposits were paid bringing the total paid in respect of both purchases to $42,000.00. The negotiations in respect of the purchases took place between the second applicants

and Mr David Heaney, an employee of P.R.D. Realty Pty Ltd.

corporation within the meaning of the Trade Practices Act 1974

("the Act"), that P.R.D. Realty Pty Ltd carried on the business of areal estate agent at Surfers Paradise in the State of Queensland, that P.R.D. Realty Pty Ltd was engaged by the respondent to sell units in "Imperial Surf", that Mr Heaney was a real estate salesman employed by P.R.D. Realty Pty Ltd, or that Heaney was authorised by P.R.D. Realty Pty Ltd and the respondent to make representations in relation to the sale of units in

The market for new units at the Gold Coast was extremely buoyant in August 1981 and there was very heavy demand for units in each of "Imperial Surf" and "Peninsula". "Imperial Surf" is a large building, about 40 storeys high, with a number of units on each floor. The land on which it was constructed has a frontage

to the Esplanade, which abuts the beachfront immediately north of

Surfers Paradise. Units in "Imperial Surf" went on sale at the end of July 1981 before construction of the building was commenced. By 11 August 1981, Unit 2B was the only two bedroom unit which was to be constructed at the front of the proposed building facing the Esplanade which had not been sold. As the applicants always understood would be the case, Unit 2B is on the farst floor above ground level and immediately above the main

As was always intended by the respondent, a large porte cochere has been constructed over the driveway at the main entrance to the "Imperial Surf" building. Although there are

still most desirable views from Unit 2B, the porte cochere is a significant obstruction to the view and has other disadvantages

The applicants allege that they were induced to enter

into the contract and the guarantee by prior misrepresentations made for that purpose which were fraudulently made. The falsity of the representations was sald in paragraph 7 of the Amended

Statement of Claim to stem from the following circumstances:

"(a) the Respondent had no intention at any material time of so constructing the said building so that the said unit would have such uninterrupted view;

(b) the Respondent had no intention at any material time of constructing the said building and the said unit in accordance with the said architect's impression and plans;

(c) the Respondent in fact constructed the said building with a 'porte cochere' which was not provided for in the said plans or in the said architect's impression;

(ad) the said 'porte cochere' is a large concrete structure which extends outwards from the balcony of the said unit and continues beyond the full length of the balcony of the said unit. As well as greatly impeding the view from the said unit 1t has a major and adverse impact on the aesthetic presentation of the said unit and is a potential source of annoyance and nuisance to occupants of the said unit.

(e) alternatively, the respondent always intended to construct the said 'porte cochere' or some structure in the nature thereof if it could persuade the Gold Coast City Council to permit its construction;

(f) alternatively, the respondent at no material time abandoned the proposal or prospect of constructing the said 'porte cochere' or some structure in the nature thereof provided the consent of the said Council thereto could be obtained;

(g) alternatively, the respondent failed to inform the applicants that the plans for the said building until at or about the date of the said contract contained provision for a porte cochere which structure would have the adverse affect on the view from the said unit referred to in paragraph 7(d) hereof and that the respondent maintained the intention at all material times of providing a substantial porte cochere should that be

The applicants' primary case is that the respondent's conduct constituted a contravention of sub-s. 52(1) of the Act, but it is further alleged that, in any event, and irrespective of

whether the alleged misrepresentations were fraudulent or

innocent, the applicants were entitled to rescind the contract

and the money paid is recoverable (with interest) as money had and received. If the Act was breached or the alleged misrepresentations were fraudulent, the same amount is claimed as

A number of alternative cases were pleaded by reference to the contract but argument was only advanced in relation to one

of the points raised in paragraph 26 of the Amended Statement of

(a) the said contract provided (by clause 5) that the Respondent would ensure that prior to the due date for settlement under the said contract the by-laws of the body corporate in respect of the said

building brought into existence upon registration of the said building units plan would grant to the First Applicant exclusive use for car parking of that part of the common property outlined in red on the sketch plan marked 'B' annexed to the said contract;

(e) in the premises the First Respondent was entitled to rescind the said contract."

A plea based on $5.49 of the Building Units and Group Titles Act 1980-1983 (Queensland) and an additional plea upon

which the second applicants sought to escape the guarantee even

In 1981, after the applicants had entered the contract, and in 1982, there was a dramatic down-turn in the market for new units at the Gold Coast anda sharp decline inthe value of units, including those in "Imperial Surf" and "Peninsula" which

By letter dated 20 August 1982, Mr Jago wrote to P.R.D. Realty seeking a release of the first applicant by the respondent in respect of the contracts which the first applicant had signed to purchase units in "Imperial Surf" and "Peninsula". The

reasons given by Mr Jago were less than entirely frank. The

applicants had repented of the transactions not merely because of other financial considerations but also because they had agreed to pay significantly more than the units were then worth. By that time and thereafter, the applicants were anxious to escape because of the decrease in value, irrespective of any other

An employee of P.R.D. Realty was prepared to buy the unit in "Peninsula" which the first applicant had contracted to purchase and the respondent agreed toa recission of the first applicant's contract in relation to that unit. By letter to the respondent dated 27 September 1982, the second applicants undertook on behalf of the first applicant "to effect the

settlement for the purchase of Unit 2B Imperial Surf in terms of

previously executed Sales Agreement ...". As part of the arrangement, the deposits which had been paid were all credited to the contract to purchase Unit 2B in "Imperial Surf". Thereafter, the applicant's purchase of Unit 2B in "Imperial

purchase of the "Imperial Surf" unit was to take place within 30 days after notice from the respondent or its solicitors to the first applicant or its solicitors that the Building Units Plan in respect of "Imperial Surf" had been registered and, by clause 3(b), it was agreed that settlement was to be effected at a place

to be nominated by the respondent's solicitors. By clause il,

The Building Units Plan relating to "Imperial Surf" was registered on 31 December 1982. By notice that day from the respondent's solicitors to the first applicant's then solicitors,

settlement of the purchase was required at the office of the

By letter dated 11 January 1983, the applicants' new solicitors wrote to the respondent's solicitors expressing concern at the porte cochere, requesting urgent advice whether, inter alia, the respondent had any intention to offer compensation or "any other course of action in relation thereto", and reserving "in full its rights in relation to this matter".

The letter was expressed to be without prejudice but has not been

The solicitors for the respondent replied by letter

"Whilst our client agrees that the canopy protrudes from the front of the building it disputes that the claim made by your client that it will effect the value, quality and enjoyment of a property which it contracted to purchase.

We are further instructed that the concept of the canopy was introduced when the plans were submitted to the Gold Coast City Council for approval. Accordingly the canopy has always been within the contemplation of the

Our client does not have any intention of approaching your cllent concerning compensation."

Meanwhile, by letter dated 19 January 1983, the solicitors for the respondent had forwarded documentation and information relative to completion of the contract to the solicitors for the applicants and, by letter dated 21 January 1983, the solicitors for the respondent, in their capacity as solicitors for its associated company, Dainford (Finance) Pty Ltd, had forwarded security documents in respect of an amount which the first applicant had arranged to borrow in connection

There was no attendance at settlement by or on behalf of the first applicant on 1 February 1983. Instead, by telex that day from the first applicant's solicitors to the respondent's solicitors, the first applicant notified its unwillingness to

complete the contract and required the return forthwith of all

deposit monies held under the contract by the respondent. The

The situation in relation to the first applicant's refusal to settle on 1 February 1983 is somewhat complicated by the respondent's own position at that time, although it is plain

that all parties were unaware of the respondent's position.

The property sold was described in the contract as including "car space 131", which was further identified ina

schedule to the contract. Clause 5S(a) of the contract provided:

(a) The Vendor will ensure that prior to settlement the By-Laws of the Body Corporate brought into existence upon the registration of the Plan will grant

to the proprietor for the time being of the said unit the exclusive use for car parking of that part of the common

property outlined in red on the sketch plan marked 'B' annexed hereto."

Reference has already been made to the fact that by clause 11

"Ci) The Purchaser agrees that on registration of the Building Units Plan the Vendor as sole proprietor may:

(1) Amend the By-Laws of the Body Corporate set out in the Third

Schedule to the said Act in accordance with the amendments set out in the Third Schedule hereto and any minor variations thereof as may seem desirable or necessary; and

Clause 40 of the Third Schedule to the contract was in the

"40. The proprietor for the time being of each lot in the building shall be entitled to the exclusive use for himself and his licensees of the car space or spaces the identifying number or numbers of which shall be notified in writing by Dainford Limited to the Council of the Body Corporate within

twelve months after the date of registration of the Plan ..."

On 5 January 1983, the respondent as sole proprietor had exercised its power in accordance with clause 9(i)(1) of the contract to adopt the by-laws inthe Third Schedule to the contract as the by-laws of the body corporate and the appropriate documentation was lodged in the office of the Registrar of Tities on 17 January 1983. After a requisition was attended to, the documentation was relodged on 27 January 1983 but, unknown to the respondent or its solicitors who took no step to check, registration had not occurred by the contractual date for

completion and did not take place until 4 February 1983. Had the

, respondent's solicitors been aware of the lack of registration on

1 February 1983, they could have arranged for it to be effected that day and they could have arranged for delivery of a notification under By-Law 40 before proceeding to settle the

Had the first applicant attended to complete, it would have been provided with, inter alia, a notification pursuant to By-law 40 of its entitlement to the exclusive use of car space 131. In fact, it was not until October 1983 that the respondent took any step to notify the Council of the body corporate that the proprietor for the time being of Unit 2B was entitled to the

The consequence of the first applicant's non-attendance for completion of the contract on 1 February 1983 and the respondent's position as at that time has been further complicated by the manner in which the issues between the parties have been pleaded. However, it is plain that the respondent initially treated the contract as still on foot and continued to do 30 during and after October 1983. Whether or not, as the applicants asserted in their pleading, the respondent commenced an action No. 553 of 1983 in the Supreme Court of Queensland seeking specific performance of the contract or alternatively damages in lieu of specific performance, the respondent's own cross-claim makes it clear that it treated the contract as still in existence and binding upon the parties until 20 December 1983. Further, it is quite obvious that the first applicant persisted

throughout in its refusal to complete. It 18 common ground that

. by letter dated 20 December 1983 from the respondent's solicitors to the solicitors for the applicants, the respondent elected to accept a repudiation of the contract by the first applicant which, if it matters, seems to have been considered by the respondent to have been the first applicant's telex of 1 February 1983 purporting to determine the contract rather than its

The respondent resold Unit 2B on or about 20 December

The applicants commenced the proceedings in this Court

on 14 February 1984. The respondent cross-claimed for "damages for breach of contract together with interest". The details of the respondent's cross-claim appear from paragraph 15 of its

pleaded Defence and Cross-claim which, after variations during

"15. By reason of the failure of the First Applicant to complete the aforesaid contract the Respondent has sutfered damage, particulars whereof are as follows:-

(a) Loss on resale (taking into account to credit of applicant the deposit and interest on deposit received by the respondent). ........--. $6679.62

(b) Interest on balance purchase monies of $178,000.00 at the rate of 18% from the lst February, 1983 to the 20th December, 1983. ....$28,353.21

(c) Body Corporate levies from the lst February 1983 to 20th December, 1983. wee ccc eer ere crevesce $1165.20

(ad) Rates from the lst February, 1983 to the 20th December, 1983.

see ee eee eee ee eee e teens $424.82 (e) Land Tax from the lst February, 1983 to the 30th June, 1983

(f) Professional costs in respect of the resale... ....ec cere eeeee $730.00

(g) Commission in respect of the resale. .. eee ee ee ee ee $4,375.00

damages from 24th December, 1983 to the date of Judgment.

The respondent did not cross-claim against the second

There was considerable conflict in the evidence concerning the discussions between Mr and Mrs Jago and Mr Heaney which preceded the payment of the initial deposits on 12 August 1981. Mr Heaney was a most unconvincing witness. That is not to say that he was unnecessarily untruthful; it us easy to understand how a busy real estate agent might have difficulty in remembering the detail of negotiations in relation to a particular transaction which occurred some time ago. Further, I do not unreservedly accept the evidence of either Mr or Mrs Jago. Perhaps as a result of the passage of time and discussions which they may have had in the meantime, each of Mr and Mrs Jago gave a

version of events which was slanted, in parts quite heavily, in

The main negotiations took place on 11 August 1981. Nothing which was said on 12 August 1981 1s of relevance for material purposes. The conversation on 11 August 1981 involved discussion of the proposed buildings, and reference was made to brochures relating to the "Imperial Surf" and "Peninsula"

The "Imperial Surf" brochure consisted of a hard cover

containing a number of loose sheets. On the back of the cover

The descriptions and pictorials contained herein are to depict in general, and not in particular, a residential and holiday lifestyle and some of the apartments and facilities which may be constructed in this project. The Developer reserves the right to deviate from these descriptions and pictorials

as it deems necessary or as any relevant authority may require."

No suggestion was made to either Mr or Mrs Jago in cross-examination that their attention was directed to, or that they were otherwise aware at any time prior to the contract of,

The loose sheets contained in a typical "Imperial Surf" brochure included an aerial photograph taken from the sea looking back towards the Gold Coast hinterland on which had been

superimposed an artist's impression of the proposed "Imperial

Surf" building, a "Floor Plan Levels 2-30", that is a typical floor plan in respect of inter alia the floor on which Unit 2B is

located, a "Site Plan & Floor Plan Levels P, E & 1", and other

The "Site Plan and Floor Plan Levels P, E & 1" indicates a "canopy" over the entry drive ain front of the main entrance to the building. Mr and Mrs Jago each agreed in cross-examination that the plan in question makes clear that there was to bea porte cochere constructed but denied that the copy of the brochure provided to them on 11 August 1981 included a copy of the "Site Plan and Floor Plan Levels P, E and 1". I. do not accept the latter evidence. However, I am satisfied that they adid not advert to the reference to the canopy in that plan and that their attention was not drawn to it. Further, that reference does not seem to me to indicate a porte cochere such as that in fact constructed. Neither the "Floor Plan Levels 2-30" nor the artist's impression of the "Imperial Surf" building superimposed on the aerial photograph gives any indication of any such porte cochere. (Nor, for that matter did the plans, including the plan of "Levels P, E & 1" contained in a schedule to the contract.) As at 11 August 1981, the respondent did intend to construct a similar although not identical porte cochere to that which has been constructed. Mr Heaney gave evidence that even he did not appreciate the extent of the obstruction which the porte cochere would cause to the view from Unit 2B and it is clear that there was no discussion which might have indicated to the applicant that the view from unit 2B would

or might be obstructed by another structure on the site.

The pre-contractual negotiations related to the purchase of a unit to be constructed one floor above ground level at the front of a building facing towards the Esplanade and the beach. The obvious expectation of an intending purchaser in the absence of information to the contrary would be of views from that unit unimpeded by some structure erected on that site between the unit and the Esplanade. Further, in the course of the negotiations between the second applicants and Mr Heaney, there was discussion of the views which would be enjoyed from Unit 2B. The tenor of those discussions was to confirm the ordinary expectation of Mr and Mrs Jago of unobstructed views consistent with the height of the unit. No attempt was made to disclose to them that the respondent then intended to erect any structure which would or might impede such views. There was no mention of a "canopy" nor were they referred to the relevant part of the material plan in the "Imperial Surf" brochure and, even if they had been, it would not have adequately disclosed the nature and extent of what was

intended, although 1t would have alerted them and provided an

In Parkdale Custom Built Furniture Pty Ltd v. Puxu Pty

"The conduct of a defendant must be viewed as a whole. It would be wrong to select some words or act which, alone, would be likely to mislead if those words or acts, when viewed in their context, were not capable of misleading. It 1s obvious that where the conduct

complained of consists of words, it would not be right to select some words only and to ignore others which provided the context which gave meaning to the particular words. The same 1s true of facts."

In Taco Company of Australia Inc & Anor v. Taco Bell Pty

Ltd & Org (1982) 42 A.L.R. 177, Deane and Fitzgerald JJ. said at p.199:

"The question whether particular conduct to which complaint is made is misleading or deceptive or more likely to mislead or deceive is, in the ordinary case, a question of fact to be answered in the context of the evidence as to the alleged conduct and as to relevant surrounding facts and circumstances. ..."

It 1s plain from these passages that the proper approach is not to look at individual aspects of the conduct of the respondent through its agent Heaney but to view that conduct as a whole. Further, as sub-s. 4(2) of the Act makes clear, conduct may include not only acts but omissions. I find that what was said and done in the course of the negotiations leading up to the first applicant's contract to purchase Unit 2B in "Imperial Surf" conveyed a false impression when viewed in the context of the

subject matter of the negotiations and was misleading.

It is essential to the applicants' claims that a nexus be established between the respondent's contravention of sub-s. 52(1) of the Act and the first applicant's execution of the contract and payment of monies thereunder and the second applicants' signature of the guarantee. (Neither party suggested

that the later step, involving the appropriation of the

-"Peninsula" deposit to the contract stands on any different footing from the initial payments under the contract.) For purposes of both ss, 82 and 87 of the Act, loss or damage must have been, or must be likely to be, suffered by the conduct constituting the respondent's contravention of, in this case,

In general law actions related to misrepresentation, the nexus which is similarly required between the conduct of the representor and that of the representee is traditionally described in terms of reliance and inducement. However, it is

sufficient "that the representation was one among the factors

which induced the contract": Australian Steel & Mining

Corporation Pty Ltd & Ors v. Corben £19741] 2 N.S.W.L.R. 202 at

p.207; Strauss v. Canberra Commercial Development Authority

(unreported judgment of the Full Federal Court delivered 25 November 1983 per Blackburn J.). In describing the general law

position in an unreported decision, Turelin Nominees Pty Ltd v.

Dainford Ltd, delivered on 2 March 1984, Smithers J. said in

",.. it ig to be remembered that the question 1g not whether the applicant would have entered into the contract had he known the truth but whether he was induced by what he believed to be the situation as a result of the representation, alone, or in conjunction with other factors."

"The latter part of the passage accords with other authority but it ig not clear to me that a conclusion that an applicant would have entered a contract had he known the truth may not, at least in some cases, be inconsistent with a conclusion that a misrepresentation induced the contract, or at least with a conclusion that the statutory nexus required by ss. 82 and 87 of the Act has been established between the contravention and the

However, on any view, it is plainly not enough for a respondent that there is ground for speculation or suspicion as to what an applicant might have done but for the contravention of the Act of which an applicant complains and in many cases it will be unrealistic even to attempt such an exercise. The burden of proof of the essential nexus lies on an applicant. The Court must decide on the evidence, which will often consist substantially of an applicant's assertions that he was influenced, with any opposition to the conclusion that the applicant's judgment was affected left dependent upon the surrounding circumstances and any adverse inference properly to be drawn from rejection, if that occurs, of evidence given by the

applicant: cf. Steinberg v. Federal Commissioner of Taxation

While a developer which had not engaged in a contravention of Part V of the Act would not find itself faced with the respondent's present problem, it would not need a

committed cynic to suspect that many purchasers discovered how

important were various aspects of the units which they were once

-380 anxious to purchase only after the boom had ended and the market in Gold Coast units had commenced to plummet. The strength of the respondent's case on this aspect of the matter lies in the scramble for units which was occurring at the time when the contract was entered into, the applicants' other activities, and unsatisfactory aspects of the evidence of each of

Much of the evidence of each of them left me unconvinced. They, or interests associated with them, already owned a number of other units onthe Gold Coast and had contracted to purchase still another when they caused the first applicant to purchase the subject unit in "Imperial Surf". At the same time, they caused it to sign a further contract to purchase aunit in "Peninsula" which did not enjoy a direct beach-front position. The market was at its peak. Units were being rushed by prospective purchasers and it was a matter of complaint by the second applicants that they had not, as requested, been notified earlier that units in "Imperial Surf" were for sale "off the plan". They gave versions concerning the purchase of unit 2B and the reasons associated with that purchase which were in some aspects inconsistent and otherwise

However, it is necessary to consider the particular transaction which was entered into. There were other units for

sale on the Gold Coast with other advantages and disadvantages

-and at other prices, including other units in "Imperial Surf" although there was no other two bedroom unit on the front of

"Imperial Surf" available. The second applicants wanted such a

The applicants' purpose was to acquire further Gold Coast units in the expectation that their value would increase. Their reasons for wanting a two bedroom unit on the front of "Imperial Surf" were related to that purpose. They selected features which they considered important, according to their

perception of what affected present value and potential future

increase in value. Their desire for a unit on the front in "Imperial Surf" was directly related to the expected views and their significance to value. Iam not prepared to reject the second applicants' evidence to the point of concluding that they would have caused the first applicant to contract to purchase the unit at the price even if the respondent had made full disclosure concerning its proposal to erect the porte cochere which has been constructed. On the contrary, I find that the applicants were influenced to sign the contract and guarantee and to make the payments by the respondent's misleading conduct to which

The respondent pleaded that the applicants had lost

their rights to resile from the contract and guarantee by "affirmation and/or delay" but no factual basis for such a

The respondent also pleaded that the applicants were not entitled to rely upon the alleged representations or in the alternative upon paragraph 7(c) of the Amended Statement of Claim

by reason of sub-clause 9(d) of the contract which provided:

"(d) (i) The Purchaser acknowledges that he has not relied on any representations by the Vendor's Agent or any other person or persons or corporation in and about entering into this Contract other than as set out herein and that the conditions and stipulations hereof constitute the only agreement between the Purchaser and the Vendor.

(11) The Purchaser shall be entitled to premises with measurements and toa standard and specifications substantially identical with those set out in the said specifications and plans."

It is not presently necessary to consider whether, under the general law, if the applicants are to set up misrepresentations in the face of the sub-clause, they must establish a case of

fraud: gee, for example, Silverton Limited v. F.S. Carroll Pty

Ltd €19831 Qd.R. 72; Brisbane Unit Development Corporation Pty

Ltd v. Robertson £19833 2 QOd.R. 105 at p.108. Certainly, the

sub-clause provides no defence to a claim for fraud "unless, perhaps, the plaintiff knowingly and with advertence to the question of possible fraud bargains away his rights": Jennings v. Zilahi-Kiss C1972] 2 5.A.S5.R. 493 at p.510. On the other hand, the latter part of sub-clause 9(d)(i) may well be effective to meet claims for breach of alleged verbal warranties: ibid.

That aside, there seems to me scope for considerable debate

concerning the effect of such provisions and the juristic

foundations for their operation: see my unreported judgment in

Sinclair v. W.R. Carpenter Australia Pty Ltd delivered 19 October

1983 and the unreported judgment of Derrington J. in the Supreme

Court of Queensland in Gold Coast Carlton Pty Ltd v. Kamalesvaran

delivered on 16 December 1983. It is not immediately obvious to me why such a clause might not fall with the remainder of a contract proved to have been induced by innocent misrepresentation, but it is unnecessary to pursue such questions. It is sufficient for present purposes that no argument wag advanced that sub-clause 9(d) of the contract might operate to affect the applicants' statutory rights pursuant to the Act. In any event, it is plain that the respondent at all

material times knew and intended the construction of such a porte

The result of these findings is that the applicants are entitled to succeed and the respondent must in consequence fail. The applicants are entitled to have the contract and guarantee declared void and to damages under the Act. In the circumstances, there is no occasion to consider the other bases of the applicants' claim, or to deal in detail with the cross-claim. If the matter is to go further, findings of fact have been made in relation to all contested issues argued before

me which I have been able to identify save one to which I shall

» Bach of the parties called valuers. Even ina market such as existed in relation to units on the Gold Coast in August 1981, there had to be an upper-limit to the price which even the foolhardy would pay. No doubt a successful developer would assess that price and charge accordingly. The price list for "Imperial Surf" reflected the obvious commercial reality that a view from a unit is significant to its value. I am unconvinced by the argument that the porte cochere would have made no difference to the saleability or price achievable then or later when, in due course, there was a glut of units for sale. I find that, at all material times, the porte cochere significantly

It remains to consider the quantum of the applicants' damages which was not made the subject of any detailed argument. The starting point is the total paid by way of deposits credited to the contract, namely $42,000.00. The applicants also claimed

an amount refcrred to as "interest", presumably related either to the cost of borrowing the deposit monies or to lost income from

the investment of those sums. The respondent, far from disputing

such a claim, itself contended for a power in the Court to award

interest pursuant to 3.72 of the Common Law Practice Act

1867-1981 (Queensland), as applied by s.79 of the Judiciary Act

It is unnecessary to hold that the Court has such a power. Questions of both foreseeability and causation enter upon the question of interest on, or by way of, damages at common law:

see Simonius Vischer and Co v. Holt and Thompson £1979] 2

N.S.W.L.R. 322 and it is by no means unlikely that similar problems, however described, will have to be confronted in determining the ambit of ss. 82 and 87 of the Act: see Hellyer Drilling Company v. MacDonald Hamilton & Co Pty Ltd (1983)

A.T.P.R. 40-414. An example of the application of the common law

attitudes is to be found in T.N. Lucas Pty Ltd v. Centrepoint

However, whatever may be the position otherwise in respect of damages under the Act, I can myself perceive no difficulty in accepting that, when money is paid in consequence of misleading conduct, the loss suffered by that conduct includes not only the money paid but also the cost of borrowing that money or the loss from its investment, as the case may be: cf. Frith &

Anor v. Gold Coast Mineral Springs Pty Ltd & Ors (1983) A.T.P.R.

40-339; affirmed (1983) A.T.P.R. 40-394. Interest awarded as a

component of damages in such circumstances is not for loss of the use of the money awarded as damages, but for loss of the use of the money paid over in consequence of the misleading conduct and

The absurdity of any other conclusion is well indicated by the present case. The guilty respondent in fact had the use of the deposit monies and received interest on them to the date

of termination of the contract totalling $6,320.38. It will

scarcely advance the object of the Act to provide a corporation nr which engages in misleading conduct with a narrow construction of

ss. 82 and 87 upon which it can rely to retain the fruit of any monies which it acquires by its contravention while denying an innocent party who has done no more than make payments the right

to recover anything more than has actually been paid over.

There is very little evidence on which to calculate an appropriate amount. Having regard to the interest received by the respondent on the deposit and the date of termination, I find

the applicants' total damages, including the deposits paid, at $50,000.00.

The Court orders that the respondent pay to the first applicant $50,000.00 by way of damages under the Act and declares void the contract and the guarantee. The respondent's cross-claim is dismissed. The respondent must pay to the applicants their costs, including any reserved costs, of the

claim and cross-claim, to be taxed. I ceriify that this and the al Ss precedin3 reges are a tiue copy of the reasons for jucd-ment herein of His Honour