44 The six flats in the building have been surveyed by the Defendant's surveyors to determine their floor areas. There is no dispute about the accuracy of the results. The surveyor made the calculations on two bases: that the relevant area was the total area contained within the inside faces of the external walls of the building, as would be done in the case of a strata plan; that the relevant floor area excluded the space occupied by the internal walls within each unit. The Defendant's valuer, Mr P.I. Phippen, regarded the first basis of valuation, the strata plan, the more appropriate basis and I agree. Calculated on this basis, the areas of the flats, excluding balcony areas, were as follows: Flat 1: 55.5m2, Flat 2: 56.2m2, Flat 3: 56.4m2, Flat 4: 56.1m2, Flat 5: 56.5m2, and Flat 6: 58.2m2.
45 There is a dispute about whether the balcony areas should be included or excluded in the calculation of the areas of the flats. The Defendant's valuer, Mr Phippen, says that the balconies would normally be excluded by surveyors when determining the floor area of buildings in accordance with the Building Code of Australia; he says that that measurement system has been accepted by the property industry as the standard of measurement for residential property. On the other hand, Mr Torpy, an experienced real estate agent, says that the balconies would normally be included when giving estimates of areas in advertisements for units.
46 In my opinion, whether the balconies should be included or excluded for the purpose of identifying the content of the representations in the flyer depends first and foremost upon what impression is given by the content of the flyer, not upon what surveyors or developers might understand as commonly accepted industry practice. This is because the flyer is a relatively informal document addressed, not to a particular audience with a common understanding of accepted practice but to the world at large.
47 When one looks at the sketch plan on the flyer one sees that the balcony is enclosed with the same heavy dark lines which identify the four external walls of the flat as well as the internal walls. No dimensions are shown for the balcony, but neither are dimensions shown for the kitchen and bathroom. Looking at the sketch plan one gets the impression that the flat is represented as a rectangle, including the balcony, rather than as a hexagon, which would be the case if the balcony were excluded. In my opinion, the sketch leads the reader to believe that the flat as described in the flyer and in the representations about its dimensions includes the balcony.
48 When one adds the areas of the balconies to the areas of the flats as calculated by the surveyor one arrives at the following: for Flat 1: 60.1m2, for Flat 2: 56.2 m2, for Flat 3: 60 m2, for Flat 4: 59.8 m2, for Flat 5: 60.1 m2, and for Flat 6: 59.8 m2.
49 An area of 60 m2 is 5% less than an area of 63 m2. Accordingly, in the case of Flats 1 and 5 the actual area was slightly less than 5% short of the area represented; for Flat 2, which had no balcony, it was more than 5% short; for Flat 3 it was 5% short, and for Flats 4 and 6 it was slightly more than 5% short.
50 Mr Phippen says "approximately" means within half a square metre either way of the specified figure; he founds this assertion on the practice of rounding up or down to the nearest whole number, which he says is common in the real estate industry. I do not accept this construction.
51 "Approximately" is a word which has no defined limits of tolerance; it means "more or less" but how much more or less is within the limits of tolerance is really a matter of impression which depends upon the particular circumstances of the case including the nature of the thing to be measured and the significance and consequences of degrees of departure from the stated approximate figure: see e.g. Louis Dreyfus & Cie v Parnaso Cia Naviara SA (The Dominator) [1960] 2 QB 49, at 55, 59.
52 I do not think that it is appropriate to judge the limits of tolerance in the present case by the use to which the Defendant itself wished to put the flats and by reference to the consequences to the Defendant of degrees of departure from the stated approximate figure. The statement as to approximate area was not made in a contract between the Plaintiff and the Defendant; it was made in a flyer addressed to all who might be interested in the property, for whatever purpose. The flyer expressly contemplated that investors or developers might be interested. Some investors might wish to let the flats out in their present condition, others might wish to renovate them in various ways; some developers might wish to alter the existing building substantially, others might wish to demolish it entirely - the possibilities are very many and varied.
53 I think that the most useful evidence directed to this issue is given by Mr Phippen who has done an exercise valuing the difference between the current market value of the land at the time of auction with a total floor space calculated on 63m2 per flat and the current market value calculated on an area per flat which excludes the balconies, an average of 56.32m2 per flat. The total discrepancy in area thus arrived at is 40.1m2. He values the discrepancy by reference to a value of $10,000 per square metre of floor space, based upon comparable sales, so that in money terms the value of the discrepancy is $401,000.
54 Even if one added in the balcony areas to the areas of the flats, the value of the discrepancy would be near enough to $220,000. I do not think that this discrepancy could be regarded as trivial or insignificant. Having regard to the consequences in terms of the market value of the discrepancy resulting from the misstatement in the approximate areas of the flat, I do not think that the errors fall within the limits of tolerance of the word "approximately 63 square metres" .
55 This conclusion does not, of course, determine this issue. The question is: did the Plaintiff represent that the area of each flat was "approximately 63 square metres" ? I should note at this point that Mr R.W. Tregenza of Counsel, who appears for the Plaintiff, concedes that the statements of the real estate agent made in the flyer are to be attributed to the Plaintiff for the purpose of determining liability.
56 Ms Merkel submits that the flyer plainly represented that the area of each flat was "approximately 63 square metres" and that that statement should be read in isolation from the rest of the document because the statement is not qualified in the same breath, as it were, and the eye is not naturally drawn to anything else in the document which qualifies the statement.
57 Mr Tregenza submits that one cannot read the statement as to area in isolation; one must read it in the context of the whole document, including the statements which appear at the foot of both pages.
58 I agree with Mr Tregenza's submission. It is true that the document is a flyer and is fairly informal in character. However, its subject matter is not a suburban family home but a property clearly worth some $3M which was going to be of interest to investors and developers. Anyone contemplating a purchase of such a character and of such a magnitude, particularly with redevelopment or investment in mind, would reasonably wish to know as much as possible about the details of the proposition. In particular, anyone having in mind plans for the property which depended upon existing dimensions and floor areas would wish to have as much information as possible upon that subject. There was no survey available; the flyer was the only document which gave any such information. One would reasonably expect the document to be read closely.
59 In these circumstances, the "ordinary reader" interested in a purchase of this type of property at a price of such magnitude would see not only the statement about the area of the flats but also the statements at the foot of both sides of the flyer, especially the statement: "All measurements are approximates only. While we trust them to be correct we cannot guarantee them." As Mr Baudinet said (see paragraph 15) "That's actually a reasonably strong statement" .
60 In my opinion, one cannot simply wave away the words of warning and qualification which appeared in the flyer, particularly on the reverse beneath the sketch plan. The ordinary reader reading this flyer and reading the statement as to floor area in the light of the qualification that no guarantee could be given as to its accuracy would naturally understand that what was being represented was, not that the floor area was "approximately 63 square metres" , but that the Plaintiff, by her agent, believed that the area was "approximately 63 square metres" but could not guarantee the accuracy of that figure.
61 Was that representation false, misleading or deceptive? In order to show it to be so, the Defendant must prove either that the Plaintiff or her agent did not actually hold the belief that the figure was approximately accurate, or that there was no adequate foundation upon which that belief could be held: Global Sportsman Pty Ltd v Mirror Newspapers Ltd (1984) 2 FCR 82 at 88. In my opinion, the Defendant has not proved either of these facts.
62 The Plaintiff said that she did not know what the area of the flats was; she relied entirely on Mr Torpy, who had been managing the flats for many years. That reliance was reasonable. Mr Torpy was a real estate agent of long experience and he was very familiar with the property. The Plaintiff was not recklessly indifferent to the truth or falsity of what was said about the approximate area of the flats in the flyer: she had reasonable grounds for believing that the approximation given by Mr Torpy was accurate.
63 Mr Torpy said that to work out the approximate area of the flats he paced out their dimensions rather than measuring them with a tape measure. While this is clearly not the most reliable form of measurement, it is one commonly used as a rough guide. Mr Torpy is, as I have said, a real estate agent of long experience. He said that he believed that pacing out the dimensions in the way in which he did would give him a figure which was "pretty close" . He was not shaken in this evidence and nothing was put to him or otherwise demonstrated which would make his evidence inherently improbable.
64 I accept that Mr Torpy actually and honestly held the belief that pacing out a flat to arrive at an approximate area had given him a figure which was "pretty close" to accurate. The fact that he was mistaken in that belief does not make the representation that he held the belief false, misleading or deceptive.
65 This finding as to the nature and quality of the representation in the flyer is sufficient to dispose of the Defendant's claim based upon misrepresentation, whether founded in tort or upon s.42 FTA. However, for the sake of completeness I should deal with the other issues raised.