An appeal court has upheld a $312k damages award against a Ray White franchisee and a sales agent for misleading car space representations in the sale of a Riparian Plaza unit in 2010.
The personal liability of agent Philip Waight was never in doubt.
Entirely on his own initiative, he had promised – as an inducement to have buyer Imogen Seirlis sign up to the deal – far more than he could ever deliver.
That was to personally remove, before settlement, a concrete plinth so as to create a third car space next to the two existing and approved parking bays.
The body corporate ultimately refused consent – notwithstanding many other owners in the CBD riverfront high-rise had already made the conversion – on the basis that such action would contravene the building’s town planning approval.
The buyer’s damages – awarded in a 2013 trial – represented the difference between the value of the unit with three car spaces on the one hand and with only two, on the other.
The George Hadgelias Ray White agency had also been found liable because its print and internet advertisements described the luxury apartment as having the benefit of three car spaces.
On appeal, the Hadgelias group argued that it and Waight were simply following instructions and that seller, Vargan Hill P/L should take the fall for the buyer’s loss.
The seller had, after all, specifically instructed the agency to promote the property with three car spaces knowing there was no approval for the third: something of which the agents were never informed.
The appeal court recognised that the agents’ representations arose entirely from the seller’s instructions but ruled that the agents’ liability under the Trade Practices Act (now Australian Consumer Law) for misleading and deceptive conduct arising from the advertisements etc, was separate and distinct.
It refused to order that the seller take responsibility for the Ray White franchisee’s liability for damages to the buyer.
Notably, there was no suggestion in the judgments that the agency had included in its “appointment of agent,” any warranty on the part of the seller as to the accuracy of the seller’s instructions or any indemnity from the seller.
And the agency’s argument was made principally in the context of apportionment as between “wrongdoers”, not by way of cross claim against the seller invoking separate liability issues.
