The off-the-plan buyers of a luxury inner city high rise have convinced a court to void their $9.58 mil buy on the grounds a misleading artist’s impression of how the unit would look on completion.
Walter and Nina Ripani first visited the display suite at the Victoriana development in Queens Rd Melbourne in January 2017.
When a hard bound brochure containing artists’ impressions of aspects of the completed project were provided, the image of unit 14.01 depicting a large free span opening between the living areas and the outside terrace caught their attention.
“That’s what’s we’ve been looking for,” they exclaimed.
The artist’s impression had been prominently utilised by marketing agents CBRE as a ‘hero render’ for the sales campaign.
They signed up for the buy from developer Century Legend Pty Ltd, in April 2017 subject to agreement on bespoke internal floor plans.
After numerous discussions with the developer’s architects concerning floor plan options, a contract – annexing floor plan Option E – came into force at the end of August.
Contested by the buyers, was the architect’s recollection that she had informed them – before the contract came into force – that the free span opening onto the terrace could not be constructed 12 m wide as depicted in the image but rather would likely be only 3m to 4m in width.
The Ripanis’ case was that such news was withheld until June 2019 when they were told the opening would be only 3.4 m wide whereupon they resolved not to complete the purchase and to seek relief from the court.
They filed proceedings in the Federal Court in April 2020 claiming the ‘hero render’ was misleading or deceptive and a breach by the developer of Australian Consumer Law s 18 which entitled them to an order under s 237 that that the contract be rescinded ab initio.
When the matter came before him, Justice Paul Anastassiou rejected the developer’s contention that the hero render did not convey any meaningful representation.
The ‘hero render’ – which depicted the indoor and outdoor areas flowing seamlessly into each other when the doors were drawn back – was, according to the judge, “properly characterised as a conceptual image” with no width or height specification in relation to the terrace opening.
That it was an “artist’s impression” without dimensions did not result in it being “meaningless or incapable of being reasonably relied upon by prospective purchasers” because it “clearly communicated that there would be a large free span opening between the terrace and the internal living areas”.
“The advantage of imagery over language is that an image, whether or not an ‘artist’s impression’, is capable of conveying meaning holistically,” observed His Honour.
“Accordingly, in my view, the words ‘artist impression’ are incapable, either alone or in combination with disclaimers and exclusions clauses of curing the misleading character of the representations”.
It emerged in the trial that the developer had in fact been told by its architects that the hero render was misleading and that it was “extremely important” that it make potential purchasers aware of the actual door opening and transition.
Moreover, CBRE’ selling agent Mr Tran was of the view – and conveyed that view to prospective purchasers – that the image depicted how the unit would be finished.
Having regard to that evidence, Justice Anastassiou concluded the developer “knew prior to using the hero render it was impossible to construct apartment 14.01 in a way that would bear a reasonable resemblance to the render.”
A disclaimer in the brochure that the render was “a visual aid and does not necessarily depict the finished state of the property or object shown” – which only appeared on page 96 with no prominence – was, he ruled, insufficient to rectify the “stark disparity between the representation and the true state of affairs” without having been specifically drawn to the buyer’s attention “in the clearest possible way”.
Neither was a scale model that showed mullions installed in the 12 m span, a sufficient counterpoint to have corrected the impression created by the render.
Evidence to neutralise the misleading representations conveyed by the artist’s impression came from architect Kate Hart who swore she had discussed the width and location of doorways with the buyers in May or June 2017.
Such discussion was not however referred to the developer’s defence or the architect’s witness statement and it was not put to either Mr or Mrs Ripani that she had told them that the maximum opening was going to be 3 m to 4 m.
His Honour went on to reject her account on the basis she had not made any contemporaneous records of the discussions.
He found that had the Ripanis been told that the apartment could not have been constructed to the design depicted in the render, they would not have contracted to purchase it.
Following the conclusion of the hearing, in August 2021, the developer’s solicitors notified of registration of the plan and called for settlement. Justice Anastassiou’s associate wrote to the parties advising that the judge expected the present status quo to be maintained by having settlement deferred pending his judgment.
When he delivered his judgement, it ruled entirely in favour of the buyers and ordered the return of their deposit.
An appeal has been filed and an application to stay the orders pending the hearing and determination of the appeal, has been made.