Federal Court of Australia

Ripani v Century Legend Pty Ltd [2022] FCA 242

File number:

VID 266 of 2020

Judgment of:

ANASTASSIOU J

Date of judgment:

18 March 2022

Catchwords:

CONSUMER LAW misleading or deceptive conduct contract of sale for apartment sold ‘off-the-plan’ – representations conveyed by a computer generated image known as a render – render contained in marketing brochure, exhibited at display suite and on website for development representations also made by real estate agent on behalf of developer whether representations sufficiently precise to found contravention of s 18 of the Australian Consumer Law (ACL) – relevance of inscription ‘artist impression’ on render – relevance of disclaimers and exclusion clauses – whether representations were made as to a future matter without reasonable groundswhether representations misleading or deceptive or likely to mislead or deceive whether Applicants relied on representations in entering into contract of sale whether misleading representation cured by statements made by architect prior to Applicants entering into contract of sale relevance of objective circumstances to evidence of disinterested witness

CONSUMER LAW remedies – whether appropriate to grant relief in the nature of statutory rescission pursuant to s 237 and s 243(a) of ACL – whether Applicants suffered or were likely to suffer loss or damage because of contravening conduct of developer loss in value of real estate property – loss or damage suffered by Applicants – whether entry into contract of sale constituted loss or damage in particular circumstances – discretionary considerations – alternative claim for rescission in equity – differences between rescission in equity and statutory relief in the nature of rescissioncontract of sale rescinded

Legislation:

Competition and Consumer Act 2010 (Cth), Sch 2, Australian Consumer Law, ss 4, 18, 236, 237, 243

Cases cited:

A H McDonald & Co Pty Ltd v Wells [1931] HCA 24; 45 CLR 506

Alati v Kruger [1955] HCA 64; 94 CLR 216

Australian Competition and Consumer Commission v GlaxoSmithKline Consumer Healthcare Australia Pty Ltd [2019] FCA 676; 371 ALR 396

Australian Competition and Consumer Commission v Productivity Partners Pty Ltd (trading as Captain Cook College) (No 3) [2021] FCA 737

Australian Competition and Consumer Commission v TPG Internet Pty Ltd [2013] HCA 54; 250 CLR 640

Australian Securities and Investments Commission v La Trobe Financial Asset Management Ltd [2021] FCA 1417

Bonham as Trustee for the Aucham Super Fund v Iluka Resources Ltd [2022] FCA 71

Butcher v Lachlan Elder Realty Pty Ltd [2004] HCA 60; 218 CLR 592

Campbell v Backoffice Investments Pty Ltd [2009] HCA 25; 238 CLR 304

Cargill Australia Ltd v Viterra Malt Pty Ltd (No 28) [2022] VSC 13

Clark Equipment Australia Ltd v Covcat Pty Ltd (1987) 71 ALR 367

Demagogue Pty Ltd v Ramensky (1992) 39 FCR 31

Harvard Nominees Pty Ltd v Tiller (No 4) [2022] FCA 105

Harvard Nominees Pty Ltd v Tiller [2020] FCAFC 229; 282 FCR 530

Henjo Investments Pty Ltd v Collins Marrickville Pty Ltd (No 1) (1988) 39 FCR 546; 79 ALR 83

HW Thompson Building Pty Ltd v Allen Property Services Pty Ltd (1983) 48 ALR 667

National Exchange Pty Ltd v Australian Securities and Investments Commission [2004] FCAFC 90; 49 ACSR 369

Oliana Foods Pty Ltd v Culinary Co Pty Ltd (In Liq) [2020] VSC 693

Perri v Coolangatta Investments Pty Ltd [1982] HCA 29; 149 CLR 537

Preda trading as Parramatta Diagnostic Imaging v Australian Imaging and Ultrasound Distributors Pty Limited [2007] NSWSC 155

Redgrave v Hurd (1881) 20 Ch D 1

Tanwar Enterprises Pty Limited v Cauchi [2003] HCA 57; 217 CLR 315

Walplan Pty Ltd v Wallace [1985] FCA 619; 8 FCR 27

Wardley Australia Ltd v Western Australia [1992] HCA 55; 175 CLR 514

Dal Pont G, Equity and Trusts in Australia (7th ed, Thomson Reuters, 2019)

Heydon J D, Leeming M J, Turner P G, Meagher, Gummow & Lehane’s Equity: Doctrines & Remedies (5th ed, LexisNexis Australia, 2014)

Young, P W, Croft, C E, Smith M L, On Equity (Thomson Reuters, 2009)

Division:

General Division

Registry:

Victoria

National Practice Area:

Commercial and Corporations

Sub-area:

Regulator and Consumer Protection

Number of paragraphs:

255

Date of hearing:

27 to 29 January 2021

4, 5, 8, 9, 19 February 2021

24 to 26 March 2021

8 April 2021

Counsel for the Applicants:

Mr S W. Stuckey QC

Solicitor for the Applicants:

Zervos Lawyers

Counsel for the Respondent:

Ms G. Costello QC with Ms E. Levine

Solicitor for the Respondent:

Patrick & Associates

ORDERS

VID 266 of 2020

BETWEEN:

WALTER RIPANI

First Applicant

NINA RIPANI

Second Applicant

AND:

CENTURY LEGEND PTY LTD

Respondent

order made by:

ANASTASSIOU J

DATE OF ORDER:

18 March 2022

THE COURT ORDERS THAT:

1.    The contract of sale for the purchase by the Applicants of apartment 14.01 at 20-21 Queens Road, Melbourne, made on or about 29 August 2017, be rescinded.

2.    By no later than 4:00pm on 25 March 2022, the Respondent return to the Applicants the bank guarantee provided on behalf of the Applicants by the Bank of Melbourne on 29 August 2017 in lieu of a deposit.

3.    The Respondent pay damages and pre‑judgment interest to the Applicants in an amount to be determined in accordance with paragraph 4 of these orders.

4.    By no later than 4:00pm on 25 March 2022, the parties file:

(a)    an agreed minute of the sums payable for damages and pre-judgment interest in accordance with these reasons for judgment; or

(b)    failing agreement, the parties are to file separate minutes and submissions, limited to four pages, concerning their respective calculations of damages and pre-judgment interest payable in accordance with these reasons.

5.    The Respondent pay the Applicants’ costs of and incidental to the proceeding, to be agreed and in default of agreement assessed on a standard basis.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

ANASTASSIOU J:

Introduction

1    This case concerns the sale of an apartment ‘off-the-plan’, specifically whether the purchasers were misled or deceived by statements made by or on behalf of the vendor concerning certain features of the apartment prior to the parties entering into a contract of sale. The vendor is the Respondent to this proceeding, Century Legend Pty Ltd, which traded under the business name JD Group during the relevant period. The purchasers are the Applicants, Mr Walter Ripani and Mrs Nina Ripani (collectively, the Ripanis).

2    The Ripanis purchased an apartment off-the-plan to be constructed at 20-21 Queens Road, Melbourne. Century Legend was the developer of the site upon which it proposed to construct a multi-storey apartment building to be known as the Victoriana. Mrs and Mr Ripani chose to purchase what was to become apartment 14.01, one of the premium apartments to be located on the 14th floor on the western side of the building. On 1 April 2017, the Ripanis signed a contract under which they agreed to pay $9.58 million for the apartment, subject to a floor plan satisfactory to them being agreed.

3    In 2016, Century Legend prepared promotional materials to be used in marketing the Victoriana and to assist with making ‘off-the-plan’ sales. It engaged real estate agents CBRE to assist it in marketing the apartments and established a display suite located at the site, at which promotional materials, as well as a scale model of the Victoriana, were available for inspection by prospective buyers. These materials included a hard-bound brochure containing various images, known as ‘renders’, of what the development, or aspects of it, would look like once constructed. Those renders were produced by a company called Squint Opera, which was engaged in the business of generating computer graphics for such purposes.

4    Promotional materials of this kind were essential if Century Legend was to be able, practically, to sell the apartments ‘off-the-plan. At the centre of this proceeding is the question of what, if any, reliance the Ripanis could reasonably place on one of the renders in particular. When considering this question, it must be borne in mind that there was of course no building to inspect, only indicative floor plans, a scale model of the Victoriana and renders of various aspects of the building and of apartments within the development. The renders included images of external and internal areas. Necessarily, the renders were artistic impressions of what the Victoriana would look like on completion. The promotional material also contained indicative floor plans for several of the apartments within the 16 levels of the Victoriana. I shall discuss the floor plans and their significance below.

5    One of the images, in particular, caught the attention of the Ripanis. It was an image of apartment 14.01, a copy of which is reproduced below and also at Annexure I. The render depicts the western aspect of apartment 14.01, specifically a large free span opening between the inside of the living areas and the outside terrace. In the image, there is no differentiation between the interior floor level and the external terrace. The Ripanis contend that the render therefore depicts a space where the indoor and outdoor areas flow seamlessly into each other when the doors are drawn back.

6    Though this render was specific to apartment 14.01, it was also selected by Century Legend as an image to be used more widely in promoting and marketing the Victoriana. The use of this particular render as a visual medium by which to depict certain features and characteristics of the Victoriana is evident from the prominence given to it in the marketing brochure for the high rise premium apartments, of which apartment 14.01 was one. This render was also displayed as a large exhibit on the wall of the display suite established at the development site.

7    The use of certain images for broader marketing or branding purposes is common in relation to off-the-plan sales. I shall refer below to the evidence of Mr Kevin Tran of CBRE concerning the use of this image, which Mr Tran referred to as one of the ‘hero shots because of its prominence in the marketing of the Victoriana to prospective purchasers. Senior Counsel for the Ripanis subsequently described the image as the ‘hero render’, which is the phrase I adopt in my reasons.

8    The ‘hero render is of central relevance to the bases upon which the Ripanis seek to be relieved of their contractual obligations to complete the purchase of apartment 14.01. Save for some oral representations made by Mr Tran of CBRE to the effect that the ‘hero render was an image of apartment 14.01, and that the Ripanis could expect the apartment to conform to the render, the image itself was the principal medium by which the representations about which the Ripanis complain were made. The Ripanis’ case is essentially that the representations conveyed by the ‘hero render were misleading or deceptive within the meaning of s 18 of the Australian Consumer Law (ACL), being Sch 2 to the Competition and Consumer Act 2010 (Cth).

9    The Ripanis claim for relief consequent upon a contravention of s 18 of the ACL turns upon essentially three questions. First, did the render convey the representations as alleged by them, essentially that there would be a free span opening and seamless transition between the internal living areas of the apartment and the terrace? Second, did the Ripanis rely upon any representations conveyed by the render at the time they entered into the contract to purchase the apartment? Third, would the Ripanis have entered into the contract to purchase apartment 14.01 had they not believed at the time that the apartment would be constructed in conformity with the image depicted in the render?

10    Leaving aside the effect of disclaimers and certain contractual exclusion clauses, to which I shall refer below, if the answers to each of the first and second questions is yes, and the answer to the third question is no, in my view the Ripanis are entitled to an order in the nature of rescission of the contract of sale pursuant to ss 237 and 243(a) of the ACL, or, alternatively, to an order in equity that the contract of sale be rescinded.

11    The statutory power to make an order in the nature of rescission is relevantly pre-conditioned by two matters: first, it only arises on the application of the Ripanis if they suffered, or are likely to suffer, loss or damage because of the contravening conduct; and second, the order must be one that the court considers will compensate the Ripanis, in whole or in part for the loss or damage, or prevent or reduce the loss or damage suffered, or likely to be suffered: see s 237(2) of the ACL; Harvard Nominees Pty Ltd v Tiller [2020] FCAFC 229; 282 FCR 530 at [18]-[21] (Lee, Anastassiou and Stewart JJ). For reasons I shall discuss below, I am satisfied of those pre-conditions in this instance. In any event, the Ripanis are concurrently entitled to an order in equity for rescission of the contract of sale.

12    Century Legend’s first level of defence to the Ripanis’ claim is that the render did not convey any meaningful representation. I reject that defence. Further, I accept that the render conveyed in substance the principal representations alleged by the Ripanis. I shall discuss below the representations as pleaded. I also find that there was no reasonable basis for making the representations. This is because Century Legend knew, prior to using the hero render in connection with marketing the apartments at the Victoriana, including apartment 14.01, that it was impossible to construct apartment 14.01 in a way that would bear a reasonable resemblance to the render. I reject the evidence of Mr Peter Hu (Sales Manager at Century Legend) to the contrary.

13    I will also refer below to the evidence of Mr Cameron De Mooy, a project manager employed by the builder of the Victoriana, Hickory Group, with responsibility for the day to day building works at the development site. Mr De Mooy was called as a witness by Century Legend and explained the reasons why it was impossible to construct the free span opening depicted in the render. I shall also refer below to the warnings Century Legend was given by its architects, RotheLowman, concerning the use of the render in marketing the Victoriana. As a result of those warnings, I find that Century Legend knew of the impossibility of constructing apartment 14.01 in the manner depicted in the hero render before it was deployed for marketing purposes.

14    I find that the representations made by or on behalf of Century Legend were misleading and deceptive and further that they did not have reasonable grounds for making those representations. In particular, I find that Century Legend engaged in misleading and deceptive conduct in contravention of s 18 of the ACL by publishing (that is to say, using) the hero render for the purpose of marketing the Victoriana generally, and for the purpose of marketing apartment 14.01 in particular; and, relevantly to the present claim, by providing the hero render to the Ripanis in the circumstances to which I shall refer.

15    The second question referred to above at [9] concerns the factual issue of whether the Ripanis relied upon the representations conveyed by the render when they decided to purchase the apartment. Century Legend revealed at trial, for the first time, that it would contend that any misapprehension on the part of the Ripanis based upon the render was corrected prior to them entering into the contract to purchase apartment 14.01. Ms Kate Hart, an architect employed by RotheLowman, gave evidence to the effect that she informed the Ripanis in May or June 2017, prior to the contract being entered into, that the free span opening for apartment 14.01 could not be constructed in accordance with what was depicted in the render. Indeed, Ms Hart gave evidence that she told the Ripanis there would be multiple openings between the interior and exterior of the apartment and the main opening to be centred on the fireplace could not be more than about 3 to 4 metres width.

16    I shall refer below to the evidence given by the Ripanis and Ms Hart concerning discussions between them prior to, and following, the purchase of the apartment. In summary, for introductory purposes, Century Legend led evidence from Ms Hart that she had extensive dealings with the Ripanis both before and after the contract of sale was signed, principally to assist the Ripanis in specifying, or ‘customising, the internal floor plan of apartment 14.01 to meet their particular requirements. The discussions between the Ripanis and Ms Hart concerned a variety of features of the internal design of the apartment, the selection of particular appliances, as well as certain features of the layout of the western terrace. These discussions occurred by reference to a number of proposed floor plans prepared by Ms Hart, usually following discussions with the Ripanis.

17    As I shall explain, these discussions focused on details of importance to the Ripanis in relation to the floor plan and bespoke fit out of the apartment. In retrospect, the discussions proved to be a ‘red-herring’ so far as the Ripanis real interest in the apartment was concerned. The feature which was of most significance to the Ripanis; namely, the free span opening between the internal living areas and the western terrace, was not a subject of discussion between the Ripanis and Ms Hart. Mrs Ripani unequivocally denied having any conversation with Ms Hart in relation to the width, or location, of the door opening on the western façade of apartment 14.01 prior to purchasing the apartment. Mr Ripani encapsulated the Ripanis’ understanding when he said in his evidence he thought it “was a given” that the apartment would have a large opening onto the terrace and therefore did not raise the question of the opening prior to entering into the contract of sale.

18    I reject Ms Hart’s evidence concerning statements allegedly made by her to the Ripanis, which, if accepted, would have cured the misleading representations conveyed by the render so far as the Ripanis are concerned. Conversely, I accept the evidence given by each of Mrs Ripani and Mr Ripani to the effect that they believed that the opening on the western side of the apartment would conform in substance to the image depicted in the ‘hero render’.

19    I also accept the evidence of Mr Tran, who was called as a witness by the Ripanis. Mr Tran gave evidence that his usual practice was to sell ‘off-the-plan’ apartments by reference to marketing materials, including any visual renders, building models, floor plans and other materials and that such materials were available in the Victoriana display suite. Indeed, Mr Tran said that he specifically told the Ripanis that the ‘hero render depicted apartment 14.01. Mr Tran also gave evidence that although the opening was not specifically discussed, the Ripanis were attracted to the large entertaining area and transition from the living areas to the terrace.

20    Having regard to these matters, I find that the Ripanis understanding at all relevant times prior to entering into the contract of sale was that apartment 14.01 would be constructed in conformity with the render, and, in particular, that the scale of the free span opening to the terrace would be as depicted in the render, allowing for the fact that it is impressionistic.

21    In relation to the third question posed above at [9], I accept the Ripanis’ evidence that the opening between the living areas and the western terrace was a feature of the apartment that was of significant attraction to them. Their evidence is consistent with Mr Tran’s evidence that the Ripanis were specifically looking for an apartment with a suitable outdoor area for entertaining guests and were attracted to the “type” and “feel” of the apartment. It is also consistent with Mr Tran’s evidence that Mr Ripani pointed to the ‘hero render’ and said words to the effect: “Look, you know, I’m after something like that.” I find that had the Ripanis been told that the apartment would, or could, not be constructed to the design depicted in the render, they would not have contracted to purchase it.

22    I note at this point, it was not until a considerable time after the Ripanis had agreed to purchase the apartment that they were told the truth concerning the opening to be constructed between the internal living areas and the terrace. After the Ripanis had entered into the contract, they were told different things at different times about what they could expect in relation to the width of the opening. In my view, the Ripanis were surprisingly tolerant of having their expectations disappointed after being told for the first time on 9 October 2018, more than a year after they entered into the contract, that the free span opening depicted in the render was not achievable. However, at that time the Ripanis were told that a free span opening of 6.4 metres might be achievable. When it was finally revealed to them on 3 June 2019 that the opening would be only 3.4 metres, they resolved not to complete the purchase and to seek relief from the Court. I shall refer in further detail below to what the Ripanis were told after entering into the contract to purchase the apartment about the opening between the living areas and the terrace.

23    I have concluded that the conduct of Century Legend was not only misleading and deceptive within the meaning of s 18 of the ACL, but deliberately so, having regard to its knowledge that the free span opening depicted in the so called ‘hero render’ could not be constructed for design and engineering reasons. Despite this knowledge, Century Legend continued to use the ‘hero render’. They did so notwithstanding that Mr Stephen Perkins of RotheLowman described the renders as “misleading” in October 2016 and told Century Legend that the free span opening could not be constructed due to development and structural requirements. Ms Hart also acknowledged that she knew the ‘hero render’ was “completely inaccurate” in the period during which she was meeting with the Ripanis to finalise the floor plan. Further, she told Century Legend in June 2017 that it was extremely important that JD Group make potential purchasers aware of the actual door opening and transition from the internal living area to the outdoor terrace.

24    I pause to note at this juncture that Mr Perkins was a senior architect within RotheLowman responsible for the design of the Victoriana. Ms Hart gave evidence that she reported to Mr Perkins and they consulted regularly in relation to the Victoriana project. In particular, Ms Hart explained that she was responsible for the interior design of the building, and Mr Perkins was responsible for the external design of the building.

25    As I have said, I reject the evidence of Ms Hart to the effect that she told the Ripanis about the impossibility of constructing the free span opening as depicted in the hero render. For completeness, there is no suggestion that any person from RotheLowman other than Ms Hart had relevant communications with the Ripanis prior to their entry into the contract.

26    Following the conclusion of the hearing, on 27 August 2021, Century Legend’s conveyancers, Hailes Lawyers, notified the Ripanis’ legal representatives, Zervos Lawyers, that the plan of subdivision was registered on 3 June 2021, and that they had received a “Stage 5 of the Occupancy Permit” for apartment 14.01. Century Legend’s conveyancer therefore gave notice that settlement of the contract of sale for apartment 14.01 was to take place on 10 September 2021. On 30 August 2021, the Court was notified by email that Century Legend’s conveyancers had called for settlement to occur on 10 September 2021. On 3 September 2021, my Associate wrote to the parties saying: “His [H]onour has also asked me to inform the parties that he expects the present status quo to be maintained, that is, settlement of the contract of purchase should be deferred pending his judgment. If there is opposition to this course, the parties have leave to raise the matter and a hearing will be arranged before 10 September. On 7 September 2021, the parties notified the Court that they had agreed to defer settlement until 14 days after final judgment.

27    Having set out those introductory matters, and expressed the principal conclusions which I have reached, I proceed first to consider in more detail the representations conveyed by the render, having regard also to the context in which the render was given to the Ripanis and what they were told about it.

The representations

28    Leaving aside for the moment oral representations made on behalf of Century Legend by its real estate agent Mr Tran of CBRE, the representations about which the Ripanis complain were conveyed by the hero render.

29    It is trite to say that meaning may be conveyed by a picture, whether it be an oil painting or a computer generated image, without requiring explanation in language. It is equally well understood that in many contexts a picture may be more effective than a description of the subject, hence the well-known saying about ‘a thousand words’. In other contexts, for example the graphic depiction of a building represented by a plan, specific detail such as measurements and dimensions may be required, depending on whether the plan is merely conceptual or, on the other hand, is to be used for construction purposes. Indeed, the use of imagery to convey meaning is a form of human expression which is likely as old as mankind. The rock art of the Kimberley is evidence that the pictorial medium of communication existed from a very early time in human history: see, eg, Walsh, G L, Bradshaw Art of the Kimberley (Takarakkar Nowan Kas Publications, 2000).

30    The hero render is properly characterised as a conceptual image. It does not contain any notation specifying the width or height of the free span opening between the living areas and the terrace. But that does not mean the render was inapt at, and much less incapable of, conveying the representations about which the Ripanis complain. Contrary to one of the principal contentions advanced by Century Legend, the render was by no means meaningless or incapable of being reasonably relied upon by prospective purchasers because it did not specify any dimensions of the free span opening.

31    Though conceptual, an impression was clearly communicated by the render; namely, that there would be a large free span opening between the terrace and the internal living areas when apartment 14.01 was built, which opening is depicted to extend almost entirely the length of the living areas adjacent to the terrace. In my view, that representation was demonstrably conveyed by the hero render. Further, having regard to the purpose for which the render was used and provided to the Ripanis, it was not necessary that it contain specifications as to the dimensions of the free span opening. In context, it was sufficient for the Ripanis’ purposes that the render showed there would be a free span opening, the scale of which is depicted by reference to the adjacent internal living areas.

32    The Ripanis each gave evidence that Mr Tran specifically told them that the render depicted apartment 14.01. Mr Tran also gave evidence that he told the Ripanis, in effect, that apartment 14.01 would be constructed as depicted in the render, with an expansive opening onto the terrace from the internal living areas. Although Mr Tran referred to the render as an artist’s impression, he did not otherwise qualify the impression conveyed by the render. That evidence was not challenged by Century Legend.

33    Mr Tran’s representations, in his capacity as a sales agent for Century Legend, are relied upon by the Ripanis as the basis for further causes of action for misleading and deceptive conduct and/or misrepresentation on the part of Century Legend. In this regard, I note Mr Tran was plainly the agent of Century Legend and acting within the scope of his actual or apparent authority in making those representations: see, eg, Walplan Pty Ltd v Wallace [1985] FCA 619; 8 FCR 27 at 36-37 (Lockhart J, Sweeney and Neaves JJ agreeing), cited in Australian Competition and Consumer Commission v Productivity Partners Pty Ltd (trading as Captain Cook College) (No 3) [2021] FCA 737 at [112] (Stewart J). For reasons I explain below, I find that the representations made by Mr Tran on behalf of Century Legend were misleading and deceptive. I note, however, that Mr Tran was merely a conduit for the representations as he was unaware at the time he made those representations that the free span opening could not be constructed and believed what he said to the Ripanis to be true.

34    I return to the representations conveyed by the render considered in context. The statements made to the Ripanis by Mr Tran provide important context relevant to whether the render conveyed any representations upon which the Ripanis could reasonably rely. Mr Tran’s statements were, of course, consistent with the purpose for which the render was created. Plainly, the render was a selling document. It was an image that had been created to assist in selling apartment 14.01 ‘off-the-plan’ and to promote the sale of apartments at the Victoriana more generally.

35    During the design process, Century Legend requested that Squint Opera designate the ‘hero render’ as one of four “priority images” to be released for marketing the Victoriana development. Moreover, once produced, the ‘hero render’ featured prominently in the marketing materials for the Victoriana. It was included in a hard-bound brochure comprising images and text for use in marketing the premium level apartments. That brochure was given to the Ripanis when they visited the display suite on 31 March 2017. The render also appeared on the home page of the website for the Victoriana development and as a large exhibit on one of the walls of the display suite.

36    Thus, the render was self-evidently intended to be used for the purpose of encouraging interest from potential purchasers of apartments in the Victoriana. Further, the render had specific relevance to the Ripanis because it was an image referable to apartment 14.01. Indeed, it was the render which captured their interest in the development, and in due course, apartment 14.01.

37    The context in which the render was provided to the Ripanis also included them telling Mr Tran that they were particularly attracted to the opening between the internal living areas and the outside terrace. Far from disabusing the Ripanis of a mistaken impression that the render depicted what they may expect apartment 14.01 to look like upon completion, Mr Tran’s statements effectively reiterated, or corroborated, the representations conveyed by the render. Again, it is hardly surprising Mr Tran said what he did considering the render formed part of the package of materials available to CBRE to assist it to market and sell apartments at the Victoriana.

38    If the connection was less direct and proximate between the circumstances under which the render came to the attention of the Ripanis and their decision to purchase the apartment, the answer to the question about what representations were reasonably conveyed by the render may have been quite different. For example, if the ‘hero render’ were to have been featured on a billboard promoting the Victoriana generally, and the purchaser was not interested in purchasing apartment 14.01 specifically, but rather one of the low rise apartments; the answer to the question of what, if any, representation the render reasonably conveyed to such hypothetical purchaser would likely be very different. Taking the billboard example, in that context it may be said that all a reasonable purchaser could infer from the render would be characteristics of the Victoriana at a general level, such as that the apartments will be luxurious, or some other such generalised impression, I believe commonly described as ‘branding’.

39    But the Ripanis did not see the render on a billboard and it was apartment 14.01 in particular which caught their attention, precisely because they were attracted to the seamless transition between the internal living areas and the outside terrace. The Ripanis saw the ‘hero render’ featured prominently on the wall of the display suite at the Victoriana and were told, in effect, that it depicted what they could expect apartment 14.01 to be like in relation to the free span opening between the living areas and the terrace, though it was an ‘artist’s impression’. It is in this context that the render was shown to the Ripanis and a copy of the marketing materials given to them.

40    Having regard to those matters, I reject Century Legend’s contention that the render is inapt to convey the representations about which the Ripanis’ now complain, much less that it is to be characterised as, in effect, meaningless puffery.

41    As I have sought to explain above, in my view, there is an important connection between the meaning visually conveyed by the render and the circumstances in which the render was shown to the Ripanis, as well as between those circumstances and what was said to the Ripanis concerning the render and what it should be understood to convey. When considered in the full context I have described, the proposition that the render could, or should, not have been relied upon by the Ripanis is untenable.

42    Further, such a defence is also untenable, to put it neutrally, because knowing what it did, Century Legend’s conduct was deliberately misleading. I shall say more about Century Legend’s knowledge of the impossibility of constructing apartment 14.01 in conformity with the render below. However, it is relevant at this point to refer to Century Legend’s knowledge of another matter. The Ripanis disclosed the reason for their particular interest in apartment 14.01 to Mr Tran from the time of their first visit to the display suite of the Victoriana. For instance, the Ripanis said that they were interested in moving to an apartment with an outdoor pool and area for entertaining, in which the internal and external areas could be seamlessly converted into one space. Mr Tran understood that to be the Ripanis’ preference and therefore suggested apartment 14.01, at least in part, because of the free span opening depicted in the render.

43    I find that Century Legend must therefore be taken to have known that the feature it knew could not be constructed was the very feature of the apartment of particular appeal to the Ripanis. Further, I find that, at the least, Century Legend had no reason to believe that the Ripanis knew, prior to entering into the contract to purchase the apartment, the truth; namely, that it was impossible to construct the free span opening depicted in the render. I shall refer below to the reasons for this finding in the context of the competing evidence given by the Ripanis, Ms Hart and Mr Hu.

44    If I were wrong to find that the render, read in context, conveys the representations complained of by the Ripanis, I would find independently that the representations made by Mr Tran on behalf of Century Legend were misleading and deceptive within the meaning of s 18 of the ACL. As I have said, Mr Tran provided the Ripanis with a hard-bound brochure promoting the Victoriana when they visited the display suite on 31 March 2017, having earlier sent them a photo of the hero render by email on 22 March 2017. During that visit, Mr Tran spoke about the development by reference to the renders, including, in particular, the hero render which was said to depict apartment 14.01. As a result of what they were told at the display suite on 31 March 2017, the Ripanis believed that the apartment they were invited to buy would be constructed in accordance with the render. To put it briefly, even if the render did not convey the principal representations about which the Ripanis’ complain, Mr Tran represented that it did. That representation, made innocently by Mr Tran, was misleading and deceptive.

Century Legend’s contentions in relation to the representations conveyed by the render

45    Century Legend contests any finding that the render conveyed a material representation relating to the width or scale of the free span opening onto the terrace. It does so on a number of bases, some of which are also relevant to the question of whether the Ripanis relied upon any representation conveyed by the render prior to entering into the contract to purchase the apartment. I have discussed Century Legend’s principal contention above; namely, that the render did not convey a representation concerning the width or scale of the free span opening capable of being relied upon by prospective purchasers such as the Ripanis. I shall discuss that question further in the context of Century Legend’s submissions concerning this issue.

46    Century Legend contends that the render should not be looked at in isolation and, in any event, did not convey a misleading representation when regard is had to: (i) the fact it is an artist’s impression only; (ii) the relevant contractual and non-contractual disclaimers; and (iii) the fact that various iterations of the floor plans for apartment 14.01 showed the opening would not be built as depicted in the render. It is necessary to consider each reason separately, as well as in combination with the contextual factors which Century Legend says informs what may be reasonably understood to be conveyed by the render. However, this analysis must also include the objective matters and surrounding circumstances which Century Legend does not address.

47    Before considering the contextual factors relied upon by Century Legend as informing any representation contained in the render, I refer to Century Legend’s contention as to what the image conveys:

Furthermore, the marketing render Mr Tran sent to Mr Ripani on 22 March 2017 was not a precise depiction of Apartment 1401. It was an artist’s impression with respect to an “off the plan” apartment that had not yet been built. Indeed, the large void without any mullions in the picture was patently unrealistic. Other parts of the brochure that Mr Tran provided to the Ripanis showed vertical mullions along the façade near the pool. Mr Tran of CBRE gave evidence that the marketing render “is actually an artist’s impression”. He also gave evidence that “… with the artist’s impression, we always refer to this as a artist’s impression…”. Indeed, Mr Tran said he pointed out to the Ripanis that the marketing materials were an artistic impression.

[Emphasis added]

48    That the render is an ‘artist’s impression’ is not in issue. What is in issue is what does that image, albeit an ‘artist’s impression’, communicate? Century Legend does not offer any interpretation of what information or meaning is conveyed by the image, save to assert that the “large void without any mullions was patently unrealistic”. That begs the question: to whom was it patently unrealistic?

49    The Ripanis did not appreciate that it was unrealistic. Mr Ripani is an experienced businessman. Mrs Ripani presented as an articulate and astute person. Both have some experience looking at ‘off-the plan’ properties, yet neither of them discerned from the render that the free span opening as depicted was patently unrealistic. Moreover, Mr Tran did not tell them it was patently unrealistic and it was not suggested to Mr Tran in cross examination that he was aware that the large void without any mullions was patently unrealistic.

50    I regard Century Legend’s contentions in this respect as disingenuous. Century Legend purports to approbate and reprobate; that is, having deployed the render as the ‘hero image for marketing purposes, it now purports in this proceeding to characterise the impression created by it as “patently unrealistic”. Further, in my view, this is a bold submission considering that Century Legend knew that the Ripanis were attracted by the feature of the apartment it now seeks to characterise as “patently unrealistic”, while also knowing that such free span opening could not be constructed. Century Legend’s submission conflates its apparent knowledge that the large void without mullions was unrealistic, with the Ripanis’ ignorance of that reality, notwithstanding that it was responsible for the use of the render in the circumstances I have described above.

51    The remaining submissions by Century Legend on this point are directed to what the render did not say. For instance, Century Legend says that the render was not a precise depiction of apartment 14.01, but rather an artist’s impression with respect to an off-the-plan apartment that had not yet been built. That may be accepted and so much is accepted by the Ripanis. However, describing the render as an ‘artist’s impression’ does not mean that it is incapable of conveying representations to the effect complained of by the Ripanis. The representations conveyed by the render are sufficiently clear and precise to constitute misleading and deceptive conduct within the meaning of s 18 of the ACL. I reject Century Legend’s contention to the contrary for the reasons I have already explained.

52    Century Legend further submitted that the render did not convey any representation as to the dimension of the ‘large void’, to use Century Legend’s description. As I have already said, while the render does not specify any dimension, it conveys the scale of the free span opening by depicting the opening along with the internal living areas and external terrace of apartment 14.01. It is the scale of the free span opening, depicted as extending most of the length of the internal living areas, which conveys the representation as to the dimensions of the opening onto the outside terrace (see Annexure A). The render is not deprived of meaning merely because there are no dimensions annotated on the image.

53    For completeness, I note that I shall address further below Century Legend’s contention that the floor plans, in themselves, dispel the misleading nature of the render. I do so in the context of considering Ms Hart’s evidence, in relation to which the floor plans are highly relevant.

Effect of notation ‘artist impression

54    As I have said, the view apparently taken by Century Legend was that it was sufficient to annotate the render with the words ‘artist impression’ to avoid responsibility for misrepresenting a salient design feature of apartment 14.01. Before considering that issue, I explain the circumstances in which the words artist impression were added as an annotation to the render, including the warnings given by RotheLowman to Century Legend concerning the render.

55    On 12 October 2016, Mr Perkins of RotheLowman raised concerns about the render in an email to Mr Shawn Lu (Marketing Manager at Century Legend) and Ms Kylie Xu (General Manager at Century Legend). The email was also copied to Ms Hart and relevantly said:

Further to my email last night I would like to advise JD Group that several of the design changes (architecture and interiors) made by JD Group during the render stage are not in accordance with the Town Planning Permit or the current Design Development drawings. Also should a purchaser want exactly what is shown in the renders, for example, a flush inside to outside threshold, or uninterrupted floor to ceiling glazing it will not be possible due to the overall height restriction of the development and structural requirements. The changes made to the interior design of the standard apartment may be possible but will require further review, design development/documentation. There are also some safety issues with the design of the landscaping and pool areas that will need to be resolved after marketing.

Due to the extent of the changes, the misleading nature of the renders, and our inability to follow through on the render design I would advise JD Group to have the renders amended before marketing launch. Should this not be possible I would advise JD Group to be transparent with all potential purchasers in relation to the render content and to ensure that all “Artists Impressions” are accompanied with a suitably comprehensive disclaimer to cover the discrepancies/inaccuracies. This disclaimer should also be included in all marketing material and contract of sale documents.

Please don’t hesitate o [sic] call should you wish to discuss the above.

[Emphasis added]

56    Mr Lu responded on the same day saying: “Hi Stephen I tried ringing you just now. Did not get through. Please call me back when you are free.” Neither Mr Lu nor Mr Perkins were called as witnesses and it is not clear whether they did in fact have a telephone conversation. However, on 11 November 2016, Mr Perkins wrote a further email addressed to Mr Hu, which recorded “a couple of suggestions” following a meeting with an agent from Melbourne Real Estate in relation to the Victoriana development. Amongst the matters to be addressed was: “[t]he inconsistencies between the renders and the marketing plans/elevation.” Mr Perkins added: “Please let me know how JD Group wish to proceed with the items above.Minutes later, Mr Lu replied on behalf of Century Legend, copying in Mr Lu, Ms Xu and Ms Hart, saying simply: “Leave them with us for now. Thanks.”

57    Mr Hu’s evidence was that upon receiving the 11 November 2016 email, he discussed the matter with Century Legend’s Board and marketing team. Present during those discussions was Mr Lu, Ms Xu and Mr John Yun (the CEO of Century Legend). Mr Hu gave evidence that, in response to Mr Perkins’ “suggestions”, Century Legend determined it was appropriate to put the words ‘artist impression’ on each render.

58    A third cautionary email was sent by Ms Hart on 23 June 2017. By this time, Ms Hart had concluded her meetings with the Ripanis concerning the floor plan and fit out of apartment 14.01. The email included the following statements:

Following up on our last conversation with regards to the perimeter banding for each level of Victoriana.

As mentioned, as part of the building architecture and structure there is perimeter edge banding that follows the building’s form, running along the building boundary and in some instances, glazing line.

Please see some quick internal images taken from the current Revit model to help illustrate the above. You will also notice in the attached images, the number of glazing mullions and transoms required for the glazing. This structure is required for wind loading and to achieve the building forms.

Also for your reference, please see the schematic structural drawings attached. These drawings highlight the location and extent of the structural banding at the building perimeter.

While structure does need to be reviewed, the edge banding will still be required, especially with the additional loading of spas and potential pools to terraces. The banding is also part of the architecture.

We feel that it is extremely important that JD Group make Purchasers aware of the actual internal / external transition and break-up in glazing that will be achieved, as this is not accurately shown in the JD Group commissioned marketing renders. It needs to be reiterated that marketing renders are ‘artist’s impression’ only and not actual building images.

Please do not hesitate to give me a call if you wish to discuss further.

[Emphasis added]

59    Ms Hart’s email of 23 June 2017 was addressed to Mr Hu, and copied to Mr Lu, Ms Xu and other architects from RotheLowman. It is significant that the email was sent as a reply to the 12 October 2016 email sent by Mr Perkins, demonstrating, if nothing else, that Ms Hart appreciated that a “hot potato” had been dropped in her hands and there was potential for the rather to mislead a potential purchaser. As I shall explain, the 23 June 2017 email is incongruous with Ms Hart’s evidence that, by this time, she had already explained to the Ripanis that the free span opening could not be constructed as depicted in the render.

60    Mr Hu responded to Ms Hart on 23 June 2017, copying in all of the recipients from the aforementioned email. Mr Hu’s email read as follows:

Hi Kate,

Thanks again for your email. We have put artist impression in all our renders and we have disclaimer as well. See below.

[Examples of the “artist impression” inscription and disclaimer exhibited in text of the email]

61    Ms Hart gave evidence that it was her understanding that another architectural firm, Carr Design, which had original been engaged by Century Legend to design the interior of the high-rise ‘premium’ apartments, had “walked away” from the Victoriana project because they did not believe the renders were an accurate depiction of what was intended to be built. Having regard to Ms Hart’s understanding of the position apparently taken by Carr Design, the warnings given by RotheLowman concerning the use of the render, and its disconformity with what was in fact to be built, there is no doubt that Ms Hart was aware of the importance of potential purchasers of the apartments at the Victoriana not being misled by the inaccuracy of the render. Indeed, Ms Hart gave evidence to the effect that she knew she was in a fraught position and appreciated, by mid-2017, that there was every prospect she would find herself in a witness box giving evidence about communications she had with the purchasers of apartments.

62    Ms Hart’s knowledge of the inaccuracy of the render, and of the correspondence about that with Century Legend, is also significant in relation to my reasons for rejecting Ms Hart’s evidence, as I explain below. She accepted that the issue concerning the render was a “potential timebomb”. I note further at this point, there was no suggestion in the correspondence from RotheLowman that it considered the render to be too vague or imprecise to convey any impression in the absence of precise dimensions of the width of the opening. Of course, whether the render conveys representations that were misleading or deceptive, or likely to mislead or deceive, is a question for the Court. I mention this because RotheLowman’s assessment, including as reflected in Ms Hart’s email dated 23 June 2017, that the render was inaccurate and, at a minimum, apt to mislead, is also relevant when it comes to considering the veracity of Ms Hart’s evidence concerning what she claims to have said to the Ripanis in relation to the opening between the internal living areas and the terrace, prior to the contract of sale being entered into.

63    A further significant feature of Ms Hart’s email of 23 June 2017 is that while she expresses the importance of Century Legend making purchasers aware of the inaccuracy of the render, she does not say in that email that she had made the Ripanis aware of the inaccuracy during meetings in May and June 2017. Instead, Ms Hart places that responsibility squarely on Century Legend. This too is relevant to evaluating Ms Hart’s evidence about what she claims to have told the Ripanis. Further, I note that in Mr Perkins’ email of 12 October 2016, he too places responsibility for informing purchasers of the inaccuracy of the render on Century Legend.

64    I return to the question of what significance, if any, the notation ‘artist impression’ has in connection with the representations conveyed by the render. In my view, that inscription does not have the effect of curing the misleading representation conveyed by the render. I do not accept the words ‘artist impression’ are akin to a disclaimer or exclusion clause in a contract, and even if those words may be analogous in other circumstances, that characterisation is not applicable in the present case. The Ripanis expressed their interest in the particular feature of the design depicted by the render, and were told by Mr Tran that the render depicted the apartment they ultimately decided to purchase.

65    More generally, in my view the inscription artist impression’ is not sufficient to qualify representations of the kind conveyed by the render in this case. The inscription conveys merely that the apartment as constructed will not appear precisely as depicted in the render. To my observation, the render is self-evidently an artist’s impression and that needs hardly be said. However, I accept there may be utility to including such an inscription as a matter of abundant caution, having regard to the very high resolution and realism of computer generated graphics. I agree with the Ripanis’ submission that the addition of the words ‘artist impression’ tells a viewer that the render is not a photographic image (and they are so realistic that an uninformed person might mistake them for one). In context, those words reasonably communicate that the finished apartment may not accord with the image in all its detailed particulars. However, the words do not suggest that the key elements of the render will not be constructed, or at the very least, are not then intended to be constructed.

66    Importantly, the fact that the render is an artist’s impression does not detract from the materiality of the image and the representations it conveys, for the very reason that in the context of an ‘off-the-plan’ sale, such renders are a proxy for an inspection. Objectively, it is surely understood by vendors and purchasers that the render, albeit an ‘artist’s impression’, is a medium by which the purchaser may gain an understanding of the salient design features of the yet-to-be constructed apartment. The advantage of imagery over language is that an image, whether or not an artist’s impression, is capable of conveying meaning holistically. Accordingly, in my view, the words ‘artist impression’ are incapable, either alone or in combination with the other disclaimers and exclusions clauses to which I will now refer, of curing the misleading character of the representations made by Century Legend.

67    Further, Century Legend says the decision in HW Thompson Building Pty Ltd v Allen Property Services Pty Ltd (1983) 48 ALR 667 is analogous. In that case, St John J held at 673 that a comparison of the artist's impression on the brochure, showing the position of the swimming pools, and the plan annexed to the contract, would easily dispel the applicant’s understanding that all the recreational facilities specified in the brochure would be available to the occupants of an apartment tower. However, his Honour’s findings in relation to whether the developer’s conduct was misleading or deceptive in that case were based on the purchaser’s previous experience buying units ‘off-the-plan’; the common understanding that a solicitor would be advising the purchaser; the subject-matter of the contract; and the price paid for each unit. For the reasons I explain below, I regard the present circumstances as distinguishable from those in HW Thompson when regard is had to the whole of the context and surrounding circumstances, including the allied representations by Mr Tran to the effect I have discussed above.

Effect of disclaimer

68    In addition to the inscription ‘artist impression’, Century Legend relied upon a disclaimer contained inside the hard-bound marketing brochure given to the Ripanis. The disclaimer was in the following terms:

While all reasonable care has been taken in the preparation of this brochure and the particulars contained herein, it is intended to be a visual aid and does not necessarily depict the finished state of the property or object shown. No liability whatsoever is accepted for any direct or indirect loss, or consequential loss or damage arising in any way out of any reliance upon this brochure. Purchasers must rely upon their own enquiries and inspections. Furniture is not included with the property. Dimension and specifics are subject to change without notice. Illustrations and photographs are for presentation purposes and are to be regarded as indicative only. This brochure does not form part of, and is not, an offer or a contract of sale.

69    For context, the disclaimer appeared on page 96 of the brochure and was given no prominence at all in the marketing materials. In fact, it appeared at the end of a lengthy volume, in much smaller font than most of the writing within the brochure and the font was barely legible against a dark background. Senior Counsel for the Ripanis accurately described the disclaimer as being “hidden” at the very back of the brochure.

70    Supposing hypothetically that the Ripanis had read the disclaimer, what does it communicate to them which might be found to have cured the impression created by the render? More precisely, leaving aside for present purposes the context in which the Ripanis were provided with the brochure containing the ‘hero render’, as well as Mr Tran’s representations, what do the words of the disclaimer communicate to the Ripanis as reasonably informed and astute purchasers of an apartment ‘off-the-plan’? The short answer is equivocal and misleading propositions.

71    The first sentence of the disclaimer says that the brochure is a visual aid “and does not necessarily depict the finished state of the property or object sown.” The implication that is embedded in the qualification “not necessarily” is that generally the visual aid will depict the finished state, and that is consistent with the purpose for which such renders are created, as a selling aid, if not a proxy for inspection. The penultimate sentences says: “Illustrations and photographs are for presentation purposes and are to be regarded as indicative only.” This sentence is consistent with the renders being used as indicative of the ‘as-built’ apartments, though not precisely the same or identical to the renders. Indeed, in the present context, the use of the word “indicative” fortifies the impression created by the render that the image depicts what the apartment may be expected to be like upon completion. In my view, in the present context, the render has no work to do, save to mislead, if it is not indicative of the apartment.

72    It is unnecessary to construe or grapple with what is communicated by the remaining sentences of the disclaimer, save at a general level. The second sentence is a vague, ambiguous and meaningless assertion. Expressed in the passive voice, it implies that it is somehow a matter for the publisher of the brochure to accept liability. Such disclaimer, or exclusion, may be apposite and effective in other contexts, for example a bailment for reward, where the terms of the bailment contract may discernibly allocate risk in a particular way. Plainly, the present case is not analogous to a bailment. Further, presumably the second sentence should be read together with the third, and indeed the clause in its entirety. The difficulty is that the third sentence, “Purchasers must rely upon their own enquiries and inspections”, brings one full circle, so to speak, back to the fact that the only inspection capable of being made was an inspection of the renders. I do not know whether this incongruity is the result of the disclaimer having been transposed from another context, but ultimately it does not matter. As expressed, the disclaimer is in my view inutile in the circumstances of the present case, particularly when compared to the ‘indicative’ depiction of what the Ripanis were led to believe they may expect, as conveyed by the render.

73    I turn now to some authorities which have considered the effect, or efficacy, of disclaimers and exclusion clauses in the context of claims founded upon misleading or deceptive conduct.

74    In Australian Competition and Consumer Commission v GlaxoSmithKline Consumer Healthcare Australia Pty Ltd [2019] FCA 676; 371 ALR 396, Bromwich J summarised the authorities in relation to the relevance of disclaimers in the following terms at [33]:

(1)    There may be occasions upon which the effect of otherwise misleading or deceptive conduct may be neutralised by an appropriate disclaimer: Abundant Earth Pty Ltd v R & C Products Pty Ltd (1985) 7 FCR 233 at 239.

(2)    A person engaging in misleading or deceptive conduct cannot readily or easily use the device of a disclaimer to evade responsibility, unless that disclaimer erases the proscribed effect: Benlist Pty Ltd v Olivetti Australia Pty Ltd (1990) ATPR 41-043; (1990) ASC 55-997.

(3)    A disclaimer having the effect of dispelling otherwise misleading or deceptive effects of conduct may be a rare occurrence given the onus that is ordinarily on the person making the otherwise contravening representation to establish that the disclaimer it relies upon creates an overall effect that is benign: Hutchence v South Seas Bubble Co Pty Ltd (1986) 64 ALR 330 at 338.

(4)    Disclaimers or qualifications must be taken into account in evaluating the conduct as a whole: Campbell v Backoffice Investments Pty Ltd [2009] HCA 25; 238 CLR 304 at [25].

(5)    Carelessness on the part of consumers in how they treat or view a representation, including any disclaimers or additional information, may be relevant: Australian Competition and Consumer Commission v TPG Internet Pty Ltd [2013] HCA 54; 250 CLR 640 at [49].

(6)    It may be relevant to consider whether or not an advertisement or other representation or conduct has the capacity to lead a consumer into error because it selects some words for emphasis and relegates the balance, including any disclaimer or other information, to relative obscurity: TPG Internet at [51].

(7)    A disclaimer must be very clear when there is a substantial disparity between the primary representation and the true position: National Exchange Pty Ltd v Australian Securities and Investments Commission [2004] FCAFC 90; 49 ACSR 369 at [55]. In National Exchange, shareholders had been offered $2 per share when the current share price was $1.93. But they were only told in a different and less prominent location that payment would be made by 15 annual instalments making the offer worth less in current value than $2 and also less in current value than $1.93. Without the qualifying context the primary representation was false because the shareholder was not being offered $2 in value per share at the time the offer was made, and was in fact being offered less than the current share price.

(8)    A disclaimer that is static may bear more weight than one that is evanescent. In a printed format, even an asterisk that indicates the presence of additional information, if it is sufficiently prominent and the qualifying text is sufficiently proximate, may be effective to draw attention to an explanation of, or qualification upon, a statement made in advertising: George Weston Foods Ltd v Goodman Fielder Ltd [2000] FCA 1632; 49 IPR 553 at [46].

That summary of the principles has been cited with approval by this Court on several occasions: see, eg, Bonham as Trustee for the Aucham Super Fund v Iluka Resources Ltd [2022] FCA 71 at [627] (Jagot J); Australian Securities and Investments Commission v La Trobe Financial Asset Management Ltd [2021] FCA 1417 at [12] (O’Bryan J).

75    In the present proceeding, the render was a visually impressive depiction of apartment 14.01. It was variously described as the ‘hero shot’, ‘hero image’ or ‘hero render’ and Ms Hart gave evidence that, in her view, the render was one of the most important images in respect of the marketing of the Victoriana. Indeed, it featured prominently in the marketing of the Victoriana to prospective purchasers generally and also in marketing apartment 14.01 to the Ripanis specifically. In circumstances where the disparity between the representation and the true state of affairs was so stark, a necessary but not sufficient condition was that the disclaimer be drawn to the Ripanis attention in the clearest possible way if it was to be effective: National Exchange Pty Ltd v Australian Securities and Investments Commission [2004] FCAFC 90; 49 ACSR 369 at [55] (Jacobson J).

76    There is no evidence to suggest that Century legend, or CBRE through Mr Tran, took steps to ensure the disclaimer was drawn to the Ripanis’ attention. Irrespective of that, for the reasons I have explained above, the disclaimer was expressed in terms which were themselves ambiguous, and, if anything, more likely to reiterate the representations implicitly conveyed by the render than to correct any misapprehension created by it.

77    Given those considerations, I find that this disclaimer was inutile in correcting the overwhelmingly misleading impression conveyed by the render. The disclaimer was written in general, boilerplate language and located in the back of a lengthy, glossy hard-bound brochure. Further, the disclaimer was not specifically drawn to the Ripanis attention and in any event, objectively it should not be expected that potential purchasers, like the Ripanis, would study a glossy marketing brochure with an eye to the fine print of a disclaimer at the back of the booklet. Thus, for all of the reasons above, the disclaimer did not have the effect of curing the misleading and deceptive representations made by, or on behalf of, Century Legend.

Effect of exclusion clauses

78    Century Legend also contends that certain disclaimers, or exclusion clauses, in the contract of sale exculpate it from any misleading impression which may have been conveyed by the render or by pre-contractual representations made by Mr Tran. Century Legend relies upon two clauses in the contract of sale, which it submits made it plain to the Ripanis that they were not entitled to rely on any pre-contractual representations made by, or on behalf of, Century Legend.

79    The first is cl 2.4 of the Special Conditions:

The Purchaser acknowledges that:

(a)    no information, representation or warranty by the Vendor, the Vendor’s Agent or the Vendor’s Legal Practitioners was supplied or made with the intention or knowledge that it would be relied upon by the Purchaser; and

(b)    no information, representation or warranty has been relied upon; and

(c)    this Contract contains the entire agreement between the parties for the sale and purchase of the Property and supersedes all previous negotiations and agreements in relation to the transaction.

80    The second is cl 3.1 of the Special Conditions:

The Purchaser acknowledges that:

(a)    It has purchased the Property as a result of the Purchaser’s own inspection and enquiry and that the Purchaser does not rely on any representation or warranty of any kind made by or on behalf of the Vendor or its agents or consultants;

(b)    The description of areas and measurements appearing in any marketing material for the Development are approximate descriptions only and may differ from actual areas and measurements of the Development (including the Property) on completion of the Development;

(c)    The Vendor has not made any representations or warranties of the views available from the Development or Property;

(d)    Any photographs and other images created for the marketing of the Development are for illustrative purposes only and subject to change and cannot be relied upon by the Purchaser;

(e)    Any potential views depicted in the photographs and other images may not be available from the completed Development or Property;

(f)    The Vendor has no control over any development by parties unrelated to the Vendor of property surrounding or nearby the Development; and

(g)    Information contained in any promotional and marketing material is a guide only and does not constitute an offer, inducement, representation, warranty or contract.

The Purchaser will not be entitled to exercise any Excluded Rights in relation to the matters in this special condition.

81    It is well settled, and accepted by all parties, that disclaimers and exclusion clauses cannot be relied upon to exclude the operation of the ACL: Clark Equipment Australia Ltd v Covcat Pty Ltd (1987) 71 ALR 367 at 371 (Shepherd J, with whom Fox and Jackson JJ agreed); Henjo Investments Pty Ltd v Collins Marrickville Pty Ltd (No 1) (1988) 39 FCR 546; 79 ALR 83 at 561 (Lockhart J, with whom Burchett J and Foster J agreed); and, more recently, Cargill Australia Ltd v Viterra Malt Pty Ltd (No 28) [2022] VSC 13 at [4357] (Elliot J).

82    However, as Connock J recently observed in Oliana Foods Pty Ltd v Culinary Co Pty Ltd (In Liq) [2020] VSC 693 at [535]:

the existence and context of such clauses are often part of the context and circumstances to consider in deciding whether there has been misleading or deceptive conduct, and whether or not, for example, pre-contractual representations were relied upon, or the claimed misleading conduct has been causative of loss.

It is evident from what I have said above concerning the importance of context that I respectfully agree with his Honour’s observations in Oliana Foods.

83    In Campbell v Backoffice Investments Pty Ltd [2009] HCA 25; 238 CLR 304, Gummow, Hayne, Heydon and Kiefel JJ said at 348:

It is as well to add, however, that, of itself, neither the inclusion of an entire agreement clause in an agreement nor the inclusion of a provision expressly denying reliance upon pre-contractual representations will necessarily prevent the provision of misleading information before a contract was made constituting a contravention of the prohibition against misleading or deceptive conduct by which loss or damage was sustained. As pointed out earlier, by reference to the reasons of McHugh J in [Butcher v Lachlan Elder Realty Pty Ltd [2004] HCA 60; 218 CLR 592], whether conduct is misleading or deceptive is a question of fact to be decided by reference to all of the relevant circumstances, of which the terms of the contract are but one.

84    A similar observation was made by French CJ in Backoffice Investments at 320:

A person accused of engaging in misleading or deceptive conduct may claim that its effects were negated by a contemporaneous disclaimer by that person, or a subsequent disclaimer of reliance by the person allegedly affected by the conduct. The contemporaneous disclaimer by the person engaging in the impugned conduct is likely to go to the characterisation of the conduct. A subsequent declaration of non-reliance by a person said to have been affected by the conduct is more likely to be relevant to the question of causation.

85    Century Legend submits that the above clauses are contextually relevant. In particular, it submits that these clauses made it clear that the marketing materials provided by Mr Tran in relation to the Victoriana were not intended to be, and were not, representations of what the Ripanis might expect apartment 14.01 to look like when constructed. Century Legend says the Ripanis’ failure to read the contract before signing it does not negate this effect. It adds that the Ripanis should have taken time to read and review the contract given they had ample time to do so, or alternatively should have sought legal advice in relation to the same.

86    Century Legend further submits that it is important to take into account that the Ripanis were sophisticated purchasers, with some previous experience purchasing ‘off-the-plan’, not naïve, inexperienced first home-buyers: Butcher v Lachlan Elder Realty Pty Ltd [2004] HCA 60; 218 CLR 592 at 605-606 (Gleeson CJ, Hayne and Heydon JJ). Moreover, Century Legend submits that given the Ripanis were entering into a contract to purchase a luxury apartment for a price of nearly $10 million, it was reasonable to expect that they would have carefully reviewed the contract and appreciated the significance of the above exclusion clauses.

87    Accordingly, Century Legend contends that the exclusions clauses weigh against a finding that the Ripanis reasonably relied on any of the representations. That is a central tenet of Century Legend’s broader submission that it did not engage in misleading or deceptive conduct by making any representation that apartment 14.01 would accord with the marketing render when constructed.

88    Considering firstly the last proposition, I disagree that the ex post facto effect of the exclusion clauses, assuming they were capable as expressed of having that effect, goes to the characterisation of the representation conveyed by the render. That is particularly so when the effect of the exclusion clauses is considered by comparison to the objective impact of the marketing materials, including the render. Instead, I agree with the observations of French CJ in Backoffice Investments, referred to above, that because the exclusion clauses are a subsequent disclaimer of reliance, they are more likely to be relevant to the question of causation.

89    For Century Legend’s analysis to be accepted, it would require at the least that the exclusion clauses were objectively capable of correcting the impression created by the render. An assessment of the efficacy of the exclusion clauses in this respect must include the context in which the Ripanis were given the render and what Mr Tran said to them about it. In the present case, the context in which the Ripanis were given the render meant they were entitled to expect that what was depicted would in substance be constructed. In my view, to do the work necessary to correct the impression created by the render, the exclusion clauses would therefore need to be expressed in terms such that purchasers would be aware that the render is not a depiction of what apartment 14.01 would look like when constructed.

90    If I am wrong to conclude that the exclusion clauses would need to be so specific and explicit to have a corrective effect in the present circumstances, the exclusion clauses as drafted would nevertheless fail a much lower threshold in relation to their curative effect. The exclusion clauses would appear to be boilerplate provisions. As such, they contain elements which are inapposite, the obvious example being an acknowledgment on the part of the purchasers, here the Ripanis, that they entered into the contract as a result of their own inspection and enquiry. I refer to what I have said above in relation to similar terms contained in the disclaimer. Had the exclusion clauses been negotiated between the parties, their effect would very likely have been different, going not to an ex post facto acknowledgement of non-reliance but rather to the characterisation of the conduct. Equally, if the exclusion clauses were negotiated they would not, rationally, contain an acknowledgement by the Ripanis of any inspection of the yet-to-be constructed apartment.

Conclusions in relation to representations

91    Though the ‘hero render’ speaks for itself for the purposes of the present claim for contravention of s 18 of the ACL, and/or misrepresentation actionable in equity, it is necessary to describe in language the meaning conveyed by the render.

92    At [9] of the Further Amended Statement of Claim, the Ripanis plead that the render conveyed the following representations:

(a)    Apartment 1401 when constructed would accord with the Visual Representation and in particular would include the flow-through design;

(b)    as at March 2017 the Respondent intended to construct the development and Apartment 1401 so that it would accord with the Visual Representation and in particular intended to include the flow-through design;

(c)    the flow through design shown in the Visual Representation was in accordance with architectural designs prepared by Rothelowman;

(d)    the building design shown in the Visual Representation accorded with the design for the construction of the building prepared by a reasonably skilled and competent architect;

(e)    the building design shown in the Visual Representation was achievable given existing building methods.

93    In order to understand the pleaded representations, it is also necessary to have regard to [6] of the Further Amended Statement of Claim:

6.    In order to show the Applicants what Apartment 1401 would look like when completed and thereby what they were invited to purchase, the Respondent by its agent provided to the Applicants:

(a)    a promotional volume produced by it or at its direction describing the development and containing computer generated pictures showing the completed development (“the Volume”); and

(b)    a computer generated image of a penthouse apartment (“the Visual Representation”) showing a large open plan space and a large rooftop terrace both at the same level with a raised concrete and glass swimming pool and a retracted glass three stack window panel system with the resultant effect that the outside and the inside formed a seamless single space (“flow-through design”).

94    The Ripanis’ verbal formulation of the representation conveyed by the render in [9](a) of the Further Amended Statement of Claim is but one of a number of ways the representation may be expressed in language. It is a reasonable formulation of the meaning conveyed by the render in the context in which it was used and conveyed to the Ripanis. The formulation of the representations in [9](b)–(e) of the Further Amended Statement of Claim are reasonable inferences that may be drawn from the render, again having regard to the relevant context.

95    It is sufficient for the purpose of determining the Ripanis’ claim in this proceeding to find that the render conveyed the representation in [9](a). I find that the render contained that representation. That representation is at the core of the Ripanis’ claim. The representation in [9](b) is also implicitly conveyed by the render, as well as by the use of it as the ‘hero render’ for marketing the Victoriana. I also conclude that the representation in [9](e) is implicitly conveyed by the render, having regard to the same contextual facts I have mentioned. The representations pleaded in (c) and (d) above are arguably also implicit in the render having regard to the context. However, those representations are more granular than what might objectively be discerned from the render, or implicitly conveyed by it. Accordingly, I do not accept that the render conveyed those representations.

96    In reaching this view, I have had regard to the well understood principle that conduct is misleading or deceptive if it induces or is capable of inducing error: see, eg, Australian Competition and Consumer Commission v TPG Internet Pty Ltd [2013] HCA 54; 250 CLR 640 at 655 (French CJ, Crennan, Bell and Keane JJ). The question is one of fact, which requires the Court to examine the relevant conduct or representation as a whole in light of the surrounding facts and circumstances: Butcher at 625 (McHugh J). Viewed in its proper context, Century Legend submits that the render did not convey the representations the Ripanis allege and, moreover, that it did not engage in misleading and deceptive conduct. I do not agree.

97    The representation that apartment 14.01 would, when constructed, have a large free span opening and seamless transition from the interior to the terrace area was a representation as to a future matter. The Ripanis therefore also rely upon the deeming operation of s 4(1) of the ACL. Century Legend did not adduce any evidence that it had reasonable grounds for making the representation. That is unsurprising given that Century Legend never intended to build apartment 14.01 in accordance with the ‘hero render’, nor was it able to do so.

98    Accordingly, for the above reasons, I find that the representations referred to above in [92](a), (b) and (e) were made by Century Legend by providing the render to the Ripanis in the context I have described. Those representations were confirmed by the oral representations made by Mr Tran concerning the render and its correlation to apartment 14.01. Mr Tran’s representations also constitute separate actionable representations made on behalf of Century Legend. I also find that the representations made by, or on behalf of Century Legend were misleading and deceptive in contravention of s 18 of the ACL and that they were false representations actionable in equity for misrepresentation.

Relevant contextual facts

99    The narrative of events to follow is divided into two periods – the pre-contractual period and the post-contractual period.

100    The first period (pre-contractual period) is between mid-late January 2017 and 29 August 2017. That period commences when the Ripanis first visited the display suite at 20 Queens Road, met Mr Tran and were told about apartment 14.01, and concludes after a series of meetings held for the purpose of settling the Ripanis’ desired floor plan, when the Bank of Melbourne issued a bank guarantee in the amount of $944,000 in lieu of the deposit of 10% payable under the contract.

101    The second period (the post-contractual period) is between 29 August 2017 and June to July 2019. The 3rd of June 2019 is a significant date because it is when I find the Ripanis were informed for the first time that the opening on the western façade would be no more than 3.4 metres in width. The 3rd of July 2019 is similarly important because it is when Mr De Mooy told the Ripanis that it was “impossible” to build the free span opening depicted in the ‘hero render’. Although the Ripanis did not file this proceeding until April 2020, they sent a letter to Century Legend’s legal representatives on 8 July 2019 communicating their displeasure with the situation and foreshadowed their intention to commence proceedings to avoid the contract of sale, insist on specific performance and/or obtain an order for damages.

102    I shall describe the relevant post-contractual events, before returning to the pre-contractual period in the context of the principal evidentiary contest in this proceeding; namely, whether Ms Hart disabused the Ripanis of any misleading impression created by the render. However, before turning to these events, it is necessary to say something about the date on which the contract of sale was entered into.

Date of entry into contract of sale

103    A preliminary matter to determine is the dispute between the parties as to the date upon which the contract of sale for apartment 14.01 was formed and became binding on the parties. The dispute occupied significant time during the hearing, both in evidence and submissions, and resulted in amendments to the pleadings. Having regard to the findings I have made concerning reliance by the Ripanis on the representations, the dispute is arid. However, in case it should be relevant hereafter, I find that the contract of sale was formed and became binding on or about 29 August 2017, when the Ripanis provided a bank guarantee from the Bank of Melbourne in the sum of $944,000 in lieu of the payment of the deposit. The reasons for this finding are as follows.

104    On 1 April 2017, the day after the Ripanis visited the display suite for the second time, Mr Tran attended the Ripanis’ personal residence. He brought with him three copies of the contract of sale to be signed: one for the Ripanis, one to be countersigned by the developer and one to be exchanged with the conveyancer. The Ripanis originally pleaded that the contract was formed on 1 April 2017 when they signed a contract in writing. However, at that time, the contract contained a handwritten clause 43 which stated: “subject to satisfactory [sic] of floor plan within 21 days.” The contract was, at that time, subject to a condition subsequent which remained unsatisfied for some months.

105    Between 6 April 2017 and 9 June 2017, there were several meetings between the Ripanis, representatives of Century Legend and of the architects, RotheLowman. During this period, the discussions principally concerned the floor plan and interior fit out of the apartment. The original, indicative, floor plan had been prepared by Carr Design, the architects who had earlier been engaged by Century Legend to design the interior of the ‘premium’ apartments on levels 10-16 of the Victoriana. However, as I have explained, Ms Hart gave evidence that it was her understanding that Carr Design decided to “walk away” from the project due to its concerns about the misleading nature the renders being used to advertise the development. It is unnecessary for me to determine as a question of fact whether Ms Hart’s understanding reflected the true reason for of Carr Design ceasing its involvement in the project. However, Ms Hart’s belief concerning the reasons for Carr Design’s decision is relevant to the contest on the evidence between Ms Hart and the Ripanis.

106    After Carr Design ceased its involvement, RotheLowman took over the design role also in relation to the premium apartments, in addition to their existing involvement in the development, which included designing the standard apartments located from the ground floor to level 10, as well as designing the common areas and building generally. Ms Hart was directly responsible for assisting purchasers such as the Ripanis in relation to customising the floor plan and fit out of the premium apartments. During the pre-contractual period, Ms Hart produced a number of proposed floor plans following meetings with the Ripanis. The floor plan which was eventually settled upon and agreed to by the Ripanis became known as Option E (see Annexure VII). The special condition in clause 43 was thereby satisfied. I pause to add that there were various iterations of the floor plan, being Option A, Option A/B, Option B, Option C and, finally, Option E (see Annexures III, IV, V, VI and VII, respectively).

107    On 15 June 2017, Century Legend signed a form of the contract of sale, with the words: ‘subject to satisfactory [sic] floor plan’ crossed out. The Option E floor plan, dated 16 June 2017, was appended to the contract. The evidence does not reveal whether and, if so, precisely when, Century Legend provided an executed copy of the contract to the Ripanis. However, on 20 July 2017, the Ripanis’ solicitors forwarded to Mr Ripani an email from Century Legend’s solicitors dated 28 June 2017. The email dated 28 June 2017 attached a copy of the particulars of the contract signed by the Ripanis (but not countersigned by Century Legend) and a copy of the Option E floor plan and relevantly stated: Please confirm that you are satisfied with the floorplan as requested.

108    By their amended pleading, the Ripanis allege that the contract was formed on 15 June 2017, being the date on which Century Legend signed the contract as referred to above. That was the date that had been pleaded by Century Legend as the date the contract was formed in its Defence dated 4 June 2020, prior to subsequent amendments. Century Legend’s pleading in the Further Amended Defence, filed on 4 February 2021, was ultimately that the contract of sale was entered into by the parties on or around 29 August 2017, when the Ripanis provided a bank guarantee in lieu of a deposit. The Ripanis were, by this time, also satisfied with the Option E floor plan.

109    In my view, the contract was not formed on 15 June 2017, as there is no evidence that Century Legend communicated its acceptance of the contract at that time. I agree in substance with the submissions made by Century Legend in relation to this issue. That is, on the best available evidence, the Court ought to conclude that the contract of sale came into force on around 29 August 2017, when, having reached a state of satisfaction with the Option E floor plan, the Ripanis provided the bank guarantee acting in performance of the contract.

110    The email from Century Legend which was forwarded to the Ripanis on 20 July 2017 in effect asked the Ripanis to confirm that the special condition in clause 43 had been satisfied, such that the contract would become unconditional. By furnishing the bank guarantee, the Ripanis unequivocally communicated their acceptance that the contract had become unconditional. For completeness, I note that the Ripanis accept that Option E was the floor plan the subject of the contract.

Post-contractual period

111    The first significant event in the post-contractual chronology is a meeting between Mr Hu and the Ripanis on 15 September 2017. Mr Hu gave evidence that at that meeting the Ripanis made a request for the “sliding door to be opened as much as possible”. Mr Hu recorded a contemporaneous note of that request in light blue pen on a version of the Option E floor plan annotated 15.9.17’. Mr Ripani gave evidence that there was no discussion of the doorway or opening between the interior of the apartment and the pool terrace at any time during that meeting. Mrs Ripani gave evidence that the focus of the meeting on 15 September 2017 was in relation to the internal aspects of the apartment, including appliances and fittings.

112    On that same date, Mr Hu met with Ms Hart at the offices of RotheLowman and relayed the Ripanis request to Ms Hart. Mr Hu’s evidence about the 15 September 2017 meeting is that Ms Hart acknowledged and recorded the request but did not say anything additional about the matter. Mr Hu’s version of events is corroborated by Ms Hart’s file note of that meeting, which includes the notation: “sliding doors to open as wide as poss to terrace.” I find that, on balance, the Ripanis mentioned their desire for the free span opening to be as wide as possible at the 15 September 2017 meeting. However, it appears that the internal layout was the focus of that meeting, as evidenced by the detailed notes regarding the fittings and fixtures for apartment 14.01 recorded on the annotated Option E floor plan (see Annexure VIII).

113    On 21 September 2017, Ms Hart emailed Mr Hu regarding the meeting on 15 September 2017. Ms Hart’s email recorded, amongst other things, the Ripanis’ request for the sliding doors to the terrace to be opened as wide as possible. This correspondence is the first reference in any of the documentation to the size of the opening on the western façade of apartment 14.01.

114    A further meeting occurred between Ms Hart and the Ripanis on 22 September 2017. The evidence of Ms Hart, Mr Ripani and Mrs Ripani was that the purpose of the meeting was to discuss the internal fit-out of the apartment. As Mr Ripani said in an email to Ms Hart on 20 September 2017, in relation to the meeting: “Nina and I look forward to seeing you this Friday at 9.30am to go over Fixtures and Fittings.

115    Ms Hart gave evidence that during that meeting, the Ripanis requested that the opening to the terrace be the maximum width possible. That request is recorded in a “purchaser upgrade” spreadsheet prepared by RotheLowman which reads: “Purchaser request: Maximise clear opening to balcony” and is dated 22 September 2017. Ms Hart reiterated that request in an email to representatives of Century Legend, including Ms Xu, Mr Hu and Mr Lu, on 2 October 2017. Ms Hart again recorded the Ripanis’ wishes in an email on 28 November 2017 to Ms Xu and Mr Lu, noting amongst other things:

With regards to the apartment terrace threshold transitions, yes purchasers for both 1401 and 1101 have expressed the expectation that there will be an even transition as per the marketing renders. Both parties have requested to maximise the width of opening to the terraces to take advantage of the interior / exterior connection.

116    There were various iterations of the purchaser upgrade spreadsheet from February to May 2018, each of which recorded the following Purchaser request: Maximize clear opening to balcony”. Century Legend also obtained an estimate dated 26 March 2018 from a quantity surveyor, WT Partnership, in relation to various upgrades to the design of apartment 14.01. Significantly, one of the items was an estimate of $43,760 for “frameless glass doors” including motorised operation and wiring “to suit 12000 x 2550 opening”. I shall explain the significance of that fact shortly.

117    On 4 May 2018, the Ripanis met with Mr Hu and Mr Tran at the Ripanis’ personal residence. Mr Hu brought the purchaser upgrade schedule and the WT Partnership estimate to the meeting for discussion with the Ripanis. At that meeting, Mr Ripani asked Mr Hu about the inclusion of the 12 metre retractable door opening recorded as a “purchaser upgrade” in the WT Partnership document. Mr Hu did not provide a clear response as to why that item had been included as a “purchaser upgrade”, but promised to investigate the matter further. Mrs Ripani gave evidence that this was the first time she had actually seen a dimension in relation to the opening and up until that point had simply expected a “big opening” based upon what was depicted in the render.

118    Importantly, Mr Hu also gave evidence that, at the time of the 4 May 2018 meeting, his understanding was that there would be a 12 metre opening. As I shall explain further below, that is contrary to Ms Hart’s evidence that she told Mr Hu about a conversation with the Ripanis during which she told them they were not going to get an opening of the type depicted in the render and the maximum width achievable would only be 3 to 4 metres. Mr Hu’s evidence is also at odds with the warnings he received from RotheLowman in 2016 and 2017 regarding the misleading impression conveyed by the render.

119    It was also revealed to the Ripanis at the 4 May 2018 meeting that the ceiling heights would be approximately 2.55 metres, rather than the 2.7 metres the Ripanis expected. During this meeting, Mr Ripani was vocal about his displeasure with that outcome, as well as concerns that the ceiling might not be flush”. As a result, Mr Hu said they would speak to the builder, Hickory, in an effort to maximise the ceiling height and limit any drop in the ceiling to “wet areas”. Mr Hu also recommended that the Ripanis speak with the architects regarding the design of the apartment.

120    The Ripanis endeavoured to arrange a meeting with Ms Hart, but she was not available until 22 June 2018. At a meeting on 22 June 2018 between Ms Hart and the Ripanis, Ms Hart told the Ripanis that attempts were being made with the engineer to keep the ceiling height at 2.85 metres through as much of the apartment as possible. Between approximately June and July 2018, Mr Ripani pressed Century Legend and RotheLowman for an answer about the ceiling heights and what was to occur with the opening onto the terrace. For example, on 24 July 2018, Mr Ripani wrote in an email to Mr Hu (copying in Mrs Ripani and Mr Lu) that he was “very concerned” about the ceiling heights for the apartment and wanted to know “what is happening with the sliding doors opening out to the balcony.”

121    On 9 October 2018, Mr Hu forwarded an internal email he had received from Mr Lu (which was also copied to Ms Xu) to the Ripanis. The email indicated that there would no longer be a drop in the ceiling height in the living areas (that is, the ceiling would be flat) and referred to a solution proposed by Hickory to maximise the opening of the glass door to the balcony, to be finalised in a few weeks. The Hickory proposal was for a 6.4 metre opening to the terrace. Mr Hu referred to the proposal as an “achievement” and “good news”. However, the Ripanis were “shocked” upon learning that the opening would only be 6.4 metres. Notwithstanding their disappointment, the Ripanis decided to continue with the contract following assurances from Mr Hu that 6.4 metres was a “worst case scenario”.

122    No attempts were made to finalise the design of apartment 14.01 until early 2019 because RotheLowman’s fee variation proposal to carry out that finalisation work had not by then been accepted by Century Legend. On 26 March 2019, Mr Hu forwarded RotheLowman’s fee variation proposal to the Ripanis and requested final approval of design specifications so that Hickory could finalise their “super luxury sky mansion”.

123    On 8 April 2019, Mr Ripani sent an email to Mr Hu (copying in Ms Xu, Mr Lu and Mrs Ripani), which conveyed in substance that the Ripanis:

(1)    considered it insulting that they would be charged for the cost of customising their apartment;

(2)    were displeased that there seemed to be “surprises at every turn”, mentioning in particular all the “dramas with the ceiling heights [and] the door openings”; and

(3)    wanted to “sit down and talk about this”, adding that it was probably time the Ripanis seek “legal advice on this matter.”

124    These exchanges ultimately led to a meeting on 24 May 2019 between the Ripanis, Ms Hart and another architect from RotheLowman, Ms Julia Meng. Mrs and Mr Ripani each gave evidence to the effect that at the meeting on 24 May 2019 the size of the door opening was the subject of renewed discussion. In particular, the Ripanis asked whether there was scope to make the door opening wider than 6.4 metres and indicated, further, that if it was only going to be 6.4 metres, they wanted it located in the middle of the western façade. According to the Ripanis, Ms Hart promised to contact Hickory to investigate the issue and revert in due course.

125    Ms Hart’s recollection of the 24 May 2019 meeting was unreliable and inconsistent. She initially accepted that there was only one meeting on 24 May 2019, before recalling another meeting on 23 May 2019 based on the date she had recorded in her handwritten notes. She then insisted that there were two meetings a day apart, and defended the date on her notes of a meeting on 23 May 2019 as accurate, recording an earlier meeting with the Ripanis that was in addition to the meeting on 24 May 2019. Ms Hart rejected the suggestion that she was in error and began developing an account of how everyone was able to meet on such short notice. After being cross examined to the effect that the evidence suggested that there was only one meeting, and it was on 24 May 2019, Ms Hart accepted that there was too much evidence to the contrary and that there was only one meeting in May 2019, on 24 May 2019.

126    On 29 May 2019, Ms Hart sent an email to the Ripanis saying she was seeking confirmation from Hickory as to their requests for the sliding door opening to be maximised and would be in contact in the next week. On that same day, Ms Meng sent a message to representatives from Hickory on a project management system called Aconex: “As noted, Walter and Nina would like to widen their facade doors to Queens Road side (nom. 6000mm wide, if possible - as per attached images from marketing materials)”. Ms Hart and other representatives from RotheLowman working on the Victoriana development were copied into that message.

127    On 3 June 2019, Ms Meng sent an email to the Ripanis, copying in Ms Hart, providing Hickory’s comments in relation to apartment 14.01. Importantly, that email recorded that due to the wind load factor, the maximum opening achievable was 3.4 metres using a double stacker sliding door.

128    The Ripanis were “quite upset” upon receiving this news. On 4 June 2019, Mrs Ripani wrote an email to Ms Meng, copying in Ms Hart, to express her frustration. The email read as follows:

Hi Julia ...

Really need to talk to you about your email last night and hickory's response.

Am a bit confused ... opening is 6.120 or 3416?

And why is the opening on one side not in the middle?

I have an email that I will send to you from Peter and Shawn from JD Group in which they confirm that after discussions with Hickory that the opening to the living area will be 6.4 metres ..

We really need to sort this out because advice just keeps changing.

Also we are not happy at all about the stepping up into the balcony. Attached is the photo of our proposed apartment which clearly shows the opening is flush going out to the balcony. That is what we signed up for not what we are being told now.

We really need to have a talk about these things because they are not what we were told or what we bought.

We have paid nearly 10M so it's really not good enough!!

Could one of you please give us a call as soon as possible ..

Regards

Nina Ripani

Sent from my iPhone

[Ellipses in original]

129    On 5 June 2019, Ms Hart emailed the Ripanis to organise a time to meet with Hickory and Century Legend to discuss apartment 14.01. There were some back and forth correspondence during which the parties sought to find a suitable time to meet. In one of those emails, on 5 June 2019, Mrs Ripani wrote in an email to Ms Hart (copying in Mr Ripani): “[I] [a]m a bit worried about this meeting. We were promised something and if we are going to be blindsided with the developer and builder, we won’t be happy.

130    By 13 June 2019, the Ripanis had not yet received a response from Ms Hart in relation to the proposed meeting. On that day, Mrs Ripani sent an email, which she had drafted in consultation with Mr Ripani, to Ms Hart and Ms Meng, copying in Mr Hu. The email said:

Hi Kate ...

Haven't heard back from you regarding a meeting for our apartment..

To be honest, we are very concerned with this situation.

We purchased a very high end apartment with nearly a 10M price tag. An apartment with a huge outdoor space which is what sold us in the first place. We were given a brochure and shown what our apartment would look like .. this is the reason we committed to this project.

However, we feel that we have been mislead and we keep having to compromise on what we were promised.

Firstly we couldn't get a straight answer as to the ceiling heights. The heights are not what we were shown and especially in the wet areas, they are really low ... not what you would expect in an apartment of this calibre .. Anyway, reluctantly we moved on as long as the ceiling height did not drop in the living areas in any spots and that the ceilings would be pushed to the optimum heights.

Now we have the issue of the doors to the balcony which we chased for ages to get clarification.

If you refer to the image we were given, the doors open basically the whole way in the living area and there is no step down to the balcony. We finally got clarification that the opening would be 6.4 metres .. this is not what the drawing showed but we again compromised to what we thought was still a decent opening and one we could live with ...

Now we have gone from 6.4 to 3.4 ... an opening in our opinion which is totally unacceptable for us ... this is a compromise we will not make .. that opening between the inside and outside areas is why we committed to this apartment.. it is the only reason.

On top of that we were never told that we would have to step down onto the balcony ... that totally changes the aesthetics of what we want.

We understand that things change between designing and building but this is nothing like what we were promised.

With all due respect, this building was designed by architects and I am sure things like wind and rain would have been taken into consideration.

To be clear from our point of view, we want to achieve the look that we were sold, if that is not possible then we cannot go ahead with this.

We are hoping that between all parties, this can be worked out. There must be a solution to achieve the results that we want.. after all it's what we bought and it's what we expect to be delivered.

We def didn't pay 10M to have a 3 metre opening to a balcony that we have to step down on to ..

Please let us know where we go from here ...

Regards

Walter & Nina Ripani

Sent from my iPhone

[Ellipses in original]

131    A meeting eventually took place at RotheLowman’s offices between the Ripanis, Mr Lu, Ms Hart and Mr De Mooy on 20 June 2019. The Ripanis gave evidence that:

(1)    they took a copy of the hard-bound brochure to the meeting and opened it up to the page of the ‘hero render’;

(2)    Mr Ripani said words to the following effect: “This is what we were shown. This is what we were told was 14.01. This is what we believed we were getting. How is it now that we end up with a 3.4 metre opening?”; and

(3)    they referred to an assurance they received in October 2018 that the opening would be at least 6.4 metres.

132    Mr De Mooy corroborated the Ripanis’ version of events, giving evidence that:

(1)    there were discussions in relation to the width of the opening on the western façade and also that Mr Ripani said he was told the opening would be 12 metres or thereabouts; and

(2)    he could vividly recall Mr Ripani referring to a marketing image, or a render, of the western outlook from apartment 14.01, which depicted an invisible façade of floor to ceiling glass and no form of obstruction from the inside living areas to the terrace.

133    The Ripanis gave evidence that Mr De Mooy said it was impossible under the Australian Building Code to build the wide opening that the Ripanis had been promised, and that a triple stacker door system shown had never been approved for multi-storey use. Mr De Mooy’s evidence was also that he told the Ripanis that what was depicted in the image wasn’t achievable within the current design parameters that had been set by the architects, RotheLowman.

134    Ms Hart’s evidence is that during the 20 June 2019, she explained to all those present that she had already told the Ripanis in May or June 2017 the door opening would not look like what was depicted in the render. Mr De Mooy did not recall any such statement. The Ripanis also dispute that Ms Hart said in the meeting on 20 June 2019 that she had previously said to them that the door opening would only be 3 to 4 metres at a meeting in May or June 2017.

135    On 2 July 2019, Mr De Mooy emailed the Ripanis, copying in relevant representatives from RotheLowman (including Ms Hart and Ms Meng) and Century Legend (including Mr Lu), stating that Hickory was investigating alternative façade sliding door options to achieve a 6 metre opening . Mrs Ripani responded to this email later on 2 July 2019, noting, amongst other things: “At the meeting, you guys were adamant that this was in no way achievable.”

136    On 3 July 2019, Mr De Mooy responded to the Ripanis. Mr De Mooy told the Ripanis that the project brief requires the façade to comply with AS4284 and FP.1.4, and that openings greater than 3.4 metres will require detraction from this brief and a lower compliance (AS2407), which will require both façade engineer and building surveyor approval. Mrs Ripani responded by stating: “I am really not sure what that means. From our point of view we just want to know if what we were shown is possible. From our discussion the other day, you seemed to believe that it was totally impossible.” It is in response to that email that Mr De Mooy said: “If your [sic] referring to the ‘invisible’ façade opening in the render that [Mr Ripani] tabled during our meeting, then no, it is impossible.”

137    On 8 July 2019, the Ripanis’ solicitors at the time, Hughes Legal, wrote to Century Legend’s solicitor, Hailes Lawyers, stating as follows:

Our respective clients have different views as to whether your client is able to convey the property in accordance with the contract.

Pictures and plans forming part of the building specifications and which induced our clients to enter into the contract clearly depict an “invisible facade opening” (your client’s builder’s description) to an approximate width of 12 metres. On any reasonable view, this would have been a stunning architectural feature and would have provided significant amenity to our clients as the outside terrace pool area could be virtually integrated into the living space of the apartment by fully opening the sliding doors dividing those spaces.

Our clients have, however, now been advised that your client is only prepared to construct the invisible façade opening to a width of a mere 3.2 metres.

Our clients consider that such a radical amendment to the specification is a substantial, material, detrimental and impressible alteration whereas the vendor considers it to be a non-material alteration which it is entitled to make.

138    The letter went on to state that although the Ripanis were ready willing and able to perform the contract, they were exploring options to either avoid the contract of sale, to insist that the invisible façade be constructed to a width of 12 metres and/or to obtain damages to compensate them for the loss of amenity. During the following months, Hughes Legal and Hailes Lawyers sought to organise a meeting between the Ripanis and Century Legend. Those attempts were unsuccessful. Subsequently, the Ripanis engaged their current solicitor, Zervos Lawyers. In a letter to Hughes Legal dated 20 December 2019 Zervos Lawyers said that unless they received an assurance that the opening would be built as depicted in the hard-bound brochure, the Ripanis intended to issue proceedings against Century Legend to have the contract of sale set aside for misleading and deceptive conduct. This proceeding was eventually commenced by Originating Application filed on 22 April 2020.

Reliance upon the representation

139    I now turn to the question of reliance, in particular, the conflict in the oral evidence concerning statements Ms Hart said she made to the Ripanis prior to their entry into the contract. If Ms Hart’s evidence were accepted, her statements to the Ripanis would have had the effect of curing the misleading representations conveyed by the render and/or Mr Tran.

140    Ms Hart’s evidence was that she disabused the Ripanis of any misapprehension created by the ‘hero render’. In particular, Ms Hart’s evidence was to the following effect:

(1)    that during various meetings in May and June 2017, she discussed the position of the doors on the western façade of apartment 14.01 with the Ripanis;

(2)    that she annotated printed A3 floor plans with dots and markings to show where there would be openings between the interior living areas and the pool terrace;

(3)    that it was not possible to have a single opening because of the wind loadings, so there would be two or three smaller openings ;

(4)    that the Ripanis expressed disappointment when told there could not be a single large opening onto the terrace; and

(5)    by reason of those discussions, it should have been apparent to the Ripanis that there would not be a free span opening between the terrace and the internal living areas.

141    Those matters were raised for the first time during the course of Mrs Ripani’s cross examination, having not been raised in the pleadings or witness outlines. Indeed, the predicate of Century Legend’s written and oral opening submissions was that there was no discussion about the opening between the interior and the terrace until after the contract was entered into.

142    It was not until Monday, 8 February 2021, midway through Mrs Ripani’s cross examination, which had commenced on Friday, 5 February 2021, that it was suggested by Century Legend for the first time that there had been a discussion about the location of doorways in May or June 2017. Even then it was not put to either Mr or Mrs Ripani that Ms Hart had told them that the maximum opening was going to be 3 to 4 metres.

143    As I have explained in the introduction to these reasons, I accept the evidence of each of Mrs and Mr Ripani that they were told no such thing and I reject the evidence to the contrary given by Ms Hart. I have reached these findings having regard to the evidence in relation to what occurred in the period prior to the formation of the contract, as well as evidence of relevant events and communications subsequent to the contract, insofar as the latter are probative in resolving the stark contradictions between the evidence of the Ripanis and Ms Hart.

Pre-contractual period

144    Returning to the beginning of the pre-contractual period, in early 2017, an advertisement for the Victoriana came to the attention of Mrs Ripani. Mrs Ripani was attracted by images of swimming pools and outdoor terraces as the Ripanis were then living on the 63rd floor in a high rise tower with no external area. Shortly thereafter, in mid-late January, the Ripanis attended the Victoriana display suite, where they met Mr Tran. At this meeting, the Ripanis expressed an interest in apartments with an outdoor area for entertaining guests. Mr Tran informed them that there were only four such apartments and they had already been sold. Mr Tran asked if they were interested in any of the other apartments. The Ripanis said they were not. Mr Tran offered to tell the Ripanis if any of the apartments in which they had an expressed interest became available.

145    While the Ripanis were overseas, Mr Tran contacted Mr Ripani by messaging application WhatsApp to notify him that apartment 14.01 had become available. On 22 March 2017, Mr Tran sent an email to Mr Ripani giving details of apartment 14.01 and attaching various .jpg files and a link to the marketing brochure. One of the attached .jpg files was the ‘hero render’. Mr Ripani gave evidence that when he opened that image, he understood it was referable to apartment 14.01 and that he “loved the massive opening and the whole living area flowing out to the outside area.”

146    On 31 March 2017, the Ripanis met with Mr Tran for the second time at the Victoriana display suite. At this meeting, Mr Tran gave the Ripanis a copy of the brochure, which included marketing materials for the premium apartments such as the ‘hero render’. The Ripanis evidence is that Mr Tran pointed to the render and said that it was a depiction of apartment 14.01. Mr Tran’s evidence was that he said in substance that the render was a representation of what the apartment would look like when constructed. Century Legend did not materially challenge this evidence. Rather, it gave emphasis in its submissions to Mr Tran’s evidence that he told the Ripanis that the render was an “artist’s impression”. For the reasons I have given above, Mr Tran’s statement, albeit accurate, was not sufficient to correct the misleading impression conveyed by the render.

147    It is convenient at this point in the chronology to refer to a further matter relied upon by Century Legend as dispelling any impression the Ripanis may have gained from the render. In its closing submissions, Century Legend submitted that a Carr Design floor plan, which was the first of four attachments to Mr Tran’s email to Mr Ripani on 22 March 2017, depicted four sliding doors, two on the pool side and two on the kitchen and entertaining side of the terrace. Century Legend further submitted that the floor plan did not depict a retractable three-stacker door system opening to approximately six, eight or twelve metres. To the contrary, Century Legend says the floor plans consistently depicted multiple smaller openings at the western façade to the terrace. The floor plan also contained a note, or disclaimer, in the following terms:

The dimensions and areas are approximate only and may not accurately represent the actual dimensions and areas of the apartments or the spaces within them and are subject to change without notice.

148    Relying on these matters, Century Legend submitted: “[t]he floor plan made clear that the marketing render was not a precise depiction of Apartment 14.01”, and that “[t]he Carr Design floor plan accompanying the render dispelled any suggestion that Apartment 14.01…would include a ‘flow-through design achieved by, inter alia, a retracted glass three stack window panel system.

149    The first of those contentions may be readily disposed of, for it tilts only at a ‘strawman’ of Century Legend’s invention. It is not the Ripanis’ case that they believed the render to be a precise depiction, or akin to a photographic likeness, of what they may expect apartment 14.01 to look like when built.

150    The second contention is that the Carr Design floor plan, read together with the disclaimer, corrected any misapprehension the Ripanis may have had that apartment 14.01 would accord with the render. Leaving aside any consideration for present purposes of the legal effect of pre-contractual disclaimers, which I have already dealt with above, the factual inferences Century Legend urges I should draw are patently untenable if one considers but a few of the uncontroversial objective facts.

151    First, the significance, if any, of the floor plan provided to Mr Ripani as an attachment to the email from Mr Tran of 22 March 2017, must be considered having regard to when that occurred in the sequence of events. The floor plan was provided before the Ripanis visited the display suite for the second time on 31 March 2017. It was at that meeting that Mr Tran described what apartment 14.01 would look like by reference to the ‘hero render’. During cross-examination, Mr Tran acknowledged that he referred to the ‘hero render’ as an artist’s impression, but beyond that did not express any qualification as to what the apartment would ultimately look like by reference to the render.

152    Second, and most significantly, the common premise of the Ripanis dealings with Century Legend, initially through its agent Mr Tran and subsequently directly through Mr Hu, Mr Lu and Ms Xu, was that the Ripanis would be able to customise their particular floor plan. Indeed, the Ripanis made clear they would not be contractually bound to purchase the apartment until the customisation had been agreed and a floor plan approved by them. This was the essence of the arrangement later embodied in the special conditions (see handwritten clause 43) of the contract signed by the Ripanis on 1 April 2017.

153    The present relevance of this is that the Carr Design floor plan was superseded by several floor plan iterations prepared by Ms Hart following discussions with the Ripanis concerning their specific requirements. Having regard to those later discussions, if the Carr Design floor plan was considered by the Ripanis, it was very soon thereafter superseded by the process undertaken between Ms Hart and the Ripanis to settle upon a floor plan for the apartment. I therefore do not see how the Ripanis could have appreciated the free span opening could not be achieved upon reviewing the Carr Design floor plan attached to Mr Tran’s 22 March 2017 email, particularly having regard to what Mr Tran said about the render at the second meeting at the display suite on 31 Mach 2017.

154    Further, and crucially, the opening onto the outdoor terrace depicted in the Carr Design floor plan was not explained to the Ripanis. Ms Hart’s evidence – as well as that of Mr Tran, Mr Hu and the Ripanis – was that nothing specific was discussed about the door opening on the western façade at the meeting on 7 April 2017. Indeed, the evidence was that any conversations in relation to the breakup of the façade, assuming there was such a conversation, occurred subsequent to that meeting. I shall also explain below the circumstances in which Ms Hart on her own initiative changed the position of the door openings on a floor pan that she had prepared designated as Option A and dated 26 April 2017, without pointing out that important change to the Ripanis.

155    Century Legend further contends that the language chosen by the pleader to describe the meaning conveyed by the render image; namely, as depicting a flow-through design’, “is a phrase so vague as to be devoid of meaning.” I reject this contention for the reasons I have already explained above. In my view, a ‘flow-through design’ is an apt substitute for the expression I have chosen, being a ‘free span’ opening. I further observe that Century Legend’s criticism of the Ripanis’ characterisation of the render as depicting a ‘flow-through design’ misses the main point; namely, that the render speaks for itself. Meaning is conveyed by the image, even if there should be disagreement about how to describe or characterise that meaning in language.

156    As I have said above, the processes of the Court require that the meaning conveyed by the render must be translated, as it were, into language for the purposes of pleading the claims arising from misleading or deceptive conduct or misrepresentation. However, in such cases the seminal source for understanding what the image conveys, what it says, or represents, must be the image itself; construed, in the sense of being understood, in the full context in which it was used. That context includes, if relevant, the purpose for which the image was created or published, as well as the transactional context in which it was seen by, and or given to, the aggrieved representee. Importantly, that context also encompasses any corrective conduct or statements by the putative wrongdoer; which of course also includes the effect of any disclaimers, warnings, or contractual exclusions as may be relevant.

157    Perhaps needless to say, I am referring only to images which are demonstrably realistic depictions of the subject. If the image was not self-evidently intended to be a realistic representation, for example in the case of a painting in the abstract style, or in the style of the impressionists, the translation of its meaning into language would not, by definition, be to describe literally the subject portrayed in the painting, but rather to grapple with its meaning at another, ethereal, level.

158    I return to the narrative of events and communications in the period prior to the formation of the contract in late August 2017. Shortly following the Ripanis’ second meeting with Mr Tran at the display suite, the Ripanis signed the contract on 1 April 2017 containing the condition subsequent in clause 43. Between that date and 15 June 2017, the Ripanis met with Ms Hart to settle upon a bespoke floor plan and fit out for apartment 14.01.

159    On 7 April 2017, the Ripanis met with Ms Hart, Mr Tran and Mr Hu at the offices of RotheLowman. Mrs and Mr Ripani gave evidence that the Ripanis took the hard-bound brochure to the meeting and opened it up to the page of the render. That evidence was contradicted by Ms Hart, who said that during that meeting, the Ripanis did not have the brochure with them. In any event, all five attendees at the meeting gave evidence that there was no discussion about the opening onto the balcony at that meeting.

160    Century Legend submitted that Ms Hart’s was evidence was, in effect, that during subsequent meetings in May and June 2017, she explained to the Ripanis the position of the doors on the western façade and told the Ripanis there would not be a single opening onto the terrace. In particular, Century Legend submitted that the Court should accept the following aspects of Ms Hart’s evidence:

(1)    that during meetings with the Ripanis prior to them entering into the contract of sale, Ms Hart pointed to, and annotated, various floor plan to show the Ripanis where the openings would be between the internal living area and external terrace;

(2)    that in a meeting with the Ripanis on a date she could not recall in May 2017, she specifically told the Ripanis that it was not possible to have a single large opening along the western façade because of the wind loading;

(3)    that in that same meeting in May 2017, she also said there had to be a series of smaller openings, but there would be a large opening centred on the fireplace allowing for access to the external terrace; and

(4)    that in a meeting on 9 June 2017, she discussed the size of the openings between the interior and exterior with the Ripanis and mentioned, by reference to the glazing mullions, that the opening would be approximately 3 to 4 metres.

Ms Hart says these matters are reflected in annotated versions of the Option B floor plan (see Annexure V) and Option C floor plan (see Annexure VI).

161    In substance, Ms Hart’s evidence was that she explained to the Ripanis that it was “impossible” to have any wider opening than had been indicated by the floor plans and that the Ripanis were “disappointed” upon being informed of this.

162    Century Legend contends that the Court ought to prefer the evidence of Ms Hart rather than Mrs and Mr Ripani in relation to whether the opening on the western façade was discussed during pre-contractual meetings. The resolution of that question is of course pivotal to the outcome of the Ripanis claim for relief.

163    Century Legend made the following submissions as to why the evidence of Ms Hart should be preferred.

164    First, Century Legend says Ms Hart is an impartial third-party witness who was engaged by the project architects, RotheLowman. In contrast to the Ripanis, who have an obvious personal and financial interest in the outcome of the proceeding, Ms Hart is effectively disinterested. Century Legend contends that this factor weighs heavily in favour of preferring Ms Hart’s evidence to the evidence given by the Ripanis.

165    Second, Century Legend submitted that Ms Hart presented as a more reliable witness, and that she was measured and understated in her testimony. Indeed, Century Legend says that Ms Hart made appropriate concessions, including her view that the marketing materials prepared by Century Legend were, in effect, misleading.

166    On the other hand, Century Legend says that Mrs and Mr Ripani each presented as unreliable witnesses. In relation to Mrs Ripani, Century Legend says that her evidence was self-serving and disingenuous. For instance, Mrs Ripani claimed to have completely overlooked the markings on the floor plan indicative of the openings to the terrace and was very reluctant to accept the presence of “visible markings” during the course of her cross examination. Century Legend further contends that Mr Ripani appeared to have no clear recollection of the discussions with Ms Hart in meetings between April 2017 and June 2017. Century Legend noted, by way of example, that Mr Ripani could not recall what materials he took to various meetings nor who was present at those meetings.

167    Third, Century Legend says that contemporaneous documentary records corroborate Ms Hart’s evidence. In this regard, Ms Hart’s evidence was that her usual practice was to date and annotate floor plans as a way of taking “minutes” of meetings contemporaneously with the meeting. Relevantly, as I have said, Ms Hart claims she annotated the Option B floor plan during a meeting in May 2017 (see Annexure V) and the Option C floor plan during her meeting with the Ripanis on 9 June 2017 (see Annexure VI).

168    Century Legend submits that certain markings in Ms Hart’s handwriting on the annotated copy of the Option C floor plan dated “9.06.17” are consistent with Ms Hart explaining the positioning of the multiple doorways at the western façade of the apartment, including the way in which the panels would stack against each other. This is supported by the hand-written annotations “2 x dr” and “potential stacking to side” on the Option C floor plan (see Annexure VI). Ms Hart gave evidence that she included those annotations “because the Ripanis wanted to maximise the opening between the interior and the exterior, and we were trying to optimise how many doors we could get between the dining and barbeque area”. Ms Hart also said that she told the Ripanis she would need to investigate whether the doors could be stacked to one side to allow for a greater opening. She added, however, that it was possible to deduce that the main opening would be roughly 4 metres by reference to the glazing mullions breaking up the western façade.

169    Century Legend therefore submits that in all the circumstances, and in particular given the contemporaneous documentary records which corroborate Ms Hart’s account, her sworn testimony that she told the Ripanis how wide the doors would really open in May or June 2017, is not a matter of “recent invention”. Century Legend submitted there is no good reason to reject Ms Hart’s testimony – she was a credible witness who should not be found to have lied in her evidence, particularly when that evidence is supported by Ms Hart’s contemporaneous written annotations on the floor plans

170    Century Legend further contends that, in any event, the Court ought to reject the Ripanis’ assertions that they did not discern the positioning of the doors at the western façade of apartment 14.01. According to Century Legend, those openings were plainly marked on floor plans the Ripanis reviewed during the course of working on a bespoke floor plan with Ms Hart between April and June 2017. Indeed, the documentary evidence shows that the Ripanis carefully examined the floor plans before going overseas in June 2017. For instance, Century Legend pointed to the following evidence:

(1)    On 26 April 2017, Mr Ripani sent a WhatsApp message to Mr Tran stating: “I'm printing off a few copies [of the revised floor plan] tomorrow at the office on A3 and we will own in [sic] what needs correction. Getting close to what we are looking for. Talk tomorrow”. Senior Counsel for Century Legend suggested that “own in” might be a typographical error and should be read as “hone in on”.

(2)    On 10 May 2017, Mr Tran forwarded an email from Mr Ripani to Ms Hart, copying in Mr Hu, and said:Walter & Nina are delighted with the revised plans. Just a few minor queries and changes”. Mr Ripani’s email set out very specific requests for changes, indicating that Mr Ripani had carefully reviewed the floor plan.

(3)    On 6 June 2017, Mr Ripani wrote in an email to Ms Hart: “Nina and I had a look at the revised drawing that you had submitted last night and they look really good. Ive [sic] just printed them out onto A3 to have a detailed look at them tonight, I have to say that whats [sic] been drawn up is pretty awesome.

171    Based on these matters, Century Legend contended that the Court ought to conclude that in carefully reviewing the RotheLowman floor plans for apartment 14.01 (including in A3 size), Mrs and Mr Ripani must have appreciated that the openings depicted on those floor plans were not consistent with the large free span opening as depicted by the render. It follows that they did not rely on the representations conveyed by the render in entering into the contract of sale. For those reasons, Century Legend submits that the evidence of Ms Hart as to what she told the Ripanis in May and June 2017 should be preferred over the self-interested and self-serving evidence given by the Ripanis.

172    As I have said above, Century Legend’s defence, as pleaded and opened, proceeded on the tacit assumption that there was no discussion of the opening in pre-contractual meetings such that it would have disabused the Ripanis of any misapprehension created by the render. It was not opened that Ms Hart told the Ripanis that what was depicted by the render could not be constructed. Rather, until Century Legend’s defence developed and altered as a result of Ms Hart’s evidence, not previously mentioned, the gravamen of Century Legend’s defence was that it was discernible from the various iterations of the floor plans, discussed at meetings between the Ripanis and Ms Hart, that the free span opening depicted in the render would not be built. This original defence as to causation is still pressed, notwithstanding that if Ms Hart’s evidence were accepted there would hardly be any need to decide whether scrutiny of the floor plans disabused the Ripanis of any misapprehension about what the render represents.

173    The original defence, as I have called it, posited that the Ripanis knew, or ought to have known, by reason of their discussions with Ms Hart concerning the various iterations of the floor plans, that the render was unrealistic and no guide to what they might expect. That defence is encapsulated in Century Legend’s closing submissions, in which it says:

The Ripanis reviewed in detail and discussed several iterations of the floor plan, from a RotheLowman concept plan through to Option A, Option A/B, Option B, Option C and, finally, Option E. None of these plans depicted a retractable three stack window panel system. None of them depicted glass doors opening to approximately 6, 8 or 12 metres. To the contrary, the plans consistently depicted multiple smaller openings at the western façade to the terrace.

[Footnotes omitted]

174    Ms Hart’s evidence is relevant to Century Legend’s original defence but only tangentially. The discussions between Ms Hart and the Ripanis about the floor plan and fit out were relevant as occasions when it may be expected the Ripanis considered the floor plans, including the depiction of the internal living areas and the terrace. Thus, as opened, Ms Hart was to give, in effect, only contextual evidence relevant to the question of reliance by the Ripanis. However, as I have said, on the second day of Mrs Ripani’s cross examination, it was suggested to her, for the first time, that Ms Hart had explained by reference to two iterations of the floor plan (Option B and Option C, see Annexure V and Annexure VI, respectively) that the free span opening depicted in the render could not be constructed. Century Legend submits that Ms Hart thereby corrected any misunderstanding the Ripanis may have had concerning the expanse of the free span opening.

175    It is convenient at this point to address the original defence as to causation, as I have described it. The evidence of the Ripanis and of Ms Hart revealed that the focus of discussions in the pre-contractual period was on the bespoke floor plan and fit out of the apartment. The Ripanis were interested in detail that mattered to them, including in the case of Mr Ripani particular fittings such as a cigar humidor and a watch winder. They were also interested in the floor layout of the apartment. Thus, the various iterations of the floor plans mainly involved changes to aspects of the internal floor plan and fit out. The Ripanis did not scrutinise the floor plans closely for potential discrepancies against the render, nor was that to be expected of them. Further, they did not observe, and then interpret, the ‘single-bladed arrows as apparently indicating doorway openings. Again, that is unsurprising. The relevant markings are small and faint, and there is no legend on the plan describing what various markings signified. In my view, the markings said to indicate door openings are inscrutable to the untrained eye. They are also obscured by the graphic depiction of the herringbone flooring on the floor plans.

176    In closing submissions, the Ripanis submitted further, or alternatively, that the floor plans do not clearly depict what was intended in terms of door stacking, such that it is objectively reasonable to read them as providing a full width stacking system of the type depicted in the render. I agree with the substance of that submission. As I have said above, the floor plans were inscrutable when it came to interpreting the detail in relation to the door stacking system.

177    Moreover, it is important to bear in mind that the floor plans are of course depicted in plan view. The Ripanis were not shown any elevation drawings of the western facade between the internal living areas and the outside terrace. In other words, the Ripanis were not shown any drawing of the elevation of apartment 14.01. If such a drawing had been produced and shown to the Ripanis, it would have presumably revealed the size and scale of the opening to be constructed. It seems to me that if the Ripanis were to be disabused of the impression created by the render, one convenient, clear and effective way to have done so would have been to produce a relevant elevation drawing.

178    On the subject of Century Legend not producing any elevation drawings of apartment 14.01 in this proceeding, Century Legend pointed to the fact that there was a scale model of the Victoriana development in the display suite which depicted glass panels between mullions along the western façade. A photograph of the model, zoomed in on apartment 14.01, is shown at Annexure IX. Apartment 14.01 is the apartment with a spa or round pool shown to the left of the picture. It is true that when the Ripanis visited the display suite on 31 March 2017, Mr Tran pointed out to them where in the building apartment 14.01 was situated, by reference to the scale model. But also exhibited in the display suite was a large picture of the render covering the wall. One is entitled to ask rhetorically: which of these should the Ripanis have believed? Moreover, Mr Tran talked about the way in which the doors opened up to create an unbroken area for entertaining guests, consistent with the representation of a free span opening conveyed by the render. Therefore, I do not accept that the scale model was a sufficient substitute for an elevation drawing or that it was a sufficient counterpoint to have corrected the impression created by the render.

179    Having regard to the render and what I have said above about the meaning and representations it conveys, I have concluded that the floor plans shown to the Ripanis, and discussed with them by Ms Hart, were not effective to disabuse the Ripanis of their belief that the apartment would look like the render. If, however, Ms Hart’s evidence in relation to what she told the Ripanis in May and June 2017 were accepted, the opposite conclusion would necessarily follow.

Consideration of Kate Hart’s evidence

180    I now come to consider the further causation defence that arose in the course of the hearing due to Ms Hart’s evidence. As I have said, this contention was not originally pleaded, and is not pleaded in the Further Amended Defence. The Ripanis did not object to the defence founded on Ms Hart’s evidence on pleading grounds and I shall not approach it on that basis either. Irrespective of whether the effect of Ms Hart’s evidence should have been pleaded, it should have been notified in a witness statement, or at least opened, if for no other reason, to avert the otherwise obvious attack as to recent invention. I had made pre-trial directions that lay evidence be given viva voce and that there be no cross examination on witness outlines without leave. However, following Century Legend’s revelation as to what Ms Hart was to say, and having regard to the significance of the evidence omitted from Ms Hart’s witness outline or her witness outline in reply, I gave leave for the witness outlines to be tendered and for Ms Hart to be cross examined on them.

181    Before discussing some discrepancies in the detail of the evidence given by Ms Hart, it is important to be clear about the objective circumstances which are relevant to an assessment of the likelihood of what Ms Hart says being accurate. The first, and arguably most significant, objective factor is that Ms Hart was well aware that the render was, to say the least, problematic. As I have said, Ms Hart believed that Carr Design walked away from the Victoriana because the renders did not accurately depict the design of the building. Whether that was in fact the reason for Carr Design ceasing its involvement in the development is unnecessary to decide. The relevance of this for present purposes is that Ms Hart believed that to be the reason. That belief is a further basis to infer that Ms Hart was conscious of the misleading nature of the render when dealing with the Ripanis. In addition, as I have described, Ms Hart corresponded with Century Legend expressing her concerns about the renders, as did Mr Perkins of RotheLowman, on no less than three separate occasions.

182    For convenience, I set out again the critical passage from Ms Hart’s email dated 23 June 2017, that being the third and arguably most pointed warning given by RotheLowman to Century Legend concerning the renders:

We feel that it is extremely important that JD Group make Purchasers aware of the actual internal/external transition and break-up in glazing that will be achieved, as this is not accurately shown in the JD Group commissioned marketing renders. It needs to be reiterated that the marketing renders are ‘artist’s impression’ only and not actual building images.

183    As RotheLowman is not a party to this proceeding, it is unnecessary for me to consider if it had any legal responsibility in the circumstances to inform the Ripanis that the render did not depict the actual internal to external transition and door opening.

184    A telling feature of Ms Hart’s email to Century Legend on 23 June 2017 is that she expressly lays the responsibility at Century Legend’s feet for informing the Ripanis about the true facts. That is understandable given the relationships between the actors involved. However, more telling is what Ms Hart does not say. She does not say that she has informed the Ripanis of the inaccuracy of the render. Though it is not necessarily the case, I consider that had Ms Hart informed the Ripanis as she claims to have, it is likely she would have said so in her email to Century Legend. And this is where the controversy concerning the render, and Ms Hart believing that Carr Design effectively resigned because of it, again becomes relevant. Given the background I have described above, it is likely on the balance of probabilities that if Ms Hart had said what she claims to have said, she would have recorded having done so in her email to Century Legend. Yet, on the contrary, she informs Century Legend’s representatives that it is their responsibility to disabuse purchasers of the incorrect impression created by a render it commissioned. Further, Ms Hart’s attribution of responsibility to Century Legend to inform the Ripanis is consistent with what Mr Perkins said in his email to Century Legend on 12 October 2016, namely:

I would advise JD Group to have the renders amended before marketing launch. Should this not be possible I would advise JD Group to be transparent with all potential purchasers in relation to the render content and to ensure that all “Artists Impressions” are accompanied with a suitably comprehensive disclaimer to cover the discrepancies/inaccuracies.

185    Ms Hart’s email of 23 June 2017 was not the only occasion when Ms Hart failed to record what she now claims to have said to the Ripanis when communicating with Century Legend. There were occasions in meetings and in correspondence with Century Legend during the post-contractual period where the issue concerning the free span opening was raised, and where it might have been expected that Ms Hart would have said, orally or in writing, as applicable, what she now claims to have said to the Ripanis prior to them agreeing to be bound by the contract of sale.

186    For example, it may have been expected that when Mr Hu conveyed a request from the Ripanis to maximise the door opening at a meeting he had with Ms Hart on 15 September 2017, shortly following his meeting with the Ripanis on the same day, Ms Hart would have said to Mr Hu, effectively, I told the Ripanis that the maximum opening achievable was 3 to 4 metres. She does not say this according to Mr Hu’s evidence. Mr Hu’s evidence is that she merely recorded the request.

187    Other examples of correspondence on the subject of the free span opening in which I would expect Ms Hart to have made some written record of what she claims to have said to the Ripanis, but failed to do so are as follows:

(1)    in June and July 2018, when the Ripanis pressed Century Legend and RotheLowman for information about the width of the door opening and expressed their desire to know “what is happening with the sliding doors opening out to the balcony”;

(2)    in May 2019, when the Ripanis met with Ms Hart and Ms Meng and specifically asked whether there was scope to make the door opening onto the terrace wider than 6.4 metres; and

(3)    in June and July 2019, when the Ripanis said “…Now we have the issue of the doors to the balcony, which we chased for ages to get clarification. If you refer to the image we were given, the doors open basically the whole way in the living area and there is no step down to the balcony…Now we have gone from 6.4 to 3.4 … an opening in our opinion which is totally unacceptable for us”.

188    The second objective factor is that there is no express reference in any contemporaneous note made by Ms Hart of the statements she claims to have made to the Ripanis. Given the context I have described, I would expect that as a matter of common professional practice, if not self-protection, that had Ms Hart said what she claims to have said, she would have been astute to have made some contemporaneous record of what she had said; and thereafter, whenever the context made it appropriate, that she would have reminded Century Legend, and the Ripanis if need be, of what she had said about the render in meetings during May and June 2017. That is all the more so given Ms Hart’s evidence that she appreciated the render was a “potential timebomb” and that in due course she might find herself sitting in a witness box giving evidence about her communications with the purchasers of apartments. But Ms Hart did not make any contemporaneous note which recorded, in terms, or even alluded to, what she says she told the Ripanis. I have referred above to her correspondence that does not assert that she had already told the Ripanis apartment 14.01 could not be constructed in accordance with the render.

189    Further, one of the versions of the floor plans by reference to which she gave evidence about what she told the Ripanis concerning the inaccuracy of the render, Option B (at Annexure V), was a superseded version of the floor plan. There was no occasion to discuss that version of the floor plan because it had been rejected by the Ripanis before any meeting, and the likelihood was that it was not referred to in a meeting with the Ripanis. This is one of the discrepancies of detail in Ms Hart’s evidence. I also note that the contemporaneous markings Ms Hart said she made on the Option B floor plans when explaining the dissonance between the render and what could be built, are merely strokes of a pen. There is no annotation recording in language, however abbreviated, what Ms Hart claims to have said, for example, that the maximum opening would be 3 to 4 metres. I shall say more about this discrepancy below.

190    Even the contemporaneous handwritten notes produced by Ms Hart do not assist Century Legend. To take one example, among Ms Hart’s discovered notes was a file note of a meeting on 15 September 2017, during which she apparently explained certain matters to the Ripanis by reference to a three-dimensional hand drawing. This is an unsurprising aide, or technique, for an architect to use in explaining features of a two-dimensional plan to lay people. However, it is, on the other hand, worth noting that Ms Hart did not produce any such sketch in connection with what she claims to have said to the Ripanis about the opening on to the terrace and the inaccuracy of the render. Instead, she gave evidence that certain dots and markings she placed on the relevant floor plans were made in the course of explaining how the doors on the western façade would open.

191    The failure on the part of Ms Hart to mention in contemporaneous notes, or correspondence with Century Legend, the Ripanis, or Mr Tran, that she had said what she now claims to have told the Ripanis, is very significant. That is particularly so having regard to Ms Hart’s belief that the render was inaccurate and her view, as expressed in her email of 23 June 2017, that it was Century Legend’s responsibility to tell the Ripanis the true facts.

192    Century Legend sought to buttress Ms Hart’s credit by submitting that she does not have ‘skin in the game’ in the way the Ripanis do and said: This factor weighs heavily in favour of preferring Ms Hart’s evidence to the Ripanis. I do not agree in this case. Disinterest in this sense on the part of a witness would usually be a significant factor in favour of accepting the witness’ evidence, particularly when the witness is called to give evidence about his or her involvement in relevant events in a professional capacity. However, I am unable to give significant weight to this factor in the case of Ms Hart’s evidence. Her failure to make any contemporaneous note, together with her failure to record the advice she says she gave to the Ripanis in correspondence with Century Legend, significantly undermines the reliability of her evidence. As I have said, given the sensitivity on her part concerning the render, her failure to record what she claims to have told the Ripanis is, in my view, so unlikely as a matter of standard professional practice, or common sense self-protection, that I am unable to give Ms Hart’s evidence the weight that would normally be given to the evidence of a professional and disinterested witness.

193    In the case of a disinterested witness, including professional advisers involved in the relevant project or transaction, where there is a conflict between such witness and a party to the transaction, in this case the Ripanis, it is natural to assume that there is no reason for the independent witness to give false evidence about what he or she did or said. The status of the witness as disinterested or ‘independent’ is for this reason usually very significant. Ms Hart was not tested in cross examination as to any motivation on her part to give a false account of what she told the Ripanis and accordingly it would be unsafe to speculate about what such motivation or motivations might be, and I shall not do so. However, it does not follow that because no motivation for giving false evidence was explored or suggested, that in the absence of any thesis as to motivation I should give significant weight to the fact that Ms Hart was disinterested in the transaction.

194    That said, there is a relevant and plausible motivation which emerges from Ms Hart’s evidence; namely, respecting the relationships between the relevant actors in the transaction. As Ms Hart said in her email of 23 June 2017, it was Century Legend’s responsibility to inform purchasers, here the Ripanis, that the render did not accurately reflect what was to be constructed. For Ms Hart to have then taken it upon herself to disabuse the Ripanis of the impression created by the render would, on her own assessment of who was responsible for correcting the impression, have been to intrude on the commercial relationship between her client, Century Legend, and its purchasers, the Ripanis. Ms Hart’s email dated 23 June 2017 suggests to the contrary that she was respectful of the commercial relationship between Century Legend and the Ripanis, though she did urge that Century Legend correct the impression created by the render. It therefore seems unlikely to me that Ms Hart would say something to the Ripanis which objectively carried the risk that it may have caused the Ripanis to not proceed with the purchase. This inference is fortified by the fact that Mr Perkins also told Century Legend that it should be transparent with potential purchasers.

195    The third objective factor which bears upon an assessment of Ms Hart’s evidence is the lateness of the revelation of the highly material change in the evidence she was to give. I have mentioned this in several contexts above, the short point being that until the second day of Mrs Ripani’s cross examination, she was cross examined on the predicate of the original defence, including that it was suggested to Mrs Ripani that the issue of the free span opening was not raised by the Ripanis until they met with Mr Hu on 15 September 2017. The weekend intervened in Mrs Ripani’s cross examination. Mrs Ripani resumed cross examination on the following Monday, 8 February 2021. This was the first time it was suggested to her that Ms Hart had disabused the Ripanis of the impression created by the render during meetings in the pre-contractual period.

196    As the Ripanis point out in their closing submissions, it was not put to Mr or Mrs Ripani in cross examination that Ms Hart said the maximum opening was to be only 3 to 4 metres. Once again, having regard to the significance of the issue of the render in Ms Hart’s mind, the lateness at which Ms Hart’s further evidence was raised is suggestive of recent invention or reconstruction. In relation to the lateness, she explained that the relevant draft floor plans had been misplaced in her former office. They had been overlooked by her as they had been left in a box under a desk at an office which was later occupied by a colleague. This was the explanation for the late discovery of the floor plans which were produced only after notice was given of Ms Hart’s intended additional evidence. Indeed, hard copies of the misplaced plans were not produced until the morning Ms Hart was called to commence her evidence in chief on 19 April 2021.

197    There were two versions of the floor plan on which Ms Hart says she made annotations during discussions with the Ripanis concerning the opening in the period between May and June 2017. Ms Hart had some difficulty recalling which meetings in May or June 2017 she had the discussions with the Ripanis about the opening, though on her evidence, she made markings and annotations to two draft floor plans which were before the meetings in May or June 2017.

198    A further relevant consideration is that Ms Hart made changes to the doorways and openings on the Option B floor plan in the absence of any discussion with the Ripanis about that matter. I reach this conclusion because in early May 2017, there were two floor plans under consideration, Option A/B (see Annexure IV) and Option B (see Annexure V). The Option B floor plan is dated 8 May 2017. It was sent by Ms Hart to Mr Tran (and Mr Hu) on the same date, who then forwarded it to the Ripanis two hours later. On 10 May 2017, Mr Ripani sent an email to Ms Hart indicating that the Ripanis preferred Option A/B (which Mr Ripani described in his email as Option A) to Option B. The Option B floor plan was thus redundant from 10 May 2017 because the Ripanis had already expressed their preference for Option A/B.

199    The only meetings which occurred between the Ripanis and Ms Hart in May 2017 were those held on 3 May 2017 and 26 May 2017. At the first meeting in May 2017, Option B did not yet exist because it was not created until 8 May 2017 and thus it could not have been annotated in the presence of the Ripanis on 3 May 2017. It is theoretically possible that Ms Hart’s evidence about annotations to the Option B floor plan occurred at the second meeting in May 2017. However, if that was the meeting she had in mind, again it is inconsistent with Mr Ripani’s email of 10 May 2017, in which he explained that the Ripanis had already reached the view that: “Option Ais the floor Plan We like.” In any event, the annotations made by Ms Hart on the Option B floor plan are merely pen strokes (see Annexure V).

200    The next meeting Ms Hart attended with the Ripanis was on 9 June 2017. Mr Hu was also present at this meeting. On 5 June 2017, Ms Hart provided Century Legend and Mr Tran with a further version of the floor plan, Option C, under cover of a letter explaining some changes that had been made following discussions with the Ripanis. Mr Tran forwarded Ms Hart’s email, together with the attached Option C floor plan, to the Ripanis approximately 10 minutes later. Ms Hart gave evidence that she also told the Ripanis by reference to this floor plan that the render image could not be constructed and produced a copy of her annotated markings (see Annexure VI). This printed version of the floor plan contains some hand written annotations, including as follows: 2xdr and potential stacking to side.

201    The substance of the evidence given by Ms Hart concerning this meeting is set out above at [168]. In addition to the above annotations, Ms Hart said that she placed some markings, dots and red pen strokes on a printed A3 version of the Option C floor plan during this meeting. She explained that the context in which she made the markings was that the Ripanis wanted to maximise that the opening on to the terrace. The red dots and the red pen strokes are marked in the vicinity of the opening. Ms Hart said the dots were placed between the mullions to indicate the width of the opening and the red pen strokes signify a potential stacking of the doors to the one side of the opening.

202    These markings and annotations may be seen as consistent with a discussion about the opening and the stacking of the doors at the meeting on 9 June 2017. However, in the absence of a contemporaneous note which records in terms, or by some abbreviated reference, what Ms Hart claims to have said at that meeting, the dispute concerning what Ms Hart said to the Ripanis about the opening prior to the contract being entered into turns principally on the competing oral evidence of the Ripanis and that of Ms Hart.

203    I digress to note that there is a subtle and opaque overlap between Century Legend’s original defence (as I have described it); namely, that the various iterations of floor plans consistently depicted multiple smaller openings at the western façade to the terrace, and the expanded defence arising from Ms Hart’s evidence; namely, that she disabused the Ripanis of any impression conveyed by the render. To appreciate this connection it is necessary to go back in the chronology.

204    As I have already explained, Mr Tran sent an email to the Ripanis on 22 March 2017, which included a floor plan prepared by Carr Design for apartment 14.01. The Ripanis met with Ms Hart, Mr Hu and Mr Tran on 7 April 2017. At that meeting, the Ripanis communicated that they did not like the Carr Design floor plan and preferred a RotheLowman concept drawing as a base floor plan. As a result, on 10 April 2017, Ms Hart provided the Ripanis with a RotheLowman floor plan marked ‘draft’. The RotheLowman draft floor plan, which was also referred to as a “concept drawing”, depicted three smaller openings on the south-west, north-west and north façade, assuming that the reader could see the arrows and appreciated that they indicated a door (see Annexure II). The single bladed arrows point in opposite directions, indicating that each is a double door, with one door sliding south and the other north, for each of the two doors onto the western terrace. During her evidence in chief, Ms Hart explained that the gap between the single bladed arrows indicated the door opening.

205    On 26 April 2017, Ms Hart emailed Mr Hu, copying in Mr Tran, the Option A floor plan (see Annexure III), in which the door opening to the western terrace had been changed when compared to the RotheLowman draft floor plan provided to the Ripanis on 10 April 2017. There were still two doors opening onto the western terrace but the gap between the horizontally opposed arrows in the middle of the dining area, opposite the fireplace, was significantly larger than had been indicated on the RotheLowman draft floor plan.

206    Ms Hart explained the provenance of the Option A floor plan during her examination in chief as follows:

MS COSTELLO: Now, who made the change to the façade of option A that is different to the original Rothelowman concept plan?

MS HART: We – as in Rothelowman – I would have made those changes, or directed those changes to be made.

MS COSTELLO: When – why did you make those changes?

MS HART: There was always openings along the façade, and I – to move from the interior to the terrace area – and I – we – the discussion of where those openings are in relation to the connection between the seating area of the external and the internal, I believe came through conversation with - - -

MS COSTELLO: When you talk about conversation, whose conversation are you talking about?

MS HART: With the Ripani’s.

MS COSTELLO: Whose conversation with the Ripani’s?

MS HART: My conversation with the Ripani’s.

MS COSTELLO: When?

MS HART: And it would have been in those – in an initial meeting, or in a meeting with the Ripani’s at the beginning of our – at the – at the beginning of the development of these plans.

MS COSTELLO: So this plan is dated 26 April ’17 and it shows a difference in the facade doors, when you compare it to the original plan. And you’ve talked about a meeting with the Ripani’s on 6 April. So when were the discussions that you’ve had with the Ripani’s that you say led to that change?

MS HART: It would have been in our discussion

MR STUCKEY: Well, your Honour, I think this witness is reconstructing. And she’s certainly giving answers as though she’s hypothesising about where the meeting took place. I’m not even sure she’s actually given definite evidence that she thinks there was a conversation.

HIS HONOUR: Yes. Ms Hart, I understand it’s difficult to put your mind back to the, sort of, granular detail of what was occurring at that particular time. But the questions that you’re now being asked are of some importance in this case. So doing the best you can, when responding to Ms Costello’s questions – avoiding speculation. If you could say whether you can recall a meeting, whether you can recall particular matters discussed at the meeting and the substance of what was discussed, and if you can’t, you can’t. So if you wouldn’t mind starting again, indicating whether you can recall a discussion with Mr and Mrs Ripani concerning the changes that you made between the original concept plan at 1085 and your first, if – can I call it, bespoke, plan, which is option A at 1110?

MS HART: Sure. Look, I can’t recall exactly the – whether a conversation exactly about those openings was had, in that initial meeting. The next plan that we sent out, which was option A revision A, does show the openings as indicated, centred on the fireplace, south of that from the entertaining, and north of that within the dining area. I can’t recall whether we had informed the Ripani’s or discussed that with the Ripani’s in the initial meeting, or whether those changes were made on our behalf as a – the development of the plan.

I take the last sentence of the transcript to mean that the changes were made at Ms Hart’s direction and that our means RotheLowman.

207    Ms Hart’s evidence was self-evidently speculative, which of course goes to the question of the reliability of Ms Hart’s recollection of events and to the risk of reconstruction on her part. The above passage of evidence is only one of a number of instances where Ms Hart appeared to be reconstructing events. In this respect, she had little to aid her reconstruction in relation to the critical issue, save for the markings she said she made to the Option B and Option C floor plans.

208    When properly understood, the self-contradiction in Ms Hart’s evidence becomes stark. Ms Hart could not have produced Option A, a floor plan with arguably more distinct door openings to the western terrace, following discussions with the Ripanis on the topic, because that floor plan was not produced until 26 April 2017. The only meeting which preceded the Option A floor plan was on 7 April 2017 and, as I have said above, all those in attendance on that day (the Ripanis as well as Mr Hu and Mr Tran) agreed that there was no discussion at that meeting concerning the doors to the terrace. The evidence given by those present at the meeting is consistent with the absence of any relevant markings on the RotheLowman floor plan dated “6.4.17”, though Ms Hart had made other annotations to that version of the floor plan at the meeting on 7 April 2017. In any event, during cross examination Ms Hart agreed that she made the changes to the doors to the terrace (as shown on Option A), without prior discussion with the Ripanis.

209    The overlap between the original defence, as I have referred to it, and the further defence based on Ms Hart’s evidence concerning what she told the Ripanis about the inaccuracy of the render, is relevant in the following way. In most respects, Option C is relevantly the same as Option A. However, Option C contains more prominent and visible horizontally opposed arrows signifying the doorways. More significantly, the break-up of the western façade is therefore more apparent and defensible on the Option C floor plan relative to what Ms Hart knew could and could not be constructed. Further, the draft RotheLowman floor plan was more opaque in this respect. That floor plan was objectively a far weaker basis upon which to believe, or contend, that the floor plan could do the work of correcting the impression created by the render.

210    As to that topic, I repeat what I have said above; namely, that without explanation the floor plans, be it the RotheLowman concept drawing, or the Option A floor plan and subsequent variations, are opaque in relation to what the Ripanis might expect when considered in the context of the render and what they were told it represented. Though the horizontally opposed arrows are clearer on the Option A floor plan compared to the RotheLowman concept drawing, in my view they remain obscured by the graphic pattern representing the herringbone flooring, and in any case, are insufficient to overcome the impression created by the render.

211    Returning to the annotated Option C floor plan, and to the markings Ms Hart says she made on that plan during a meeting on 9 June 2017, I observe that Ms Hart had previously effected changes to the door positioning and the opening size without consulting with the Ripanis. As I have said, Ms Hart concedes that she amended the Option A floor plan at her own initiative on 26 April 2017, recalling there was no discussion of the opening at the meeting on 7 April 2017. It seems to me that Ms Hart must have done this before there was any occasion to discuss such changes with the Ripanis.

212    This reveals that, at least on one occasion, it was Ms Hart who initiated the changes to the floor plans in relation to the opening onto the terrace. The changes she made, had they been drawn to the attention of the Ripanis, would have revealed that the opening as marked on Option A and later iterations, including Option C, are at least potentially consistent with what might be constructed. Option C allows for a larger opening centred on the fireplace, rather than having what is depicted more faintly on the RotheLowman concept drawing; namely, two smaller door openings to the south-west and north-west. That, of course, would be entirely inconsistent with the representations conveyed by the render.

213    As I have said, it was not until cross examined that Ms Hart accepted that the changes she made between the RotheLowman draft floor plan and Option A were made at her initiative, and not that the changes had been made at the behest of, or at least following discussions with, the Ripanis. In all of the above circumstances, I do not accept that there were discussions concerning the free span opening to the terrace as represented by the render compared with what was capable of being constructed by reference to the Option C floor plan. I therefore find that the annotations to the Option C floor plan are not adequately explained in the evidence given by Ms Hart.

214    I note, however, that other than the explanation given by Ms Hart to the effect that she had disabused the Ripanis of the impression created by the render, Ms Hart’s conduct is entirely consistent. She told Century Legend that it was its responsibility to alert purchasers to the inaccuracy of the render which it had commissioned. She made no contemporaneous note of her advice to the Ripanis. She did not say, at any time during the post-contractual period, that she had previously disabused the Ripanis of the misapprehension caused by the render either in meetings or in correspondence. The evidence was instead raised for the first time in the course of Mrs Ripanis’ cross examination.

215    In relation to Ms Hart’s demeanour as a witness, I found her to be vague and evasive in relation to the critical questions concerning the circumstances in which she claims to have orally informed the Ripanis of the inaccuracy of the render. That is not a criticism of Ms Hart in relation to her understandable uncertainty of recollection about particular meetings or discussions relative to others. Rather, it is her uncertainty about the impetus for the critical changes to the floor plans, which I have described at length, that is more significant in reaching the conclusion that Ms Hart’s evidence was reconstructed and unreliable, notwithstanding her ostensible positon as a disinterested witness.

216    The Ripanis, on the other hand, gave evidence that revealed a straightforward and plausible course of events. They were attracted to apartment 14.01 because of the appeal of the free span opening. They were told by Mr Tran that the render depicted apartment 14.01 and they had no reason to doubt that statement. They did not believe, or contend in this proceeding, that they expected the apartment to look identical to the render. They understood that there was a degree of interpretation in the render. But equally, they took from the render what it conveyed; specifically, a free span opening effectively the width of the internal living areas.

217    After the Ripanis entered into the contract they had occasion to ask, and to emphasise, that they wanted the opening to be as large as it could be, not having been given precise dimensions of the width of the opening. Thereafter, there was obfuscation on the part of Century Legend, and its architects RotheLowman. Nevertheless, the Ripanis were remarkably tolerant of this obfuscation until, finally, they were informed in June 2019 that the opening would be 3.4 metres, down, so to speak, from 12 metres to 6.4 metres and finally, 3.4 metres.

218    The Ripanis conduct throughout was consistent with their evidence that they believed the render represented what they could expect, allowing for it being an artist’s impression. I was impressed by the clarity and candour of the evidence of each of Mrs and Mr Ripani. When it was suggested to Mrs Ripani for the first time that Ms Hart had explained the true position to her prior to settling upon the ultimate and final floor plan, Option E, Mrs Ripani appeared genuinely surprised, or shocked. As I said in the introduction to these reasons, Mr Ripani encapsulated his state of mind by saying in effect that the opening depicted in the render was a given, so far as he was concerned. Mrs Ripani had the closest involvement in the detail when it came to customising the apartment. She was focused on the room layout, aspects of the fit out and details of significance to the Ripanis. Without intending to trivialise Mr Ripani’s interest in any way, having chosen the apartment for the features that he and Mrs Ripani desired, in particular the free span opening to the terrace, he appeared to leave the detail to Mrs Ripani, save perhaps for items of particular interest to him like the cigar humidifier and watch winder.

219    Thus it seems to me that the Ripanis attention was understandably distracted from the real issue, including the significant change made by Ms Hart to the openings in the Option A floor plan, without informing the Ripanis. The Ripanis’ conduct during the pre-contractual period, which I have described at length, is consistent with their belief that the apartment would conform to the render. The Ripanis’ conduct during the post-contractual period, including after they were informed in October 2018 that the opening would be only 6.4 metres, and later 3.4 metres in June 2019, is also consistent with their ignorance of the true facts pre-contract and with their evidence that they would not have purchased the apartment if they had known that the apartment would not be constructed as depicted in the render.

220    I make the final point that Ms Hart’s email of 23 June 2017 (extracted at [58]) is expressed in terms that reveal she was not satisfied the amendments she made to the floor plans had disabused the Ripanis of the impression created by the render. Hence, she reminds Century Legend’s representatives that it is their responsibility to inform potential purchasers, here the Ripanis, that the render is inaccurate. That conduct is inconsistent with having already explained to the Ripanis that the maximum opening achievable was 3 to 4 metres.

221    For the above reasons, I reject the evidence of Ms Hart about the critical matter of whether the Ripanis were disabused by her of the inaccuracy of the render and I accept the evidence to the contrary by the Ripanis.

Loss or damage as a pre-condition to statutory rescission

222    Having concluded that the representations conveyed by the render were misleading and deceptive, and further that Century Legend did not have reasonable grounds for making those representations, I turn to consider the appropriate remedy which should follow. Relevantly, in order to make out their claim for rescission and/or damages pursuant to the ACL, the Ripanis need to establish that they have suffered or are likely to suffer loss or damage because of the conduct of Century Legend: s 237 of the ACL.

223    A person who has suffered or is likely to suffer loss or damage because of infringing conduct by another person may apply for a compensation order under s 237(1) of the ACL. Section 237 of the ACL confers on the Court the power to make orders as it thinks appropriate in relation to such applications and s 243 sets out the types of orders that may be made, including an order in the nature of statutory rescission: s 243(a) of the ACL. The Court has power to make such an order in circumstances where it considers the order will compensate the aggrieved person, in whole or in part, for the loss or damage or it will prevent or reduce the loss or damage suffered or likely to be suffered: s 237(2) of the ACL.

224    I am satisfied that the Ripanis have suffered loss and damage by reason of Century Legend’s conduct. In Harvard Nominees, the Full Court of this Court (Lee, Anastassiou and Stewart JJ) held (at [77]) that loss or damage contemplated by s 237 includes detriment suffered by being bound to a contract unconscionably induced (referring to Demagogue Pty Ltd v Ramensky (1992) 39 FCR 31 at 32 (Black CJ) and 44 (Gummow J)), as well as the disadvantage of incurring contractual obligations which would not have been incurred but for the conduct complained of (referring to Demagogue at 47 (Cooper J)).

225    The Court in Harvard Nominees further held (at [79]) that loss or damage is not confined to economic loss and it is sufficient to establish “some other manifestation of other loss”. For instance, the Court may make an order for statutory rescission where the applicant suffers “some prejudice or disadvantage” or enters into an agreement of a “disadvantageous character or effect” as a result of the contravening conduct: Harvard Nominees at [79] citing Wardley Australia Ltd v Western Australia [1992] HCA 55; 175 CLR 514 at [527] (Mason CJ, Dawson, Gaudron and McHugh JJ).

226    The Ripanis have entered into a contract to purchase an apartment for over $9,500,000. The apartment, as constructed, does not have the particular feature that induced them to enter the contract; namely, a free span opening between the internal living area and terrace. Furthermore, this is not a case involving a mistake in the preparation of an advertisement or inadvertent misstatement. To the contrary, it is a case in which the Ripanis were misled by reason of a render that depicted an apartment Century Legend never intended to construct and, notwithstanding a series of warnings, persisted to use in marketing the Victoriana.

227    In my view, therefore, the Ripanis have suffered detriment by reason of being induced to enter into a contract on the basis of a misleading render. If required to perform the contract, the Ripanis would experience a substantial prejudice and disadvantage. Further, as the Full Court explained in Harvard Nominees (at [96]): the “principles developed in equity are at least relevant to the exercise of the statutory discretion to make orders in the nature of rescission under s 243”. That is to say, the Court may order rescission on terms that seek to “do what is practically just” between the parties. The well understood maxims of equity include that equity considers as done that which ought to have been done: Dal Pont G, Equity and Trusts in Australia (7th ed, Thomson Reuters, 2019). Applied in the present circumstances, those principles fortify my view that an order for statutory rescission is appropriate.

228    I do not accept Century Legend’s contention that the Court should decline to grant statutory rescission on discretionary grounds as practical justice could not be achieved if such an order was made. Most relevantly, Century Legend submitted that it would incur a loss in the sum of $129,800, being 50% of the total commission payable to CBRE in relation to the sale of apartment 14.01, which was transferred on 30 November 2017. Century Legend also points to the fact that if the contract is unwound, it will not only have to forego the commission to CBRE, but will also incur marketing costs and real estate costs in the process of re-selling the apartment. Century Legend contends that is an amount it would not be entitled to recover if the contract was declared void ab initio, whereas the Ripanis would suffer no material detriment or loss as a result of the apartment not having the free span opening depicted in the render.

229    Century Legend further submits that an order for statutory rescission would not provide practical justice in circumstances where the difference between a 3 metre wide and a 6 metre or 8 metre wide opening from the internal living areas to the terrace and pool area of the apartment causes no material detriment or loss to the Ripanis. All of that may be accepted, but s 18 of the ACL forbids misleading or deceptive conduct. Here, the conduct of Century Legend was not inadvertent, it was deliberate. It was not transitory or inconsequential; rather, it persisted throughout the course of events that led up to this proceeding.

230    I also reject Century Legend’s characterisation of the Ripanis as sophisticated and experienced buyers that were “careless” for choosing not to read the contract of sale (including the exclusion clauses contained therein) or heed relevant. As I have said, while it may be accepted that they are sophisticated, to the extent that means anything in the absence of a definition, and while they were not, and did not claim to be under any disadvantage in their dealings with Century Legend, it does by any means therefore follow that they were not misled.

231    Accordingly, I am not persuaded that there would be any practical injustice in ordering statutory rescission. To the contrary, Century Legend’s insistence on the continued use of the render notwithstanding the express warnings given to it by RotheLowman concerning the inaccuracy of the renders, including Ms Hart’s email of 23 June 2017 telling Century Legend that it was its responsibility to correct the inaccurate impression it had created, reveals that Century Legend’s conduct was conscious and deliberate, or at least wilfully blind to the consequences of continuing to use the render in connection with marketing the Victoriana.

232    Plainly, on the evidence of the Ripanis (which I accept), there is a material difference from their perspective between the free span opening depicted in the render and the 3.4 metre opening which has been constructed. I refer to what I have said above concerning what the Ripanis would have done but for Century Legend’s misleading or deceptive conduct and repeat my conclusion.

233    In addition, I am satisfied that the Ripanis have nonetheless suffered economic loss by entering into the transaction to purchase apartment 14.01. Mr Anthony Rohan, a registered valuer, gave evidence that the apartment had deceased in value by $380,000 as at 12 November 2020. It was put to Mr Rohan in cross examination that as at the date he gave evidence, 8 February 2021, his valuation would be “outdated”, and he could not say what the value of the apartment may be in six months’ time. Mr Rohan conceded that proposition, as he must. It is inherent in any expression of opinion as to the value of real estate that it is an opinion expressed at a point in time.

234    The Ripanis did not lead any evidence concerning the value of the yet-to-be constructed apartment at the date they entered into the contract, which I have found to be on or about 29 August 2017. Such evidence may be required in other so called ‘no-transaction’ cases. However, in the present case, it is sufficient to establish that in the events that have transpired, the apartment has depreciated in value subsequent to the contract to purchase it but before completion. In this regard, it is important to appreciate that the Ripanis do not claim to recover the diminution in value of $380,000. Rather, the significance of this evidence is to demonstrate the causal link between the misleading or deceptive conduct, which caused the Ripanis to enter into a contract, as a result of which, if enforced, the Ripanis would suffer, or be likely to suffer, economic loss, assessed at $380,000 as at 12 November 2020.

235    Century Legend did not lead any contrary valuation evidence. Accordingly, at the time of the hearing I am entitled to infer that the value of the apartment was less than the Ripanis contracted to pay for it. Thus, if it be necessary to establish economic loss, that has been established. It therefore follows that the pre-requisites to the exercise of the statutory power to order rescission are satisfied. In short, the grant of an order in the nature of rescission will achieve practical justice and avert the risk to the Ripanis that if required to complete the purchase, they would, or would be likely to, suffer economic loss.

236    Moreover, the Ripanis have been deprived of the funds spent by them to pay interest for the provision of the bank guarantee in lieu of the deposit, being an amount of $11,800 charged semi-annually since 29 August 2019. I shall therefore order that the Ripanis be compensated pursuant to s 237 of the ACL for the expenditure incurred in paying interest and bank fees in connection with the bank guarantee, and that they be paid pre-judgment interest on that compensation. The effect of these orders will be to compensate the Ripanis for the disbursement of the interest payable for the bank guarantee and the award of pre-judgment interest, notionally compensating the Ripanis for the loss of the use of the money paid in relation to the bank guarantee.

Misrepresentation and rescission in equity

237    If I were wrong to conclude that I have the power pursuant to s 237 and/or s 243 of the ACL to make an order in the nature of rescission, I would in any event have made that order, expressly for rescission, pursuant to the Court’s jurisdiction and power to grant equitable relief.

238    The warrant to exercise that power lies in the unconscionability of Century Legend’s conduct, the particulars of which I have explained in detail above and hardly bear repeating here. But rescission for misrepresentation does not require knowledge of the falsity of the representation when made; that is to say, an innocent misrepresentation will suffice. In the case of an innocent misrepresentation, equity will come to the aid of the innocent party and will not permit the representor to retain the benefit of a contract he or she now knows to have been induced by a false representation, for to do so would be a moral delinquency: see, eg, Redgrave v Hurd (1881) 20 Ch D 1, discussed below.

239    Century Legend contends there are different impediments to the exercise of the equitable power to order rescission. First, it says that the Ripanis failed to communicate their election to rescind the contract. Indeed, far from communicating an election to rescind, Century Legend says the Ripanis have communicated that they are “ready willing and able to perform the contract according to its terms. In support of this contention, Century Legend relies on Alati v Kruger [1955] HCA 64; 94 CLR 216, in which the High Court said at 224 (Dixon CJ, Webb, Kitto and Taylor JJ):

Rescission for misrepresentation is always the act of the party himself: Reese River Silver Mining Co. v Smith (1869) LR 4 HL 64, at p 73. The function of a court in which proceedings for rescission are taken is to adjudicate upon the validity of a purported disaffirmance as an act avoiding the transaction ab initio, and, if it is valid, to give effect to it and make appropriate consequential orders.

240    Conversely, the Ripanis submit that they are entitled to an order for equitable rescission without the need for an election because their claim against Century Legend is based on innocent representation: Redgrave v Hurd. The Ripanis contend that in those cases, rescission is the act of the Court, not the party: see also Young, P W, Croft, C E, Smith M L, On Equity (Thomson Reuters, 2009) at [11.430].

241    In Redgrave v Hurd, the plaintiff had misrepresented the income and substance of his business but no allegation of dishonesty or fraud was made. Notwithstanding, the Court of Appeal of England and Wales made orders that the contract be rescinded pursuant to its powers in equity on the grounds of innocent misrepresentation. In particular, Sir George Jessel MR said in Redgrave v Hurd at 12-13:

Before going into the details of the case I wish to say something about my view of the law applicable to it, because in the text-books, and even in some observations of noble Lords in the House of Lords, there are remarks which I think, according to the course of' modern decisions, are not well founded, and do not accurately state the law. As regards the rescission of a contract, there was no doubt a difference between the rules of Courts of Equity and the rules of Courts of Common Lawa difference which of course has now disappeared by the operation of the Judicature Act, which makes the rules of equity prevail. According to the decisions of Courts of Equity it was not necessary, in order to set aside a contract obtained by material false representation, to prove that the party who obtained it knew at the time when the representation was made that it was false. It was put in two ways, either of which was sufficient. One way of putting the case was, "A man is not to be allowed to get a benefit from a statement which he now admits to be false. He is not to be allowed to say, for the purpose of civil jurisdiction, that when he made it he did not know it to be false; he ought to have found that out before he made it." The other way of putting it was this: "Even assuming that moral fraud must be shown in order to set aside a contract, you have it where a man, having obtained a beneficial contract by a statement which he now knows to be false, insists upon keeping that contract. To do so is a moral delinquency: no man ought to seek to take advantage of his own false statements." The rule in equity was settled, and it does not matter on which of the two grounds it was rested.

[Emphasis added]

242    Accordingly, the Ripanis contend that their claim for an order for rescission is distinguishable from Alati v Kruger, as that case involved a fraudulent misrepresentation. In those circumstances, rescission is the act of the party, and the Court’s role is simply to declare that the rescission is valid and to make any consequential orders necessary to bring about restitution: Young et al (2009) at [11.420].

243    The final sentence of the well-known judgment of Sir George Jessel MR makes it clear that there has been debate since at the least the 19th Century about how the court’s equitable power to rescind a contract is to be engaged. Sir George Jessel MR’s answer to this question reveals that it is an arid debate because “[t]he rule in equity was settled, and it does not matter on which of the two grounds it was rested.” When that proposition is translated and applied to the present case, that is to say where there is a claim for an order in the nature of rescission pursuant to s 237 and s 243 of the ACL, founded upon misleading and deceptive conduct, that being relevantly cognate to a claim for innocent misrepresentation, then analogously it comes within the second way Sir George Jessel MR described the Court’s binary jurisdiction to make an order for rescission pursuant to equitable principles.

244    The jurisdiction in equity to rescind for innocent misrepresentation has been recognised by the High Court in A H McDonald & Co Pty Ltd v Wells [1931] HCA 24; 45 CLR 506 at 512 (Rich, Starke and Dixon JJ):

We are, however, unable to arrive at the conclusion that the representation was fraudulent. We think that the finding of the learned Chief Justice that the respondent was not fraudulent must be sustained. The result is that the appellant cannot obtain relief save upon the footing of innocent misrepresentation, and this means that he is limited to rescission. But rescission requires restitutio in integrum and it cannot be granted unless the parties can be restored substantially to the position which they occupied before the transaction was entered upon. No doubt it is not necessary to restore them precisely, and Courts of equity give relief by way of rescission when by the exercise of their powers they can do practically what is just in the restoration of the parties…

245    In Tanwar Enterprises Pty Limited v Cauchi [2003] HCA 57; 217 CLR 315, the High Court similarly referred to Redgrave v Hurd when it said at [25] (Gleeson CJ, McHugh, Gummow, Hayne and Heydon JJ):

legal rights may be acquired by conduct which pricks no conscience at the time. A misrepresentation may be wholly innocent. However, at the time of attempted enforcement, it then may be unconscientious to rely upon the legal rights so acquired. To insist upon a contract obtained by a misrepresentation now known to be false is, as Sir George Jessel MR put it in Redgrave v Hurd, "a moral delinquency" in a court of equity.

[Footnotes omitted]

246    I observe that there appears to be an ongoing debate to whether rescission in equity is effected by the act of the party or whether rescission is entirely by the decree of the Court: see, eg, Heydon J D, Leeming M J, Turner P G, Meagher, Gummow & Lehane’s Equity: Doctrines & Remedies (5th ed, LexisNexis Australia, 2014) at page 903. However, it is unnecessary for me to consider this debate as I am satisfied, in any event, that the Ripanis made a valid election to rescind the contract by bringing this proceeding. In this regard, it is well established that an election to rescind may be verbal or written and includes the commencement of proceedings: see, eg, Perri v Coolangatta Investments Pty Ltd [1982] HCA 29; 149 CLR 537 at 570 (Brennan J); Preda trading as Parramatta Diagnostic Imaging v Australian Imaging and Ultrasound Distributors Pty Limited [2007] NSWSC 155 at [59] (White J). This was also the case in Alati v Kruger, where the issue of the writ was regarded as a clear election. In particular, Dixon CJ, Webb, Kitto and Taylor JJ said at 222:

On 29th June 1954 the respondent issued (and presumably served) the writ by which the present proceedings were commenced… [I]t was on the basis of rescission that relief was claimed, and the appellant cannot have been in any doubt that the respondent, by commencing the action was assuming to rescind, and was asserting a consequential right to get his money back.

247    In my view, the fact that a claim for rescission pursuant to equitable principles was not included in the prayer for relief until the Ripanis filed their Further Amended Statement of Claim on 5 February 2021 is not an impediment to the exercise of the Court’s powers in equity to rescind the contract of sale. The Ripanis’ claim has from the outset been for an order in the nature of rescission pursuant to s 237 and s 243 of the ACL. As I have said, the Ripanis claim is cognate with a claim for rescission for innocent misrepresentation. Accordingly, the Ripanis communicated by the bringing of this proceeding that they intended to rescind the contract.

248    Century Legend submits that the second impediment to rescission, or an order in the nature of rescission, is that the Ripanis had elected to affirm the contract. I do not accept that the Ripanis affirmed the contract, quite the opposite. The Ripanis then solicitors, Hughes Legal, said on 8 July 2019 that the Ripanis were “ready, willing and able to perform the contract”. However, the letter foreshadowed that the Ripanis were considering commencing proceedings to either avoid the contract of sale, insist on specific performance and/or obtain an order for damages, and that counsel had been briefed to draw the requisite initiating documents.

249    In my view, the Ripanis’ solicitors stating in the same breath, so to speak, a willingness to perform the contract, yet at the same time, threatening proceedings in relation to the grievance which is the subject of this proceeding, could not be reasonably construed by Century Legend as a statement of affirmation on the Ripanis’ part. Though the 8 July 2019 letter could have been more carefully expressed, it in effect states a negotiating position, which is not sufficient to amount an unequivocal election to affirm the contract. Further, the Ripanis’ desire to avoid the contract was apparent by December 2019, when the Ripanis’ current legal representatives, Zervos Lawyers, told Century Legend that they would commence proceedings for misleading and deceptive conduct unless they received an assurance that the free span opening between the internal living area and the terrace would be built as depicted in the render.

250    Century Legend also raises a number of discretionary factors in support of its contention that equitable rescission should not be granted. In summary, those considerations are that Century Legend: (i) entered into a contract with the Ripanis which ought to be honoured; (ii) has already paid 50% of the sales commission to CBRE; and (iii) has been deprived of the opportunity to sell apartment 14.01 to another potential purchaser. For the reasons I have explained in the preceding section, I am not persuaded by these considerations.

251    Specifically, the contentions advanced by Century Legend do not address the unconscionability of it insisting upon retaining the benefit of the contract, even if it did not know that the representations conveyed by the render were false. That insistence, to repeat again the words of Sir George Jessel MR in Redgrave v Hurd, is a “moral delinquency” in a court of equity.

252    The three discretionary factors relied upon by Century Legend are not sufficient to outweigh making an order to rescind the contract. The first factor is not relevant to the discretion and begs the very question. As to the second factor, the payment of 50% of CBRE’s commission is an incident of Century Legend’s unlawful conduct. Further, the evidence did not disclose the basis for the contention that Century Legend would not be able to recover the part-payment of the commission. Even assuming that is the case, it has very little bearing on my discretion having regard to the whole of the circumstances I have described above.

253    As to being deprived of the opportunity to sell the apartment in the interim, that opportunity was taken when Century Legend sold the apartment to the Ripanis and until this proceeding is determined it has been unable to re-sell the apartment. Once the contract is rescinded, there is no evidence to suggest that the apartment cannot be re-sold. If it is to be re-sold at a lower price than the Ripanis agreed to pay, that too is a consequence of Century Legend’s own unlawful conduct.

254    In my view, the Ripanis conduct since the time they discovered they had been misled has been that “of a reasonable litigant who recognises, pragmatically, that it must seek relief in court and must make do with the state of affairs” in the interim: Harvard Nominees Pty Ltd v Tiller (No 4) [2022] FCA 105 (Jackson J) at [102]. Accordingly, there is no reason why it would be unjust to make an order in equity rescinding the contract of sale, if it were necessary to do so.

Disposition

255    For the above reasons, I have concluded that the Applicants claims should succeed and I shall make orders accordingly.

I certify that the preceding two hundred and fifty-five (255) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Anastassiou.

Associate:

Dated: 18 March 2022    

ANNEXURE I – RENDER

ANNEXURE II – ROTHELOWMAN CONCEPT DRAWING

ANNEXURE III – OPTION A FLOOR PLAN

ANNEXURE IV – OPTION A/B FLOOR PLAN

ANNEXURE V – ANNOTATED OPTION B FLOOR PLAN

ANNEXURE VI – ANNOTATED OPTION C FLOOR PLAN

ANNEXURE VII – OPTION E FLOOR PLAN

ANNEXURE VIII – ANNOTATED OPTION E FLOOR PLAN

ANNEXURE IX – SCALE MODEL OF APARTMENT 14.01