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REIQ Journal : March 2010
Paul Hopkins, Partner, Carter Newell Lawyers In some cases, an agent's silence may amount to misleading and deceptive conduct depending upon the information that is withheld and whether this creates a false impression in the mind of a buyer entering into the contract. It is not a defence for an agent to say that they did not intentionally make the misrepresentation. In determining whether an agent's conduct is misleading or deceptive, a Court will look at the representation from a buyer's point of view. An agent's conduct may be considered to be misleading or deceptive if there is a real likelihood or chance a representation is going to mislead or deceive. The TPA in action In the case of Havyn Pty Ltd v Webster  NSWCA 182, a real estate agent prepared a brochure for a block of ats for sale in which it was stated "each at approximately 63 square metres". The brochure included a disclaimer that "the information contained herein given has been supplied to us and we have no reason to doubt its accuracy, however we cannot guarantee it ...". It also noted that "all measurements are approximate only. While we trust them to be correct we cannot guarantee them". The agent had paced out the oor area of one of the ats in the block and had incorrectly concluded that each at was approximately 63 square metres in size. The Court held that the calculation of the size of the ats was a simple matter. It found the agent's conduct was misleading and deceptive in stating the information had been given to the agent and there was no reason to doubt the accuracy of the information. Consequently, the inclusion of the disclaimer in the brochure did not prevent the Court from nding the agent had breached section 52 of the TPA. It concluded that a reasonable person in the agent's position would have grounds to doubt the accuracy of the measurements given the casual method of calculation adopted by the agent. What recourse is available to a buyer? A buyer who has su ered loss or damage as a result of an agent's misleading or deceptive conduct has up to six years to make a claim to the TPA. A Court may order a refund of the deposit and rescission of the contract or damages, which in most cases will be the di erence between the true value of the property and the price paid by the buyer. An agent's failure to act honestly will also amount to breaches of the Real Estate Agency Practice Code of Conduct and may give rise to disciplinary action under the Property Agents and Motor Dealers Act 2000 (Qld). Conclusion In light of the serious consequences which ow from misrepresentations made by agents in property transactions, members of the profession should exercise extreme caution when providing information about properties to prospective buyers. If placed in a position of uncertainty about any aspect of a property, agents should not attempt to guess an answer, rather, they should advise the potential buyer to undertake his or her own enquiries and/or seek professional advice from an appropriately quali ed expert. In determining whether an agent's conduct is misleading or deceptive, a Court will look at the representation from a buyer's point of view. REIQ Journal March 2010 35 LEGAL ISSUES