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Decisions of the Superior Courts of New South Wales, 1788-1899

Cape v McIntosh (1835) NSW Sel Cas (Dowling) 444; [1835] NSWSupC 15

Supreme Court of New South Wales

Dowling J., 26 February 1835

Source: Dowling, Select Cases, Vol. 4, Archives Office of New South Wales, 2/3463[1 ]

[p. 26]

[Thursday.

26th February]

 

[If upon the faith of an auctioneers advertisement containing a false description of the property published at the instance of the vendor a vendee is induced to give a bigger price than he would otherwise have done, if left to his own vigilance, an action for damages may be sustained against the Vendor for deceit though the vendee had an opportunity before the sale of seeing the property & was not prevented by the vendor.]

Before Dowling J. &

Two assessors

W. T. Cape v R. McIntosh

Case for a deceit in falsely and fraudulently & knowingly representing the value of a certain estate sold at Public Auction and bought by the Plf of the Deft, to be more than it was worth, whereby the Plf was greatly damnified.  The cause of action was stated in the form of a notice.  Plea not Guilty.  At the trial before Dowling J. it appeared in evidence that on the 10th Aprillast, the Deft caused to be advertised in the public papers a piece of land of 200 acres situate at Pittwater, to be sold by auction at Sydney.  The advertisement set forth a variety of particulars, from which it might be collected that the estate was a most valuable property, that 35 acres were cleared, 25 of which were in cultivation; that about 150 acres were fenced in; that there was a house & barn on the land, valuable timber on it; a never failing supply of fresh  water, & an extensive run for cattle.  The Plf upon seeing this advertisement employed a friend to attend the sale and bid for the estate; and accordingly [p. 27] upon the faith of the advertisement he was induced to purchase it on the 17th April at 13/ an acre & paid a deposit, & upon the execution of the conveyance on the 6th June following he paid the whole of the purchase money payable in bills, which were afterwards honored.  Upon sending down to take possession, it turned out that there were but 12 acres cleared, of which about four were in a state of cultivation, that about 7 or 8 acres only were fenced in, & that the house was merely a thatched hut which had fallen down, and no building answering the description of a barn.  In other particulars the advertisement was proved to be untrue.  Without the improvements, the land was estimated by a surveyor to be worth about 5/ an acre.  It was proved that the auctioneer drew up the advertisement for the sale upon the description given him of the property by the Deft.  The deft himself attended the sale, & conversed about the estate with the plf's agent.  The advertisement was read in the Defts presence, & the agent said he purchased it for the plf, at 13/ an acre, upon the faith of the description of the property in the advertisement.  The Plf did not go or send to inspect the estate before it [p. 28] was purchased although there was abundant time for him to do so.  At no time during the sale did the deft give any intimation that the description of the property was incorrect.  Before the Bills given for the purchase money fell due, the discovery of the alleged fraud was made.  The defendant upon being afterwards remonstrated with upon the deception practices upon the Plf, threw the blame on the auctioneer, who drew up the advertisement, but offered to the take back the land upon being allowed to retain one half the purchase money.  Upon this evidence the Plf rested his case.

Kerr for the deft went for a nonsuit, the two grounds, first, that there was no proof that the Deft knew of the defects in the property as compared with the advertisement; & secondly, that if he did, still there ought to be proof to shew that the Deft had thrown some obstacle in the Plfs way to prevent his inquiring into the state of the property before he became the purchaser.  He citedPickering v Dowson (4 Taunt. 779) and (1 Stark 75) that the maxim vigilantitus non dormicantitus servit lex, applied to [p. 29] the present case.

Foster contra, cited Dobell v Stephens (3 BH.3)

Dowling J. refused to nonsuit.

Kerr addressed the assessors on the merits.

Dowling J.  in summing up the case told the assessors that all transactions of this kind should be founded in common honesty.  The question was, did the Deft knowingly cause the auctioneer to publish a false description of the property, with intent to deceive and defraud the purchaser.  If he did, then he was liable.  It was proved that it was upon his representation the auctioneer published the description.  He was himself present at the sale and conversed with the Plfs agent about the property.  He afterwards admitted the falsehood of the description by throwing the blame on the auctioneer, & offered to take back the estate if he were allowed to retain half the purchase money.  The maxim of law cited for the Deft would be applicable in the absence of fraud, but fraud vitiates all transactions.  The cases cited for the Deft were not in point. [p.30]  They referred to instances where the vendee had immediate means of referring to and examining the subject of sale, before the purchase & satisfying himself of the truth or falsehood of the representation.  A vendor must give, as far as is within his knowledge, a true, fair & honest description of the property he proposes to sell.  A vendee ought to put some faith in the representation of the vendor & is not bound to assume that he is about to deal with a rogue.  It is often highly inconvenient if not impossible for a vendee of distant estates in this country to visit the subject of sale to ascertain whether the description given in an auctioneers advertisement is correct, where the sale takes pace in Sydney.  There the Plf made all the inquiries he could, short of going to see the property before the sale.  The true point therefore, for the assessors to determine is, was the Plf by false & fraudulent representation knowingly given forth by the Deft, as to the value of the property, induced to give more money for the estate than he would otherwise [p. 31] have done, if left to his own judgment and vigilance.  If the assessors thought so, then they would estimate their damages by reference to the actual value of the estate, compared with the fictitious value at which it was purchased at the auction.

The assessors found for the Plf Damages 50£.

The verdict was not sought to be disturbed.

 

Dowling J., 26 February 1835

Source: Sydney Herald, 2 March 1835[2 ]

 

Before His Honor Mr. Justice Dowling, J. Busby, and J. E. Manning Esqs., Assessors.

Cape v. Mackintosh. - This was an action on the case, to recover a compensation in damages for a deceit practised by defendant on the plaintiff in the sale of a farm at Pitt Water.  Damages were laid at £200.

It appeared that in April last, defendant instructed Mr. Lyons to dispose of his farm at Pitt Water, and having described the same, an advertisement was inserted in the Sydney Gazettefor the purpose of inviting Public Auction thereto; plaintiff seeing the advertisement, became desirous of purchasing it from the description given of its situation and improvements, and on the day of sale Mr. Jacques, plaintiffs father-in-law, attended for the purpose of bidding for it.  In answer to enquiries respecting the property, Mr. Lyons stated that he was entirely unacquainted with it, except from information derived from the proprietor, who would be present at the sale, and would furnish the required particulars respecting it.  Plaintiff ultimately became the purchaser at 13s. per acre.  Relying on the representations set forth in the advertisement, it was not considered necessary to inspect the property previously to the sale, but an opportunity was taken a short time subsequently, when it was discovered that it had been materially overrated, in the various particulars set forth in the advertisement.  There was no appearance whatever of improvement from a state of nature, although it had been represented that the property was fenced in, and a substantial house erected thereon.  A professional gentleman who had drawn up the deed of conveyance, met defendant a few days after plaintiff had visited the property, and who had learned his dissatisfaction at his purchase, and informed defendant of the same; defendant observed that if he did not approve of it, he might give it back, as he would have no objection to receive it on his forfeiting half of the purchase money; to this proposition plaintiff did not agree, but instituted the present action.

The advertisement was put in, and the actual state of the property at the time of sale proved by Master Jacques who accompanied plaintiff on his visit of inspection.  A fence had enclosed about nine acres formerly, but according to the evidence of another witness, it had been burned down in consequence of a bush fire.

Defendant was present at the sale, and heard the advertisement read, but made no observations thereon, nor opposed any objections to the representations set forth as to the property.  Mr. Jaques [sic], Government Auctioneer, stated that defendant purchased at a Government sale immediately after the sale of his own farm to plaintiff another piece of land in the vicinity at 7s. per acre; Mr. Jaques [sic] considered that land in question was worth no more than the minimum price fixed by the Government.

Mr. Kerr for the defendant, submitted to the Court that his client was entitled to a nonsuit, inasmuch as it had not been proved that any means had been employed to prevent plaintiff from having an opportunity of inspecting the property previously to the sale, which he might have done it he had thought proper, quoting the case of Pickering v. Dowson, 3rd Taunton, in support of the application.

Mr. Foster the plaintiff took an objection to the application, and quoted the case Dobell v. Stephens, Barnwell and Cresswell, p. 623, which the Court held was fatal to the application.

In putting the case to the Assessors, his Honor left it for their consideration whether any deceptive means had been employed to induce the plaintiff to become a purchaser, and whether such deceptions had the effect of putting a greater value on the said land than its actual worth.  It had been urged by the learned Counsel for the defendant, that plaintiff had had an opportunity to judge of the value of the land by inspecting it before the time of sale, which he had neglected to do, and which had not been prevented by any act of defendants; but they would consider that the plaintiff was not bound to do so, particularly in this colony, where a piece of land advertised for sale by auction in Sydney might be situated at the distance of two hundred miles through the wilderness, and it was therefore impracticable to inspect before the sale every piece of land offered to the public in the newspapers.  From that difficulty arose the necessity of relying on the representation put forth by auctioneers in their advertisements, which might be made the vehicles of the grossest deceptions.  In England the case stood different; the facility of communication between one part of the country and another rendered it easy to ascertain by inspection the nature and value of property offered for public sale.  The question for their consideration was not whether the land was actually worth the sum paid for it, but whether in consequence of the deceptions used, plaintiff was no induced to give more for it than he would otherwise have done, and to what extent of damages has he been damnified thereby.  The Assessors found a verdict for the plaintiff damages £50.

His Honor remarked on the impropriety in auctioneers of practicing that figurative description of property entrusted to them for sale, which they were in the habit of doing, thereby imparting to it by a flourish of their fancies, a character and value which was totally inconsistent with the fact.  It was necessary that they should confine themselves to mere facts, in describing such property, in order that the Public might not be deceived.

 

Notes

[1 ] For another case in which false advertising was alleged, see Paul v. BettsSydney Gazette, 9 June 1836.  The plaintiff sued for the price under a sale of goods.  Justice Burton put to the assessors whether the advertisement had been a false representation, and whether the defendants purchased under that representation.  Held, judgment for defendant.

[2 ] See also Australian, 6 March 1835.  It quoted Dowling J. as ``observing that though the defence set up might perhaps be available in England where the facility of communication rendered inspection easy, it could not hold good here, where land might be situated 300 miles from Sydney, so as to make inspection impossible in many cases before the sale took place.  The only question was, whether the plaintiff had been induced to become the purchaser, or to give more than he otherwise would by the misrepresentation."

Published by the Division of Law, Macquarie University