NSWCA: Real Estate Agent a Mere Conduit, Not Liable for Misleading Statement

In the matter of Hyder v McGrath Sales Pty Ltd [2018] NSWCA 223, the court was required to consider whether McGrath, in their capacity as a real estate agent, had engaged in misleading or deceptive conduct by making representations to a property purchaser about parking availability.

The proceedings commenced after Amy Hyder purchased a Sydney property for $9.4 million in February 2015, with her husband conducting the purchase negotiations and ultimately making the decision to proceed with the sale.

Acting on behalf of the property’s seller, McGrath published online and print advertising material which described the property as having ‘plentiful parking’ and highlighted that the property featured a “double garage plus private off-street and driveway parking.’

Both the online and printed material featured the following disclaimer:

“Scale in meters. Indicative only. Dimensions are approximate. All information contained herein is gathered from sources we believe to be reliable. However we cannot guarantee its accuracy and interested persons should rely on their enquiries.”

Having inspected the property on at least four occasions, the Hyders understood that it featured a double garage. There was also space in front of the garage for two more cars, however parking here would block access to the garage. Public parking was not permitted on the street.

The lot also included a strip of land which gave two other lots access to their homes, with these lots having right of way over the strip. However, prior to the Hyder’s purchase, this space had been treated as parking for the property owners, and at the time of purchase it featured two signs which read ‘Private Parking Space 24′. ’24’ represented the street number of the property.

Upon inspecting the property, the Hyders had been informed by McGrath’s agents that the property owners had exclusive use of the ‘private parking’ area. The promotional material also included a detailed site plan showing images of three cars parked in this strip.

After agreeing to a purchase price of $9.4 million, Mrs Hyder signed a standard form contract of sale, which was accompanied by attachments including:

  • copies of a title search that noted the relevant rights of way;
  • the relevant deposited plan; and
  • the memoranda of transfer creating the rights of way.

The contract also included special conditions which indicated that the purchaser had not relied on any statements, inducements or representations made by or on behalf of the vendor (including by any estate agent acting on their behalf).

However, in April 2016, Mrs Hyder commenced proceedings against McGrath, alleging that the agent’s pre-sale representations concerning parking availability contravened s18 of Australian Consumer Law. In doing so, Mrs Hyder contended that she had suffered a loss as a result of McGrath’s misleading and deceptive conduct, stating that she would not have purchased the property at the price of $9.4 million had the representation not been made.

At first instance, the primary judge dismissed the appellant’s claim, finding that although McGrath had engaged in misleading and deceptive conduct, it was not satisfied that Hyder had suffered a loss as a result of this conduct.

On appeal, the court was required to consider whether the primary judge erred in finding that Hyder would have proceeded with the purchase.

Ultimately, the court dismissed the appeal, finding that McGrath had not engaged in misleading or deceptive conduct. In doing so, it held that the parking information was not endorsed by McGrath, but rather information which it expressly or impliedly disclaimed responsibility for. Moreover, it held that Mrs Hyder had failed to establish that she suffered loss as a result of the conduct, and so the appeal was dismissed with costs.

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