Misleading representations in the sale of land

by The FindLaw Team

Consumers in Australia enjoy a number of safeguards from false or misleading representations made in the sale of goods and services from vendors with the protections also extending to the sale or grant of an interest in land. The purchasing of land is obviously a major financial undertaking so it only makes sense that laws exist preventing a person from making false or misleading representations when selling or granting land under the provisions of the Australian Consumer Law (the ACL).

The law

Section 30(1) of the ACL proscribes that a person in a trade or commerce in connexion with the sale or grant, or the possible sale or grant of an interest in land, or in connection with the promotion by any means of the sale or grant in an interest in land, make false or misleading representations concerning:

  • sponsorship, approval or affiliation; or
  • the nature of the interest in the land; or
  • the price payable for the land; or
  • the location of the land; or
  • the characteristics of the land; or
  • the use to which the land is capable of being put or may be lawfully put; or
  • the existence of availability of facilities associated with the land.

Turning to case law regarding false or misleading representations in connection with the sale or grant of land, the matter of Pryor v Given (1979) 24 ALR 442; (1980) 30 ALR 189 (FC) can shed some light as to the approach by the court.

The matter of Pryor v Given was an appeal to the Federal Court of Australia regarding a decision under s 53A(1)(b) of the former Trade Practices Act 1974 (the TPA) in which the appellant was convicted of making misleading statements in the sale of land. The basis for initiating legal action centred around  advertisements for the sale of land in various media that included the words “a wonderful place to live” and “watch it grow”, with the ads also including a pictorial representation of a number of houses.

The court in Pryor v Given looked at the advertisements as a whole, that took into account both the words and pictures and found that a representation was made by the appellants that houses could be built on the land when in fact, the land was subject to a planning scheme requiring special approval from the responsible authority, and furthermore, potential purchasers were also subject to onerous conditions. The court held that anyone who saw the advertisements could only come to the conclusion that houses could be built on the land in question.

Ultimately, the court found that the appellant had engaged in a misleading representation concerning the use of the land contravening s 53A(1)(b) of the TPA, which was a precursor to s 30(1)(f) of the ACL.

One of the interesting aspects of the s 30 provisions of the ACL, is that there is no need to establish that a sale resulted from, or was likely to result from the making of the misleading representation. Under the provisions, representations made in ‘connection with the promotion of the sale’ of land via a brochure made available to the public, can be considered enough to show that a person engaged in false or misleading statements, as was the case in Videon v Barry Burroughs Pty Ltd (1981) 37 ALR 365.

In Videon v Barry Burroughs Pty Ltd, the Federal Court of Australia held that:

“For a misleading statement to be made “in connection with the promotion of the sale” there is no necessity to establish that a sale resulted from or was the likely result of the making of a statement. The fact that a brochure containing the statement was available to the public is sufficient and there is no need to establish that it was read by any person...”

This article is a broad overview of the laws concerning misleading representations in the sale of land. If you are experiencing any difficulties involving property, please seek the assistance of a lawyer via the FindLaw directory who will be able to help.



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