The Court held in this case that for a finding of misleading and deceptive conduct, the circumstances of the sale of land need to have given rise to a reasonable expectation that a past suicide on the land would have been disclosed and the silence must have been relied on by the purchaser in entering into the contract.  By entering into a deed extending the completion date after learning of the suicide, the purchaser ‘refreshed’ the original contract and could not then argue that it had been misled by the silence when entering the original contract.  If a party to a contract discovers information that would have stopped it from entering into the contract had it been disclosed at that time, care should be taken to ensure that the party’s subsequent conduct does not jeopardise a misleading and deceptive conduct claim.

In this case, Charles Lloyd Property Group Pty Ltd (Charles Lloyd) sought to have a contract for the purchase of land from Ms Buchanan annulled under the Fair Trading Act 1999 (Vic) on the basis that it was misled and deceived by Ms Buchanan’s pre-contractual silence about the fact that a suicide had occurred on the land, which Charles Lloyd claimed was material.

Mukhtar AsJ made the following general observations on silence as misleading and deceptive conduct:

  • cases have drawn a distinction between mere silence and silence coupled with related positive statements that are capable of leading a plaintiff into error;
  • for mere silence to attract liability, there must be something more -  thus the approach of considering whether circumstances gave rise to a reasonable expectation that if some relevant facts existed, they would be disclosed; and
  • the statute is not concerned with state of mind – while there is support for the view that a failure to disclose must be deliberate, Mukhtar AsJ preferred the contrary views based on the paramountcy of the legislation which is concerned with the objective effect of conduct leading a plaintiff into error.

In finding for Ms Buchanan, Mukhtar AsJ found that:

  • given that the land was to be subdivided and developed, it could be doubted that the circumstances gave rise to a reasonable expectation that a suicide on the property would be disclosed; and
  • Charles Lloyd entered a deed with Ms Buchanan extending the completion date after learning of the suicide and cannot now claim it was misled at the very beginning.  In executing the extension deed, Charles Lloyd entered into new legal relations, with knowledge of the suicide (in effect refreshing the original contract).

See the case.