In this case Bransgroves acted for the Plaintiff lender and obtained judgement by consent for $575,000 against a third party mortgagor, Mr Walster. The mortgagor then pursued his cross-claim against the broker and obtained judgement for $575,000 for breach of s42 of the Fair Trading Act – misleading and deceptive conduct.
The broker submitted that at no time did he intend to mislead the Mr Walster. However the court noted the intent of the maker of the representation is not relevant under s.42 and all that is relevant is whether, tested objectively, the conduct was misleading or deceptive or likely to mislead or deceive:
Justice Johnson determined that the critical representation was a representation that long-term finance had been arranged by 20 December 2005, but that the funds would not be available, until January 2006. The facility in question being a short-term bridging loan.
The judge rejected the broker’s claim that the statement that he had “arranged long term finance” meant something less than that long-term finance was in place. At one point in cross-examination by the broker said “I was in the process of organising” finance. In his Defence he asserted that he said to Mr Walster “words to the effect that he was working on long term finance”. But the judge found a fair and reasonable interpretation of what the broker said to Mr Walster was that long-term finance was to definitely be available with the only difficulty being one of timing, so that the finance would not be available until January 2006. The statement was not objectively correct. It was both misleading and deceptive
The broker represented himself at the trial which indicates he was uninsured.