COURT
IN THE FEDERAL COURT OF AUSTRALIA
QUEENSLAND DISTRICT REGISTRY
GENERAL DIVISION
Spender J.(1)

CWDS
  Trade Practices - misleading or deceptive conduct - misrepresentations by
agent as to attributes of land sold and nature of documents signed by
purchaser - no belief in truth of representations - damages - loss included
loss of enjoyment of money paid.
  Equity - contract for sale of land - mortgage - unconscionable conduct -
documents containing unusual features - purchaser without independent advice -
purchaser functionally illiterate - misrepresentations.
  Equity - contract for sale of land - mortgage - mistake - purchaser mistaken
as to purchase price - purchaser not aware that he was executing a mortgage -
vendor aware of purchaser's mistake - misrepresentation as to the effect of
documents.
  Trade Practices - misleading or deceptive conduct - representations made
with regard to sale of land contract - initial contract causally connected to
contract from which loss or damage flowed - whether respondent 'knowingly
concerned in' contravention - knowledge of essential facts of contravention.
  Trade Practices Act 1974 ss. 52, 75B.
  Sanrod Pty Ltd v. Dainford Limited (1984) 54 ALR 179
  Brown v. The Jam Factory Pty Ltd (1981) 53 FLR 340
  Taylor v.Johnson (1983) 151 CLR 422
  Yorke v. Ross Lucas Pty Ltd (1986) 85 FLR 143
  Yorke v. Ross Lucas Pty Ltd (1985) 158 CLR 661
  Commercial Bank of Australia Limited v. Amadio (1983) 151 CLR 447
  Blomley v. Ryan (1956) 99 CLR 362

HRNG
BRISBANE
#DATE 13:3:1992
  Counsel for the applicant:     Mr R. Morton Shannon,
  Instructed by:                 Nicholson and Co.
  Counsel for the respondents:   Miss A. Philipedes
  Instructed by:                 Henderson Trout

ORDER
  The Court declares that:
The Bill of Mortgage Registered No. J66381 dated 6 February 1987 be void ab
initio.
  THE COURT ORDERS THAT:
   (1)   Judgment be entered for the applicant against
    the first, second and fifth respondents in the sum of
    $45,180.00.
   (2)   The first, second, third and fifth
    respondents pay the applicant's costs of and
    incidental to the proceedings, including reserved
    costs, to be taxed if not agreed.
   (3)   The provisions of O. 62 r. 36A not apply to
    the costs ordered to be paid.
   (4)   Liberty to apply within seven days.
THE COURT DIRECTS THAT:
   The moneys held in Court, together with any
   accretions, be paid to the solicitors for the
   applicant in partial discharge of the order for
   judgment in the sum of $45,180.00.
Note: Settlement and entry of orders is dealt with in Order 36 of the Federal
Court Rules.

JUDGE1
  This is a case of fraud.
2.  In January 1987 Cafred Pty Ltd ("Cafred") was the owner and registered
proprietor of land at Dalby in the State of Queensland including Lot 3 and Lot
7 on Registered Plan Number 205405.  Cafred was engaged in marketing and
selling that land, including Lot 3 and Lot 7.
3.  In January 1987 Xaton Nominees Pty Ltd ("Xaton") caused to be placed in
newspapers in Sydney advertisements for the sale of the land owned by Cafred,
including Lot 3 and Lot 7.  One of the advertisements, which appeared on 9
January 1987 was in these terms:
    "OLD FARM
    630 Ac $30,764
    Run down property in need of work, large dams,
    tree studded, partly cleared GRAZING PASTURES, FULLY
    FENCED, easy drive to town, in the heart of The
    Darling Downs.
    VENDOR ASSIST with FINANCE
    PHONE TODAY]
    QLD FINANCE and LAND
    MARKETING..."
4.  As a result of the advertisement, Mr Douglas George Lee ("Lee") contacted
Xaton on about 16 January.  The fourth respondent, Ms Hilda Dagel, attended at
the applicant's residence at Mt. Druitt in Sydney.  She spoke principally to
Lee, although it appears that a Ms Couzins and Lee's brother-in-law were also
present for some parts of the conversation.
5.  Lee says that he told Ms Dagel that he wanted to run horses, turkeys, and
a few poddy calves on the property and that she had said that it was "ideal"
country for those purposes and that the land had plenty of feed and water on
it.  He says that before the contract was signed he told her he had about 200
turkeys and 16 horses.   He also says that Ms Dagel represented that the land
was suitable for growing avocados as a friend of hers near the property had
started growing them and was going very well.  Lee says that Ms Dagel
recommended he purchase the property known as "Lot 3", and that no other lot
was discussed so that the conversation was directed to the attributes of that
particular lot.
6.  Ms Dagel allegedly produced certain photographs which she said were of Lot
3.  Those photographs became Exhibit 6 in these proceedings and consist of ten
photographs, most of which have a caption underneath which purports to state
what each of the photographs are showing.  Two of the photographs are said to
be the boundary between Lot 1 and Lot 3; two show the boundary between Lot 3
and Lot 4; one shows a general view of the centre of Lot 3; and another is
said to be a rear shot of Lot 3. What these photographs show of Lot 3 is a
fairly densely wooded property.  There is then another photograph which shows
about 50 sheep grazing in a clearing and is captioned "SHEEP ON LOT 3", and
another shows four horses near a dam in an open area. This photograph does not
have a caption.  The other two photographs do not purport to be of Lot 3.
7.  None of the photographs of Lot 3 shows any fences and Lee says that he
asked Ms Dagel where the fences were and that Ms Dagel had answered: "That's
on the line of the fences.  The fences are just going up now" and that the
property would be fully fenced. Lee says that Ms Dagel told him that the land
had at least one dam on it.
8.  Lee says that his brother-in-law asked whether there was any chance of
seeing the land before purchasing it, and that Ms Dagel had said that if they
flew up to see the land it would be a waste of a trip because the land was
selling so fast that it would be gone.  Further, Lee was told that if he
purchased the property sight unseen then they could drop the price to
$30,000.00 as a portion of the purchase price included the cost of
transporting Lee to Dalby to inspect the property.
9.  Lee says that after discussing the above matters and looking at the
photographs he decided to go ahead with the purchase of Lot 3 and he signed a
contract for its purchase on that afternoon.  That contract is dated 20
January 1987, although it appears that the parties have proceeded on the basis
that Lee signed the contract on or around 16 January 1987.  He then paid a
deposit of $2,900.00 cash on the afternoon of signing, and $27,000.00 was paid
a few days after.  Settlement of the contract was to be on 6 February 1987.
Lee understood Ms Dagel as saying that this amount included $1,000.00 in
solicitors' fees "to draw up the contract" and that the solicitor was "our",
that is the vendor's, solicitor.
10.  There was a discussion about in whose name the property would be put as
Ms Dagel had suggested that for taxation purposes it should be bought by Lee
as trustee for his children.  Lee says that he had to ring through to her the
next day to give her the proper spelling of his children's names as, being
illiterate, he could not give them to her on that afternoon.
11.  The fourth respondent did not give evidence and her absence was
unexplained.  While in some respects Lee's version of events is erroneous, I
accept him as an honest man trying to give an honest account of events to the
best of his ability.  There is no doubt that the representations contained in
the advertisement were made and I am satisfied that representations were made
by the fourth respondent concerning Lot 3, namely, that it was fully fenced,
had at least one dam on it, was suitable for growing avocados, raising turkeys
and the keeping of horses and that, if Lee bought Lot 3 without seeing the
property, the price would be reduced to $30,000.00. I am satisfied that those
representations concerning Lot 3 were false and were made by the fourth
respondent without any belief in their truth.
12.  Evidence from a licensed surveyor, Mr B. J. Booth, is that Lot 3 is
fenced on the western boundary only and that there is no fencing on the
northern, eastern or southern boundaries and there are no dams on it.  He
stated:
   "It would take quite a lot of diligent
   searching to find the boundaries of Lot 3 and Lot 7."
I accept that the quality of Lots 3 and 7 is as described in a report by
Stephen Davis, a registered valuer.
13.  Lee travelled with his de facto spouse, Ms Kerri Couzins, and his four
children to Dalby.  He arranged for a number of horses and dogs to be
transported to Dalby.  After his arrival, he could not locate the land at
first but, with the aid of local police, he eventually found Lot 3.  He was
unhappy with the property.  It had no fences or dams and was very heavily
timbered.  After inspecting the property, he contacted a solicitor from Messrs
Michael Quinn and Company, a Brisbane firm of solicitors who had performed the
conveyance of Lot 3.  Lee says that he complained "the land was no good" and
he wanted out. "I wanted my money back."  He says he told the solicitors
specifically why he was not happy with the land, namely, "that it was heavily
timbered, no water, no dams, no fences".  Lee says that after complaining
about the land, he threatened to go to the Willesee program and the solicitor
then told him that he could not get out of the contract, that there was
nothing he could do about it.
14.  There is a diary note made by a solicitor, Mr Ryan, of Michael Quinn and
Company dated 2 February which states:
    "Mr Lee rang not proceeding as land is
    valueless he claims. I tried to explain
    his contractual position but he said he
    was going to Mike Willissee (sic) and rang off. "
15.  On the same page and immediately under that diary note is a further diary
note dated 2 February:
    "Raised matter with P. Sissons.  Lee
    alleges no fences. "
Mr Sissons is associated with the second respondent.
16.  Lee says he then phoned Queensland Land and Finance and, after again
complaining bitterly that he was not happy with the land, was told that
somebody would be sent out to talk to him about it.
17.  The fifth respondent, Mr Pearson ("Pearson"), visited Lee in Dalby and
had various dealings with him.  There are significant differences between
Pearson's version and Lee's version of what occurred in early February 1987.
18.  Lee's account is that he first met Pearson on 5 February, which was the
day before a contract for Lot 7 was signed.  The meeting occurred at his
sister-in-law's house in Dalby at about noon and later Lee, Pearson and Lee's
brother-in-law, Mr Bernie Couzins, drove in Pearson's car to look for the dam
on Lot 3. Lee says that they drove over the property but could not find the
dam and on the way back Lee asked Pearson about other lots.  According to Lee,
Pearson made a call at Dalby but did not say anything to Lee about it and left
saying he would return the next day.  Lee says that Pearson returned on the
following day, 6 February, at about 10 or 11 o'clock and they went to look at
Lot 7.  Pearson told him that Lot 7 was fenced and had dams. According to Lee
they were unable to inspect Lot 7.  In his first version he said the reason
was because it was raining pretty heavily but later he said that that account
was wrong and the position was that there were storm clouds threatening and
they left for that reason and the rain did not start until they had got to
Kogan.
19.  Lee says that as they headed back to Dalby there was a discussion
concerning swapping Lot 3 for Lot 7. While driving back Pearson handed Lee
some documents. Lee said he could not read.  Pearson asked Lee if he knew
where a Justice of the Peace was and was told that there was a Justice of the
Peace at the chemist and that Lee signed some documents there.  According to
Lee, Pearson did not say Lot 7 was $8,000.00 dearer nor tell him that he was
executing the mortgage.  Lee says that he later found out there were no fences
and dams on Lot 7.  He received a letter from Queensland Land and Finance.  He
dictated a letter to his spouse which was forwarded to Colrich Finance Pty
Ltd, the mortgagee in respect of Lot 7. The letter, uncorrected, is
reproduced:
    "  To Whome It May Consern.
    I wasn't shore how to fill in the form
    you sent me.  I sined and filled it out to the best
    of my nologe.  Because I still owe eight thousand
    dollars on it I thought I would be better to put it
    back on the market because only being on unimployment
    benifits I just can't find the money to pay for it.
    I would like to get $39,500.00 dollars for it if
    possable. that is for Lot 7.  there is 260.4 ha.
    thanking you very much for your interest.  If you
    need any more information I will send it to you If I
    can.
     (Sgd.)  D G L  "
20.  On 16 February a notification of change of ownership in respect of Lot 7
was received by the Chinchilla Shire Council from Michael Quinn and Company
and on the following day the Council received a notification of change of
ownership from Cafred.  The one received from Michael Quinn and Company showed
the address of the purchaser as 66 Patrick Street, Dalby Qld. 4405.
21.  Rates were not paid in respect of Lot 7 and in November 1990 and in June
1991 a notice of sale in respect of unpaid rates of $703.53 was sent to
Douglas George Lee as trustee for Rebecca Louise Lee, Lucrecia Rosie Lee,
Patricia Ann Lee and Sandra Maree Lee at an address of 56 Patrick Street,
Dalby.  Not surprisingly, given the incorrect address, those envelopes were
returned unclaimed.  Mr Edward William Hoffman, the Deputy Shire Clerk of the
Chinchilla Shire Council says that he became aware that Colrich Finance Pty
Ltd held a registered mortgage over Lot 7 and he says he forwarded a further
copy of the notice of sale sent by prepaid post to Colrich Finance Pty Ltd at
30th Floor, M.L.C. Centre, 239 George Street, Brisbane, on the same occasion
as letters had been sent to Lee.  Neither envelope sent to Colrich Finance Pty
Ltd was returned unclaimed to the Council.
22.  On 5 July 1991 Lot 7 was sold by the Chinchilla Shire Council for arrears
of rates at a price of $20,100.00.  The net amount after payment of
outstanding land taxes and expenses of sale amounts to $18,493.98.  That sum
has been placed in an interest bearing account since 9 November 1991.
23.  Pearson's account of the events of early February 1987 is significantly
different from the account of Lee.  Pearson describes himself as a lister with
the Q.F.L. group of companies, which occupation entails mainly searching out
development properties for the company to develop and put on the market for
sale. He is not a real estate agent. Pearson says he was told by Queensland
Land and Finance that Lee was unhappy with Lot 3 because he could not find any
dams on the property. On his account he visited Lee on 4 February at about
9.00 a.m. at Dalby and he went with Lee to Lee's friend's house and Pearson,
Lee, Lee's friend and their sons went with Pearson to look for a dam on Lot 3.
According to Pearson, on the way out to the property Lee said he had been over
the estate and could not find a dam on Lot 3.  Pearson says that they were
unable to find a dam on Lot 3 and headed back.  Pearson says that on the way
he asked "What about one of the other blocks?" and Lee mentioned Lot 7.
According to Pearson, Lee said that he thought Lot 7 was the best block of the
lot because it had more clearing on it. Pearson said that in response to that
observation:
   "  I indicated to him that, as I understood
   it, I had been told, he had signed a cash
   unconditional contract, so he was committed, so maybe
   he could transfer his funds across to lot 7.  "
24.  Pearson said that he made a reverse charges call from Kogan from a public
telephone booth outside the post office and spoke to Mr Ron Morrison
("Morrison") and made enquiries about the availability of Lot 7 and its price.
He said that he had to wait a little while.  He then rang back a short time
later and was told that the lot was available and there was a price difference
of approximately $8,000.00. He says that after those two telephone calls they
went back to the property and, according to Pearson, spent a lot of time going
over Lot 7.  They saw the dam on Lot 8, walked the watercourse south from Lot
8 into Lot 7 and there was a conversation concerning a good dam site.  He then
said he tore the speedo cable of his car while driving on the estate.  They
then left for Dalby and went to Lee's friend's house where Pearson made
another reverse charges call to Morrison.  Pearson said that he enquired as to
how much the finance would be monthly and that Lee indicated he was happy with
Lot 7 and wished to transfer to it. Pearson says he asked Morrison to prepare
the documents.  He says that on the following day he picked up an envelope
containing documents in Brisbane.  He says:
   "  There was an envelope there with some
   documents which explained to me what had to be fixed
   up. "
25.  He says he went out again to Lee on 6 February, leaving at approximately
10 o'clock.  He went to Lee's friend's house where he showed the documents to
Lee.  He says he put them on the kitchen table and explained them, the
contract was signed by Lee and witnessed by Pearson.  Lee also signed the
application for finance documents. Because the mortgage needed witnessing by a
Justice of the Peace, this was done at the chemist.  He says that after the
documents were signed he made a reverse charges call to Morrison from a public
telephone booth outside the post office in Dalby to let Morrison know he was
on his way back.
26.  Morrison gave evidence that on or about 4 February he received a reverse
charges telephone call during the morning about prices and finance for Lot 7
and that he received a reverse charges call later that afternoon as a result
of which he started preparing the contract for Lot 7 and finance for
$8,000.00.  He says that he received another reverse charges call on or about
6 February about midday when Pearson said all the documents had been signed.
27.  I do not accept Pearson as a truthful witness.
28.  A record from Telecom Business Services of national operator assisted
calls to Xaton Nominees Pty Ltd shows that there were three phone calls from
Dalby on 4 February to that company, the first of them from a public telephone
booth at 10.16 a.m. and the second from the same public telephone booth at
10.50 a.m. and the third at 4.34 p.m, not from a public telephone booth.
There is a record on 6 February at 12.15 p.m. from a public telephone booth in
Dalby. Accepting that the first two telephone calls were the calls to Morrison
concerning prices and finance for Lot 7, it cannot be that those conversations
occurred after Pearson had driven with Lee to search for a dam on Lot 3.  The
estate is approximately 84 kms from Dalby over bitumen and earth roads.
Pearson says he arrived at Dalby at around 9 o'clock, so it would not be
possible to drive to the estate, inspect Lot 3, and drive back to Dalby in
time to make the telephone calls which are recorded as occurring before 10.50
a.m. on the 4th.  In my opinion Pearson was engaged in very serious damage
control, particularly in the light of threats to complain on television and I
am satisfied that events of 4-6 February did not occur as he claims.  I am
also sure that Lee's account is unreliable in a number of respects.  I am
satisfied that the first visit to the property was on 4 February and that
Pearson returned with documents for signature on 6 February.
29.  Pearson admitted that two of his sworn answers to interrogatories were
incorrect.  He swore that prior to the inspection with Lee, he had a
discussion with him by telephone on 4 February in order to arrange a meeting
to facilitate the inspection of Lot 3.  This he says now is false.  He also
said in answer to an interrogatory "that Lot 7 did have water on it, and to
the best of my knowledge the water situated in it as (sic) located in a dam
and partially in a watercourse".
30.  Apart from the confusion as to days on which events occurred I prefer
Lee's version of events to that of Pearson's.  I do this paying full regard to
the evidence of Pearson, Lee and Justine Bond, concerning conversations which
occurred outside the courtroom after Pearson had given his evidence.
31.  I am satisfied that Pearson went to Dalby because of the serious
complaints that Lee had made and that he was aware that Lee had threatened to
go to the media.  I am satisfied that he told Lee that Lee could not get his
money back, and I am satisfied that there was a conversation in the vehicle to
the effect of Lee's evidence where he said:
    "  `I did not see a fence.' and he said
    'Neither did I' and I said `Well, what's a man got to
    do?'  And I said `It looks like I am going to lose
    out here?' And he said `The only way you are going to
    get anything out of it is to take lot 7. "
32.  I am satisfied that he asked Pearson whether Lot 7 was fully fenced and
had dams and that Pearson replied "Yes. If it is advertised that way, it would
be."  Lee says that after that answer he asked "Well, how come lot 3 was
advertised that way?" and Pearson replied "That's exceptional.  That is run by
the Sydney mob."
33.  It seems improbable that a man complaining about the absence of dams and
fences on Lot 3 would describe Lot 7 as the best of the lot. This is
particularly so if, as Pearson says, Lee told him he had looked over the whole
estate and had found other land with dams on it.  It seems incredible that, if
Lee was aware that there were no dams or fences on Lot 7, he would agree to
pay $8,000.00 more for it, that lot suffering from precisely the deficiencies
which led to his bitter complaints concerning Lot 3. I am satisfied that there
was no inspection of Lot 7, or any mention of an increased price for Lot 7, or
any mention of a mortgage.  I am satisfied that Lee was informed by Pearson
that "they looked like transferring from lot 3 to lot 7", and that when Lee
asked Pearson whether the price would rise or be less, Pearson said "No. this
is a clean swap.  It is a swap over."  I believe Lee when he said that Pearson
told him that Lot 7 was fully fenced and had dams.  Having seen both Pearson
and Lee, I am satisfied that, contrary to his assertion, it was obvious to
Pearson that Lee was uneducated, quite unsophisticated and wholly
inexperienced in business matters.
34.  It is admitted that the second respondent is the agent of the first
respondent and the fourth and fifth respondents were employees and agents of
the second respondent.  I am satisfied also that Pearson was Colrich's agent
for the purpose of having the mortgage executed.  I am satisfied that the
conduct of Pearson was misleading and deceptive as alleged in the statement of
claim and that conduct in contravention of s. 52 of the Trade Practices Act
1974 ("the Act") has been established against the first, second and third
respondents, it being admitted that they are corporations and that the conduct
was in trade or commerce.
35.  The fifth respondent is a party knowingly concerned in that contravention
of s. 52.
36.  The conduct of the fourth respondent in respect of Lot 3 was conduct on
behalf of the first and second respondents and was misleading and deceptive.
It was submitted on behalf of the respondents that the Lot 7 sale was distinct
from the Lot 3 sale and that, once Lee discovered that the representations
concerning Lot 3 were false, he did not proceed with the sale of Lot 3.  In
the view I take of the matter, the events have to be looked at in their
entirety, particularly in the light of Lee's evidence that he was told by
Pearson:
   "  The only way you are going to get
   anything out of it is to take Lot 7."
and the statement by Pearson in evidence that:
   "  He was not happy with Lot 3.  I indicated
    to him that, as I understood it, I had been told, he
    had signed a cash unconditional contract so he was
    committed so maybe he could transfer his funds across
    to Lot 7. "
37.  Notwithstanding that the misrepresentations by the fourth respondent
induced Lee to enter into a contract to purchase Lot 3 and that the entry into
the contract for Lot 3 is connected in a causal way with the purchase by Lee
of Lot 7, I am unable to conclude that the fourth respondent is a person who
has "been in any way, directly or indirectly, knowingly concerned in, or party
to, the contravention" of the Act in respect of which Mr Lee has suffered loss
or damage, within the terms of s. 75B(c) of the Act.  Any loss or damage flows
from the acquisition of Lot 7.  In my opinion, the fourth respondent is not by
virtue of the provisions of s. 75B a person involved in that contravention.
38.  In Yorke v. Ross Lucas Pty Ltd (1983) 68 FLR 268, Fisher J. at first
instance said at 272:
   "  In my opinion the authorities establish
    that it must be proved that Mr Lucas was aware or
    should have been aware of the relevant facts before
    he can be said to have been involved in the
    contravention. "
39.  In the Full Court of the Federal Court (Bowen C.J., Lockhart and Beaumont
JJ.) (1985) 80 FLR 143, the Court said at 152:
   "  The phrase 'knowingly concerned in' (s
    75B(c)) plainly requires a mental element, namely,
    knowledge of the relevant facts: see Mallan v Lee
    (1949) 80 CLR 198 at 211. "
And later:
    "  The words 'party to the contravention' necessarily connote, in
    our view, that a person assents to or concurs in the conduct which
    constitutes the contravention.  He must therefore know or be aware
    of the essential facts or matters which must be proved to establish
    the contravention.  "
And the court said at 153:
    "  In our opinion, the words 'party to the
    contravention' refer to a person who participates in,
    or assents to the contravention in question.  To be
    regarded as participating in or assenting, such a
    person must actually or constructively be aware of
    the elements constituting the contravention.  To our
    minds, it is not sufficient to render an individual
    liable if he is shown to be aware of some only of
    those elements.  Where the contravention in question
    relates to engaging in trade or commerce in conduct
    that is misleading, one of the elements involved is
    that the conduct is misleading.  If a person sued
    under s 82 for damages as a person involved in the
    contravention is unaware of the essential facts and
    matters constituting the contravention, then he lacks
    knowledge of an essential element of the
    contravention.  He cannot, in our view, in those
    circumstances, be regarded as a party to the
    contravention (cf Guthrie v. Doyle Dane and Bernbach
    Pty Ltd (1977) 30 FLR 116 at 119-120, but see
    Taperell, Vermeesch and Harland Trade Practices and
    Consumer Protection (2nd ed), p 604). "
40.  In the High Court (1985) 158 CLR 661, Mason A.C.J., Wilson, Deane and
Dawson JJ. said at 670:
   "  There can be no question that a person
    cannot be knowingly concerned in a contravention
    unless he has knowledge of the essential facts
    constituting the contravention. "
And later:
   "  In our view, the proper construction of
    par. (c) requires a party to a contravention to be an
    intentional participant, the necessary intent being
    based upon knowledge of the essential elements of the
    contravention. "
41.  There is no evidence to suggest that the fourth respondent was aware in
any way of the matters touching the purchase of Lot 7.  It follows in my
opinion that the fourth respondent is not a person involved in the
contravention of the Act which caused loss or damage to Lee.
42.  On the facts as found I am also satisfied that relief should be granted
on the ground of unconscionable conduct in respect of the purchase of Lot 7.
In The Commercial Bank of Australia Limited v. Amadio (1983) 151 CLR 447 at
461, Mason J. said:
   "  Relief on the ground of unconscionable
    conduct will be granted when unconscientious
    advantage is taken of an
    innocent party whose will is overborne so
    that it is not independent and voluntary, just as it
    will be granted when such advantage is taken of an
    innocent party who, though not deprived of an
    independent and voluntary will, is unable to make a
    worthwhile judgment as to what is in his best
    interest. "
43.  In Blomley v. Ryan (1956) 99 CLR 362 at 405 Fullagar J. said:
   "  The circumstances adversely affecting a party, which may induce a
    court of equity either to refuse its aid or to set a transaction
    aside, are of great variety and can hardly be satisfactorily
    classified.  Among them are poverty or need of any kind, sickness,
    age, sex, infirmity of body or mind, drunkenness, illiteracy or lack
    of education, lack of assistance or explanation where assistance or
    explanation is necessary.  The common characteristic seems to be
    that they have the effect of placing one party at a serious
    disadvantage vis-a-vis the other.  "
And Kitto J. said at 415:
   "  ...whenever one party to a transaction is at a special
    disadvantage in dealing with the other party because illness,
    ignorance, inexperience, impaired faculties, financial need or other
    circumstances affect his ability to conserve his own interests, and
    the other party unconscientiously takes advantage of the opportunity
    thus placed in his hands. "
44.  On 6 February 1987 Lee could not repay anything. He had no income and was
unlikely to have any for some time.  The documents which Pearson caused Lee to
sign that day have a number of very curious features: the contract is one
subject to finance on the same day as it is entered into; there was approval
of finance by a lender which in effect is a company controlled by the same
people as the vendor; there was approval of finance by Colrich before the
contract was signed; there was an approval of finance without any application
or investigation of finances; a bill of mortgage was signed forthwith and the
lender paid the stamp duty and costs of the mortgage and the vendor paid not
only the extra outlays on the contract but also the balance of fees owing to
the solicitor who, nominally in any event, was acting for the purchaser.  The
initial payment of $29,900.00 was as a consequence of the clear
misrepresentations by Ms Dagel.
45.  Lee made it plain to Pearson and to Ryan that he wanted to get his money
back.  I find that he was told by each of them that the contract was an
unconditional cash contract and he was therefore unable to get his money back.
Pearson knew that Lee had a solicitor who was purporting to act for him yet
had Lee sign documentation without there being any reference to that solicitor
for any independent advice.
46.  I am satisfied that both Pearson and Morrison were aware that, if Lee
obtained truly independent competent advice, he would be able to avoid the
contract for Lot 3.  For practical purposes Lee is illiterate.  As at 4 and 6
February 1987 he was in a cruel predicament: he had spent nearly $30,000.00 on
land that was worthless for any practical purpose he had in mind.  He was
persuaded by Pearson to the wrong belief that he had no prospect of recovery
of his money and that his only alternative was to take Lot 7.  Lee was
deceived as to the attributes of Lot 7 by Pearson and the circumstances under
which the document came to be executed were such that, in my opinion, Lee was
unable to make a worthwhile judgment as to what was in his best interest.
47.  I am satisfied that the execution of those documents occurred when Lee
was under a serious mistake about the contents and nature of those documents.
I am satisfied that he was not aware that he was executing a mortgage or
accepting a loan.  His belief was that the purchase price was no more than he
had already paid for Lot 3 and that the documentation that he signed was that
which was merely necessary to effect a "swap" of Lot 7 for Lot 3.
48.  In Taylor v. Johnson (1983) 151 CLR 422, Mason A.C.J., Murphy and Deane
JJ. said at 432:
   "  ...a party who has entered into a written
    contract under a serious mistake about its contents
    in relation to a fundamental term will be entitled in
    equity to an order rescinding the contract if the
    other party is aware that circumstances exist which
    indicate that the first party is entering the
    contract under some serious mistake or
    misapprehension about either the content or subject
    matter of that term and deliberately sets out to
    ensure that the first party does not become aware of
    the existence of his mistake or misapprehension. "
49.  On this basis also the transaction should be set aside in equity.
50.  As to the measure of damages to which the applicant is entitled, Fox J.
in Brown v. The Jam Factory Pty Ltd (1981) 53 FLR 340 at 351 said:
   "  The correct way to approach the
    assessment of damages in this case in my view is to
    compare the position in which the applicants might
    have been expected to be if the misleading conduct
    had not occurred with the situation they were in as a
    result of acting in reliance on that conduct (see
    Esso Petroleum Co. Ltd v. Mardon (1976) 1 QB 801).
    This is the  same, or analogous to, the general
    principle respecting the measure of damages in tort.
    There was not anything promissory in the statements
    relied upon, and no basis exists for adopting the
    measure of damages applicable in contract.  As an
    action based on s. 52 is more appropriately
    classified as one of tort, it is possible that the
    measure of damages will always, fundamentally, be
    based on principles affecting torts. "
51.  In this case Lee has paid $29,900.00 in respect of a block of land which,
through no fault of his, he no longer has. Whether a further amount of $241.29
referred to in a letter of 5 February 1987 from Michael Quinn and Company has
been paid is not clear from the evidence.
52.  It seems to me that where money is paid as a consequence of misleading
conduct, the loss suffered by that conduct includes not only the money paid
but also the loss from the use of that money.
53.  In Sanrod Pty Ltd v. Dainford Limited (1984) 54 ALR 179, Fitzgerald J.
said at 191:
   "  I can myself perceive no difficulty in
    accepting that, when money is paid in consequence of
    misleading conduct, the loss suffered by that conduct
    includes not only the money paid but also the cost of
    borrowing that money or the loss from its investment,
    as the case may be: cf Frith v. Gold Coast Mineral
    Springs Pty Ltd (1983) ATPR 40-339; affirmed (1983)
    ATPR 40-394; 47 ALR 547.  Interest awarded as a
    component of damages in such circumstances is not for
    loss of the use of the money awarded as damages, but
    for loss of the use of the money paid over in
    consequence of the misleading conduct and is directly
    related to the misleading conduct. "
54.  Lee has lost not only the purchase price but the enjoyment of that which
was represented to him and in my opinion interest on the sum of $29,900.00
should be paid from 1 February 1987. Having regard to Lee's intention in
respect of the purchase of land, it seems to me that the rate of interest to
be adopted should be conservative.  I propose to allow interest on the sum of
$29,900.00 from 1 February 1987 to judgment at ten percent, which, with some
rounding off, amounts to $15,280.00.
55.  The moneys held in Court which represent the net realisation of the sale
of Lot 7 have been accumulating some interest.  I propose to give judgment for
the applicant against the first, second and fifth respondents in the sum of
$45,180.00.  I direct that the moneys held by the Court, together with any
accretions, be paid to the solicitors for the applicant in partial discharge
of the order for judgment in the sum of $45,180.00.
56.  So far as the third respondent is concerned I think it right,
notwithstanding the sale of Lot 7 for arrears of rates, to make a declaration
that the bill of mortgage registered number J66381 given by the applicant in
favour of the third respondent and dated 6 February 1987 be void ab initio.
57.  For the reasons earlier indicated, I make no order against the fourth
respondent.
58.  I order that the first, second, third and fifth respondents pay the
applicant's costs of and incidental to these proceedings including reserved
costs, to be taxed if not agreed.   I further order that the provisions of O.
62 r. 36A not be applied in taxation of the costs hereby ordered.  I grant
liberty to apply.