Zhang v Sydney Advance Realty - Representation as to Future Value Allows Purchaser to Avoid Contract
FACTS: The Agent represented that a unit being sold off the plan was the leader of three suburbs which were going to double in value in five years. She relied on an article published in the Sun Herald. The vendor had not known of or authorised the representation.
HELD: The representation was misleading and deceptive despite the fact that it was based on third party material. The purchaser was entitled to rescind the contract and return of the deposit or damages. The agent lost its commission.
LESSON: You should never be specific when prognosticating about future value. If you use material from another source, reproduce it, attribute it, and add a disclaimer. If you hold a deposit as stakeholder and there is a dispute, do not pay it to the vendor.
The full report of the case can be read here.