Cummins Generator Technologies Germany GmbH v Johnson
Controls Australia Pty Limited  NSWCA 264
In litigation where a lender sues a property valuer for
negligently valuing a property, it is commonly asserted by the
valuer that the lender is required to prove that it would have
embarked on a different course of action "but for" the
misleading and deceptive conduct of the valuer. This is often
referred to as the "no transaction" principle or the
"different transaction" principle.
A recent decision of the New South Wales Court of Appeal in
Cummins Generator Technologies Germany GmbH v Johnson Controls
Australia Pty Limited  NSWCA 264 has considered this
Cummins was a case which involved the supply of
electrical generators. The generators were required to possess
certain technical specifications which would allow them to operate
in parallel with a suite of already functioning generators. The
generators which were supplied did not possess those
specifications, and a claim for misleading and deceptive conduct
was brought against the supplier.
Although the facts of Cummins are unrelated to valuer
negligence the Court held that, to prove causation of damage in a
misleading and deceptive conduct claim, it is only necessary for a
party to prove that it relied on a misrepresentation and, in
reliance on the misrepresentation, it acted in a particular way
that caused it loss.
There is no strict requirement for a party to prove that it
would have taken a different course of action "but for"
its reliance on the misrepresentation.
The supplier, against whom the claim of misleading and deceptive
conduct was made, submitted that "...establishing loss or
damage requires consideration in comparison with the events that
actually happened with what would have happened had there been no
This submission was rejected by the Court, which noted at 
...the trial judge was correct in stating there was no
strict requirement to prove a 'no transaction' or
'different transaction' case. Rather, it is necessary for a
party to prove that in reliance on the misrepresentation it acted
in a particular way that caused it loss and to then prove the
quantum of that loss.
When faced with a defence from a valuer that a lender must put
forward a "no transaction" or "different
transaction" case in order to prove it has suffered damage,
lenders can rely on the conclusion of the Court in Cummins that
enquiries as to what a lender would have otherwise done, or might
have otherwise done, but for the negligent or misleading valuation
are irrelevant in determining causation.
Although a lender may need to go into evidence of what other
action it might have taken if not for the negligent or misleading
valuation to explain the quantum of damage it had suffered, in
order to show that the conduct of a valuer caused it to suffer
damage, the lender need only demonstrate that it relied on a
negligent misrepresentation (the valuation) and, in doing so,
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
Kemp Strang has received acknowledgements for the quality of
our work in the most recent editions of Chambers & Partners,
Best Lawyers and IFLR1000.
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