The Block is a reality television series in which couples renovate apartments from a diabolical state to sartorial glory. The properties are then sold at auction. The couples pocket the ‘profit’, namely, the difference between the reserve and purchase price. The winner also receives a bonus sum. This post explores the legal implications of two recent controversies from Series 9, The Block Glasshouse. The first concerns an episode concerning a misidentified EPA inspector. The second concerns the reported prospect (now denied) of legal action from one of the ‘losing’ couples.
The EPA and the underground fuel tank
It was Episode 44. A musical soundtrack provided a ‘pending doom’ undercurrent to the voiceover. Why? A mysterious underground tank threatened the safety of the Glasshouse building site. Site foreman Keith Schleiger had discovered the building was an Ampol service station circa 1974, and the tank contained an estimated 15,000 litres of fuel. “We’re basically sitting on a bomb,” Keith said.
Fortunately, “Chris” from the Environment Protection Authority (EPA) was there to help.
According to a Herald Sun report, “Chris” was not, in fact, from the EPA but was an environmental scientist hired by the show’s producers to liaise with the EPA. This was later said to be a case of “misidentification”. Further, senior EPA media adviser Terry Sefton reportedly advised no one from the EPA had investigated the site for at least the last 10 years.
It goes without saying that reality television often bears little resemblance to reality. Much behind the scenes is hidden from the viewer. Examples include boring paper work and dealings with regulatory authorities. So, in keeping with the theme, let us not make legal assumptions about the activities of the Block Glasshouse itself. Instead, the scenario is useful, hypothetically, to illustrate a few points.
For instance, what happens when a buyer of real estate obtains more than one bargained for, such as an underground petroleum storage system or “UPSS” to those in the know?
In 2014–15, the EPA has a UPSS program intended to raise awareness and understanding of compliance standards and environmental risks associated with service stations. Its focus is on leak detection monitoring and leak response at high-risk sites. See here.
The EPA also has broad remedial powers to order the clean up of risky sites. If these are not dealt with properly, sanctions can apply.
For an example of the type of clean up work involved, see the notice the EPA provided to residents about a former 7-Eleven service station in Chelsea.
It goes without saying that de-contamination activities, which may include removing the old UPSS, can be costly to purchasers of property. And this may be a hidden cost if the risks were not identifiable to the purchaser in its due diligence process.
The Australian Consumer Law (ACL) has long been a friend to those misled or deceived, including in real estate transactions.
Section 18 of the ACL states that a person must not, in trade or commerce, engage in conduct that is misleading and deceptive or likely to mislead or deceive.
In other words, the law can intervene if a purchaser has fallen into error as a result of a misrepresentation made by the seller or its agent.
Consumer Affairs Victoria refers to the example of the real estate agency selling apartments with a view of the sea. The agency assured prospective buyers that the view was protected because the land between the apartment block and the sea was zoned for low-rise development. However, the zoning was about to change, allowing high-rise development. The agency had made a false statement.
Where, however, a person has reasonable grounds to make a claim about a future matter, even if it later proves incorrect, he or she will not be liable for misleading consumers (see section 4 ACL). Accordingly, in the Consumer Affairs Victoria example supplied above, the agent was able to rely on this loophole to escape liability.
Silence can be misleading or deceptive if it means important details known to the seller or its agent were not disclosed prior to purchase. Whether this conduct crosses the line will always depend on the circumstances in each case (e.g. perhaps a certain producer could say: “Surely you watched Episode 44…”).
The ACCC provides important information to those looking to purchase real estate. See here.
Getting much less than bargained for – Impact of auction results
Three couples walked away almost empty handed after months of work on The Block Glasshouse. At the happy end of the scale, Shannon and Simon won the competition, securing a profit of $335,000 (plus a bonus sum of $100,000). However, two couples took home a profit of only $10,000. One couple’s profit of $40,000 was only marginally better.
This led to reports of possible lawsuits, with Darren and Deanne named as possible plaintiffs. This suggestion though was ultimately denied.
Insofar as the auction process itself was concerned, Consumer Affairs Victoria announced beforehand that it would monitor the auction process closely to help avoid the prospect of any shenanigans.
Director of Consumer Affairs Victoria, Claire Noone explained:
“Consumer Affairs Victoria has worked with The Block production team throughout the series, reviewing documentation in preparation for the auctions including new amendments to the Sale of Land Act which came into effect on 1 October, and our uniformed inspectors will be present to monitor the conduct of the auctions,” Dr Noone said.
Here, of course, the consumer watchdog’s focus was on a fair process between property seller and buyer. Its attention was not directed to the legal rights of affected contestants.
Noting again the general nature of this discussion, it is typical for game show contestants to sign legal agreements with confidentiality terms before the contest begins. One can expect the contracts to protect the producers from liability in the event the contestant’s expectations are disappointed.
Despite the contractual fine print, if representations are made outside the contract about what the contestants can expect, section 18 of the ACL can again have a role to play.
For instance, if you are induced to enter a contest on the basis you will “win big”, you might later wonder if you were being offered a guaranteed outcome to make the experience worth your while.
However, even with this example, the law would likely be on the producer’s side. Puffery is not a misrepresentation. The opportunity to “win big” is a bit like living in “the best city in Australia”. Such broad claims are always open to interpretation. The law does not intervene where puffery is involved.
Further, one can infer that game show participants know, irrespective of what they’re told, that the whole point of a competition is the prospect of winning… or losing.
Accordingly, to persuade a court that a representation is misleading or deceptive in these circumstances, the claim might need to be very specific, with plenty of detail about who said what and when, and with little room for interpretation.
Further, if no one’s conduct has induced the expectation, there can be no legitimate claim.
For instance, in Seasons 7 and 8 of The Block, all of the contestants were rewarded well. In Season 8 the range was from $507,250 to $736,000. In Season 7 the range was from $242,000 to $295,000.
Based on these results, future contestants might well have been optimistic that they too would make a handsome profit from their intensive efforts. However, this is no more than working out the odds before rolling the dice.
After all, a look further back in time (via the authoritative source Wikipedia) reveals that the poor results for some couples this season were not anomalous:
- In Season 6 Mark and Duncan only received $25,000
- In Season 4 Amie and Katrina received nil profit
- In Season 2 two couples received nil profit
What do we learn from the above?
Disappointed people can, of course, bring legal claims. Not many happy people do! However, it is one thing to bring a claim. It is quite another for it to succeed. Should you be unsure whether you have a misleading or deceptive conduct claim, consider the following:
- Is it something that was actually disclosed, even if in the fine print? If so, consider whether the fine print is something you should have looked at, or whether the ordinary reader would expect the issue to be more prominently displayed. Consider also whether your attention has been sufficiently directed to the fine print.
- Did you do your due diligence properly? This is particularly important if your complaint concerns what people did not say. The court will expect you to try to help yourself. It is not always someone else’s fault.
- Is there a contract involved? What does it say, if anything, about the rights and liabilities of the parties involved?
- How general was the representation? If it sounds like generalised ‘Ad Speak’, the claim might just be puffery.
- Having considered points 1 to 4, if you can articulate precisely the conduct complained of, you might well have a grievance with legal legs.
Finally, think outside the square when contemplating options. Litigation costs a lot of money. A left field scenario might be your best option. For instance, what might be a disappointment today might be an opportunity in the future. Consider, for example, Series 10…
Note1: The author has not watched The Block Glasshouse intensely this series, or indeed, any series of The Block, after Warren and Gavin gained her lifelong loyalty in Series 1 when Jamie Durie was the host. [Gav and Waz now have their own design business for those interested.] So, if there are any important factual errors, please comment.
Note2: The author also tried to work in a reference to the love triangle between Sam Frost, Louise Pillidge and Blake Garvey (latest developments see here). However, finding a legal angle to The Block was one thing. The Bachelor? That was a whole different ballgame.