Ausgrand Pty Ltd v Stephanie Michele Freeland-Small
[2016] VCC 942
•1 July 2016
| IN THE COUNTY COURT OF VICTORIA AT MELBOURNE COMMERCIAL DIVISION | Revised Not Restricted Suitable for Publication |
GENERAL LIST
Case No. CI-15-05675
| AUSGRAND PTY LTD | Plaintiff |
| v | |
| STEPHANIE MICHELE FREELAND-SMALL AND FREELAND-SMALL PTY LTD (ACN 156 415 959) | First Defendant Second Defendant |
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JUDGE: | HIS HONOUR JUDGE MACNAMARA | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 15, 16, 17 June 2016 | |
DATE OF JUDGMENT: | 1 July 2016 | |
CASE MAY BE CITED AS: | Ausgrand Pty Ltd v Stephanie Michele Freeland-Small & Anor | |
MEDIUM NEUTRAL CITATION: | [2016] VCC 942 | |
REASONS FOR JUDGMENT
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Subject: CONTRACT
Catchwords: Sale of Land; Contracts for sale “off the plan” secured by cash deposits and bank guarantees; section 32 Statements provided with proposed plan of subdivision containing special conditions; apartments ultimately constructed according to later version of the plan; variations to subject lots; purported rescission by purchasers/defendants; claim for return of deposit plus interest and damages; operation of s9AC Sale of Land Act; whether variations materially affected the land; objective test; further breaches of special conditions claimed by purchasers; declaration sought by plaintiff/vendor to have rescinded; claim for retention of deposit and damages; apartments subsequently sold.
Legislation Cited: Sale of Land Act 1962; Sale of Land (Allotments) Act 1985; Interpretation of Legislation Act 1984; Owners Corporations Act 2006; Supreme Court Act 1986; Civil Procedure Act 2010; Penalty Interest Rates Act 1983; Property Law Act 1958
Cases Cited:Besser v Alma Homes Pty Ltd [2012] VSC 460; Lockwood v PSP Investments Pty Ltd [2013] VSC 10; JD No 6 (Dava) Pty Ltd v P Battlay Holdings Pty Ltd [2011] VSC 353; Yared v Spier [1979] 2 NSWLR 291
Judgment: (i) Within 14 days of this date the parties must bring in short minutes to give effect to these reasons. (ii) Costs reserved.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr M. Harvey | Walsh Johnston & Co |
| For the Defendant | Mr M. McKenzie | TJ Mulvany & Co |
HIS HONOUR:
Background
1 The Aquila shoe factory was located at No 496‒500 Brunswick Street, Fitzroy North. When manufacturing ceased at that site, it became available for redevelopment. The site was acquired by Ausgrand Pty Ltd (“Ausgrand”), a company controlled by Mr Michael Bonadio, an accountant by profession, who now manages a building and property development group. Ausgrand is trustee of a discretionary family trust, with Mr Bonadio as its sole director. Ausgrand acquired the factory site in 2006. Ausgrand and Mr Bonadio proposed a number of concepts to council which, for one reason or another, were not acceptable. Progress was interrupted by the global financial crisis of 2008/09. Eventually, council accepted a proposal to redevelop the site for 53‒54 apartments and marketing for “off the plan” sales began in 2012. (Transcript (“T”) 105‒106)
2 On 1 July 2013, Ausgrand entered into contracts to sell Units 209 and 307. The first contract was with Ms Freeland-Small, the first defendant in this proceeding. The second contract relative to Unit 307 was with Freeland-Small Pty Ltd, a company controlled by Ms Freeland-Small’s mother. These contracts provided in orthodox terms for the payment of deposits of 10 per cent of the purchase price. (Court Book (“CB”) Tabs 4 and 5) The deposits were in each case satisfied, as to $1,000, by the payment of cash upon execution of the contract and, as to the balance, by bank guarantees established by Commonwealth Bank of Australia.
3 Unit 209 had a sale price of $599,000 and therefore a deposit requirement of $59,900. Unit 307 was priced at $629,000 and therefore required a deposit of $62,900. At this stage, construction of the new buildings had not commenced and the features of the proposed units were to be found in the vendor statements, given at or prior to sale, under s32 of the Sale of Land Act 1962, which were attached to the two contracts. That Section 32 Statement included a proposed plan of subdivision of the new building. Each unit was shown as having a lot entitlement and lot liability of 50 out of a total of 208,000, which calculates at 1.79 per cent. The development was depicted as having a basement and sub-basement level, together with a ground level and four additional storeys. At ground level, the footprint was depicted as occupying the entire parcel of land, with the upper units stepping back progressively from Brunswick Street so that the four units at Level 4, numbers 401, 402, 403 and 404, were set back more than halfway in the depth of the building from Brunswick Street. These units were marketed as penthouses. Special Condition 2.2 of the contract provided:
“2.2The Vendor agree [sic] that as well as completing the works in accordance with the said Plans the Vendor will complete such works in accordance with the specifications and standards required by the City of Yarra and further in accordance with the Schedule of Fixtures and Fittings.”
Special Condition 2.1 made the contract —
“subject to and conditional upon the Vendor arranging and ensuring the completion of … all design, building and construction works (“the works”) for the development of the property (“the building”) substantially in accordance with the Plans and Specifications supplied to the Purchaser. The Purchaser acknowledges that the Vendor shall at any time be entitled to make (without reference to the Purchaser) any minor alterations or variations that the Vendor may deem necessary to be made to the Plans or the works. However, the Vendor agrees to notify the Purchaser in writing of any proposed changes to the Plans or the works which substantially materially and detrimentally affect the land hereby sold.”
4 The contracts contained no part headed “Schedule of Fixtures and Fittings”. However, handwritten additions to the printed form included the following:
“To be supplied by the vendor: ‒ timber floor to living areas including hallways – window furnishings – double glazing – purchaser to choose colour selection available for kitchen and bathroom vanity and timber floors”
which might be regarded as constituting a Schedule or alternatively a schedule might be found in the detailed plans and specifications referred to in the Special Conditions.
According to Special Condition 2.3, Ausgrand, as vendor
“shall be deemed to have completed the works and discharged its obligations under special condition 2.1 and 2.2 upon it producing to the Purchaser a Certificate of Occupancy”.
Clause 3.1, headed “Plan of Subdivision”, provided:
“3.1The Vendor reserves the right to make any alterations in and to the Plan of Subdivision necessary to comply with the amended Planning Permit referred to in Special Condition 1 and to secure its registration and the Purchaser shall make no objection or requisitions nor claim for any compensation in respect of any excess or deficiency whether in area, boundaries, measurements, occupation or otherwise on the ground that the Plan as finally registered by the Registrar of Titles does nor (sic) agree in measurements or otherwise with the Plan or proposed Plan as lodged in the Land Titles Office or submitted to the Purchaser of the land sold as inspected by the Purchaser provided that this condition shall not extend to any amendments or alterations which substantially materially and detrimentally affect the land sold and which amendments are made without the consent of the Purchaser. Sub-section 10(1) of the Sale of Land Act does not apply in respect of the final location of any easements shown on the certified plan.”
In fact, when construction of the development took place Ausgrand did not proceed with construction according to the plan attached to the vendor statement; rather, if that version of the development is designated as Version 1, what was ultimately constructed was Version 6. This plan of subdivision is to be found at CB Tab 13 and bears a date under the heading ‘Plan Registered’ on the bottom right-hand corner of Sheet 1, ‘5:02pm date 5/02/2015’. That plan, on the matters which are the subject of this proceeding, was not materially different from another version of the plan to be found at CB Tab 8 and designated as ‘Version 2’. It is by reference to this ‘Version 2’ that the purchasers, in purported reliance on s9AE of the Sale of Land Act, purported to rescind the relevant contracts as appears below. Mr Bonadio said that the impetus for this was provided by the discovery during construction of a “bluestone vein” running through the site which extended the planned 14 month building time by three or four months. (T119, Lines (“L”) 2‒10) According to Mr Bonadio:
“our build costs blew out and we tried to look at ways of how can we recoup some of these funds in order to make this a viable project? So as most developers do … they look at ways of maximising their profit. … So we looked at it and we looked at various alternatives such as changing the shop layout – that wasn’t going to work, making some apartments that weren’t sold smaller – that didn’t work, and at that time there was a bit of a shift in council and they were favourable to increasing heights on developments in the area and that was an option that was given to us. …” (Ibid L10‒21)
Mr Bonadio could not say when first it became evident that the vendor’s construction budget had “blown out” as a result of the discovery of the bluestone vein, and the vendor became aware that council, as responsible authority under the Yarra Planning Scheme, would look favourably upon a revision of the plan of subdivision to enable additional sales revenue to be derived to defer the additional construction outlay. No doubt each of these matters left a documentary trail, including correspondence with council, but he neither informed himself by reference to the vendor’s files before giving evidence nor brought the files to court with him so that he could refer to them. The best that he could say was that these matters occurred some time in 2014 (T120).
5 The principal alterations in the plan were to be found at Level 4 which, in the proposed plan of subdivision attached to the contracts of sale, was depicted as having some four penthouse units set back more than halfway to the rear from the Brunswick Street frontage. The modified plan increased the number of Level 4 units to seven, with the setback from the Brunswick Street frontage now one-quarter to one-third of the depth of the site. Rather than remaining penthouses, these Level 4 units were redesignated as “sub-penthouses” and a large penthouse was added at Level 5, which was the largest residential unit in the development with a balcony and a setback of less than half the depth of the building from Brunswick Street.
6 The variation had consequential effects upon the parking arrangements at the basement level. The original proposed plan attached to the contracts depicted the pertinent car parking space for Unit 209 close to the Brunswick Street frontage with a limited setback from the northern wall. The parking space for Unit 307 was adjacent to the southern wall in the south-east corner of the basement. As depicted, it seems larger than most car parking spaces. Other units have storage bins relatively remote from the car parking spaces. It appears that the storage space and the car park for Unit 307 in this proposal were intended to be located contiguously in the south-east corner of the basement. There were some 12 other car parking spaces which appear to have been designated “visitor parking”. Along the southern wall of the basement from the exit of the up ramp from the sub-basement were some 10 marked parking spaces delineated with broken lines reaching to the western boundary of the three designated car parks for Units 310, 308 and 307. Mr Bonadio noted that the current planning permit required only 10 parking spaces and there were two other designated parking spaces toward the northern wall immediately to the east of the spaces designated for Units 302 and 303. He concluded that two, or perhaps three, of the parking spaces marked in broken lines on the southern wall were not to be regarded as visitor parking. The words “visitor parking” appear twice in this block of delineated spaces. The first group of words occupies the first four and crosses them. The second occupies the seventh and the eighth. Mr Bonadio suggested that the fifth and the sixth delineated spaces were “floating spaces” (whatever that may mean). (T128) For completeness, it should be noted that, as to the parking space for Unit 307 in the south-east corner, a “bite” was shown as being taken out of its north-east corner and apparently designated as a storage space for Unit 308.
7 In contrast to these arrangements for parking in the basement, the layout adopted by Ausgrand in Version 2 appropriated some six of the spaces previously designated for visitor parking on the south wall to Units 406, 405, 404, 403, 402 and 401 respectively. The parking space for Unit 209 was in its original space but some 13 centimetres narrower with a pillar at the south-east corner. No areas were designated for visitor parking. In the lower basement, an area previously occupied by double or tandem parking spaces — that is, spaces where two vehicles could park one behind another for Units 402, 403 and 404 — was now devoted to a “mega” space which could occupy as many as six vehicles for Penthouse Unit 501. (CB Tab 8)
8 By email dated 6 October 2014, Ms Barrow, the conveyancer acting for the purchasers, wrote to Mr Neil Johnston, Ausgrand’s solicitor, seeking a revised plan in light of the purchaser’s observation that the building was not being erected in accordance with the plans attached to the contract. Mr Johnston responded “We have not received any amended plan, will send when we do”. (CB Tab 42) Those plans were forwarded under cover of an email from Mr Johnston to Ms Barrow of 31 October 2014 at 4.59pm. (CB Tab 47) Ms Barrow’s firm, Professional Conveyancing Services, wrote to Mr Johnston on 10 November 2014 acknowledging receipt of the revised plans, noting the variations between them and the plans attached to the vendor’s statement. The letter said:
“Notwithstanding that the Vendor has failed to even advise the Purchaser of any amendment to the Plan which it is required to do, the Purchaser confirms that the above amendments materially affect the Purchaser.
Where the Vendor under the contract of sale fails to comply with section 9AC the Purchaser gives notice that she rescinds the contract under section 9AE of the Sale of Land Act 1962.
The Contract is now at an end and the Purchaser requires return of her deposit … together with interest …” (CB Tab 48)
9 Apparently the vendor’s solicitors, Walsh, Johnston & Co, responded to the conveyancer’s letter in a letter of 20 November 2014. No copy of that letter appears in the Court Book. The conveyancer acting for the purchasers, however, responded in a letter dated 2 December 2014 (CB Tab 50), referring to Walsh, Johnston’s letter of 20 November 2014:
“wherein you advise that the Vendor does not consider amendments brought to your attention to materially affect our client’s lot.”
10 The letter continued:
“Our client confirms that the amendments outlined in our letter of 10 November 2014 do materially affect our client’s Lot and on behalf of the Purchaser we give notice that our client rescinds the contract under s9AC(2) of the Sale of Land Act 1962.
We await return of the deposit, being $1,000 cash deposit together with interest earned on same together with the original deposit Guarantee for the balance of the deposit.”
11 Walsh, Johnston responded in a letter dated 9 December 2014 (CB Tab 52), referring to the conveyancer’s letter, and continuing:
“Our client instructs us that your client’s Lots are not materially affected and our client requires your client to proceed with the Contract.”
12 It seems that the purchasers then instructed legal practitioners, namely Paul L Ryan and Associates, who sent a letter to Walsh, Johnston by post and email dated 5 January 2015, a copy of which is at CB Tab 53. Mr Ryan reviewed the history of the matter and advised that the section of the Sale of Land Act relied on in support of the purchaser’s rescission was s9AC. Mr Ryan complained that no acknowledgment of the amendments to the plan was received by the purchasers until 31 October 2014, when their conveyancer received the Version 2 plans. He continued:
“Council apparently received the amended plan on 19 September 2014.”
13 Next, he said that merely providing the plan did not entail compliance with s9AC(1) of the Sale of Land Act which, he said, required a vendor in these circumstances to “advise the purchaser in writing of the proposed amendment”. He said the purchaser’s lots were materially affected:
“The Aquila apartment development is no longer the boutique apartment block they bought into. Further, the amended plan of subdivision shows the total lot entitlement and liability for the Aquila apartments has increased from 2,800, in the plan of subdivision attached to the Section 32 Statements incorporated in the contracts, to 2,950 in the amended plan of subdivision (Version 2). The additional lots 405, 406 and 407 and a penthouse on level 5, being lot 501, are the reason for the increase in the lot entitlement and liability. The fact that penthouse lot 501 has a liability of 50, which is the same liability as lots 297 and 309, is questionable.”
14 He said that changing the lot entitlement and liability was, according to recent decisions of the Supreme Court, in itself, a material effect upon a purchaser’s lot. He referred to Besser v Alma Homes Pty Ltd [2012] VSC 460 and Lockwood v PSP Investments Pty Ltd [2013] VSC 10. Mr Ryan noted that Special Condition 3.1 of the contract required advice to purchasers only of changes which “substantially, materially and detrimentally” affected the land sold. Those expressions, he said, were not part of s9AC(1), and:
“In so far as [the vendor] is endeavouring to contract out of the provisions of s9AC, the special condition is void pursuant to s14 SLA.”
15 Mr Ryan complained that there had still not been any proper notification of the changes under s9AC of the Sale of Land Act. He attached a schedule of the changes which he said were affected by Version 2.
16 Mr Johnston, the vendor’s solicitor, despite on the face of it having received the letter from Mr Ryan stating that he now acted for the purchasers, sent an email to the conveyancer dated 14 January asking the purchasers to amend their contracts to insert “margin scheme” in the GST clause of the particulars of sale because the vendor wished to employ that arrangement in relation to Goods and Services Tax. He also stated:
“We advise that the plan of subdivision was lodged on 12 January and expect registration in approximately two weeks.”
17 The conveyancer responded by email of 15 January, noting her advices and those of Mr Ryan that the purchasers regarded the contracts as rescinded; therefore, no agreement was forthcoming as to the insertion of “margin scheme” in the contract. This exchange of emails is at CB Tab 54.
18 An email (at CB Tab 56) from Mr Ryan complains that correspondence is not being directed to his firm, and demands a refund of cash deposit and return of guarantees, failing which legal proceedings would be commenced.
19 Mr Johnston responded in an email of 25 February (CB Tab 57), stating:
“Our client has instructed us that he does not agree to refund the deposit and that the contracts are to be rescinded if your clients do not confirm they will proceed to settlement.”
20 Mr Ryan then wrote a letter which he sent by post and email, dated 19 May 2015, reviewing the situation as the purchaser saw it, threatening legal proceedings, and enquiring as to whether Mr Johnston had instructions to accept service. He also said:
“It has now become apparent the deposits guarantees held and drawn in favour of your client’s company do not comply with s9AA of the Sale of Land Act, 1962 which requires they be paid into the trust account of a solicitor or estate agent and this has not occurred. This section gives my client an unqualified right to rescind under s9AE.” (CB Tab 58)
21 He then sent a further letter by email dated 29 April 2015 complaining that whilst Mr Johnston said that he was obtaining instructions and would advise, Ausgrand had proceeded to call the guarantees. Mr Ryan remarked:
“I gathered you were unaware of your client’s actions.” (CB Tab 59)
22 Presumably as a result of this, the conveyancer lodged caveats in the name of the purchasers, number AL872707W for the second defendant, and AL872701K relative to the first defendant. Both caveats were dated 9 May 2015 (CB Tabs 60 and 61). By an email of 14 May 2015 Mr Johnston told Mr Ryan that Ausgrand:
“will agree to the deposits being paid into an interest-bearing account pending resolution by the court of the issues. Please advise and I will arrange the accounts.” (CB Tab 62)
23 In a letter dated 28 May 2015 addressed to Mr Tiernan of TJ Mulvany & Co, who it seems were now acting for the purchasers, Mr Johnston made what he described as an open offer which was not subject to without prejudice privilege. He said:
“we are instructed that our client is willing to pay the deposits received with respect to the properties into an interest bearing trust account which will be held by us. We are prepared to give you an undertaking that we will not pay out any monies from that account, unless there is an agreement between your clients and our client or there is an order of the Supreme Court.”
24 Mr Johnston then called for the removal of the caveats (CB Tab 63). Mr Tiernan of Mulvany & Co agreed to this proposal by letter of 4 June 2015 (CB Tab 64).
25 The units were resold by Ausgrand. Unit 209 was sold for $620,000, and a transfer dated 12 June 2015 was lodged (CB Tab 66). The other allotment was sold for $659,000 (CB Tab 68). Withdrawals of caveat were provided by the purchasers (CB Tabs 69 and 70).
26 Walsh, Johnston & Co, by letters dated 3 March 2015, enclosed rescission notices on behalf of Ausgrand by way of service upon the two defendants. These notices stated that settlement of the units had been due on 20 February 2015 and that the purchasers had defaulted in performance of their obligations by failing to pay Ausgrand the balance of the purchase prices for the unit “on the due date or at all”. The notices stated that, unless the default was remedied “within 14 days of the service of this notice upon you” and legal costs of $440 were paid within 14 days, the contracts would be rescinded pursuant to general condition 28 of the contract, and the deposit up to 10 per cent of the purchase price would be forfeited. Upon rescission, the vendor would either retain the property and sue for damages, or resell and recover damages, if any, resulting.
Legal proceedings
27 TJ Mulvany filed an originating motion commencing proceeding CI-15-04995 in this court on 21 October 2015 with respect to Unit 209 seeking an order under s49(2) of the Property Law Act 1958 that Ausgrand repay the deposit and that the sale of that lot had been rescinded pursuant to s9AC(2) of the Sale of Land Act 1962.
28 On 30 November 2015 solicitors acting for Ausgrand filed an originating motion commencing the present proceeding, seeking a declaration that the plaintiff had rescinded the purchasers’ contracts in pursuance of its rescission notices dated 3 March 2015. Further orders were sought for the disbursement of the deposit money held by the solicitors for the plaintiff to the plaintiff.
29 Judge Kennedy ordered that the dispute between the parties proceed and be determined within the scope of the present proceedings. She directed that pleadings be filed and that each party make discovery.
30 The matter has come on for hearing before me.
Section 9AC Sale of Land Act 1962
31 When Mr Harvey of counsel opened this case on behalf of the plaintiff he referred to s9AC of the Sale of Land Act as “the heart of this case”. This was the section under which the defendants purported to rescind the contracts. He said that the plaintiff’s case was that the modifications or alterations to the plan of subdivision did not materially affect the purchasers’ lots; therefore, the purchasers’ rescission was invalid, but the vendor’s rescissions based on the notices dated 3 March 2015 were valid (T2–4).
32 In closing, however, Mr Harvey submitted that s9AC had no application to the present proceeding. He said that it dealt with a situation in which amendments to a plan of subdivision which has been “presold” were requested either by the Registrar of Titles or by the vendor. There was no suggestion that the Registrar of Titles played any role in requesting the amendments which have given rise to the present dispute, so that part of the section was irrelevant. Where the section speaks of amendments “requested by the vendor”, according to Mr Harvey, “what it means is that the vendor has requested the Registrar to amend the plan of subdivision” (T324, L23‑25). He referred to a judgment of Croft J in JD No 6 (Dava) Pty Ltd v P Battlay Holdings Pty Ltd [2011] VSC 353. What was required to trigger this provision was an overt act, viz lodging the plan of subdivision for registration with the Registrar of Titles. This occurred on 12 January 2015, said Mr Harvey, referring to the correspondence at CB Tab 54 (T328, L19–21). Therefore, the purchasers’ purported rescission in reliance on s9AC was premature and invalid (T330 L20–22).
33 Section 9AC of the Sale of Land Act 1962 provides as follows:
“Amendments to plan
(1) If after a prescribed contract has been entered into and before the registration of the relevant plan of subdivision an amendment to the plan is required by the Registrar or requested by the vendor, the vendor shall within 14 days after the receipt of the requirement of the Registrar or the making of the request by the vendor (as the case requires) advise the purchaser in writing of the proposed amendment.
(2) The purchaser may rescind a prescribed contract of sale within 14 days after being advised by the vendor under subsection (1) of an amendment to the plan of subdivision which will materially affect the lot to which the contract relates.”
34 The expression, “prescribed contract of sale”, used in the section refers to a contract whereby a person sells a lot in a plan of subdivision with the plan not being registered by the Registrar of Titles: s9AA(1) and (7).
35 The contracts in this case are prescribed contracts.
36 The drafting of s9AC is, in some respects, curious. The key requirement for its engagement is that there is an amendment to a plan “required by the Registrar or requested by the vendor”. The evidence of the vendor’s sole director, Mr Bonadio, described the lengthy negotiating processes which his company undertook with Yarra City Council as responsible authority under the Yarra Planning Scheme. Section 9AC was introduced into the Sale of Land Act 1962 by Act No 10216, the Sale of Land (Allotments) Act 1985. The Second Reading debates in the Legislative Assembly on the Bill which became the Sale of Land (Allotments) Act show that then, as now, there could be lengthy negotiating processes and delay at the local council level: see in particular the speech of Mr Heffernan, the Member for Ivanhoe. The Registrar of Titles no doubt has to see to certain important but relatively fixed and black-letter matters before registering or, in the language which was current in 1985, approving the relevant plan of subdivision, but requests would today, and in 1985, for amendment have characteristically come from the local council, not from the Registrar.
37 The section is in the same form in which it found itself in 1985, save that reference to “approval” of a plan by the Registrar has been replaced with a reference to its “registration”. The result would seem to be that the section dealing with amendments to plans on presold lots fails to deal at all with the most typical instance in which the plan for presold lots might be amended; viz, the requirements of the responsible authority under the relevant planning scheme. This point was raised before Croft J in JD No 6 (Dava) Pty Ltd v P Battlay Holdings Pty Ltd which was cited by Mr Harvey. His Honour found that, for a variety of reasons, s9AC had no application to the case before him, principally because what his Honour was dealing with were options, rather than an enforceable bilateral contract. He noted, however, a contention by one of the parties that, since the relevant amendment had been requested by the Shire of Mornington Peninsula as the responsible authority, s9A could have no application, because the request came neither from the Registrar nor from the vendor. His Honour rejected this contention [2011] VSC 353 [42]. This view:
“... would have the effect of creating a significant lacuna in the operation of the suite of provisions in the Sale of Land Act in which s 9AC finds itself; provisions which are clearly designed to protect purchasers of lots on unregistered plans of subdivision which, in the course of their approval, may be subject to significant amendments which would have made the purchase unattractive to a purchaser, hence the right of rescission in subs 9AC(2).”
38 His Honour continued [43]:
“In any event, it is entirely artificial to argue that in circumstances such as the present, any “amendments” to the plan of subdivision are not “requested by the vendor” for the purposes of sub-s 9AC(1). The ordinary subdivision approval process lies in the hands of a vendor seeking to sell lots on an unregistered plan, a position which is made clear in the present circumstances by clause 9 of the Option Agreement. The role of the municipality, in this case the Shire of Mornington Peninsula, is to approve or require amendments to a proposed plan of subdivision as a condition of approval through the Planning Permit process. It is then a matter for the vendor whether or not it chooses to accept these amendments. It could choose not to proceed with the proposed plan of subdivision, seek to review the conditions of a planning permit which would have the effect of amending a plan of subdivision, or accept the amendments as required by the municipality. In the latter event, amendments of this kind would, in my view, clearly be “requested by the vendor” for the purposes of sub-s 9AC(1) of the Sale of Land Act.”
39 In my view, it is proper to give a wide and generous operation to s9AC, as did Croft J. To do otherwise would be to adopt an interpretation which would have created the “lacuna” described by his Honour. It would be in violation of the principle laid down by s35(a) of the Interpretation of Legislation Act 1984, in that it would fail to promote the evident purpose of the relevant section, as enunciated by his Honour. No words compel the view that a request by the vendor for the purposes of the section must be one addressed to the Registrar.
40 In accordance with the analysis of Croft J, where a vendor becomes aware of a requirement of a responsible authority, whether by a formal notice of determination or an informal communication in conference with a planning proponent’s consultant, acceptance of the stipulation by the responsible authority by the proponent should be regarded for the purposes of s9AC as a request by the vendor. In the present case, this request by the vendor was made before the November rescission letter on behalf of the purchasers. I am not clear as to whether the letters dated 13 March 2013 from the City of Yarra (CB Tab 30) are to be regarded as in evidence. It possibly may refer to an acceptance and, therefore, a request by Ausgrand as vendor for the purposes of s9AC. Whether it does or not, the concession recorded in the transcript and referred to above indicates that the principal argument advanced in closing by Mr Harvey must be rejected, and s9AC does operate with respect to these contracts. With some hesitation, I conclude that provision of the revised version of the plan constituted advice in writing of the proposed amendments for the purposes of s9AC(1). On this basis, the purchasers rescinded within the available 14 day period.
41 The next question is whether the amendments to the plan described above materially affect the purchasers’ lots.
42 Mr Harvey submitted that acceptance of his contention that s9AC of the Sale of Land Act was not engaged required one to analyse the changes between the two versions of the plan, not by reference to whether they materially affect the purchasers’ lots, but rather, whether they “substantially materially and detrimentally affect the land hereby sold” for the purposes of Special Conditions 2.1 and 3.1 of the contract. In drawing attention to the restrictive nature of these three adjectives (T348) he necessarily implicitly drew attention to the much lesser requirement entailed in the concept of “materially affecting” land, which is the touchstone of the application of s9AC.
43 The amendments to the plan evident between Versions 1 and 2 plainly do have some effect on the purchasers’ lots. The question is, is that effect material? The adjective “material” is defined over many closely-typed columns of print in the Oxford English Dictionary. The meaning that seems most apt in the context of s9AC is numbered 4(d) as follows:
“Chiefly law. Applied to evidence or facts which are of such significance as to be likely to influence the determination of a cause, to alter an instrument, etc. Serving materially (to prove).”
44 I turn, first, to the single amendment which relates only to Unit 209 by reference to this criterion, according to Mr Bonadio:
“People don’t like a parking spot near a column and they say, ‘No I don’t want it near a column. Can I have it somewhere else?’ All they need to do is just ask us.” (T129, L22–25)
45 It would seem that the vendor, if there were available carparking spots to “swap”, might swap out a carpark with a column to close a sale of a unit which was initially allocated a spot with a column (T130, L10–23). It would seem to follow that being able to offer a unit without a column might be the difference between being able to sell a residential unit or failing to sell it. These car parking spaces are valuable assets in themselves. It seems they change hands in this development for $50,000 or $60,000 (T256 L22-30). In light of the dictionary definition of the word “material”, it is difficult to see that the inclusion of the column or pillar adjacent to the parking spot for Unit 209 would not, in itself, be material in accordance with the dictionary definition. I am fortified in this view by the photographic evidence which depicts the “pillar” or “column”. The description “pillar” or “column” brings to mind a slender vertical member. The structure depicted in the photograph is more like a tilt-up concrete wall, abutting more than half of the parking space allotted to Unit 209.
46 On the same point, Mr Harvey submitted that there was no material effect upon Lot 209 by having an allotted park which was some 13cms narrower at 2.6m in width, versus the originally depicted 2.73 metres in Version 1. He made the submission based upon the fact that the minimum carparking space width required by the Yarra Planning Scheme is 2.6 metres. It is difficult to accept that one’s lot is not materially affected, and adversely for that matter, by having its carpark transformed from one of superior dimensions to the minimum statutory requirement.
47 As to the reduction in visitor parking, I was struck by the contrast between Version 1 of the plan of subdivision as contained in the vendor statement and the purchasers’ contracts on the one hand, and Version 2 and the final registered version on the other, in that the latter do not designate particular spaces as visitor spaces. Mr Bonadio gave evidence that to his recollection, Ausgrand marked both the visitor and non-visitor spaces as part of its construction role in the project. He was of the view that the deletion of the specific designation on the registered plan, in contrast to what appeared on Version 1, was of no significance. This would appear to be correct in so far as areas set aside for visitor parking would be common property and the use of common property, in particular vehicles and parking on common property, is a subject matter upon which the Owners Corporation is empowered to make rules: Owners Corporations Act 2006 s138(1), Schedule 1, paragraph 4.3. The matter of visitor parking is placed in the control of the Owners Corporation, and the form of designation of visitor parking appearing on Version 1 does not appear to have any “entrenching” effect, so that a lot owner could not be materially affected by the disappearance of the designation from one version of the plan to another.
48 As to the reduction in the number of visitor carparking spots from ten to six as required in the permit, or from twelve to six as a simple comparison of the two versions of the plans would suggest, both vendor and purchaser relied upon evidence. Mr Bonadio said that during his frequent attendances at the site during its period of development, he found no problem in obtaining on-street parking. The first defendant, however, Ms Freeland-Small, said she had a different experience, finding parking in the area around the development generally difficult, with frequent restrictions as to the number of hours particular parking spots could be occupied. She referred to advices from the parking department of Yarra City Council given to her on 26 June 2013 to the effect that there would be no resident permit parking entitlements to occupants of the Aquila development. The scheme was structured so as to exclude entitlements for occupiers of any new dwelling commenced on or after 10 December 2003 (CB Tab 72).
49 In my view, the proper comparison between Version 1 of the plan and Version 2 and the version registered is as between twelve visiting parking spots and six. Mr Bonadio took his stand based on the view that the planning permit current at the time that Version 1 was formulated required only ten visitor spaces. However, as previously noted, if the plan had been registered in the form of Version 1, it would have been competent for the Owners Corporation, in which the owners of Units 307 and 209 would have a voice, to treat all of the twelve spots apparently available in Version 1 as available for visitor parking. The use of some of these units for the purpose of creating additional lots to generate further sales income for the developer in my view could be regarded as a material affection of the purchaser’s lot.
50 According to Pagone J in Besser v Alma Homes Pty Ltd [2012] VSC 460 [10]:
“Whether an amendment will materially affect the lot is not to be judged by reference to the reason the amendment is made but by objective facts and circumstances. Nor is it to be judged by reference to whether a person in the position of the party affected by the amendment might not, or that some might think the party affected should not, elect to rescind.”
51 I heard only the most general of evidence on carparking issues in the area. It is a notorious matter, of which I believe I can take judicial notice, that Fitzroy and North Fitzroy are closely developed inner suburbs with limited open space and parking facilities. In an environment such as that, visitor parking is of greater significance than it might be in outer “leafier” suburbs. The effect of what has happened here is to reduce visitor carparking by 50 per cent upon the basis which I have explained. What has been provided is apparently in accordance with the requirements of the responsible authority, but if a lot owner moves from a situation of having a common property provision of visitor parking which exceeds the minimum required by the planning authorities to one where the entitlement is set by reference to the planning requirements, one moves from a situation of a superior arrangement to a merely standard one. This is, in my view, a material effect.
52 The considerations just mentioned make good the purchasers’ contention that the transition from Version 1 to Version 2 did materially affect their lots. I should consider, however, the other matters which were urged in support of that conclusion. The parking arrangements for lot 307 and the storage arrangements were said to be inferior in Version 2 as compared with Version 1. In Version 2 the storage and parking arrangements which appeared to be consolidated were split into two locations. It was also asserted in a general sense that the parking space seemed to be smaller. The generality of that assertion, in contrast to particular measurements to which the parking space for Unit 209 was subjected in the second version, would appear to indicate that the issues for the carpark of Unit 307 were more apparent than real, and no clear explanation was given as to why it really made any difference. Accordingly, I would reject those matters as having had a material effect on lot 307.
53 Next, Mr McKenzie drew attention to the change in common property which was affected by the addition of further “sub-penthouse” units at Level 4 which took a bite out of the common property constituted by the roof of Level 3 and the further reduction in common property constituted by the roof of Level 4 which was entailed in the establishment of the penthouse unit at Level 5. Mr Harvey submitted that the total common property was in no way reduced. The open roof areas were only lifted to a greater height. In any event, he said that these roof areas were available for maintenance only, and not for recreation. Mr McKenzie made various statements indicating that evidence would be forthcoming to give the lie to that contention, but ultimately none was.
54 In final submissions Mr McKenzie contended that his clients as would-be members of the Owners Corporation were deprived of some land development potential. There were references to instances where owners corporations had been able to raise extra money by selling off surplus common property. No doubt, such a thing could occur if the common property was at ground level, but the thought that there is serious development potential which could be accessed by the Owners Corporation in a more extensive Level 3 roof than what has actually been constructed is fanciful. Section 13 of the Owners Corporations Act 2006 prohibits owners corporations from carrying on business.
55 Next it was said that the very intensification of the occupation of the development was itself a material effect. This development was, whether in its original or enlarged form, a very large and quite intense development. The addition of a few extra units, in itself, would not constitute a material effect for either of these units, given, amongst other things, that the additional units are not on the same level.
56 There is also a marginal increase in unit entitlement and liability from 2800 in Version 1 to 2950 in Version 2. The increase in both values was said to be of the order of .1 per cent, from 1.79 per cent of the total to 1.69 per cent in Version 2. Mr McKenzie invited me to consider Besser’s case standing for the proposition that any variation of lot entitlement and lot liability was, in itself, a material affection of a purchaser’s lot for the purposes of s9AC. His Honour in that case was dealing with a subdivision of only four allotments. The initial version of the plan of subdivision provided for a lot entitlement and liability for each allotment of 100, totalling 400. The revised arrangements, which his Honour found materially affected Ms Besser’s lot, reduced entitlements and liabilities to 202, and Lot 4 had an entitlement of 1 out of 202. His Honour noted at paragraph [10] therefore, that the rights enjoyed by the owner of Lot 4 were materially different from those which were promised in the original version. Under the original version, a holder of 25 per cent of the lot entitlements would have a right to call a general meeting and call a ballot. His Honour referred to s74 and 83 of the Owners Corporations Act 2006. Having a 25 per cent entitlement would put one in a much stronger position to resist a special resolution which was thought to be disadvantageous to a particular lot owner in his or her relationship with the Owners Corporation. The reduction of lot entitlements and liabilities in Besser’s case was therefore striking. Here, it is marginal. In my view, those matters in themselves do not constitute a material effect on either of the lots which these purchasers contracted to buy.
57 Having found that the purchasers were entitled to rescind under s9AC, as they purported to do, it follows that they have an entitlement under s9AF(1)(b) for the refund of their deposit money. There was apparently an issue, as previously described, as to where the deposit moneys were to be held. Despite what was said by the solicitors for Ausgrand to procure the withdrawal of the caveats, apparently the deposit moneys were not forthwith put into that solicitor’s trust account as one would have expected (see CB Tab 20). Mr Harvey said that, if a refund of the deposit moneys was ordered, the plaintiff accepted liability to make up any shortfall in the interest earned so as to bring the amount refunded up to the amount which it would have reached had the proper interest been earned. The order for return of the deposits should reflect this. Nevertheless, since the order for refund will carry an entitlement to interest under s58 of the Supreme Court Act 1986 the trust account issue seems moot.
Other claims by the defendants
58 By way of counterclaim, the purchasers also allege breaches of Special Conditions 2.1, 2.2 and 3.1 of their purchase agreements with the plaintiff.
59 Special Condition 3.1 is a condition inserted for the benefit of the vendor plaintiff. It begins “The Vendor reserves the right ...”, but the reservation of that right is, according to the terms of the special condition, not to extend to amendments or alterations which “substantially materially and detrimentally affect the land sold”. The special condition does not seem to impose any obligation on the vendor at all. The situation is perhaps analogous to provisions in real estate leases prohibiting assignment or sub-letting, save with the consent of the landlord, subject to a proviso that such consent will not be unreasonably withheld. Unless the lease goes further and includes a covenant on the part of the landlord not unreasonably to withhold his consent to a proposed assignment, no claim for damages may be brought against the landlord for unreasonably withholding his consent despite the terms of the proviso: Yared v Spier [1979] 2 NSWLR 291 per Waddell J. Speaking of the usual clause prohibiting assignment with a proviso that consent is not to be unreasonably withheld, his Honour said:
“It seems to me that it has been taken to be settled law for many years that, in the absence of an express covenant by a lessor not to refuse his consent, provisos of the kind under discussion have been regarded as not exposing him [viz the landlord] to any liability in damages for such a refusal.” ([1979] 2 NSWLR 291, 297)
60 Assuming that the vendor plaintiff has conducted itself in a manner inconsistent with Special Condition 3.1, it has not, for that reason, become liable to pay any damages to the purchaser.
61 Special Condition 2.3 likewise is a provision inserted for the benefit of the vendor plaintiff and not for the benefit of the purchaser. It provides a means of proof, namely the production of “a certificate of occupancy” (the current statutory language is “occupancy certificate”), to enable the vendor plaintiff to prove its performance of its obligations under Special Condition 2.1 and 2.2. The Special Condition is inherently incapable of giving rise to a damages claim by the purchasers. It imposes no obligation on the vendor nor grants any right to the purchasers.
62 Special Condition 2.2 deals with an obligation of the plaintiff vendor separate from erecting the development in accordance with the plans. It refers to a Schedule of Fixtures and Fittings. There was some uncertainty as to what that schedule might be. I was referred by Mr Harvey to some handwritten additions to the particulars of sale. I think the reference is more likely to be to the detailed specification in the plans relative to fixtures and fittings. No criticism has been made of the fixtures and fittings here; nor has it been suggested that any “specifications and standards required by the City of Yarra” have not been adhered to. There is no basis for an allegation of breach by the plaintiff of Special Condition 2.2.
63 The sole remaining additional cause of action alleged by the purchasers arising out of the special conditions is clause 2.1. This clause obliges the vendor to erect the building “substantially in accordance with the plans and specifications supplied to the purchaser”. Again, subject to an entitlement to make minor variations; the clause nevertheless appears to suppose that these minor variations may be of such significance as to “substantially materially and detrimentally affect the land hereby sold”, in which case the vendor is obliged to notify the purchasers in writing. I have found that the plaintiff vendor made variations which materially affected the purchasers’ lots, but this special condition, if valid, would appear to authorise the vendor to make those variations or amendments. If Special Condition 2.1 is treated as an enforceable contractual provision, it cannot be said that the vendor has breached it save, potentially, in one respect. There is an obligation on Ausgrand to notify the purchasers in writing of proposed changes which substantially, materially and detrimentally affect the purchasers’ lots. The provision of Version 2 of the plan meets this obligation. There is no stipulation as to time for the advices to be given. Whilst I have found the variations materially affected the purchasers’ lots, it is far from clear that the affect is substantial. If the reference to “proposed” changes implies the advices must be prior to Ausgrand’s acceptance of these changes in accordance with the analysis of Croft J in the Battlay Holdings case, it is not obvious what loss the purchasers have sustained by reason of late advice.
64 None of these further causes of action has therefore been made out.
65 There is a further allegation that Special Conditions 2.1 and 3.1 are void by reason of s14 of the Sale of Land Act. That section provides:
“Any agreement under which a person purports to waive any right the person may have under this Act to avoid a contract is void.”
66 If the special conditions are void, they cannot provide the basis for any claim for relief by the defendants. The defence and counterclaim might have alleged that the special conditions should be read down so that they continued to have some effect but not the effect which would render them void under s14 of the Act, but that is not the way in which the defence and counterclaim approaches the matter. With the special conditions void, it might be said that a separate condition requiring the vendor to construct the sale property in accordance with the plan of subdivision and the specifications attached to the vendor statement could be implied. Again, however, no such thing is pleaded.
67 I therefore reject the contention that there is a claim for damages available to the purchasers under any of the special conditions.
68 The damages claim at paragraph 21 of the defence and counterclaim must therefore fail.
69 The defendants also claimed relief based upon a raft of alleged breaches by the plaintiff of provisions of the Civil Procedure Act 2010. The breaches alleged seem to relate to acts and omissions occurring before the commencement of proceedings. As Mr Harvey correctly observed, with the exception of the now repealed Part 3, the Civil Procedure Act governs conduct following the filing of proceedings, only. These claims must fail.
Deposit money
70 According to paragraph 43 of the defence and counterclaim, despite the representation made by the solicitors for the plaintiff “on or about 4 June 2015” that the deposit moneys would be paid into the solicitor’s trust account, it was said that it was only in November – the 20th for the deposit for Lot 209, and the 26th for Lot 307 – that the deposit moneys were placed in the trust account. According to the counterclaim, “by reason of the representation the ability of interest to accumulate on the deposit sums was lost”. Mr Harvey, on behalf of the plaintiff, accepted liability that if the deposit moneys were found to be refundable, then the plaintiff would top up those deposits so as to provide the defendants with the interest which would have accrued had the deposits been put in the trust account in June 2015 as was represented.
71 Having closed the defendants’ case at the end of the second day of hearing, Mr McKenzie sought to reopen it on the morning of the third day. He said that he wanted to call evidence from the principal of the second defendant to the effect that she had lost an opportunity to recover interest at a rate well above current market rate. I declined to grant leave to reopen the case. I accepted that in the circumstances the plaintiff would not have been prejudiced if leave were granted, but, given that there was no evidence that the plaintiff was aware of the special investment opportunities available to the defendants, this would not be an appropriate head of damages recoverable in accordance with ordinary contractual principles.
72 The counterclaim alleges a further entitlement to rescind for the defendants based upon the provisions of the Sale of Land Act. Dealing with s9AA of that Act, it provides as follows:
“Sale of land prior to approval of plan
(1) A person shall not sell a lot in a plan of subdivision (whether certified or not) to anyone except a statutory body or authority if the plan has not been registered by the Registrar, unless—
(a)the contract for the sale of that lot provides that the deposit moneys payable by the purchaser are to be paid—
(i) to a legal practitioner, conveyancer or licensed estate agent acting for the vendor to be held by the legal practitioner, conveyancer or licensed estate agent on trust for the purchaser until the registration of the plan of subdivision; and
(b)the deposit moneys payable under the contract do not exceed 10 per cent of the purchase price of the lot.
(1A) A contract for the sale of a lot referred to in subsection (1) must contain a conspicuous notice to the purchaser stating—
(a)that subject to the limit set by subsection (1)(b), the purchaser may negotiate with the vendor about the amount of deposit moneys payable under the contract; and
(b)that a substantial period of time may elapse between the day on which the purchaser signs the contract for sale and the day on which the purchaser becomes the registered proprietor of the lot; and
(c)that the value of the lot may change between the day on which the purchaser signs the contract for sale of that lot and the day on which the purchaser becomes the registered proprietor.
(2) The deposit moneys paid by the purchaser before the registration of the plan under a prescribed contract of sale of a lot must be paid to the legal practitioner, conveyancer or licensed estate agent acting for the vendor.
(5) A person may sell land under a prescribed contract despite anything in section 8A.
(6) In this section (except subsection (1)(b)) and section 9AF, “deposit moneys” in relation to the sale of a lot includes any moneys which are part of the purchase price received by the vendor or on behalf of the vendor before the purchaser becomes entitled to a transfer or conveyance of the lot.
(7) In this section and in sections 9AB to 9AF and 10 prescribed contract of sale means a contract of sale of a kind referred to in subsection (1) of this section.”
73 As previously noted, only a small part of the 10 per cent deposit in each case was paid in cash. It is not suggested that this cash portion was dealt with other than in accordance with s9AA; rather, the submission is that s9AA requires that the 10 per cent deposit be in cash, and does not countenance the arrangement which was undertaken here with the use of bank guarantees, particularly when, as the evidence showed, the bank guarantees were made payable, not to a legal practitioner, conveyancer, or licensed estate agent acting for the vendor, but rather to the vendor, itself, as the evidence showed they were. It was not suggested that the form of the contract did not require payment of purchase moneys in accordance with subs(1) or that the contracts provided for a deposit in excess of 10 per cent as also required by subs(1) of s9AA. Mr Harvey submitted that the effect of the section was to impose its requirements as to investment only if deposit moneys were, in fact, paid.
74 No moneys were paid until the guarantees were called upon. By that time, according to the cases advanced by both parties, the contract was at an end, albeit that the parties are at odds as to the grounds and the timing of the termination. It may be that the calling of the guarantees, other things being equal, would have engaged the operation of s9AA and required the payment of the moneys raised by calling the guarantee into trust in accordance with subs(2).
75 S9AE(1) provides:
“ If the vendor under a prescribed contract of sale of a lot fails to comply with section 9AA(1) or (2) or 9AB the purchaser may rescind the contract of sale at any time before the registration of the plan of subdivision.”
76 It would seem to follow that the purchasers might have had a further right of rescission, this time under s9AE, at the time that the bank guarantees were called, with the cash not immediately put in trust. Given that the contracts were already at an end, that further right seems to be neither here nor there.
Effect of rescission
77 Section 9AF of the Sale of Land Act provides as follows:
“Repayment of deposit moneys
(1) If—
(a)the vendor rescinds a prescribed contract of sale of a lot as a result of a default by the purchaser, the vendor shall be immediately entitled to be paid the deposit money in the vendor’s own right; or
(b)the purchaser rescinds a prescribed contract of sale of a lot as a result of a default by the vendor or pursuant to section 9AC or 9AE, the purchaser shall be entitled to the immediate return of the deposit moneys less the amount of any occupation fees paid by the purchaser.
(2) Nothing in subsection (1) shall limit or affect the power of the court—
(a)to order the repayment of the deposit moneys (whether that order is made pursuant to section 49(2) of the Property Law Act 1958 or otherwise); or
(b)to relieve a purchaser against forfeiture of the deposit.”
78 I was initially attracted to the view that, where a rescission was effected by a purchaser pursuant to s9AC of the Act, the effect was similar to rescission of a contract for non-satisfaction of a condition precedent as to performance; for example, a finance clause. The contract would be undone without there being any entitlement to damages for the one party or the other. Section 9AF(1)(b) seems to draw a distinction between default by the vendor on the one hand and rescission pursuant either to s9AC or 9AE. This distinction is supportive of my preliminary view that a rescission under s9AC has the effect that “all bets are off”. The deposit is refunded, but no damages liability is created. The sub-section does not create, recognise or preserve any right to damages. I infer that recovery of the deposit and cancellation of the contract are the only remedies available to a purchaser who rescinds under this provision. This, therefore, is the view which I adopt for the purposes of this judgment. The result is that no loss of bargain damages are recoverable by the purchasers.
79 The deposits relative to both lots are recoverable under s9AF(1). Sub-section (2) preserves the entitlement to recover the deposit under s49 of the Property Law Act 1958, but, given that the Sale of Land Act has provided the necessary remedy, there seems no occasion to resort to the entitlement under the Property Law Act.
Relief
80 The purchasers are entitled to recover the deposits but no damages. I accept the submission made by Mr McKenzie that interest at the rate prescribed by the Penalty Interest Rates Act 1983 is payable pursuant to s58 of the Supreme Court Act. The question is, from what date should that interest run? In his written outline it was said:
“Interest at the penalty interest rate ought to be ordered to be paid from the date of the notice being given.”
81 If the deposits had been paid in cash, the obligation to pay interest should date from the rescission letter written by the purchasers’ conveyancer in November 2014. Here, however, that interest should be payable only upon the cash component of each deposit. On the findings that I have made, the bank guarantees should not have been called. It is reasonable to infer that the defendants’ accounts were debited by the bank which issued the guarantees at the time which it made payment. The interest under s58 should run from that date. As to the portion of the deposits paid in cash, the refund should extend to all interest earned whilst they were held in trust before rescission.
82 Mr McKenzie also sought an order for indemnity costs. Aside from that brief reference in his written outline, I have not heard submissions on the question of costs, and realistically they could not be made until the substantive outcome of the proceeding was made known by the publication of these reasons. Accordingly, I will reserve the question of costs.
83 I will direct the parties within 14 days of this day to bring in short minutes to give effect to these reasons.
Orders
(i) Within 14 days of this date the parties must bring in short minutes to give effect to these reasons.
(ii) Costs reserved.
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