Baiyai Pty Ltd v Guy

Case [2009] NSWCA 65

New South Wales


Court of Appeal


CITATION: BAIYAI PTY LTD v GUY [2009] NSWCA 65
HEARING DATE(S): 20-21/10/2008
 
JUDGMENT DATE: 
1 April 2009
JUDGMENT OF: Beazley JA at 1; Giles JA at 2; Handley AJA at 3
DECISION: (1) Appeal allowed in part;
(2) Judgment of the District Court for $147,444 and costs in favour of the first plaintiff against the third defendant set aside except as to costs;
(3) Order that there be substituted judgment in favour of the first plaintiff against the third defendant for $198,990 inclusive of pre-judgment interest with affect from 8 August 2007;
(4) Cross appeal dismissed;
(5) Respondent and cross appellant to pay twenty five per cent of the appellant's costs of the appeal and cross appeal.
CATCHWORDS: DAMAGES – failure to mitigate loss. - VALUATION – value of land – offer by intending purchaser admissible. - VENDOR AND PURCHASER – Vendor not willing & able to perform contract – not entitled to recover price.
PARTIES: Baiyai Pty Limited - Appellant/Cross-Respondent
Gregory Guy - Respondent/Cross-Appellant
Lyndell Joy Humphrey - Second Cross-Respondent
FILE NUMBER(S): CA 40700 of 2007
COUNSEL: M Bradford - Appellant
D L Davies SC with J Oakley - Respondent
SOLICITORS: Booth Brown Samuels & Olney - Appellant
Ebsworth & Ebswroth - Respondent
LOWER COURT JURISDICTION: District Court
LOWER COURT FILE NUMBER(S): DC 2004 of 2005
LOWER COURT JUDICIAL OFFICER: Rolfe DCJ
LOWER COURT DATE OF DECISION: 8 August 2007





                      CA 40700/07


                          BEAZLEY JA
                          GILES JA
                          HANDLEY AJA

                          1 April 2009

BAYAI PTY LIMITED (ACN 077514544) v GREGORY GUY

CATCHWORDS


DAMAGES – failure to mitigate loss.

VALUATION – value of land – offer by intending purchaser admissible.

VENDOR AND PURCHASER – Vendor not willing & able to perform contract – not entitled to recover price.


HEADNOTE

A former client brought an action in the District Court against the solicitor who acted for it in a conveyancing transaction which culminated in a transfer of title without receipt of the balance of purchase money expressed in “trade” dollars. The Trial Judge found for the client and awarded damages and interest of $147,444.00 based on the loss of the value of the land at the date of settlement. The client appealed, challenging the findings that the land was worth $165,000 at the relevant date and that the client had failed to mitigate its loss. The solicitor cross-appealed challenging the findings on causation and quantum. Held: (1) the Judge’s decision on the value of the land at the relevant date could not be disturbed; (2) the decision to reduce the client’s damages because it had failed to mitigate its loss by abandoning its action to recover the balance of the purchase price was erroneous. The balance of the purchase price in “trade” dollars was only payable when the vendor had repaid a loan from the purchaser and the vendor had never been ready, willing and able to perform this obligation. The client’s damages should therefore be increased by $28,500.00, the amount deducted by the Trial Judge for…

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AGLC
Baiyai Pty Ltd v Guy [2009] NSWCA 65
Case
[2009] NSWCA 65
Decision Date

CaseChat Overview and Summary

Baiyai Pty Ltd (the appellant) appealed to the Court of Appeal of New South Wales against a judgment of the District Court which had awarded damages to Guy (the first plaintiff, a respondent and cross-appellant). The dispute arose from a contract for the sale of land where the vendor, Baiyai Pty Ltd, was found to be unwilling and unable to complete the sale. Guy sought to recover the purchase price.

The Court of Appeal was required to determine whether the District Court had erred in its assessment of damages, specifically concerning the valuation of the land and the principle of failure to mitigate loss. A key issue was whether an offer made by a subsequent intending purchaser was admissible and relevant to determining the market value of the land at the time of the vendor's breach.

The Court of Appeal held that the District Court had erred in its valuation of the land. It found that the offer from the subsequent purchaser was admissible and relevant evidence of the land's market value. The Court applied the principle that a vendor who is unwilling and unable to perform a contract for the sale of land is not entitled to recover the full purchase price. Instead, the vendor is entitled to the difference between the contract price and the market value of the land at the time of the breach, less any expenses incurred. The Court also considered the principle of mitigation, noting that the purchaser had taken reasonable steps to mitigate their loss.

The appeal was allowed in part, and the District Court's judgment was set aside except as to costs. A substituted judgment was entered in favour of Guy against Baiyai Pty Ltd for $198,990, inclusive of pre-judgment interest from 8 August 2007. The cross-appeal was dismissed, and the parties were ordered to share the costs of the appeal and cross-appeal.

Orders

Orders of the court

(1) Appeal allowed in part; (2) Judgment of the District Court for $147,444 and costs in favour of the first plaintiff against the third defendant set aside except as to costs; (3) Order that there be substituted judgment in favour of the first plaintiff against the third defendant for $198,990 inclusive of pre-judgment interest with affect from 8 August 2007; (4) Cross appeal dismissed; (5) Respondent and cross appellant to pay twenty five per cent of the appellant's costs of the appeal and cross appeal.

Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

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