Burger v Longboat Holdings Group2 Pty Ltd
[2021] VSC 469
•9 August 2021
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMON LAW DIVISION
PROPERTY LIST
IN THE MATTER of applications pursuant to section 49(1) of the Property Law Act 1958 (Vic)
S ECI 2021 01233
| MICHAELA BURGER and JONKER ANDRIES BURGER | Plaintiffs |
| v | |
| LONGBOAT HOLDINGS GROUP2 PTY LTD (ACN 603 619 638) | Defendant |
and
S ECI 2021 01190
| SYLVAIN JEAN-MARIE TAUPENAS and EDWIN ALVAREZ VELASQUEZ | Plaintiffs |
| v | |
| LONGBOAT HOLDINGS GROUP2 PTY LTD (ACN 603 619 638) | Defendant |
---
JUDGE: | Matthews AsJ |
WHERE HELD: | Melbourne |
DATE OF HEARING: | 19 July 2021 |
DATE OF JUDGMENT: | 9 August 2021 |
CASE MAY BE CITED AS: | Burger & Ors v Longboat Holdings Group2 Pty Ltd |
MEDIUM NEUTRAL CITATION: | [2021] VSC 469 |
---
PROPERTY LAW – Whether purchasers validly rescinded contract pursuant to s 9AC(2) of the Sale of Land Act 1962 (Vic) –Besser v Alma [2012] VSC 460; Lockwood v PSP Investments Pty Ltd [2013] VSC 10 and Ausgrand Pty Ltd v Stephanie Michele Freeland-Small [2016] VCC 942; Harris v K7@Surry Hills Pty Ltd [2019] VSC 551 considered – Purchasers validly rescinded contracts and entitled to return of deposits paid – Plan of subdivision amended – Certain amendments to plan of subdivision materially affected the relevant lots.
---
APPEARANCES: | Counsel | Solicitors |
| For the Plaintiffs in both proceedings | Mr J.W.G. Grant | SLF Lawyers |
| For the Defendant in both proceedings | Mr B.J. Parker | Madgwicks |
HER HONOUR:
Introduction
Both of these proceedings were commenced by originating motions and concern applications made pursuant to s 49(1) of the Property Law Act 1958 (Vic) (‘PLA’) in respect of two lots in a development owned by the Defendant known as the ‘Eternity’ development at 110 Roberts Street, West Footscray, Victoria (‘Development’).
The Plaintiffs in each proceeding entered into off-the-plan contracts to purchase two‑bedroom apartments in the Development, as follows:
(a) The Plaintiffs in proceeding S ECI 2021 01233 (‘Burger Proceeding’) purchased Lot 30 on the unregistered plan of subdivision PS 749624 H relating to the Development (‘POS’).
(b) The Plaintiffs in proceeding S ECI 2021 01190 (‘Taupenas Proceeding’) purchased Lot 46 on the POS.
In each instance, pursuant to s 49(1) of the PLA the Plaintiffs seek an answer to the following question (‘Question’):
Does the amendment to the plan of subdivision materially affect the lot to which the contract relates entitling the plaintiffs to rescind the contract pursuant to section 9AC(2) of the Sale of Land Act 1962.
If the answer to the Question is ‘Yes’, then the Plaintiffs seek:
(a) declarations that they lawfully rescinded their respective contracts;
(b) orders that the Defendant refund the deposits paid by them plus any interest earned thereon; and
(c) orders that the Defendant pay the Plaintiffs interest pursuant to s 58 of the Supreme Court Act 1986 (Vic) earned in respect of the deposits from a specified date.
Alternative or further relief is also sought, which I will detail later in these reasons.
The issues in both proceedings are identical in most respects. I shall refer to the plaintiffs in both proceedings as the Plaintiffs, and where it is necessary to differentiate between the two proceedings, I shall refer to the plaintiffs in the Burger Proceeding, being Michaela Burger and Jonker Andries Burger, as the Burgers; and to the plaintiffs in the Taupenas Proceeding, being Sylvain Jean-Marie Taupenas and Edwin Alvarez Velasquez as Taupenas & Velasquez.
Due to their similarity, the common legal representation across both proceedings, and the commonality in identity of the Defendant, the proceedings have been listed to be heard together. Pursuant to orders made by the Court on its own motion, both proceedings have been referred to me for hearing and determination pursuant to rule 77.05 of the Supreme Court (General Civil Procedure) Rules 2015.
For the reasons which follow, the answer to the Question in respect of both proceedings is ‘Yes’, and therefore relevant declarations and orders will be made, as set out later in these reasons.
Evidence relied upon
The following affidavits were filed in the Burger Proceeding and relied upon at the hearing:
(a) Affidavit of Ms Burger affirmed 21 April 2021 (‘First Burger Affidavit’);
(b) Affidavit of Theodore Abel Kerlidis sworn 7 June 2021 (‘First Kerlidis Affidavit’). Mr Kerlidis is one of the two directors and sole shareholder of the Defendant;
(c) Affidavit of Ms Burger affirmed 30 June 2021 (‘Second Burger Affidavit’);
(d) Affidavit of Patrick Anthony Fabris affirmed 12 July 2021 (‘First Fabris Affidavit’). Mr Fabris is a solicitor employed at SLF Lawyers, solicitors for the Plaintiffs;
(e) Affidavit of Mr Kerlidis sworn 15 July 2021 (‘Third Kerlidis Affidavit’); and
(f) Affidavit of Joseph Mark Teege affirmed 19 July 2021 (‘Teege Affidavit’). Mr Teege is a solicitor employed at Madgwicks, solicitors for the Defendant.
The following affidavits were filed in the Taupenas Proceeding and relied upon at the hearing:
(a) Affidavit of Mr Taupenas sworn 19 April 2021 (‘First Taupenas Affidavit’);
(b) Affidavit of Mr Kerlidis sworn 7 June 2021 (‘Second Kerlidis Affidavit’);
(c) Affidavit of Mr Taupenas sworn 2 July 2021 (‘Second Taupenas Affidavit’); and
(d) Affidavit of Mr Fabris affirmed 12 July 2021 (‘Second Fabris Affidavit’).
The parties agreed that leave should be granted for them to rely on affidavits filed outside the times previously ordered by the Court.
The parties also agreed that evidence in one proceeding should be evidence in the other. This was a sensible course which I am content to follow, given that in each proceeding the parties had filed separate affidavits but in some instances filed an affidavit only in one of the proceedings, despite them being relevant to both.
Certain objections were made to particular aspects of Mr Kerlidis’ affidavits. It was common ground that those objections be addressed during submissions as to the relevant issues and for rulings on them to be made during the course of me considering my reasons. I will adopt this course and refer to the objections and my views about them where relevant.
In addition to the affidavit evidence, the Plaintiffs relied without objection on a tender bundle for each proceeding forwarded to my Associate on 15 July 2021, which go to the deposits paid and interest earned thereon, referred to respectively as the Burger Tender Bundle and the Taupenas Tender Bundle.
Further, the parties rely on their written submissions filed in each of the proceedings, being:
(a) In the Burger Proceeding:
(i) The Burgers’ written submissions dated 12 July 2021 (‘Burgers’ Outline’) and
(ii) The Defendant’s written submissions dated 16 July 2021 (‘Defendant’s Burger Outline’).
(b) In the Taupenas Proceeding:
(i) Taupenas & Velasquez’s written submissions dated 12 July 2021 (‘Taupenas’ Outline’); and
(ii) The Defendant’s written submissions dated 16 July 2021 (‘Defendant’s Taupenas Outline’).
I do not intend to summarise the evidence or the submissions here, I will deal with these in respect of particular matters as set out later in these reasons.
Background
The following background information is taken from the affidavits relied upon and was not the subject of controversy between the parties, save for the alleged changes to the Plan relied upon by the Plaintiffs.
Taupenas & Velasquez entered into an off-the-plan contract with the Defendant (‘Taupenas Contract’) on 12 February 2018 to purchase a two-bedroom apartment with car park in the Development, being Lot 46 on the Plan.[1] I will refer to the apartment as the Lot 46 Apartment and to the car park as the Lot 46 Car Park.
[1]First Taupenas Affidavit, [3]; Exhibit SJMT-1 to that affidavit is a copy of the Taupenas Contract.
A deposit of $60,000 was paid by Taupenas & Velasquez (‘Taupenas Deposit’) pursuant to their contract, and continues to be held by Madgwicks on interest bearing deposit.[2]
[2]Taupenas Tender Bundle.
The Burgers entered into an off-the-plan contract with the Defendant (‘Burger Contract’) on 24 April 2018 to purchase a two-bedroom apartment in the Development, being Lot 30 on the Plan.[3] I shall refer to the apartment as the Lot 30 Apartment. The Burger Contract also contained a right to use a specific allocated car‑stacker space,[4] which I shall refer to as the Lot 30 Car Space.
[3]First Burger Affidavit, [3]. Exhibit MB-1 to that affidavit is a copy of the Burger Contract.
[4]Exhibit MB-1.
A deposit of $58,940 was paid by the Burgers (‘Burger Deposit’) pursuant to their contract, and continues to be held by Madgwicks on interest bearing deposit.[5]
[5]Burger Tender Bundle.
Both contracts contained special condition clause 7 (‘SC 7’) which dealt with the Plan. Relevantly, SC 7 provided as follows:
7.4 Minor variations to Plan
(a)Subject to the Sale of Land Act 1962 (Vic), the vendor may make minor variations to the Plan and the purchaser must not make any requisition or objection, delay settlement, claim any compensation or terminate or purport to terminate this contract because of any variation made in accordance with this special condition. The vendor must promptly inform the purchaser in writing of the variation.
(b)Without limiting special condition 7.4(a), the vendor may:
(i)make such minor variations to the Plan as are necessary to comply with a requirement of any Government Authority or the Registrar of Titles;
(ii)alter the number, size or location of any of the lots shown on the Plan; and
(iii)renumber any of the lots shown on the Plan.
7.5 Other variations to Plan
If any variation to the Plan (other than a minor variation under special condition 7.4) is proposed or is necessary to comply with a requirement of any Government Authority or the Registrar of Titles:
(a)the vendor must promptly inform the purchaser in writing of the variation;
(b)…
(c)the purchaser may, within 10 Business Days after being informed by the vendor of the variation, but only if the variation will materially affect the property, by giving written notice to the vendor, terminate this contract, in which case the deposit must be refunded to the purchaser together with any accrued interest (less bank and government charges incurred in relation to the deposit).
7.6 Purchaser’s acknowledgment
The purchaser acknowledges and agrees that an amendment made to the Plan which alters the area of the property by 5% or less will not be regarded as an amendment which materially affects the property.
The vendor’s statement in respect of both contracts contained the Plan, which is dated 22 November 2017 and is marked version 4 (‘Plan Version 4’).[6]
[6]First Burger Affidavit, [5]; First Taupenas Affidavit, [5].
The Taupenas Contract contained a special condition in respect of the type of apartment which was to be the subject of that contract. Special Condition 31 (‘SC 31’) required the Defendant to amend the Plan to incorporate the type G1 apartment as contained in the schedule of inclusions (contained in annexure 2 of the Taupenas Contract) (‘Type G1 Apartment’). SC 31 provided as follows:
The Vendor and purchaser agree that the purchase of apartment #214 (Lot 46) is subject to a change to the subdivision from a ‘Type A’ apartment to a ‘Type G1’ apartment as outlined in the schedule of inclusions. This change of Subdivision is also to include the car park space scheduled for lot 47 to be allocated to Lot 46 in the new plan of Sub-division. Should the change of subdivision mot be finalised and agreed to with the appropriate authorities and the Type G1 apartment is Not allowed for Lot 46 and the car park Lot No. 47 is not allowed, then the purchaser has the right to end this contract and all monies in full will be refunded to the purchaser within 7 days of being notified.
Plan Version 4 contained, in respect of Lot 46, a Type A apartment rather than a Type G1 Apartment.
Mr Taupenas deposes that on 15 February 2018 an amended version of the Plan was provided by the Defendant to Mr Velasquez and himself detailing an amendment to Lot 46 in accordance with SC 31. This version of the plan is date 15 February 2018 and is marked version 7 (‘Plan Version 7’).[7]
[7]First Taupenas Affidavit, [6].
Ms Burger deposes that on or about 21 July 2018, the Defendant provided an updated version of the Plan which was dated 12 February 2018 and marked version 5 (‘Plan Version 5’).[8]
[8]First Burger Affidavit, [6].
On 15 March 2021, the then solicitors for each set of Plaintiffs received an amended version of the Plan from the Defendant’s solicitors. This version of the Plan is dated 20 August 2020, is digitally signed by Martine Rolley of Maribyrnong City Council (‘MCC’) on 2 February 2021 and is marked version 15 (‘Plan Version 15’).[9]
[9]First Burger Affidavit, [8]; First Taupenas Affidavit, [7].
Ms Burger deposes that neither the Burgers nor their solicitors were provided with versions 6 to 14 of the Plan and that they have not received any correspondence from the Defendant in relation to those versions of the Plan.[10]
[10]First Burger Affidavit, [7].
Mr Taupenas deposes that neither he and Mr Velasquez nor their solicitors were provided with versions 8 to 14 of the Plan.[11]
[11]First Taupenas Affidavit, [8].
In order to consider the alleged changes to the Plan relied upon by the Plaintiffs in this case, it is necessary to consider the version of the Plan which was the relevant Plan in respect of each contract, and then compare that with the Plan reflecting the amendments complained of. In respect of the latter, that is Plan Version 15. In respect of the former, for the Burger Proceeding it is Plan Version 5 and for the Taupenas Proceeding it is Plan Version 7. This is because those are the versions of the Plan which they were provided with subsequent to signing their respective contracts and which they are to be taken as having acceded to. I did not apprehend this to be controversial between the parties.
It was common ground that for the consideration of the alleged changes to the Plan, there is no material difference between Plan Version 5 and Plan Version 7. For convenience and ease of reference, I propose to work from Plan Version 7 and to refer to it as the ‘Contracted Plan’. This is consistent with how Counsel for each party made their oral submissions.
Ms Burger deposes that when provided with Plan Version 15, the correspondence accompanying it did not provide any written advice detailing the proposed amendments to the Plan from Plan Version 5.[12]
[12]First Burger Affidavit, [9].
Ms Burger deposes that after receipt of Plan Version 15 on 15 March 2021, the following occurred:[13]
[13]First Burger Affidavit, [11]-[15].
(a) On 18 March 2021, the Burgers’ former solicitors sent an email to the Defendant’s solicitors raising a number of concerns;
(b) On 29 March 2021, the Burgers’ former solicitors sent a letter to the Defendant’s solicitors advising, amongst other things, that the Burgers rescinded the Burger Contract;
(c) Between 30 March and 9 April 2021, the Burgers’ former solicitors and the Defendant’s solicitors exchanged correspondence;
(d) On 15 April 2021, the Burgers’ solicitors sent an email to the Defendant’s solicitors, maintaining their rescission of the Burger Contract on 29 March 2021 and demanding the refund of the Burger Deposit plus any interest earned thereon;
(e) On 20 April 2021, the Defendant’s solicitors sent an email to the Burgers’ solicitors stating that the Defendant did not accept the Burgers’ position.
Mr Taupenas deposes that after receipt of Plan Version 15 on 15 March 2021, the following occurred:[14]
[14]First Taupenas Affidavit, [10]-[12].
(a) On 15 March 2021, SLF Lawyers sent an email to the Defendant’s solicitors giving notice pursuant to s 9AC(2) of the Sale of Land Act 1962 (Vic) (‘SLA’). By this email, Taupenas & Velasquez rescinded the Taupenas Contract and demanded the repayment of the Taupenas Deposit and any interest earned thereon;
(b) On 30 March 2021, the Defendant’s solicitors responded, saying that the Taupenas Contract remained on foot and settlement is required to take place;
(c) On 31 March 2021, SLF Lawyers sent an email to the Defendant’s solicitors, maintaining that the Taupenas Contract had been validly rescinded under the SLA and in the alternative giving notice of ending the contract pursuant to SC 31.
The Defendant’s evidence does not appear to dispute that the correspondence referred to in the previous two paragraphs occurred.
In each instance, the Plaintiffs in each proceeding rely on several matters which they say separately and/or together constitute an amendment of the Plan which materially affect their respective lots.
In respect of the Burger Contract, Ms Burger deposes that the amendments included the following:[15]
[15]First Burger Affidavit, [10].
(a) Amendment of the boundary between Lots 30 and 31 resulting in reduction of the size and shape of the master bedroom of Lot 30;
(b) Reduction in the size of the light court between Lots 30 and 31 resulting in a reduction of available natural lot in the master bedroom of Lot 30;
(c) The assigned car park for Lot 30 has been relocated from the upper-basement level to the sub-basement level;
(d) Amendments to the northern boundary of Lot 30;
(e) Amendments to the width of the balcony of Lot 30;
(f) Reduction in the common property by the creation of reserve 1 to be vested in MCC; and
(g) Decrease in the area of land of common property 1 by the creation of common property 2.
In respect of the Taupenas Contract, Mr Taupenas deposes that the amendments included the following:[16]
[16]First Taupenas Affidavit, [9].
(a) Amendment of the boundary between Lots 46 and 47 resulting in reduction of the size and shape of the master bedroom of Lot 46;
(b) Reduction in the size of the light court between Lots 46 and 47 resulting in a reduction of available natural lot in the master bedroom of Lot 46;
(c) Decrease in the size of the car park for Lot 46.
(d) Reduction in the common property by the creation of reserve 1 to be vested in MCC; and
(e) Decrease in the area of land of common property 1 by the creation of common property 2.
By the time of the hearing, these matters had been refined in terms of how they were put: I will set that out later when considering each of the changes. Suffice to say for now that in effect, the complaints made in respect of the reduction in size and shape of the master bedroom for each of Lot 30 and Lot 46 are the same, as are the complaints in respect of the light court and both complaints regarding the common property. The only differences between the two proceedings in respect of the specific alleged changes are in respect of the car parks/spaces. I shall refer to each of these as:
(a) In respect of the alleged reduction in size and altered shape of the master bedroom in each of Lot 30 and Lot 46, the ‘Master Bedroom Size and Configuration Changes’;
(b) In respect of the alleged reduction in the size of the light court, the ‘Light Court Change’;
(c) In respect of the alleged reduction in the area of land common property no. 1 (‘CP 1’) by the creation of reserve 1 to be vested in MCC, the ‘Creation of the MCC Reserve’;
(d) In respect of the alleged decrease in the area of land of CP 1 by the creation of common property no. 2 (‘CP 2’), the ‘Creation of CP 2’;
(e) In respect of the alleged changes in location and size of Lot 30’s allocated car space, the ‘Lot 30 Car Space Change’; and
(f) In respect of the alleged decrease in size of Lot 46’s car park, the ‘Lot 46 Car Park Change’.
I will set out the Defendant’s responses to these matters later in these reasons. The above description of the issues has been included here not as findings or conclusions but merely as a description so as to give some sense of what the complaints are about.
By the time of the hearing, the Burgers did not make any submissions in respect of any alleged amendments to the width of the balcony of Lot 30.
Relevant law and principles
Statutory provisions
Section 9AC of the Sale of Land Act 1962 (Vic)
Section 9AC of the SLA relevantly provides as follows: [17]
(1)If after an off-the-plan 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 … advise the purchaser in writing of the proposed amendment.
(2)The purchaser may rescind an off-the-plan contract within 14 days after being advised by the vendor … of an amendment to the plan of subdivision which will materially affect the lot to which the contract relates.
[17]Section 9AC of the SLA uses the term “off-the-plan contract”, defined as a contract for the sale of a lot on a plan of subdivision (whether the plan is certified or not) where the plan has not been registered under s 22 of the Subdivision Act 1988 (Vic): s 2(1) of the SLA. The SLA was amended by the Sale of Law Amendment Act 2019 (Vic), substituting “off-the-plan contract” for “prescribed contract” as it appears in (inter alia) s 9AC of the SLA from 5 June 2019. There is no substantive difference between the definition of “prescribed contract” as it then was (see s 9AA(7) of the SLA (as it then was, and now repealed) read with s 9AA(1) (as it then was)) and the definition of an “off-the-plan contract” in the SLA as amended.
If an off-the-plan contract is rescinded by reason of default of a vendor or pursuant to s 9AC(2) of the SLA, then the purchaser is entitled to the immediate return of the deposit.[18]
[18]Paragraph 9AF(1)(b) of the SLA.
Section 49 of the Property Law Act 1958 (Vic)
Section 49 of the PLA relevantly provides as follows:
(1) A vendor or purchaser of any interest in land, or their representatives respectively, may apply to the Court, in respect of any requisitions or objections, or any claim for compensation, or any other question arising out of or connected with the contract (not being a question affecting the existence or validity of the contract), and the Court may make such order upon the application as to the Court may appear just, and may order how and by whom all or any of the costs of and incident [sic] to the application are to be borne and paid.
(2) Where the Court refuses to grant specific performance of a contract, or in any action for the return of a deposit, the Court may, if it thinks fit, order the repayment of any deposit.
Thus the Court also has a discretion on application under s 49(1) of the PLA to order the repayment of a deposit if it thinks fit.
Applicable principles s 9AC of the SLA
The parties were in substantial agreement as to the principles applicable to s 9AC of the SLA.
“Materially”, in the context of s 9AC of the SLA, has been given its ordinary meaning of: “to an important degree, considerably”.[19]
[19]See Derham AsJ in Harris v K7@Surry Hills Pty Ltd [2019] VSC 551, [90] (‘Harris v K7@Surry Hills’) adopting the Macquarie Dictionary (6th ed, 2013).
In Harris v K7@Surry Hills, Derham AsJ considered and summarised the authorities in respect of s 9AC of the SLA.[20] After doing so, his Honour stated that the effect of the decisions he had summarised is that:[21]
(a)The words materially affect the lot to which the contract relates mean that the proposed amendment will affect the lot considered as a bundle of rights to an important or significant degree;
(b)the proposed amendment need not be detrimental, deleterious or adverse to the lot for there to be a material affect on the lot;
(c)the degree of affect on the lot is a question of fact in the context of the particular plan of subdivision;
(d)a change found to be adverse to the interests of a purchaser may more readily translate into one that will be found to materially affect the lot.
[20]Harris v K7@Surry Hills, [90]-[97].
[21]Harris v K7@Surry Hills, [98].
Whether an amendment to a plan of subdivision materially affects the relevant lot is determined objectively; not by reference to the reason the amendment was made, but by the objective facts and circumstances.[22]
[22]Besser v Alma Homes Pty Ltd [2012] VSC 460, [10] (‘Besser’).
When considering whether an amendment materially affects a lot it is necessary to consider the “lot” as a bundle of rights, including the benefits and burdens that are determined by reference to the lot, such as the lot entitlements and liabilities and any other benefit or burden that depends on the contractual or putative proprietary rights accompanying the lot in question; that may variously include storage cages, car parks, and the rights to common property vested in the lot owner as member of an owners corporation.[23]
[23]Besser, [8]; Lockwood v PSP Investments Pty Ltd [2013] VSC 10, [36]-[42] (‘Lockwood’).
Alleged changes said to materially affect the relevant lots
The Master Bedroom Size and Configuration Changes
Evidence
The lot boundaries in respect of the Lot 30 Apartment were shown in the Contracted Plan as follows (‘Figure 1’):
The lot boundaries in respect of the Lot 30 Apartment were shown in Plan Version 15 as follows (‘Figure 2’):
A copy of the floor plan for the Lot 30 Apartment was annexed in the schedule of inclusions in the Burger Contract, as follows (‘Burger Floor Plan’):
The lot boundaries in respect of the Lot 46 Apartment were shown in the Contracted Plan as follows (‘Figure 3’):
The lot boundaries in respect of the Lot 46 Apartment were shown in Plan Version 15 as follows (‘Figure 4’):
A copy of the floor plan for the Lot 46 Apartment, being a Type G1 apartment, was annexed in the schedule of inclusions in the Taupenas Contract, as follows (‘Type G1 Apartment Plan’):[24]
[24]The Type G1 Apartment Plan is the apartment on the right in this diagram.
The Plaintiffs submit that the effect of the amendments to the boundaries of the subject properties on the master bedroom is best demonstrated in an excerpt which appears to have been taken from amended architectural drawings for the Development, which is embedded in an email from the architect with day-to-day carriage of the Development, Joy Saikasem,[25] to Mr Kerlidis of 21 March 2021.[26] A copy of this is extracted below (‘Figure 5’):
[25]First Kerlidis Affidavit, [9]; Second Kerlidis Affidavit, [9].
[26]Exhibit TK-05 to the First Kerlidis Affidavit; Exhibit TK-05 to the Second Kerlidis Affidavit.
As I apprehend it, in Figure 5 the yellow shading shows the area of the subject property, in the first sketch being the area prior to the amendment (ie as per the Contracted Plan), and in the second sketch being the area after the amendment (ie as per Plan Version 15). Further, the email from Ms Saikasem to Mr Kerlidis of 21 March 2021 stated that the size of the subject property in the Contracted Plan was 95 m2, whereas it is 91 m2 in Plan Version 15, a reduction of 4 m2.
As can be seen from Figures 1 to 4, the boundaries, size and shape were effectively the same for the Lot 30 Apartment and the Lot 46 Apartment. Further, it appeared to be common ground that the changes made in respect of the new structural wall (explained below) affect the two apartments in the same way – Lot 46 being located on the floor above Lot 30. Therefore, the matters set out in this section below apply to both properties.
Plaintiffs’ submissions
The Plaintiffs submit that the result of the amendment to the property boundary is that:
(a) the size of the master bedroom has been reduced by the width of the corridor which opens onto the room;
(b) the doorway into the master bedroom now opens into what is, in effect, an alcove;
(c) taken in conjunction with the space required to open the door, the usable space of the master bedroom has been reduced by approximately one quarter;
(d) it is questionable whether there would now be much in the way of surplus empty space if a queen bed was located in the room (which can be seen from the Burger Floor Plan and the Type G1 Apartment Plan);
(e) the amendment has reduced the utility of the room as it would affect the ability to manoeuvre furniture into the room; and
(f) the amendment has reduced the attractiveness of the room.
It was also contended by the Plaintiffs that the utility and attractiveness of the master bedroom is affected by the Light Court Change. Although I will deal with this separately below, I accept that there is such a connection.
The Plaintiffs also submit that SC 7.6 does not render the changes to the boundary of the subject property immaterial, that is, being a reduction of 5% or less, as:
(a) to the extent that SC 7.6 purports to preclude the Court’s consideration as to the materiality of the amendments, it is void pursuant to s 14 of the SLA;
(b) the Plaintiffs’ acknowledgment is irrelevant to the Court’s assessment of whether, objectively considered in light of the facts and circumstances,[27] the amendments materially affect the property;[28]
(c) the amendment does not merely reduce the size of the property overall, but it reduces the size of an important room in the property as well as its utility and attractiveness. Even if, by reason of SC 7.6, the parties should be understood as agreeing that a reduction of 5% or less would not be material, they cannot be objectively construed as having agreed that an amendment of 5% or less to the overall size of the property would never be material no matter howsoever it was implemented and howsoever it affected the property; and
(d) there is no admissible evidence that the reduction in size of the subject property was 5% or less. The extent of the evidence as to the quantum of reduction is a bare assertion to that effect contained in Ms Saikasem’s email to Mr Kerlidis of 21 March 2021, which is inadmissible hearsay. Given what I say in paragraphs 64 and 65 below, I do not place much weight on this criticism of the evidence.
[27]Besser, [10].
[28]JD No 6 (Dava) Pty Ltd & Anor v P Battlay Holdings Pty Ltd [2011] VSC 353, [44] (‘Dava’).
In relation to SC 7.6, the Defendant properly conceded the propositions advanced by the Plaintiffs which I have summarised in sub-paragraphs (a) and (b) of the preceding paragraph.
Even if that were not the case, it is clear that the parties cannot contract out of s 9AC of the SLA[29] and therefore I agree with the Plaintiffs in that regard. Although unnecessary, therefore, to express a view, I also agree with the proposition advanced by the Plaintiffs as set out in paragraph 63(c) above.
[29]Dava, [44].
Defendant’s submissions
The Defendant accepts that there have been some minor amendments to the size and shape of the master bedroom caused by the construction of a structural wall, but says that those amendments cannot be material for the purposes of enlivening any rights a purchaser may have under s 9AC of the SLA.
Mr Kerlidis deposes that during construction, it became apparent that a structural wall was required between the boundary of Lot 30 and Lot 31 which would result in a ‘modest’ change to the size of the master bedroom in Lot 30 (the same applies for Lot 46). He says that the structural wall arose by virtue of a conflict between the architectural drawings and the structural drawings.[30]
[30]First Kerlidis Affidavit, [17]-[19]; Second Kerlidis Affidavit, [17]-[18].
The Defendant submits that a 5% reduction in size is generally regarded as tolerable,[31] and that here the reduction in size is lower than that, being a 4.39% change.[32] Counsel for the Defendant properly acknowledged that this was of limited assistance to the Court, given that parties cannot contract out of s 9AC of the SLA.
[31]Relying on Birch v Robek [2014] VCC 68; Buckley v Drk (Unreported, Supreme Court of Victoria, Teague J, 30 April 1993).
[32]Transcript, 19 July 2021, 92.14.
The Defendant submits that to accept the Plaintiffs’ position on the Master Bedroom Size and Configuration Changes, the Court would need to ignore the purpose of the inclusion of the word ‘material’ in s 9AC(2) of the SLA. The Defendant submits that the Plaintiffs’ position proceeds on the basis that any change to the size and shape of a bedroom, or indeed a lot, would be sufficient to enliven the protections of that section, notwithstanding the requirement that changes be ‘material’.
Evidentiary onus and type of evidence required
There was some dispute between the parties as to where the evidentiary onus lies and what evidence is required.
The Defendant says that the Plaintiffs would have the Court decide the issue of whether, for example, the changes to the size of the master bedroom are material solely on the basis of a visual inspection of the Contracted Plan when compared with Plan Version 15, where no evidence has been adduced by them as to what effect the changes have actually had on the size of the property. It is said that the only evidence is that which I have referred to in paragraph 59 above and Figure 5.
The Defendant also says that it is not sufficient for a purchaser to simply point to changes on the relevant plans which do show some adjustments to the layout of the design of the relevant lot, and ask the Court to draw an inference that those adjustments must be considered material, as the adjustments have had the effect that the lot as ultimately constructed was not exactly as they had contracted for.
According to the Defendant, the Plaintiffs are required to show something more than just an amendment. It says that there is simply no evidence before the Court – other than the email referred to above – which explains what effect the amendments to the boundary wall have had on the overall amenities of the subject property. It is said that effect is minimal, at best, and should not be considered of a ‘material’ nature such that the Plaintiffs are now entitled to rescind their contracts.
However, the Plaintiffs submit that the evidentiary burden on an applicant purchaser to establish that a change to a plan of subdivision materially affects the lot for which they have contracted may be established by production of the contract, the initial plan of subdivision and the plan as amended, relying on the decision of Judd J in Lockwood v PSP Investments Pty Ltd.[33]
[33] Lockwood, [44].
The Plaintiffs say that they have requested further documentation from the Defendant, such as the building plans to accompany the Plan Version 15, which have not been forthcoming.[34] They say that they have done the best they can to demonstrate the changes to the Contracted Plan, but the fact that they cannot show the exact dimensions of the changes is a product of the documentation which is available to them.
[34]First Fabris Affidavit; Second Fabris Affidavit.
Consideration
I accept the Plaintiffs’ submissions in respect of the evidence required to show the alleged changes. Here, we have the contracts, the Contracted Plan and Plan Version 15, which is what was said to be required in Lockwood. Provided those documents enable the Court to see what the changes are and to make some assessment as to their materiality, the protective purpose of s 9AC SLA “leads to the conclusion that the evidentiary burden on the purchaser, to establish materiality of a change in the plan, should not require the kind of precision contended for by the defendant.”[35] In a case such as this, I would not require the Plaintiffs to show the ‘effect’ of amendments to the Contracted Plan in terms of specific loss of space in square-metre terms, or loss of light measured in lumens, or some other more precise loss of amenity. The Plaintiffs are entitled to rely on the Contracted Plan and Plan Version 15, and to make their case on the face of those documents.
[35]Lockwood, [44].
This is particularly the case where, as we have here, the Defendant has not described the amendment to the Contracted Plan in any way to the Plaintiffs, and where such more detailed information is within the knowledge of the Defendant rather than the Plaintiffs. While there is no shift in the evidentiary burden, it resting on the Plaintiffs from first to last, it is clear that in a case such as this the burden is not as onerous as the Defendant would have it.
That there have been changes to the Contracted Plan which affect the size and configuration of the master bedroom is not controversial between the parties; rather, the issue is whether the changes are material such that the subject lot is materially affected by the changes made by Plan Version 15.
In my view, it is plain from a simple comparison between Figures 1 and 3 on the one hand and Figures 2 and 4 on the other hand that there have been changes made by Plan Version 15 to the size of the subject property, much of which has occurred to the master bedroom. The effect of the changes is readily ascertainable from the Burger Floor Plan and from the Type G1 Apartment Plan. The master bedroom has been reduced in size, which reduction is not insignificant. If the overall reduction in size to the subject property is at least 4 m2, it is also apparent that this size reduction applies exclusively, or at the very least mostly, to the size of the master bedroom.[36] A reduction in size of that amount, to a master bedroom that could hardly be described as palatial prior to the change, is clearly material.
[36]In oral submissions, Counsel for the Defendant stated that the change in size to the master bedroom was 4.93m2.
The effect of the size reduction on the master bedroom is exacerbated by the positioning of the structural wall such that a small alcove is effectively created at the entry to that bedroom. I accept the Plaintiffs’ submissions that this deleteriously affects the utility of the bedroom. One does not have to be an expert to imagine the difficulty (if not impossibility) of manoeuvring certain typical furniture (such as a bed) in and out of the room. One only has to look at the bottom drawing in Figure 5 to see this.
The positioning of the structural wall also potentially affects the amount and distribution of natural light into the master bedroom from the light court. The light court window adjacent to the master bedroom door is the only window in that room. In the Contracted Plan it appears that light was able to enter the master bedroom relatively unimpeded, save for the door when open; whereas in Plan Version 15 it would appear that light is funnelled between the door and the new structural wall. Even setting aside the Light Court Changes, which are discussed below, it is easy to imagine that one effect of the funnelling of light in this manner would be increased darkness in the south-western corner of the master bedroom across from the doorway, and perhaps an overall reduction in the natural light available in the master bedroom.
Conclusion regarding the Master Bedroom Size and Configuration Changes
I am therefore satisfied that the Master Bedroom Size and Configuration Changes are ones which materially affect the Lot 30 Apartment and the Lot 46 Apartment.
The Light Court Change
Given that the dimensions of Lot 30 and Lot 46 are the same, as is the placement of the structural wall and the light court, I will use Figures 1 and 2 and the Burger Floor Plan as the basis for the following discussion.
Has there been a change to the light court?
The Plaintiffs say that the size of the light court and, critically, its northern boundary abutting Lot 30, is clear from a comparison of the light court as depicted in the Contracted Plan (Figure 1) with the light court as depicted in Plan Version 15 (Figure 2). They say it is evident that the boundary of the light court with Lot 30 has evidently been amended. They also say that this is apparent when viewing the drawing in each of these plans, as they are drawn to scale and one can ascertain this by measuring the light court at its northern boundary in accordance with the scale.
The Defendant says that it is not clear how, or by what measurement, the Plaintiffs say that the light court has been reduced, or on what basis they say – even assuming there has been a change to the size of the light court – how that change can constitute a material amendment for the purposes of s 9AC of the SLA.
The Defendant does not accept that the size of the light court has been reduced. It says that comparing the scaled drawings for the Contracted Plan and Plan Version 15, it is apparent that the width of the light court has undergone little, if any change, and appears to have actually increased.
In my view, it is clear to the naked eye that the northern boundary of the light court has been reduced in Plan Version 15. Both plans utilise the same scale, being 1:250. But we do not have to rely on the naked eye. On my calculation, the length of the northern boundary of the light court in the Contracted Plan[37] measures 11mm on an A4 page, which is 2.750m when scaled up, whereas in Plan Version 15[38] it is 9mm which is 2.250m. This is a reduction of 0.5m.[39]
[37]Exhibit SJMT-2 to the First Taupenas Affidavit.
[38]Exhibit SJMT-3 to the First Taupenas Affidavit.
[39]It should be noted that these measurements are based on the plans as set out in the two exhibits referred to in the previous two footnotes, which were re-produced in A4 size. As I understand it, the originals of the Contracted Plan and Plan Version 15 were on A3 size paper, which would affect the measurements, such that on A3 paper the measurements are each likely to be longer. Accordingly, these measurements can only be regarded as indicative, noting that the difference is likely to be greater than that set out here. To be clear, this does not affect my conclusion as to materiality, as set out below.
Is the change to the light court material?
There being a change in the length of the northern boundary where it abuts Lot 30, the question then is whether that change is material.
The Plaintiffs say that the Burger Floor Plan shows that the northern boundary of the light court abutting Lot 30 comprises two floor to ceiling windows running the breadth of that boundary, separated by a wall containing the entry door into the master bedroom. The Plaintiffs submitted that the wall was roughly in the centre of the northern boundary of the light court, as is shown in the Type G1 Apartment Plan. A reduction in the length of that northern boundary thus reduces the size of the window either side of that wall in roughly equal proportions, and thus the light allowed into (inter alia) the master bedroom. Furthermore, the natural light will now need to travel through the alcove and the extent of its ingress into the room will be narrowed. If the door into the bedroom were opened, it would obscure much of the window.
The Plaintiffs contend that the boundary amendments (being the Master Bedroom Size and Configuration Changes and the Light Court Change) have substantially reduced the size, layout, and light allowance to the master bedroom; and consequently, its utility and attractiveness. In the context of a two-bedroom apartment, those amendments have materially and deleteriously affected the property.
The Defendant says that the Plaintiffs have not produced any evidence to substantiate any argument that there has been a material reduction in the light which would otherwise enter the master bedroom. It is also said that the windows through which the light passes sits at the end of a south facing light court, such that it is simply not the case that those windows receive uninterrupted light which would result in a substantial, or material, reduction in that light should there be any change to an internal wall.
The Defendant submits that the Plaintiffs could have engaged an expert to opine on the effects, if any, on the light to the master bedroom. The Defendant says it would have given access to the property to the expert to enable an inspection. In response, the Plaintiffs say that such an inspection would yield little useful information as there is no built state for Lot 30 as provided for in the Contracted Plan, and so the comparison with the built state as per Plan Version 15 cannot be made.
That being the case, it seems to me that an expert’s opinion would likely be based on comparing the two plans. Such a comparison would likely be more readily done from the building plans, however the Plaintiffs have not been given the building plans for Plan Version 15. For this reason and for the reasons set out in paragraphs 76–77 above concerning Lockwood, while the Court may have been assisted by an expert’s opinion as to light flow into Lot 30, in particularly the master bedroom, I do not consider the lack of such evidence to be a barrier in reaching a finding as to whether or not the Light Court Change has materially affected Lot 30. It seems obvious to me that a reduction in the size of the northern boundary of the light court where it abuts Lot 30 is likely to result in a decreased amount of light to the master bedroom. This may not be significant in and of itself, but when combined with the alcove at the entry to the master bedroom, created by the structural wall, it seems likely that the flow of light into the bedroom would be affected.
Conclusion regarding the Light Court Change
In my view, the Light Court Change has materially affected Lot 30 given the Master Bedroom Size and Configuration Changes.
The same analysis and conclusion applies to Lot 46.
Creation of the MCC Reserve
Evidence
It is difficult for me to describe the changes brought about by the Creation of the MCC Reserve without first setting out the section of the Plan showing the relevant portion of the common property which has been affected by the Creation of the MCC Reserve.
In the Contracted Plan, the relevant portion of CP 1 is shown on Diagram 4 of that plan as follows (‘Figure 6’):[40]
[40]First Taupenas Affidavit, exhibit SJMT-2.
In Plan Version 15, the MCC Reserve is shown on Diagram 4 of that plan as follows (‘Figure 7’):[41]
[41]First Taupenas Affidavit, exhibit SJMT-3.
The difference can be shortly described as this: by the Creation of the MCC Reserve, a portion of CP 1 has instead become the land labelled as Reserve No. 1 (ie the MCC Reserve), which is most of that portion of CP 1 in front of the apartments along the southern edge. Apart from a strip of land in front of the apartments on the southern edge, which remains part of CP 1, the rest of the land in front of the apartments on the southern edge has now become the MCC Reserve. As I apprehend the evidence, that land leads down to a creek.[42]
[42]As far as I understand it, the creek is not part of the land upon which the Development is located.
In respect of the portion of the land which has become the MCC Reserve, Mr Kerlidis deposes as follows:
(a) That portion of the land is subject to an easement (‘Easement Land’) in favour of the Melbourne Metropolitan Board of Works (‘MMBW’) (as it then was, now Melbourne Water) placed on the title to the land upon which the Development is located in 1971 (‘Easement’). The Easement runs along the southern edge of the land, along the northern side of the waterway known as Stony Creek;[43]
(b) The title documents indicate that the MMBW paid the sum of $17,000 to obtain the Easement;[44] and
(c) The restrictions contained in the Easement prevent any use of the Easement Land other than as landscaped reserve and only as approved by Melbourne Water. The Easement did not permit the following kind of activities to occur on the Easement Land without the permission of Melbourne Water: any construction of any nature, not even fences, any plantings of vegetation, any change of levels.[45]
[43]First Kerlidis Affidavit, [33].
[44]First Kerlidis Affidavit, [34].
[45]First Kerlidis Affidavit, [35].
Mr Kerlidis deposes that during the course of construction, there was a number of significant flooding events which led to the outcome that, with the Defendant’s approval, MCC agreed to take over responsibility for the Easement Land, with it being excised from the title with it becoming a reserve. This extended to MCC agreeing to undertake the landscaping works in accordance with a Melbourne Water approved landscaping works.[46]
[46]First Kerlidis Affidavit, [37].
Mr Kerlidis deposes that from his dealings with Melbourne Water, he understands that consent would have been extremely difficult to obtain for any ingress on the Easement Land due to its significance in preventing flooding to the land and to areas upstream and downstream of the land. He says that had the Easement Land remained part of CP 1, it would have continued to have been subject to the restrictive conditions of the Easement. He also says that all residents of the Development still retain full rights of access over the land which is now the subject of the MCC Reserve.[47]
[47]First Kerlidis Affidavit, [38]-[39].
In the Third Kerlidis Affidavit, Mr Kerlidis says that the “highly restrictive nature” of the Easement is illustrated by:[48]
[48]Third Kerlidis Affidavit, [14].
(a) Information contained on Melbourne Water’s website, which is exhibited to his affidavit;[49]
(b) MCC will not issue building permits unless written approval from Melbourne Water has been obtained;[50]
(c) Every type of use on the easement, including planting flora or building pathways requires approval.[51]
[49]Third Kerlidis Affidavit, [15]; Exhibit TK-10 to the Third Kerlidis Affidavit.
[50]Third Kerlidis Affidavit, [16].
[51]Third Kerlidis Affidavit, [17].
Mr Kerlidis states that the owner of the land has no influence or discretion as to how the land can be used; he says it is at the sole discretion of Melbourne Water. Mr Kerlidis also states that the owner’s rights over this land are restricted by the control of Melbourne Water.[52]
[52]Third Kerlidis Affidavit, [17].
Defendant’s submissions
Having set out the Defendant’s evidence regarding the Creation of the MCC Reserve, it is convenient to first set out the Defendant’s submissions followed by those of the Plaintiffs.
The Defendant does not dispute that the Plan has been amended to remove the Easement Land from CP 1 and to excise it from the title as a reserve now controlled by MCC. The Defendant does, however, dispute that the Creation of the MCC Reserve materially affects the subject lots.
The Defendant’s submissions in respect of the Creation of the MCC Reserve begin with some comments on Lockwood, as follows:
(a) In that case, Judd J was asked to consider an amendment to the relevant plan which had the effect of increasing the size of common property. His Honour held (referring with approval to the decision in Besser) that a ‘material affect’ for the purposes of s 9AC of the SLA did not need to the detriment of the lot owner, before finding that an increase in the size of common property, in that particular instance, constituted a material affect entitling the purchaser to rescind the contract.
(b) However, Lockwood should not be taken as establishing a principle that any material change in the size of common property necessitates a finding that there has been an equivalent material change to lot for the purposes of s 9AC of the SLA.
(c) In Lockwood, the creation of the additional common property was in lieu of an area which had been allocated as carparks, to be privately owned. The area in question was one which had a practical usage, and one over which the owners corporation could exercise effective control.
(d) A proper analysis of the decision in Lockwood highlights the emphasis his Honour placed on the “bundle of rights”[53] that attach to a lot. Referring to s 30(1) of the Owners Corporation Act 2006, his Honour noted that “following the amendment, the entitlement of each lot owner of an apartment lot would be different to their entitlement prior to the amendment”.[54] Read in the context of the Owners Corporation Act, that entitlement should be seen as the entitlements which are placed in the hands of a purchaser (as a member of the owners corporation) to exercise some form of control, or “rights” over the common property. So much bears out in the considerable emphasis his Honour placed on the ability of parties to acquire a lease over the area which now had become common property.[55]
(e) What was critical in Lockwood was the effect on the rights of the respective lot owner which may be affected by a change in the size of common property. What those rights may be are entirely determined by the nature of the common property in question and, in particular in this present case, what rights may have been attached to that common property.
[53]At [42].
[54]At [42].
[55]At [44].
In respect of the Easement Land, the Defendant submits that the ‘bundle of rights’, together with the practical usage of that land, have suffered no material change – whether beneficial or detrimental – such that an entitlement to rescind the Burger Contract or the Taupenas Contract can arise.
The Defendant submits that any rights which a lot owner (as a member of the owners corporation) may have exercised over that part of what was once common property was severely limited, to the extent that those rights (in a sense of exerting control and ownership) were effectively non-existent.
The Defendant also contends that Mr Kerlidis has deposed to the effect the Easement had on that part of the common property from his personal knowledge as one of the directors of the Defendant which developed the land, that effect being a complete lack of control to do anything with the land other than with the consent of the relevant authority.
The Defendant says that the only practical use – being simply walking over the Easement Land or enjoying the visual amenity - which any resident of the Development could make of the area now the subject of the reserve when it was once listed as common property is still present, and has not suffered any change.
The Defendant accepts that there has been a reduction in that area of common property as set out in the Plan, but submits that the factual scenario must be distinguished from that in Lockwood.
In conclusion, the Defendant says that no practical change has occurred to the ‘bundle of rights’ which attach to Lots 30 and 46 and, accordingly, there can be no ‘material’ change which affects those lots.
Plaintiffs’ submissions
The Plaintiffs point to the endorsed building plans for the Development annexed to the Burger Contract and the Taupenas Contract as showing the Easement Land as landscaped.[56] They also point to the owners corporation schedule to the Contracted Plan as showing that all of the lots in the Development are members of owners corporation no. 1 (‘OC 1’), and that CP 1 (including the Easement Land) is vested in those members.[57]
[56]First Taupenas Affidavit, exhibit SJMT-1.
[57]First Taupenas Affidavit, exhibit SJMT-1; exhibit SJMT-2.
The Plaintiffs refer to Lockwood, relying on the same principle as summarised in paragraph 107(a) above.
The Plaintiffs reject the Defendant’s contention that the Creation of the MCC Reserve does not materially affect the subject lots due to the limited utility to the members of OC 1 of the Easement Land.
In this regard, the Plaintiffs submit that:
(a) There is no admissible evidence that the Easement Land was subject to an easement with the terms which Mr Kerlidis asserts. It is said that Mr Kerlidis’ assertions are inadmissible hearsay. Rather, the Plans merely show that the Easement Land was subject to an easement (the terms of which are not apparent). Mr Kerlidis’ inadmissible hearsay evidence is thus said to be contrary to the direct evidence before the Court.
(b) Even if the Easement Land could only be used as an accessible landscaped area for walking, the members of OC 1 had an exclusive right to use that landscaped area for walking which was lost (that is, the exclusivity of the right) when it was excised from the title to the Development.[58]
(c) Even if the Easement was as restrictive as asserted by Mr Kerlidis, by excising it from the title, the members of OC 1 have lost the possibility of seeking to vary the terms of the easement.[59]
(d) Furthermore, if Mr Kerlidis’ evidence is accepted, it may be inferred that there was some benefit to MCC taking over the Easement Land and undertaking required landscaping. Presumably, it should be inferred, thereby relieving OC 1 from a correlative burden. The relief of that burden would materially affect the subject properties by affecting the bundle of rights and obligations that went with the properties. An amendment which has a materially beneficial effect on a lot nonetheless enlivens the right to rescind at s 9AC(2) of the SLA.
[58]First Kerlidis Affidavit, [37].
[59]The Plaintiffs say that to the extent that Mr Kerlidis’ “understanding” at Kerlidis Affidavit [38] comprises an opinion (as opposed to hearsay), it is also inadmissible for that reason: s 76 of the Evidence Act 2008 (Vic).
The Plaintiffs conclude by submitting that the excision of the Easement Land from CP 1 materially affected Lots 30 and 46, by materially affecting the rights and obligations attaching in Lots 30 and 46 as members of OC 1.
Consideration
It is to be noted that the Plaintiffs’ written submissions were prepared prior to the Teege Affidavit being filed, thus at that time they did not have the terms of the Easement itself.[60] The Plaintiffs’ submissions about the admissibility of Mr Kerlidis’ evidence therefore need to be read in that light.
[60]A copy of the Easement is exhibited to the Teege Affidavit: Exhibit JMT-01.
The actual terms of the Easement were referred to in oral submissions.
In summary and based on my reading of the Easement, the Easement gives Melbourne Water full and free right and liberty to enter and re-enter upon the Easement Land, full and free right and liberty power and authority for Melbourne Water to dig cut and excavate for the purpose of laying down building constructing or placing therein any main drain, main drains, main drainage works, sewers, branches, connections, pipes, manholes, vent columns, inspection shafts or other works or undertakings in connection therewith or such other works or undertakings as may from time to time be deemed necessary by Melbourne Water in connection with or in pursuance of the powers and authorities conferred on Melbourne Water.[61]
[61]Exhibit JMT-01 to the Teege Affidavit.
The extract from Melbourne Water’s website as exhibited to the Third Kerlidis Affidavit does not support all of the assertions made in that affidavit as to the nature of the restrictions. It supports Mr Kerlidis’ evidence that consent from Melbourne Water is required before applying for a building permit, stating that:[62]
You need our formal approval before you can build or work on any new or existing structure, on or near our assets.
….
Councils, authorities and utility companies need our formal approval before working near our assets.
[62]Exhibit TK-10 to the Third Kerlidis Affidavit.
The information contained in this extract is generic and does not, in substance, go beyond what I have cited in the previous paragraph. There appear to be a number of links to different guidelines and application forms, however these have not been extracted.
I therefore place no weight on Mr Kerlidis’ assertions in his affidavits as to the effect of the Easement unless supported by the documentary evidence available or unless he has specifically identified a source for such assertion. Further, statements such as the restrictions imposed by the Easement being “highly restrictive” are conclusionary in nature.
In any event, my view about Mr Kerlidis’ evidence in this regard is not decisive in determining whether or not the Creation of the MCC Reserve materially affects Lots 30 and 46. This is because I accept the Plaintiffs’ submission that even if Mr Kerlidis’ evidence is accepted, the lot owners’ rights in respect of the Easement Land are affected and I consider the effect to be material. After all, it is the bundle of rights attaching to a lot which are affected. On the Defendant’s own submission, what is affected here are the lot owners’ rights, through OC 1, to exercise some form of control or rights over the Easement Land.[63]
[63]See paragraphs 107(d) and (e) above.
Even if the lot owners’ rights were as restricted as Mr Kerlidis contends, such that their rights were confined to walking over the land or enjoying the visual amenity, those rights were exclusive to the lot owners save for the rights of Melbourne Water to come on to the Easement Land and carry out works there. By the excision of the Easement Land (which I note appears to be a sizeable proportion of CP 1 if one disregards the car parking floors of the Development) from Plan Version 15 and the Creation of the MCC Reserve, any ‘rights’ the lot owners have to walk over the land are no longer proprietary and are no longer exclusive, and are dependent upon what access MCC provides. There is no evidence before me as to any conditions attached to the reserve now that it belongs to MCC. There is a meaningful and significant distinction between the ability to do something because MCC permits it, and the right to do something derived from the lot owners’ membership of OC 1 (it being the owner of the Easement Land until the Creation of the MCC Reserve).
Conclusion regarding the Creation of the MCC Reserve
The lack of exclusivity alone (excepting for the rights conferred by the Easement) is a change which materially affects Lots 30 and 46 and therefore it is a basis upon which the Burgers and Taupenas & Velasquez can exercise their rights under s 9AC(2) of the SLA.
Creation of CP 2
Evidence
In respect of the Creation of CP 2, Diagram 4 of each of the Contracted Plan and Plan Version 15 are relevant. These are Figures 6 and 7 above.
The relevant space in each respect is the area to the right of Lot 1 and the stairwell (for convenience, I will refer to this as ‘Area Two’).
On the Contracted Plan, Area 2 is shown as being part of CP 1. On the building plans contained in each of the vendor’s statements for the Burger Contract and the Taupenas Contract, Area Two is shown as a landscaped area.[64] By Plan Version 15, Area Two is no longer part of CP 1 but is now part of CP 2.
[64]Exhibit SJMT-1 to the First Taupenas Affidavit.
As mentioned above, all of the lot owners of the Development are members of OC 1 which has the rights in respect of CP 1. However, Plan Version 15 shows that only 16 of the lot owners, not including Lots 30 and 46, are members of owners corporation no. 2 (‘OC 2’) and only members of OC 2 have any rights in respect of CP 2.[65]
[65]Exhibit SJMT-3 to the First Taupenas Affidavit.
Accordingly, the Creation of CP 2 has had the effect of removing any rights members of OC 1 had to Area Two unless they are members of OC 2. This is not a matter of dispute between the parties: rather, the dispute is as to whether this materially affects Lots 30 and 46.
As to the creation of CP 2, Mr Kerlidis deposes that:
(a) A number of lots in the Development are or will be occupied by participants in the National Disability Insurance Scheme (‘NDIS’). During the course of construction, it was apparent to him that an area of the roof to the ground level of the building could be re-purposed and adapted to create an extra terrace which could be dedicated to the NDIS residents;[66]
(b) Area Two was a concrete lid to the concrete basement and, in the original plans, was to be inaccessible to all residents;[67] and
(c) Area Two was, and is, approximately 80m2 in size.
[66]First Kerlidis Affidavit, [41].
[67]First Kerlidis Affidavit, [41].
Submissions
The parties’ submissions in respect of the Creation of OP 2 are the same as those set out above in respect of the Creation of the MCC Reserve: both parties dealt with these issues in the same sections of their written outlines and therefore, apart from any submissions made in respect of only one of these issues, the submissions apply to both issues.
In respect of the Creation of OP 2, the Defendant submits that as Area Two was originally entirely inaccessible by all residents, it was therefore not available in any practical sense to be utilised or enjoyed by a lot owner under the Contracted Plan. Accordingly, no practical change has occurred to the bundle of rights attaching to Lots 30 and 46 in respect of Area Two.
The Plaintiffs submit that there is no admissible evidence that Area Two was inaccessible to residents, as Mr Kerlidis’ evidence is inadmissible hearsay and contrary to the direct evidence before the Court, Area Two being shown on the building plans as a landscaped area.
The Plaintiffs submit that the loss to OC 1 from the Creation of OC 2 is clearly apparent. They say that even if it is accepted that Area Two as it stood was inaccessible to residents, OC 1 lost the ability to deploy the space for the use for which it has ultimately been deployed, being a terrace. The rights in respect of Area Two belonging now only to members of OC 2, enjoyment of that terrace is lost to members of OC 1 who are not also members of OC 2. The Plaintiffs say that this amendment materially affects Lots 30 and 46 as members only of OC 1.
Consideration
I do not accept the Plaintiffs’ submission that Mr Kerlidis’ evidence that Area Two was inaccessible is inadmissible hearsay: as a director of the Defendant and heavily involved in the Development, I accept that this is something within his knowledge. I also do not accept the submission that this is contrary to the direct evidence before the Court, being the building plans. Neither the Contracted Plan or the building plans contained in the vendor’s statement appear to reveal whether or not Area Two was inaccessible to all residents. The building plans certainly show it as a landscaped area, but that is as far as it goes.
Nonetheless, even if Area Two was to be inaccessible to all residents, I accept the Plaintiffs’ submission that Area Two being removed from CP 1 and ‘placed’ in CP 2, to which only those 16 lots belonging to OC 2 have any rights, materially affects Lots 30 and 46. This is because those lots no longer have any rights in respect of Area Two, including to any usage of Area Two should it no longer be inaccessible, which has now become the case.
True it may be that Area Two is a relatively small area of land in the context of this Development, however the loss of the use of a terrace or the ability to create a terrace, is not insignificant.
Conclusion regarding the Creation of CP 2
Accordingly, I consider that the Creation of CP 2 and the rights in respect of it being confined to those lot owners who are members of OP 2 has materially affected the subject properties.
Lot 30 Car Space Change
Evidence
Pursuant to the Burger Contract, the Burgers also contracted for the right to use a specific allocated car-stacker space.[68]
[68]First Burger Affidavit, exhibit MB-1, particulars of sale and cl. 4.
On the Contracted Plan, that allocated space appears in diagram 3 for the upper basement level.[69] On Plan Version 15, the allocated space appears in diagram 1 for the sub-basement level.[70]
[69]Burger Affidavit, exhibit MB-1; exhibit MB-2.
[70]First Burger Affidavit, exhibit MB-3.
Mr Kerlidis explains the practical change as follows:
… the assigned carpark for lot 30 remains the fifteenth carpark along the western boundary. Version 15 has simply changed the position of the allocated car space (for lot 30) from the top rack of the stacker to the bottom rack of the stacker …[71]
[71]First Kerlidis Affidavit, [29].
The Burgers rely on photos of the car stackers on-site which they say show that the height difference between the lower and upper space in the car stacker is material.[72] The photos depict a relatively small car in the lower space with little clearance above the vehicle.
[72]Second Burger Affidavit, exhibit MB-1.
Burgers’ submissions
The Burgers’ position is that the change in position from the top rack of the stacker to the bottom rack of the stacker is material, principally as the clearance area above the stacker in the top position (3m height) is more than twice that in the bottom position (1.45m height). They say that this can be seen in cross-section A-A of Plan Version 15,[73] and the plan of surface level works at annexure 3 of the Burger Contract, which shows a difference in the depth of the basement versus the sub-basement of 1.45m.[74]
[73]First Burger Affidavit, exhibit MB-3.
[74]First Burger Affidavit, exhibit MB-1.
The Burgers submit that in Ausgrand Pty Ltd v Stephanie Michele Freeland-Small,[75] Judge McNamara of the Victorian County Court considered whether a reduction of a car park from 2.73m to 2.6m in width (a reduction of 13cm) was material, holding that:[76]
[i]t is difficult to accept that one’s lot is not materially affected, and adversely for that matter, by having its car park transformed from one of superior dimensions to the minimum statutory requirement.
[75][2016] VCC 942 (‘Ausgrand’).
[76]Ausgrand, [46].
The Burgers say that similarly in this case, the dimensions of the car space to which they had a right of use have been diminished in size. The reduction in dimensions is such that it may affect the use of the car space.
It is therefore said by the Burgers that the amendment materially affected the rights associated with Lot 30 in a detrimental fashion, and thus materially and detrimentally affected the lot.
Defendant’s submissions
The Defendant rejects the Burgers’ contention that the reallocation of the Lot 30 Car Space from the top to the bottom of the stacker has had the effect of reducing the available height of the allocated carpark from 3m, to a height of only 1.45m.
In relation to the photographs relied upon by the Burgers, the Defendant says that:
(a) the lower car stacker is not, and cannot be, restricted to a height of 1.45m. If that was the case, the car in question would need to be of a height little more than 1m, a most unlikely proposition; and
(b) the photographs have been taken from the lower perspective, which plainly inflates any minor difference which might exist between the clearances on the lower level of the car stacker when compared with the upper level.
The Defendant relies on the Third Kerlidis Affidavit, where it is noted that the maximum height available to the Burgers could never be 3m, as that measurement ignores the design parameters for the car stacker but also the concrete slab which abuts the roof as well as pipes which further decrease the available height to no more than 1.80m.[77]
[77]Third Kerlidis Affidavit, [6].
Further, Mr Kerlidis deposes that the design specifications and installations are such that the maximum clearance heights is in fact 1700mm for the lower deck, and 1800mm for the upper level.[78]
[78]Third Kerlidis Affidavit, [10].
The Defendant also relies on the Contracted Plan, wherein it is stated that:
All internal columns, service ducts, pipe shafts and cable ducts, service installations & car stacking mechanisms within the building are deed to be part of common property No. 1.
The positions of these columns, ducts, shafts or installations or car stacking mechanisms may not been [sic] shown on the diagram contained herein.
The Defendant says that this means that there was never a particular size of the Lot 30 Car Space contained in the Burger Contract.
Referring to the same passage of Ausgrand relied upon by the Burgers, the Defendant describes this as limited dictum that changes to the dimensions of a car space may constitute a material change for the purposes of s 9AC of the SLA,[79] and that discussion is in the context of a reduction in a car space to the statutory minimum size, in other words, the smallest car space that can be legally provided. The Defendant says that there is no evidence that any such change has occurred.
[79]Ausgrand, [46].
The Defendant submits that any changes to the Lot 30 Car Space have had no material effect on the lot which was contracted for, and accordingly this aspect of the Burgers’ case should be dismissed.
Consideration
I do not accept the Burgers’ case that the change in the Lot 30 Car Space from the top of the stacker to the bottom of the stacker has reduced the height of the car space from 3m to 1.45m. I prefer Mr Kerlidis’ evidence in this regard that the maximum height for the top deck of the stacker is 1.8m and for the lower deck is 1.7m. Further, I accept the Defendant’s submission as I have set it out in paragraphs 156 and 157 above. In particular, I do not consider that Ausgrand stands for a general proposition that even a minimal change to the size of a car park lot is or would usually be a material change.
During the course of the hearing, Counsel for the Burgers stated that the top deck of the stacker is more desirable than the bottom deck: this appeared to be irrespective of the clearance height issue. There was no evidence to support this proposition and therefore I have not taken it into account.
Conclusion regarding the Lot 30 Car Space Change
Consequently, I do not regard the Lot 30 Car Space Change as one which materially affects Lot 30 and therefore I do not consider this amendment to be one upon which the Burgers can rely to rescind their contract.
Lot 46 Car Park Change
Evidence
Pursuant to the Taupenas Contract, the Lot 46 Car Park as shown on the Contracted Plan is a stand-alone car park on the ramp down the basement, one space in front of the car stackers.[80] The dimensions of the Lot 46 Cark Park on that Plan has dimensions of 2.6m by 5.52m, that is 14.35m2.[81]
[80]First Taupenas Affidavit, exhibit SJMT-2.
[81]First Taupenas Affidavit, exhibit SJMT-2.
By Plan Version 15, the dimensions of the Lot 46 Car Park were reduced to 2.6m by 4.9m, that is, 12.74m2.[82]
[82]First Taupenas Affidavit, exhibit SJMT-3.
This is a 0.6m reduction in length, and a 1.61m2 reduction in area. That is an 11% reduction overall.
Taupenas & Velasquez submissions
Taupenas & Velasquez refer to the same passage of Ausgrand as set out above, where there was a width reduction in the car park from 2.73m to 2.6m in width (a reduction of 13cm) which was held to be material. They say that the reduction in the present case exceeds that in Ausgrand, the quality of the car park is similarly diminished, and the amendment materially affects Lot 46 in a deleterious way.
Defendant’s submissions
The Defendant accepts that there has been a reduction in the size of the Lot 46 Car Park, that reduction should not be seen to have any material effect on that lot.
Again, the Defendant describes Ausgrand in the same way as set out above and seeks to distinguish it on the same basis as it sought to in the Burger Proceeding.
The Defendant submits that there is no evidence that any such change (i.e. a reduction to the statutory minimum) has occurred here. Rather, the width has remained the same, and all that has occurred has been a relatively slight reduction in the length of the car park. There is no suggestion that the reduction has any material effect on the type of cars which may be parked in that location.
The Defendant says that any changes to the Lot 46 Car Park have no material effect on the lot which was contracted for, as the car park is still of a substantial length, and accordingly this aspect of the Taupenas & Velasquez case should be dismissed.
Consideration
There is no evidence before me as to what the statutory minimum size is for a car park. Therefore, I do not know if the length of the Lot 46 Car Park has been reduced to the statutory minimum or not. Consequently, the statements made in Ausgrand are not particularly useful to me in assessing whether the Lot 46 Cark Park Change is to be regarded as material.
Nor is there any evidence before me which goes to the effect of the Lot 46 Car Park Change. I do not know, for example, whether it results in fewer types of cars being able to utilise that car park. Without knowing that or any other effect of the change, other than that the car park is not as long, I cannot be confident that the Lot 46 Car Park Change has had a material effect on Lot 46 and therefore I am not satisfied that it is a change which materially affects the subject property. This is one instance where more than a comparison of the Contracted Plan and Plan Version 15 is required in order to assess whether the amendment is one which materially affects the subject lot. Unlike the Master Bedroom Size & Configuration Changes, and also the Light Court Changes, the effects of the reduction in length of the Lot 46 Car Park are not apparent from the plans themselves (other than the reduction in length itself, of course). I cannot discern the impact of this change.
Conclusion regarding the Lot 46 Car Park Change
Therefore, I do not regard the Lot 46 Car Park Change as one which materially affects Lot 46 and therefore I do not consider this amendment to be one upon which Taupenas & Velasquez can rely to rescind their contract.
Taupenas Proceeding – special condition 31
Are Taupenas & Velasquez entitled to rely on SC 31 to rescind the Taupenas Contract?
As I have found that material changes have been made to the Plan which materially affect Lot 46, it is not strictly necessary for me to express a view as to the rescission of the Taupenas Contract pursuant to SC 31. However, out of deference to the evidence and submissions of the parties, I will say something brief about it.
The Type G1 Apartment Plan is depicted in the drawing at paragraph 57 above.
Taupenas & Velasquez submit that even if the amendments to the Plan did not materially affect Lot 46, they were in any case entitled to rescind the Taupenas Contract pursuant to SC 31 thereof, and did so on 30 March 2021.[83]
[83]First Taupenas Affidavit, [11], exhibit SJMT-5.
Taupenas & Velasquez submit that Plan Version 15, that is, the version of the Plan as ultimately finalised, agreed, and certified by the appropriate authorities, did not contain a Type-G1 Apartment. They say that it contained something different, for the same reasons as set out above when discussing the Master Bedroom Size and Configuration Changes and the Light Court Change. They also say that the Defendant delivered a different apartment than the one contracted for, and the right to terminate pursuant to SC 31 was enlivened.
Taupenas & Velasquez also submit that if the Court declares that they were entitled to rescind the Taupenas Contract (either pursuant to s 9AC(2) of the SLA or pursuant to the contract), it follows that the deposit must be repaid.[84]
[84]Subsection 9AF(1)(b) of the SLA; see also s 26 of the SLA.
The Defendant rejects the submissions made by Taupenas & Velasquez in respect of whether they had a right to rescind their contract under SC 31.
It is said that it is not clear on what basis Taupenas & Velasquez say they were not delivered a Type G1 Apartment, other than the amendments to the size of the master bedroom which are dealt with extensively above. The Defendant submits that those amendments do not have the effect of changing the apartment from a Type G1 Apartment.
In my view, it is clear that the Defendant has not delivered a Type G1 Apartment to Taupenas & Velasquez. So much is apparent from looking at the Type G1 Apartment Plan and Figure 3, for the same reasons as I expressed above.
Have Taupenas & Velasquez validly exercised their rights under SC 31?
The Defendant goes on to submit that even if it has not delivered a Type G1 Apartment to Taupenas & Velasquez, they are not entitled to rescind the Taupenas Contract under SC 31.
The Defendant says that this is because SC 31 requires that Taupenas & Velasquez exercise any rights in this respect within seven days of being notified of a Type G1 Apartment not being delivered.
In this regard, the Defendant refers to the evidence that Taupenas & Velasquez were provided a copy of Plan Version 15 on 15 March 2021,[85] and yet only purported to exercise any rights under SC 31 on 31 March 2021.[86] Accordingly, says the Defendant, any rights which may have existed under SC 31 had elapsed by the time Taupenas & Velasquez purported to exercise those rights.
[85]First Taupenas Affidavit, [10].
[86]First Taupenas Affidavit, [12].
Taupenas & Velasquez reject this submission. They say that the reference to seven days in SC 31 is to the time by which the Taupenas Deposit is to be refunded, and not to the timing of the act of rescinding the Taupenas Contract pursuant to SC 31.
I accept Taupenas & Velasquez’s submissions in this regard. SC 31 relevantly provides that if a Type G1 Apartment “is not allowed, then the purchaser has the right to end this contract and all monies in full will be refunded to the purchaser within 7 days of being notified.” This is the only reference to notification in SC 31: importantly, there is nothing in that provision stating that the vendor has to give notice that a Type G1 Apartment is not being supplied for example. The notification referred to in SC 31 is of the purchaser ending the contract, and therefore the 7 days applies to the refund of all monies paid, not to the timing of the purchaser rescinding the contract.
Accordingly, Taupenas & Velasquez had the right to rescind the Taupenas Contract pursuant to SC 31 and did so in accordance with its terms.
Alternative relief – discretion to order return of deposit under s 49(2) of the PLA
Plaintiffs’ submissions
The Plaintiffs submit that an extensive review of the legislative history and purpose of s 49(2) of the PLA, being the discretion to order the refund of a deposit, decisions considering and applying the provision and its UK and New South Wales equivalents, and the applicable principles distilled therefrom, is set out in the recent decision of Riordan J in Simcevski v Dixon (No 2).[87]
[87](2017) 53 VR 357, [46]-[121], see particularly [118]-[121] (‘Simcevski’).
The Plaintiffs say that even if the amendments to the Plan did not materially affect the subject properties, the Court should exercise its discretion to order the repayment of the deposits paid by the Burgers and Taupenas & Velasquez.
The Plaintiffs contend that the present circumstances are exceptional,[88] as:
(a) As to the Defendant’s conduct, the Plan evidently went through a number of revisions between the Contracted Plan and Plan Version 15. The Defendant did not advise the Plaintiffs of any of those revisions. Plan Version 15 contained a number of amendments affecting the subject properties. The Defendant did not specifically bring those amendments to the attention of the Plaintiffs – indeed, it simply advised that them that the Plan had been lodged for registration. The Defendant has still failed to provide proper detail as to the amendments made to the Plan.
(b) There is no suggestion that the Plaintiffs contributed to the position in any way (they were entirely ignorant of the amendments at all relevant times).
[88]Simcevski, [120]-[121].
The Plaintiffs also submit that this case is analogous to that in Lockwood, in which Judd J would have ordered the return of a deposit had His Honour been called to do so (his Honour instead found that the purchasers were entitled to rescind per s 9AC(2) of the SLA).[89]
[89]Lockwood, [49]-[52].
Defendant’s submissions
The Defendant refers to Aussie Invest Corp Pty Ltd v Pulcesia Pty Ltd, Dodds-Streeton J reviewed on the authorities on s 49(2), where her Honour stated:[90]
The authorities indicate that although the court’s discretion under s 49(2) is unfettered, its exercise is “the exception rather than the rule” and will not be justified merely because the vendor will obtain a windfall. In Mallett v Jones the Full Court of the Supreme Court of Victoria observed that the express terms of the parties’ agreement governed their respective rights on default, and stated that “in any event the matter is in the court’s discretion which, in most cases where the vendor has rescinded by reason of the purchaser’s default, would probably not order the return of the deposit.” That approach was followed in Poort v Development Underwriting (Victoria) Pty Ltd and Bantick v Boss Properties. In Mulkearns v Chandos Developments Pty Ltd (No 4) Young CJ in Eq extensively discussed the equivalent New South Wales provision equivalent to s 49(2). His Honour noted that “In Romanos v Pentagold Investments Pty Ltd … the High Court reiterated the importance of a deposit as security for the due performance of a contract and reversed Windeyer J’s decision that the deposit ought to be refunded to a purchaser under the sub-section. Again, the purchasers were developers and the contract failed through no fault of the vendors.
[90][2005] VSC 362, [322]; citations omitted.
The Defendant submits that there is nothing ‘exceptional’ in either proceedings which would enliven the Court’s discretion. The Defendant says that the Plaintiffs have simply sought to rescind their respective contracts on an erroneous basis, that rescission has been rejected as ineffectual, and they should be required to settle on those contracts.
Consideration
Given my findings in respect of the Plaintiffs’ rights to rescind their respective contracts, it is not necessary for me to consider whether to grant relief on the alternative basis sought, being the exercise of the Court’s discretion under s 49(2) of the PLA to order the return of the deposits to the Plaintiffs.
In brief, I will say that if I had not found that there had been changes to the Plan which materially affected the subject properties, then I would not have exercised my discretion to order the return of the deposits as I do not accept that exceptional circumstances arise here which would justify the exercise of that discretion.
Conclusion
For the reasons set out above, I have concluded that:
(a) The following changes, individually and in combination, materially affected the subject lots:
(iii) The Master Bedroom Size and Configuration Changes;
(iv) The Creation of the MCC Reserve; and
(v) The Creation of CP 2;
(b) The Light Court Change, in combination with the Master Bedroom Size and Configuration Changes, has materially affected the subject lots;
(c) The following changes, whether individually or in combination with any other of the alleged changes, have not materially affected the subject lots:
(i) The Lot 30 Car Space Change;
(ii) The Lot 46 Car Park Change.
Accordingly, the answer to the Question is Yes, and the Plaintiffs are entitled to declarations that they lawfully rescinded their respective contracts.
I have also concluded, for the reasons set out above, that Taupenas & Velasquez are entitled to rescind the Taupenas Contract pursuant to SC 31 and that they have lawfully done so.
The proceedings will be listed for 10:30am on 20 August 2021 for the making of final orders, including costs, and including as to interest earned on the Burger Deposit and the Taupenas Deposit, and interest pursuant to s 58 of the Supreme Court Act 1986 (Vic) earned in respect of the deposits from a specified date. I have refrained from expressing a view as to either aspect regarding interest, as the Defendant indicated that it wished to be heard further on this point once the answer to the Question had been delivered, and I indicated at the conclusion of the hearing that I accepted that course.
If the parties reach consent as to the final orders (including as to costs and interest) prior to the hearing date, they may submit proposed consent orders to my Chambers for consideration. If they do not reach consent, then each party is required to submit to my Chambers, by no later than 4:00pm on 19 August 2021, their preferred form of order and a brief submission, of no longer than 5 pages. Unless there are matters peculiar to only one of the proceedings, the same submissions are to be submitted in respect of both proceedings.
5
0