Charalambous v Amuplex Pty Ltd
[2012] VCC 1552
•13 November 2012
| IN THE COUNTY COURT OF VICTORIA | Revised Not Restricted |
AT MELBOURNE
CIVIL DIVISION
COMMERCIAL LIST
GENERAL DIVISION
Case No. CI-11-03939
| DESPINA CHARALAMBOUS | Plaintiff |
| v | |
| AMUPLEX PTY LTD (ACN 124 037 869) | Defendant |
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JUDGE: | Her Honour Judge Kennedy | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 17, 18, 19 and 22 October 2012 | |
DATE OF JUDGMENT: | 13 November 2012 | |
CASE MAY BE CITED AS: | Charalambous v Amuplex Pty Ltd | |
MEDIUM NEUTRAL CITATION: | [2012] VCC 1552 | |
REASONS FOR JUDGMENT
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Catchwords: Contract – Alleged breaches of terms of settlement in relation to a joint venture involving subdivision – whether terms breached – appropriate relief – whether damages for loss of rent, outstanding works and distress are sustainable.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr P. Barton | Mulcahy Churkovich |
| For the Defendant | Mr T. Sowden | Gary Prince Solicitor |
HER HONOUR:
Background
1 In this case, the plaintiff claims that there have been various breaches of terms of settlement entered on 3 October 2008 between the plaintiff and the defendant.
2 Those terms were executed to settle a dispute under a joint venture for the development of the plaintiff’s property situated at 34 Holland Road East Ringwood (the property). The joint venture involved the subdivision of the property, with the construction of 2 units and renovation of the existing premises.
3 A number of issues have been addressed since the current proceeding was issued in August, 2011.
4 However, the remaining issues are whether or not the plaintiff is entitled to the following relief:
a) An order that the defendant take all necessary steps to obtain registration of a plan of subdivision which was certified by Maroondah City Council;
b) An order for damages constituted by an alleged loss of rent;
c) Damages in respect of outstanding building works to the value of $10,590 and an additional $150 for a poorly done fascia; and
d) Damages for injured feeling, disappointment, inconvenience and mental trauma.
Background facts
Events prior to terms of settlement
5 In about 1987, the plaintiff purchased the property with her husband and lived there with her family (including 3 daughters). Following a divorce, the plaintiff became the sole registered proprietor of the property which was later subject to a registered mortgage to Perpetual Trustees Victoria Ltd to secure a loan of approximately $200,000 (the first mortgage).
6 In early 2007, the plaintiff commenced discussions to enter a joint venture arrangement to subdivide her property with her brother (though he later dropped out). At that time she also came into contact with Mr Louis Moutidis, builder, and, through him, Mr Achilles Tzelepis, developer and director of the defendant.
7 By letter of 25 January 2007, Maroondah City Council granted a planning permit to allow the construction of 2 dwellings and retention of the existing dwelling in accordance with the endorsed plans and subject to various conditions. The permit was to expire if the development was not completed within 2 years of commencement of the development.
8 A formal Joint Venture Agreement was then entered into on 2 April 2007, between the plaintiff, the defendant developer and a builder, Landmark Builders Pty Ltd.
9 The Joint Venture Agreement provided, inter alia, that the plaintiff was to enter a contract of sale of the property with the defendant developer. In return she was to receive the (improved) Lot 3 and 40% of the net proceeds of Lot 2 (clause 3).
10 Upon signing, the developer was to pay all outstanding loan repayments up to the date of the agreement and to so continue until the commencement of the development (clause 7).
11 Upon settlement of the contracts of sale the plaintiff was to ensure that unencumbered title passed to Amuplex (clause 4).
12 A building contract dated 22 June 2007 was tendered into evidence. The parties were described as the defendant as owner, and “Landmark Building Services Pty Ltd – Kim Moutidis” as builder. The plaintiff’s evidence was that Kim Moutidis was the son of Louis Moutidis.
13 By transfer dated 1 August 2007 the plaintiff executed an instrument of transfer of the property to Amuplex (though, as will be seen below, this instrument was not registered until 2009).
14 On 26 October 2007 a building permit was granted which provided that building work was to commence by 26 October 2008 and be complete by 26 October 2009.
15 It appears that works commenced in the second half of 2007 and apparently before 14 November 2007.[1]
[1] See Letter to Amuplex from Maroondah City Council dated 4 May 2010, advising of expiration of Planning Permit M/2006/445.
16 On 31 October the Maroondah City Council enclosed and endorsed the landscaping plan and requested that landscaping works be completed prior to occupation.
17 By mortgage dated 14 December 2007 the plaintiff gave a second mortgage to Peter Sangster to secure an advance of $49,500, which was registered on 3 January 2008 (the second mortgage).
18 However, by notice of default dated 22 May 2008, Mr Sangster served a notice of default on the plaintiff.
19 By mid 2008 the plaintiff had become unhappy with the project, including the lack of progress and rubbish being left on the property. By letter dated 7 July 2008 her solicitors, Coleman Lawyers, elected to terminate the joint venture agreement.
20 By this stage, it appeared that works were fairly advanced and had in fact reached lock up stage by July 2008 according to Mr Tzelepis.
21 Meanwhile, the plaintiff was under some financial strain such that Mr Sangster obtained a default judgment for possession against her on 26 August 2008, which was later followed by a notice to vacate by 17 October, 2008.
22 In September 2008, the defendant commenced a proceeding in this court seeking an injunction for the performance of the joint venture agreement.
23 It was in this context that the terms of settlement were executed on 3 October, 2008.
Terms of settlement
24 The Terms of Settlement provided that Ms Charalambous (as defendant at that time) would sell the property to Amuplex (as the then plaintiff) for $300,000 subject to various adjustments (clause 1).
25 Clause 2 provided a somewhat complex calculation for the “$300,000 consideration” and provided as follows:[2]
[2] For ease of reference, Charalambous has been substituted as defendant and Amuplex for plaintiff.
As consideration of the $300,000 Amuplex will pay within 45 days from the date hereof all liabilities relating to the First and Second Mortgage currently outstanding on the said property as follows:
a)In respect of the first mortgage, the balance of the sum paid by Amuplex that exceeds $292,000.00 will be added to the sale price of $90,000 for the sale of Lot 2 as referred in paragraph 3 below, subject to that Charalambous will be liable for all interest and early repayment fees up to the date of execution of these terms and Amuplex will be liable for any interest due under the first mortgage from the date of execution of these terms date until the settlement date; Such additional amounts payable by the Parties will be either added or subtracted from the payment of $90,000.00 payable by Charalambous.
b)In respect to the second mortgage, the balance of the sum paid by Amuplex that exceeds $68,000.00 will be added to the sale price of $90,000.00 for the sale of Lot 2 as referred to in clause 3 below, subject to that Charalamobus will be liable for the amount between $68,000.00 and $71,100.62 and Amuplex will be liable for any additional amount over and above the amount $71,100.62 due under the second mortgage from the date of execution of these terms until the settlement date; Such additional amounts payable by the Parties will be either added or subtracted from the payment of $90,000.00 payable by Charalambous.
26 Clause 3 provided that Amuplex and Charalambous would enter into a contract of sale to sell lot 2 for $90,000 within 7 days of being notified of the plans of subdivision being registered. If Charalambous failed to settle Amuplex was entitled to sell lot 2 (clause 7).
27 Pursuant to clause 4 Amuplex granted Charalambous a licence to reside in the existing premises pending completion of the contract for lot 2, or the failure to settle.
28 Clause 9 is significant and provided as follows:
Amuplex shall upon obtaining Title to the property from Charalambous and in an expeditious and timely manner:-
a)engage a Builder to complete the development being Lot 1 and 3 on the proposed Plan of Subdivision on the said property in accordance with the current Plans, Building Permits and Planning Permits.
b)ensure that all Planning and building permits are transferred from the Builder into its name.
c)Complete the Subdivision of the property into three (3) lots pursuant to the Joint Venture Agreement and obtain registration of the Plan of Subdivision at the Offices of Titles.
d)Complete the renovation to the exterior of the premises situated on Lot 2 of the proposed Plan of Sub Division in accordance with the original Joint Venture Agreement. Such works are to be identified in Annexure A herein.
29 Clause 10 also provided that the parties “must use their best endeavours and in good faith” to ensure they complied with the terms.
30 Finally, clause 15 provided that time was “of the essence.”
31 Various steps took place following these terms as follows:
· By contract of sale of land dated 3 October, 2008, Charalambous agreed to sell the property to the defendant subject to the 2 mortgages;
· By transfer of mortgage dated 16 January 2009, the Sangster mortgage was transferred to Tzelepis Nominees Pty Ltd;
· Charalambous withdrew a caveat she had lodged over the property (on 30 July 2008) by withdrawal of caveat of 26 May 2009;
· On 1 June 2009 Maroondah City Council certified the plan of subdivision. However, the requirements of the permit remained to be satisfied including paving, drainage and landscaping;
· By a contract dated 8 July 2009 Amuplex executed a “new homes contract” with Landmark Building Services Pty Ltd, an entity owned by Chris Moutidis, the son of Louis Moutidis (the contract tendered in court does not include details of the contract price which have been “blackened out.”)
32 Critically, it was not until 23 September 2009 that Amuplex became registered as sole proprietor of the property subject to a mortgage to the NAB (and to Sangster). It was only from this time that the provisions of clause 9 therefore operated (which only applied “upon obtaining Title”).
Post 23 September 2009
33 By 26 October 2009 the building permit was due to expire. There is, however, evidence of an (undated) application for extension of time for this permit.
34 By October 2009 the planning permit had also expired, though no action was taken in relation to this until after 4 May 2010 when the Maroondah City Council advised that the planning permit had expired.
35 On 11 May 2010, Amuplex made application to the Council to extend the permit (more than 3 months after expiry of the permit) which was refused.
36 On 18 June 2010 Amuplex lodged an application in VCAT to review the failure to extend the time to make the application.
37 By order of VCAT dated 27 July 2010, VCAT then set aside the Council’s decision and ordered that the time within which the development was to be completed be extended until 24 January 2011.
38 Between 2010 and August 2011 relations continued to be strained with the plan of subdivision remaining unregistered.
39 Then on 17 August, 2011 this proceeding was issued by Ms Charalambous.
Witnesses
40 The plaintiff, Ms Charalambous, gave evidence, and also called her daughter, Ms Nikki Charalambous, as well as a building consultant, Mr Anthony Croucher, and a real estate valuer, Mr Rolf Imberger (in relation to the loss of rent claim).
41 Amuplex called Mr Achilles Tzelepis and Mr James Nicholas (a carpenter, who has undertaken much of the building works).
42 There were difficulties with the oral evidence of both the plaintiff and Mr Tzelepis which was consistent with the total breakdown of relations between the parties, and reflected the sad and sorry history of this building venture.
43 In terms of the plaintiff, it was clear that the length of this project had caused her distress. However, her evidence, at times, was highly emotive and argumentative. She was also regularly prepared to offer opinions she was not qualified to give.
44 In terms of Mr Tzelepis, although his presentation was more measured, there were some unsatisfactory aspects of his evidence.
45 Of particular concern was his evidence about a statement he made in the application to VCAT. This was that “amongst the two new units being built, there is a third existing unit which cannot be occupied due to the unsafe state of the driveway and surrounding area.”
46 He initially admitted that this was not a true statement but one he was told to put in by Council. However, he later took this back and suggested the site was unsafe and that he certainly would not live there.
47 The suggestion that the existing unit “cannot be occupied” was certainly not accurate given the plaintiff herself was in occupation. A readiness to make such a statement to a Tribunal, and to blame a third party for it (the Council) did not do Mr Tzelepis credit.
48 The difficulties with the oral evidence did not mean that all oral evidence was rejected. However, any evaluation of the oral evidence has been undertaken with caution, and with due regard to any available objective evidence.
Order for Registration of plan of subdivision
principles
49 The plaintiff seeks an Order that the defendant take all necessary steps to obtain registration of the plan of subdivision. In particular, the plaintiff says that the defendant has not acted in an “expeditious and timely manner” to complete the subdivision and obtain registration pursuant to clause 9(c) of the terms of settlement.[3]
[3] The plaintiff also cited clause 9(a) but this is not sustainable given a builder was engaged even prior to entry into the terms.
50 The plaintiff also cites the obligations for the defendant to use its “best endeavours” and “act in good faith” and, also highlights that time was “of the essence” of the contract.
51 The defendant submitted that there was no specific time frame for completion and that the phrase “expeditious and timely” was not susceptible of precise meaning, citing a decision of Dura.[4] The defendant also highlighted various other matters which affected the developer in this case, which will be cited further, below.
[4] Dura (Australia) Constructions Pty Ltd v Hue Boutique Living Pty Ltd (Formerly SC Land Richmond Pty Ltd) [2012] VSC 99.
52 In Dura,[5] Dixon J suggests that the phrase “due expedition and without delay” is uncertain in its precise meaning, although the ordinary dictionary meaning of due expedition requires “affirmatively, adequate or sufficient promptness or speed in accomplishing something” (which was generally confirmed in the cases).[6]
[5] Ibid [426].
[6] Ibid [427]–[439].
53 However, Dura was concerned with a very different clause which was not concerned with the completion date – as in the present case – but rather the rate of progress.[7] It was also noted in Dura, that the personal circumstances of the contractor do not condition the obligation which is an objective standard.[8]
[7] Ibid [236]
[8] Ibid [432].
54 Consistent with the approach of both Counsel, I do not consider that the “time of the essence” clause adds a great deal in this setting where no period is actually stipulated, though it does provide some context.
55 Insofar as the primary obligation is affected by other obligations, the “best endeavours” clause 10 requires the developer to do all he “reasonably can in the circumstances.”[9] Moreover, Carter and Harland,[10] suggest that the obligation of “good faith” includes “co-operation” which involves “an obligation to do all such tings as are necessary to enable the other party to have the benefit of the contract.”
[9] Joseph Street Pty Ltd & Ors v Tan & Ors [2012] VSCA 113, [41].
[10] J W Carter, Elisabeth Peden and G J Tolhurst, Contract Law in Australia (Lexis Nexis Butterworths, 5th ed, 2007) 30.
56 It remains then to consider the facts in the light of these principles.
Application of principles
57 The issue of obtaining registration is tied up to the completion of the building works. Thus, the defendant concedes that registration cannot be obtained unless all works are done.[11]
[11] Further Amended Defence dated 22 October 2012, para 17(e).
58 As mentioned already, the defendant’s obligations are to be considered from 23 September 2009 since the obligation to complete the subdivision and obtain registration only arises from the “obtaining of title” pursuant to clause 9 (c).
59 In this context, it is now over 3 years since the obligation arose notwithstanding that the planning permit allowing the land to be subdivided into three lots was sealed by the Council on 1 June 2009. Prima facie, then, the completion and registration does not appear to have been done in an “expeditiously and timely” manner with even Mr Tzelepis accepting that “it was slow.”
60 However, the defendant contends:
· the plaintiff admits she was instrumental in causing works to stop due to a lapsed building permit on 4 May 2010 (this appeared to be the planning permit given this is what the 4 May letter was about);
· it was not the defendant’s fault that he experienced difficulties with a builder.
61 However, firstly, the lapsed building permit only caused the works to stop between 4 May 2010 and 27 July 2010 (when the VCAT order was made).
62 Secondly, if, as appears the case, the plaintiff brought the lapse to the attention of the Council, such lapsing cannot be attributed to the plaintiff. Rather, in my view, there was an obligation on the developer to ensure that relevant permits were kept up to date, particularly given he was aware of the original time limits relating to both the planning permit and the building permit in 2007. Despite this, it appeared that the developer was not paying attention to time limits, and only became aware of the expiry of the planning permit when it was brought to his attention.
63 In terms of the builder, I accept that Mr Tzelepis experienced difficulties initially in obtaining a builder to complete a partially completed project. However, this cannot assist the defendant given Landmark Building Services Pty Ltd was signed on by 8 July 2009.
64 It was then said that the builder caused difficulties, becoming difficult to contact to the point where he had “lost interest” by May 2010.
65 The plaintiff submitted that these explanations were unsatisfactory and that the building contract was in fact a “sham.” I am not prepared to make such a finding although there were certainly unsatisfactory aspects about the arrangements with the builder.
66 For example, evidence given about the efforts to compel the builder to comply with his obligations was unsatisfactory. In particular, Amuplex did not exercise any rights under the building contract to compel performance; nor was there any evidence of even letters being written.
67 It was even unclear whether any payments were actually made to the builder. Initially Mr Tzelepis said he did not believe any payments had been made, though he later said that 3 payments totalling $25,700 had been made (even though no discovery was provided about them).
68 In the result, an unsatisfactory arrangement was reached whereby the developer effectively took over the project using a carpenter, Mr Nicholas, instead. Mr Nicholas, however, was not a registered builder.
69 I therefore do not regard the subjective problems with the builder of assistance to the defendant. Rather, the objective evidence suggests that little “expedition” was applied. In this respect it is important to also note:
· The evidence of the plaintiff was that in 2009 the only work done was rendering and carpentry; in 2010 no work was done except roofing; in 2011 there was work done on the units but not her house. Even if there was some exaggeration, this lack of progress was consistent with the objective evidence which was that the project had already reached “lock up” in July, 2008;
· The evidence of Mr Croucher was that he accepted that building projects often run over time, though his general position was that the project should have been completed in 6 months “optimistically” and 9 months “realistically”;
· That there appeared to be a lack of diligence in even reading the plans (for example, the developer did not appear to have realised that a path was necessary).
70 Any consideration of the time period should also take into account that these terms were executed in a context wherein the project had already commenced, with recital B noting that the parties had “previously been involved in a joint venture” which had led to a dispute.
71 The effluxion of a further 3 years without adequate explanation constitutes a breach of the obligation to complete the subdivision and obtain registration in an “expeditious and timely manner.” In my view, the defendant has also not done all it reasonably could in the circumstances.
72 I am therefore satisfied that Amuplex has breached its obligation under clause 9(c) of the Terms of Settlement, and that, further it has not used its best endeavours to ensure compliance with the terms.
Appropriate relief
73 In considering the issue of appropriate relief, the defendant highlighted that the order sought was unnecessary given the evidence of Mr Tzelepis was that registration was expected in 1–2 weeks.
74 However, the application to VCAT in June 2010 also stated that the project was only 2 months from completion. Given also the rather tortuous history of this matter, I consider that the defendant has been given ample opportunity to obtain the registration and that an order is appropriate.
75 In terms of discretionary considerations, no other obstacle was suggested. I am satisfied, in any event, that damages would not be adequate in this case. I also note that there should be little difficulty with compliance given Mr Croucher’s evidence was that an occupancy certificate would probably be granted at the date of his recent inspection in October 2012.
76 In such circumstances, I am satisfied that it is appropriate to order Amuplex to take all necessary steps to obtain registration of the plan of subdivision pursuant to clause 9(c) of the Terms of Settlement to bring this project to closure.
Lost Rent
77 The plaintiff claims that the above breaches also give rise to damages for lost rent, by reason that she has been unable to become registered and has thereby lost the opportunity to rent the property out.
78 However, the defendant denied that such a claim was sustainable, and cited the decision of the New South Wales Supreme Court in Lahoud v Lahoud.[12]
[12] [2009] NSWSC 623.
79 In Lahoud, Justice Ward considered whether a claim for lost rent would be “such as may fairly and reasonably be considered … to arise naturally” within the first limb in Hadley v Baxendale.[13] His Honour determined that the first rule in Hadley did not apply absent evidence of actual harm; thus, damages for lost rent are not awarded without some evidence being adduced that the plaintiff would in fact have pursued that opportunity.[14]
[13] (1984) 156 ER 145.
[14] Lahoud v Lahoud [2009] NSWSC 623, [195]–[197]; There was no suggestion that the second limb of Hadley v Baxendale applied, the plaintiff conceding, properly, that it did not
80 The evidence of Ms Charalambous as to her intention included the following:
I was hoping either to sell or to rent out the property and my parents who are in their late 70s they needed some help and I probably would have gone and stayed with them for a little while and gotten an income out of my property and maybe later on would have sold it in 2009.
…
I would have been able to have an income through that property or sell it. It didn’t matter which way I went, at that time the prices were really good regardless of which direction.
…
So part of the purpose behind this would have been for you to reduce your debt levels?...Correct.
And the other part of the project would be to have a place to live ……Yes, or sell it and move on because I wasn’t going to stay there for the rest of my life.
But at that stage, your intention was to live in the unit?....For the meantime, for a little while, yes (emphasis added).
81 Her evidence was therefore equivocal as to whether she really would have rented the property out, or sold it, given it did “not matter” which option she took.
82 In such circumstances, the best guide might be found in the objective written terms themselves which suggest that it was very important for the plaintiff to be able to reside at lot 2 (thus it will be recalled that clause 4 actually granted her a licence to reside there).
83 In any event, given the state of the evidence, I am unable to be satisfied that the plaintiff intended to rent the property out.
84 The loss of rent claim is not established.
Outstanding Building Works
85 The plaintiff claims damages for the failure to complete the renovation of lot 2 pursuant to clause 9(d) and/or for a failure to carry out the work in a proper and workmanlike manner and in accordance with the plans.[15]
[15] Amended Statement of Claim dated 22 October 2012 (ASOC) para 17(e) and (f).
86 In so claiming, the plaintiff claims the costs of rectification and relies, in particular, on 2 reports of Mr Croucher; one dated 7 November 2011; and a second dated 1 February 2012 (which costs the alleged damage).
Landscaping
87 The plaintiff claims $2,732 for failure to complete landscaping pursuant to the terms.[16]
[16] ASOC para 17(e)(v), 18(d)(iii).
88 Mr Tzelepis gave evidence that “[t]he landscaping was undertaken, and the … garden had turf laid on it … certain bushes and trees were planted around the edge of the … fence.”
89 Mr Nicholas gave evidence that landscaping started in November 2011 and continued to January/February 2012. He further said that he consulted the plan in undertaking the landscaping and ordering the plants. He also produced invoices from Plant Multi Nursery relating to plants available as at 26 October 2011 and further “top up plants” as at 14 August 2012.
90 Mr Croucher made it clear that at time of first inspection, being 19 October 2011, the landscaping had not been done.
91 However, he gave further evidence that at the time of his recent inspection in 2012 “…some of the landscaping work had been done…” Under cross examination, he also conceded that he would not be in a position to contradict the proposition that the plants had been planted but had been subsequently ripped up or had died.
92 The defendant thereby contends that the landscaping was completed, and any existing discrepancy between the current state of the property and the plans is due to the plants dying, or being removed.
93 Ms Nikki Charalambous corroborated this, to some extent, given she accepted that plants were planted. She also accepted that no weeding had been carried out for months and that a dog was present (Mr Nicholas also said the dog was often in the backyard).
94 The plaintiff’s evidence was to the effect also that she had been in exclusive possession since fences were erected in late 2011.
95 Given all this evidence and, in particular, the uncontradicted evidence of Mr Nicholas (which was corroborated by the invoices) I am unable to be satisfied that the defendant failed to complete the required landscaping.
96 As such, no relief will be granted in respect of landscaping.
Path
97 The plaintiff claims $697 from the defendant for failing to install a path to the existing residence from the driveway.[17]
[17] ASOC para 17(e)(viii), 18(d)(i).
98 The Report prepared by Mr Croucher on 7 November 2011 details that the “approved Landscaping plans indicate a path is to be installed to the existing residence [Unit 2] from the driveway but this has not been installed” (at page 5). In his second report he estimates the cost of rectifying this defect as $697. Furthermore, at the time of Croucher’s second inspection (in October 2012), the path had not changed.
99 Mr Tzelepis gave evidence that he was not aware there was a problem with the path and that he was prepared to fix it.
100 As such, there will be an order either to rectify the discrepancy regarding the path or for damages of $697.
Storage Shed
101 The plaintiff claims $608 from the defendant for failing to install a storage shed against the garage in accordance with the plans.[18]
[18] ASOC para 17(e)(xiv), 18(d)(vii).
102 Mr Croucher’s first report states that a storage shed should have been supplied and installed against the wall of the unit 2 garage according to the plans. His second report estimates the cost at $608.
103 Mr Tzelepis gave evidence that Amuplex was prepared to install the storage shed.
104 It is therefore appropriate that an order be made to either install a shed or for damages at $608.00.
Platform
105 The plaintiff claims damages in the amount of $6,323 in relation to a raised “platform” in the garage.[19]
[19] ASOC para 17(f)(xiii), 18(d)(xiv).
106 The evidence of Mr Nicholas was that the platform (with a height of some 5 cm) was installed to cover up or “mask” an aberration in the footings, which aberration occurred during the course of the joint venture.
107 In paragraph 16 of his report of 7 November, 2011, Mr Croucher suggested that the existence of the platform inhibited full use of the garage and also that the exposed edge had not been finished off. He further suggested that the platform should be removed and, if footings were exposed, to cut and lower them.
108 However, under cross examination, Mr Croucher accepted that there was another way of dealing with the problem, namely, to “finish it and leave it there” which he accepted would be far cheaper and which he accepted had now been done. It was also not suggested that this was an inferior option.
109 Mr Croucher was also shown a photograph which evidenced that two cars were able to be put in the garage. He suggested that they were fairly small cars. However, he agreed that he had not undertaken any empirical studies about car access and had not measured the width. Ultimately he agreed that there was a shelf that was “going to inhibit slightly the use” and, further, that it was “presentable” as it was.
110 There was also evidence from an Archicentre report of a Mr Green of 25 July 2012 who opined that the raised platform was not a “defect” unless the specification indicated that the entire floor was to be constructed at the same level. It was however “unusual and not normal building practice” and would reduce the useful floor area.
111 However, Mr Green was not cross examined and was not aware of the reason the platform was installed. Moreover, his ultimate suggestion was consistent with the option given by Mr Croucher since he recommended that the front should be “finished” off.
112 In the light of this evidence, I am not satisfied that the defendant has breached the terms by reason of the installation of the “platform”, rather the reason for its existence appears to predate entry into the terms. Moreover, and in any event, the plaintiff has not established that the defendant’s work in installing the platform constituted a breach of the proper/workmanlike manner obligation as alleged.
113 No relief will be granted in respect of the platform.
Concrete Sill
114 The plaintiff claims that, although one brick/concrete sill had been installed (as referred to in Mr Croucher’s first report), one still remained to be installed to the doorway servicing the garage with a value of $230 (half the original amount estimated by Mr Croucher).[20]
[20] ASOC para 17(e)(xvi), 18(d)(viii).
115 Mr Croucher confirmed in oral evidence that the seal to the doorway in item 14 of his original report remained outstanding.
116 Counsel for the defendant also conceded that the sill was outstanding, but suggested that the defendant would fix this.
117 An order to either install the sill or for damages of $230 is appropriate.
Fascia
118 Finally, the plaintiff claims an amount of $150 for the junction of new and old fascia on the driveway of unit 2 to be repaired, as it is allegedly poorly installed.
119 Mr Croucher confirmed that this had not been completed properly and quantified the cost to repair the fascia at $150.
120 I am also satisfied that this claim is made out with the result that an order to either repair or for damages in that amount will be made.
Opportunity to make good or damages
121 Mr Sowden made submissions in closing that any appropriate relief would be to make good, rather than damages, because Charalambous gave some evidence to the effect that she would be unable to raise the $90,000 to settle the purchase of her home under the terms. In such circumstances, the obligations to “make good” would be imposed on the developer anyway.
122 Although there may be questions as to the plaintiff’s ability to settle, such evidence was speculative and emotional in character. In any event, if, as I have found, the defendant has breached the contract, damages are ordinarily an appropriate remedy.
123 Moreover, although a builder may be given an opportunity to “make good” I do not consider that to be an appropriate remedy in the current circumstances. Instead, damages will provide an adequate remedy in circumstances where there has been ample opportunity for such “making good” to occur. An order to “make good” would also require cooperation of the parties and supervision by the court.[21] This is undesirable given the history of this matter.
[21] Pakenham Upper Fruit Co Ltd v Crosby (1924) 35 CLR 386; JC Williamson Ltd v Lukey (1931) 45 CLR 282.
124 The plaintiff is therefore entitled to damages in an amount of $1685.00 in respect of the path ($697), shed ($608), sill ($230) and fascia ($150).
Damages for Injured Feelings
Nature of claim
125 The plaintiff alleges an entitlement to damages for injured feelings, disappointment, inconvenience and emotional trauma. This was on the basis of the delay as well as the late payment of the mortgages pursuant to clause 2. There was also a separate claim of failure to ensure the property was safe and free from debris and not pose a danger to the plaintiff, her guests, visitors or invitees under special condition 22 of the contract of sale.
126 I have already found a breach of clause 9(c) by reason of the delay. As is apparent from my findings above, the renovation to lot 2 is also not complete such that a breach of clause 9(d) is also established.
127 The defendant also did not pay off the mortgages within the 45 days specified in clause 2. Although this appeared to have little impact in relation to the Perpetual loan (which the defendant continued to service), this was of some significance in relation to the Sangster loan since it appeared that the sheriff continued to pursue the property between mid-November and until January 2009, when the Sangster mortgage was paid off. Thus, by correspondence of 8 December, the plaintiff’s solicitors advised that they had been informed by Mr Sangster’s solicitors that they would be evicting the plaintiff “at 2.00 pm tomorrow.” Then on 16 January 2009 solicitors for the plaintiff advised that she had received a letter from the sheriff to vacate the premises immediately.
128 I am also satisfied that the defendant breached special condition 22 as the defendant himself conceded that, consistent with his statement to VCAT, the site was “unsafe” given the state of the pathway.
129 Although there appears to be a general rule that damages for breach of contract are not awarded for distress,[22] such damages have been awarded for breach of building contracts.
[22] N C Seddon and M P Ellinghaus, Cheshire and Fifoot’s Law of Contract (LexisNexis Butterworths, 9th ed, 2008), 23.19.
130 Thus in Boncristiano v Lohmann,[23] President Winneke, delivering the leading judgment of the Victorian Court of Appeal, states:
It now appears to be accepted…that awards of general damages of the type to which I have referred can be made to building owners who have suffered physical inconvenience, anxiety and distress as a result of the builder’s breach of contract, but only for the physical inconvenience and mental distress directly related to those inconveniences which have been caused by the contract.
[23] [1998] 4 VR 82 at 94 per Winneke P
131 With respect to the quantum of these type of damages, President Winneke further says as follows[24]:-
[24] Ibid 95
Whilst in my view damages awarded under this head will rarely be large, because of the very nature of the loss being compensated, it seems to me that a trial judge, once he has satisfied himself that damages are awardable under this head, should not be constrained from awarding damages which are fair and reasonable by a concept which, in my view, is foreign to the assessment of general damages.
Evidence
Failure to discharge mortgage
132 In terms of the failure to refinance, I consider that it was reasonably foreseeable that the plaintiff would suffer distress if the 45 day limit was not complied with. This is particularly so given the terms of settlement were executed in circumstances where both parties could be expected to realise that this was a significant matter for the plaintiff.
133 The plaintiff’s evidence was that this was a very hard time for her given she was not given much time to pack her belongings and leave. She claimed she went to “a few doctors” who prescribed Lovan, but it affected her and they put her on something lighter. However, she decided not to take medication any more and deal with her situation as best she could, though she described it as the “worst time” her children had to go through with their mum.
134 I accept that the plaintiff suffered some stress between about mid November (45 days after the date of the terms) and January 2009 as alleged. However, given the default judgment was entered on 26 August, 2008, some degree of stress predated the execution of the terms and was extraneous to the breach of the terms. In the plaintiff’s own words, the sheriff was knocking on her door on the day she was signing the terms of settlement which was the “biggest stressful day of my life.” Moreover, the plaintiff appears to have managed any stress without any significant medication, and did not provide any medical evidence in support of her stress claim during this (relatively short) time, or at all.
135 In all the circumstances, then, I am satisfied that an amount of $500.00 is a fair and reasonable amount for this head of general damages.
unsafe site
136 In terms of safety, the plaintiff claimed that she fell in April 2010 on an uneven driveway such that her leg was sore, bruised and bleeding.
137 The defendant suggested that it was the plaintiff’s daughter who had fallen at this time, and not the plaintiff. However, the plaintiff’s daughter claimed to have injured herself last year and generally corroborated the evidence that her mother had fallen and hurt her knee.
138 In any event, although the plaintiff obtained an x-ray she conceded that there were no fractures and she was “fine, it healed.” She also adduced no medical evidence in support of this claim, nor did she provide the x-ray.
139 The plaintiff also claimed a second fall where she slipped because it was muddy and grazed herself on her toe. However, no medical treatment was even sought, with cleaning and bandaging being sufficient.
140 Given the state of this evidence, I am unable to be satisfied that any loss was established as a result of the unsafe site.
delay
141 The general delay claim was pursued more strongly. In this respect, the plaintiff claimed that she felt tired, anxious and withdrawn and claimed to have anxiety attacks. The absence of the backyard also meant they had no social life and that her children could not play in the backyard. She saw doctors who tried to put her on prescriptions but she did not want them.
142 There were a number of problems with this claim.
143 Firstly, there was little evidence that directly quantified her distress in relation to the terms of settlement. Rather, much of the evidence appeared to be directed to her frustration with the overall length of the project with the plaintiff complaining about the “five and a half years” she had endured, from the signing of the joint venture.
144 Secondly, the plaintiff also accepted that she had “pulled [herself] through on my own…” without medical treatment. This was consistent with the general absence of medical evidence.
145 Thirdly, and finally, some of the stress appears to have been borne by her daughter given the plaintiff herself moved out in about September, 2011 and that she had also not been continually there for a “few months” prior to that time (being “back and forth” to her partner’s house).
146 In terms of the delay in general, I accept that it was reasonably foreseeable that a substantial delay might cause distress. However, given the difficulties in the evidence already highlighted, only a relatively small amount is fair and reasonable which I will fix at $1000.00
Other matters
147 In terms of other matters, the plaintiff did not pursue an order that the defendant take all necessary steps to have the Sangster mortgage discharged given, although it appeared to remain on the title, the defendant had in fact discharged the mortgage and held an executed discharge for lodging with the titles office.[25]
[25] Further Amended Defence dated 22 October 2012 para 17(c).
148 The plaintiff also did not pursue a declaration as to any amount that will be payable by the plaintiff under paragraph 3 of the terms in the event she re- purchases Lot 2. This was appropriate given the evidence of Mr Tzelepis suggested that the defendant would only seek an adjustment for interest and fees based on, and in accordance with, the methodology set out in clause 2 of the terms. In any event, the application of clause 3 has not yet arisen.
Conclusion
149 The plaintiff is entitled to the following orders:
· That the defendant take all necessary steps to obtain registration of the plan of subdivision pursuant to clause 9(c) of the Terms of Settlement;
· damages in an amount of $1685.00 in respect of the path, shed, sill and fascia;
· general damages of $1500.00 for inconvenience, anxiety and distress
150 I will hear from the parties as to the appropriate order as to costs.
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