Developments (WA) Pty Ltd v Whittle-Herbert
[2008] WASC 261 (S)
DEVELOPMENTS (WA) PTY LTD -v- WHITTLE-HERBERT [2008] WASC 261 (S)
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [2008] WASC 261 (S) | |
| Case No: | CIV:1436/2006 | 29 AUGUST, 19 SEPTEMBER & 21 NOVEMBER 2008 | |
| Coram: | McKECHNIE J | 13/11/08 | |
| 20/11/08 | |||
| 10 | Judgment Part: | 1 of 1 | |
| Result: | Defendant entitled to offset cost of restoration from purchase price | ||
| B | |||
| PDF Version |
| Parties: | DEVELOPMENTS (WA) PTY LTD (ACN 008 952 252) ROSS WHITTLE-HERBERT |
Catchwords: | Decree of specific performance Return of property to state at practical completion Turns on own facts |
Legislation: | Nil |
Case References: | Developments (WA) Pty Ltd v Price [2008] WASC 260(S) |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
- IN CIVIL
DECISION : 21 NOVEMBER 2008 FILE NO/S : CIV 1436 of 2006 BETWEEN : DEVELOPMENTS (WA) PTY LTD (ACN 008 952 252)
- Plaintiff
AND
ROSS WHITTLE-HERBERT
Defendant
Catchwords:
Decree of specific performance - Return of property to state at practical completion - Turns on own facts
Legislation:
Nil
(Page 2)
Result:
Defendant entitled to offset cost of restoration from purchase price
Category: B
Representation:
Counsel:
Plaintiff : Mr P J Hannan
Defendant : Mr N D C Dillon
Solicitors:
Plaintiff : Tottle Partners
Defendant : Wojtowicz Kelly
Case(s) referred to in judgment(s):
Developments (WA) Pty Ltd v Price [2008] WASC 260(S)
(Page 3)
1 McKECHNIE J: Judgment in this matter was delivered on 14 November 2008. At that time I made an order for specific performance. At [73] I concluded that I should grant a decree of specific performance requiring the vendor to return the property to its condition as at practical completion.
2 Proceedings were then adjourned for a week in an effort to have the parties agree as to what would be required. A site inspection took place on 18 November 2008. Present were Mr Joseph Tilli, Mr Papas, Mr Wilkie, Mr Price, Mr Whittle-Herbert, Mr Clack and the solicitor Mr Reid. The parties were unable to agree.
3 This morning the matter was listed for final orders. Mr Whittle-Herbert's hearing for final orders took place at the same time as that involving Mr Price: Developments (WA) Pty Ltd v Price [2008] WASC 260(S). The defendant adduced evidence by way of affidavit from Mr Whittle-Herbert, Mr Clack and Mr Reid, who produced photographs. In response, the plaintiff produced an affidavit from Mr Tilli essentially annexing a report from Mr Wilkie and a further report from Mr Papas.
4 The parties were in agreement that some remedial work needed to be undertaken in order to comply with my order. However, despite the relatively small amount of money in dispute and the opportunity afforded to them to make one last effort to agree on a sensible approach by my adjourning for a time this morning, the parties were still unable to agree.
5 I heard submissions and also took oral evidence from Mr Pietro Tilli who was cross-examined. In summary, counsel for Mr Whittle-Herbert contended that the relationship between the parties had broken down absolutely and that what was required was a determination of the amount required to bring the property into a state of practical completion and that that sum be abated from the settlement figure.
6 Counsel for the plaintiff, in summary, contended that there was a legitimate dispute between the parties as to the appropriate amount to be paid for rehabilitation of the properties, settlement should proceed and the dispute referred to a referee.
7 Having considered the evidence in the affidavit and the evidence orally given by Mr Tilli, I am in a position to resolve the dispute and will do so. As I said at [72] of the judgment, what the defendant, Mr Whittle-Herbert, bargained for was the property in its condition as at practical completion. But for the vendor's denial of Mr Whittle-Herbert's contractual rights, that is what he would have received.
(Page 4)
8 The issue is not then one of making good damage, but restoring the property to the condition it would have been in at practical completion. In respect of some damage there may be no material difference. When it comes to matters such as painting, however, what is required is not the possibility of repainting to match but an actual match.
9 I turn to the evidence.
The evidence of George Russell Clack
10 Mr Clack was engaged by Mr Whittle-Herbert. Mr Clack swore an affidavit that he is a building consultant and carries on the business known as Australian Standards Building Inspection Consultants. He is a qualified A-class builder and registered builder and has been carrying out building inspections for approximately 15 years. His estimate as to the costs of undertaking the work is based on his experience as a registered builder and building consultant and being aware of the standard rates charged for such work in the building industry.
11 Mr Whittle-Herbert deposed that he had asked Mr Clack to identify the work needed to return the unit to the condition it would have been upon practical completion. Mr Clack's report, following his inspection, makes detailed comment as to external and internal areas and what is required. He made a series of recommendations and estimated costs as follows:
a. Pre-paint walls and ceilings including plaster patch $3000.00
b. Alternative structural re-enforced repair to
garage/family wall $3000.00
c. Repaint external metal work $2000.00
d. General repair/maintenance $5000.00
Total $13,000.00 (excl GST)
12 Mr Whittle-Herbert noted, among other defects, numerous marks on the carpets in several rooms that appear to have stained the carpet. As a result, he attended at Carpet Call Floor Centre, Willetton, and received a quote for the cheapest hardwearing carpet in stock for laying in an investment residential property. The quote is annexed to his affidavit. He used a floor plan of the property which is the same in essential aspects as that in Mr Price's unit.
13 He also received two quotations for painting, one being for $5,720 inclusive of GST, and the other for $5,500 inclusive of GST. It can be seen then that Mr Clack's estimates have support at least in relation to painting estimates.
(Page 5)
The evidence of Mr A A Wilkie
14 Mr Wilkie was engaged by the plaintiff. He is a consulting engineer. There is no affidavit from Mr Wilkie but his report is attached to the affidavit of Mr Tilli. Mr Wilkie says:
I have perused the report provided by [Mr Clack] and do not disagree with the defects listed, although my list Australian Standards Building Inspections Consultants has minor differences. However, I disagree with the work required to remedy and the cost thereof and that some marking to walls is washable.
15 There is then little dispute as to the list of defects. Mr Wilkie did not comprehensively comment on matters raised by Mr Clack but did so selectively. In relation to the ceiling, Mr Clack said at page 5:
Ceilings
• Gyprock sheeting glued to softwood ceiling frame with sheet joints visible to be re-topped to side bedroom, family room over kitchen area, including making good painted patches adjoining kitchen. Cornice edge cut back and made good along garage side and laundry side of family room.
• Make good cornice joints on laundry wall of family room.
• Ceiling surface shows slight sagging delaminations along family, laundry/sliding door resulting in cornice movement. Family room ceiling to be propped, and lag supports over ceiling joist.
16 His recommendations in relation to ceilings at page 6 are:
a. Ceilings to be repainted to match exiting (sic) after repair and rectification. [It should be 'existing'].
17 Mr Wilkie does not comment on the repair to the ceiling but merely says:
1. Ceilings are not in need of repainting.
18 I accept then Mr Clack's summary of the condition of the ceilings and accept also that to return the property into appropriate condition will require the ceilings to be repainted to match.
19 In relation to the walls, Mr Clack found:
Walls
• Painted plaster with marks visible throughout.
(Page 6)
- • Cracked surface plaster under cornice to garage side of family room near air conditioner and along laundry and store room walls.
• Plaster stained behind toilet cistern lid.
20 He recommended:
b. Wall paint finish unacceptable to wash/remove marks requires full repaint in washable finish.
21 Mr Wilkie commented:
1.2 Many of the very minor marks on the walls are removable and in any event not all walls are marked or require repainting.
22 This suggests some walls require repainting and does not deal with the specific descriptions given by Mr Clack.
23 Mr Clack described the external gutters as follows:
Due to oxidization external metal gutters, fascias, downpipes and meter box to be washed down and repainted to gloss finish.
24 Mr Wilkie says:
2.4 Cleaning of external gutter fascia, down pipes and meter boxes is required. Painting is not required.
25 As Mr Wilkie does not disagree with Mr Clack's list of defects, I accept that there is oxidisation. I accept Mr Clack's view that painting is required due to the oxidisation. Mr Wilkie's report is entitled, 'Remedial Action Required Prior to Handover, Units 3 and 4, 41 George Street, Midland'. It is not clear whether he understood the standard to which that remedial action should be taken. There is no evidence that he knew the order of the court. Mr Tilli's affidavit does not take the matter further.
26 Mr Wilkie has provided an estimate of the costs in the sum of $2,800. He does not disclose any relevant expertise in the estimation of costs, unlike Mr Clack or indeed Mr Tilli, to whom I will shortly refer. I am satisfied that Mr Clack has relevant expertise to make an estimate of building costs, and have noted previously that his estimate, at least in relation to painting, finds close support in the quotations received. I do not consider there is any evidence that Mr Wilkie is appropriately qualified to estimate costs as a consulting engineer, and as a result I do not find his evidence as to costs persuasive.
(Page 7)
The evidence of Mr Papas
27 Mr Papas would appear to be a real estate property representative. He does not deal in any detail with his inspections of unit 3 or 4 other than saying:
The general presentation of each villa shows only nominal wear and tear and is so negligible that minor issues would only ever arise as a matter for concern.
The interiors of units 3 and 4 are very good with virtually NO wear and tear on carpeting, and the regular steam cleaning of these by the tenants attests to the presentation. I have no issue as far as this is concerned as the carpets are of a commercial grade hard wearing and visually as 'near to new' in appearance as possible.
28 There is no evidence of any qualifications that Mr Papas might have in respect of building inspection. I do not accept his evidence in preference to that of Mr Clack, especially in the detail that Mr Clack has identified.
29 A handwritten notation on Mr Wilkie's statement says: 'Carpets are in as new condition'.
30 On the other hand, as I have said, Mr Whittle-Herbert has deposed as to numerous marks on the carpets in several rooms, that appear to have stained the carpet.
31 Mr Papas specifically refers to wear and tear. He does not refer to stains on the carpets, although implicitly his comment about steam cleaning may refer to the stains.
32 However, his statement, and that of Mr Wilkie as to the condition of the carpets, is not supported on oath, whereas Mr Whittle-Herbert's observations are. They are to some degree confirmed by Mr Clack. I prefer the evidence of Mr Whittle-Herbert as it is on oath.
The evidence of Mr Pietro (Peter) Tilli
33 Mr Peter Tilli gave evidence. He was not at the inspection and does not appear to have conducted a formal inspection of the properties for some considerable time. I am not even sure whether he has been in the properties in the last 12 months. He was shown a series of photographs of the inspection taken by Mr Reid, solicitor for the defendant, and invited to comment and provide estimates of the possible costs that he might incur in repairing, or in some cases as a hypothetical to illustrate the point,
(Page 8)
- replacing various defects illustrated in the photographs or referred to by Mr Clack. It is fair to say that his estimates were substantially lower than the general estimation provided by Mr Clack, although not so low in painting.
34 There are a number of difficulties with Mr Tilli's evidence. The first and most obvious is that he was not at the inspection on 18 November 2008. His comments as to damage and other matters where they conflict with those of Mr Clack I discount. The photographs, with great respect to the photographer, are not of such quality that would enable anything more than a general impression to be gained as to what they depict, so I accept Mr Clack's evidence as to what he observed and what is required to bring the units back to a state equivalent to that of practical completion.
35 Mr Tilli denied a suggestion by cross-examining counsel that his estimates were based on a patch-up job rather than a return to the state as at practical completion. I would not go so far in the criticism of his evidence. He was called upon to support what counsel for the plaintiff asserted in closing was an exorbitant difference in the figures supplied by Mr Clack and the actual costs of repair.
36 However, I accept the evidence of Mr Clack as to his observations which are substantially agreed with by Mr Wilkie. I accept that he is qualified to make an estimate of costs, unlike Mr Wilkie. Mr Tilli is also qualified to make an estimate of repairs but necessarily, because of a lack of inspection, has been reduced to doing so on a speculative basis, without observing for himself the nature and extent of damage or marks. I accept the evidence of Mr Clack as persuasive and satisfactory. I reject the evidence of Mr Tilli as substantially speculative.
37 True it is that the plaintiff might have the facilities to complete the work that needs to be done at a slightly lower cost than by Mr Whittle-Herbert engaging independent contractors. However, the plaintiff has got itself into the position by not transferring the property at the time of practical completion and has had since then to get the property into order.
38 Specifically, it has had since last Friday, (14 November) particularly since last Tuesday (the date of the inspection), to put forward a realistic proposal to do the work, although I acknowledge this may not be a very practical outcome because of the breakdown between the parties. Litigation should, as far as possible, and subject to appeal rights, be final. The plaintiff proposes an ultimate determination by a referee. The orders
(Page 9)
- that the plaintiff proposes will not lead to finality but merely to further dispute and further costs.
39 Everyone agrees that some money needs to be expended. The defendant says the sum is $17,930.
40 Mr Wilkie says $2,800. The plaintiff's proposal is in effect for an arbitration over the sum of $14,130 after the parties have already incurred great costs in caveat proceedings and in the main action. The case of Jarndyce v Jarndyce comes to mind. There must be an end.
41 I am satisfied that the evidence produced by the defendant as to the estimate of the costs of restoring the property to practical completion is reasonable. To give effect to my order for specific performance for the property and its condition as at practical completion I will order the sum of $17,930 be deducted from the price payable by the defendant to the plaintiffs at settlement.
42 The orders I will make are as follows:
(1) The agreement dated 27 July 2004 between the plaintiff and the defendant ('contract') whereby the plaintiff agreed to sell and the defendant agreed to purchase Unit 4, 41 George Street, Midland, being the portion of land known as lot 4 on strata plan 45936, being the whole of the land comprised in certificate of title volume 2601, folio 438 ('property') be specifically performed and carried into execution.
(2) Settlement of the sale of the property will take place on or before 4.00 pm on Friday, 5 December 2008.
(3) Settlement will take place in accordance with the contract (except as to cl 3 of annexure A).
(4) It is declared that the defendant is entitled to have the property and all fixtures and fittings (including curtains and carpets) restored to their condition at the time of practical completion. To give effect to this declaration it is ordered that the defendant is entitled to deduct the sum of $17,939 (inclusive of GST) from the balance otherwise owing under the contract at settlement.
(5) The plaintiff's action is dismissed.
(6) In respect of Supreme Court action CIV 1692 of 2005 ('caveat action') in which the defendant in this action was plaintiff and the plaintiff in this action was the first defendant:
- (a) The caveat action is dismissed;
(b) The plaintiff (in this action) pay the costs of the defendant (in this action), including any reserve costs, such costs to be taxed in default of agreement.
- (7) The plaintiff pay the defendant's costs of this action including all reserved costs.
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