Fiora v Griffiths - [2020] WADC 125

JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA
IN CHAMBERS

LOCATION:   PERTH
CITATION:   FIORA -v- GRIFFITHS [2020] WADC 125
CORAM:   DEPUTY REGISTRAR HEWITT
HEARD:   2 SEPTEMBER 2020
DELIVERED          :   1 OCTOBER 2020
FILE NO/S:   CIV 1567 of 2020
BETWEEN:   ANGELO WARREN FIORA
First named First Plaintiff
TERESA MARY GAGLIANO
Second named First Plaintiff
AND
CHRISTOPHER NEIL GRIFFITHS
First named First Defendant
SARAH JANE ONEILL
Second named First Defendant
FLEUR KANE
Second Defendant

Catchwords:

Practice and procedure - Defendants' summary judgment application - Plaintiffs claim for return of a deposit on a house - Contract terminated by purchaser - Accepted as repudiation by seller misleading and deceptive conduct claim against selling agent - Relevance of these matters to Building Act 2011 (WA) turns on its own facts

Legislation:

Building Act 2011 (WA)

Result:

Action against second defendant dismissed
Application by first defendant dismissed

Representation:

Counsel:

First named First Plaintiff	:	Mr T Houweling
Second named First Plaintiff	:	Mr T Houweling
First named First Defendant	:	Mr P F Fletcher
Second named First Defendant	:	Mr P F Fletcher
Second Defendant	:	Mr P F Fletcher

Solicitors:

First named First Plaintiff	:	Cornerstone Legal
Second named First Plaintiff	:	Cornerstone Legal
First named First Defendant	:	Fletcher Law
Second named First Defendant	:	Fletcher Law
Second Defendant	:	Fletcher Law

Case(s) referred to in decision(s):

Nil

DEPUTY REGISTRAR HEWITT:

This action was commenced by a writ which was lodged on 1 May 2020 and each of the defendants lodged an appearance shortly thereafter. There next followed a summons by the defendants for summary judgment which was filed on 2 June 2020 and that is the application with which I am required to deal. In order to understand the issues in the matter it is necessary to know the background to the action.
The first named and second named defendants were at the relevant time the proprietors of a property at 55 Fairbairn Road, Coogee which they had placed on the market. The second defendant was an employee of a company Realtor Coogee Pty Ltd which trades under the business name of Acton Coogee and was the agent handling the sale.
On 17 February 2020 the plaintiffs submitted an offer to buy the property for $875,000. The offer contained a term informing the purchaser that some of the improvements on the property were not in accord with the approved design. Immediately prior to receiving that offer it was brought to the attention of the second defendant that there was a drainage point in the alfresco area and when the second defendant sought further information from the sellers she was told that it was a sewer access point. On 18 February 2020 by email to the first plaintiff the second defendant notified the plaintiffs the fact that the alfresco was constructed over the sewer access point and asked if they wished to proceed with the offer. Attached to the email was a photograph of a map which comprised a water corporation aerial photograph of the property showing the rear wall of the garage workshop and alfresco had been constructed other than in accordance with the approved plans and closer to the rear boundary that had been approved. The plan also showed an indication of the positions of the sewer lines and the various connections to that sewer line. In summary the sewer line lay, as I understand it, outside the block and the connection lines were roughly in the form of a trident such that the centre prong provided the sewer access to the property being sold and the other prongs respectively serviced the sewer connections for the adjoining properties. On obtaining this information the plaintiffs withdrew from the transaction. At a later stage however the plaintiffs submitted a further offer of 7 March 2020 and that was accepted by sellers and became the contract which is the basis of the present dispute. Under the terms of the contract a deposit of $20,000 was paid and that is the money which the plaintiffs seeks to recover in this action.
Why the action should have been brought in the District Court puzzles me since in terms of quantum the matter is well within the jurisdiction of the Magistrates Court and I can see no reason why the matter is not prosecuted there. There was a suggestion in argument that the Magistrates Court might not have the jurisdiction to deal with the matter but I find that difficult to accept because the claim is simply for the sum of $20,000 paid plus interest and such further relief (which is unspecified) as the court may think just. Exactly, what that further or other relief might be is difficult to understand. One effect of the choice of courts is likely to be that even if successful there will be a gap between the costs which the defendants are liable to pay the plaintiffs and the costs of their solicitors on the District Court scale. Given the small amount of the monies in dispute that differential is likely to significantly erode any amount which the plaintiffs may succeed in recovering if indeed they do succeed. In the event that the plaintiffs do not succeed they will be required to pay costs on the District Court scale.
I now turn to the various arguments which have been advanced by the parties and I shall begin with the claim which is brought against the second defendant which in essence suggests that she acted in misleading and deceptive conduct in contravention of the Australian Consumer Law as she was aware of a demand, requisition or requirement relating to the property and that the use of the property was unlawful but failed to disclose that information to the defendants. The requisition which is referred relates to a letter of the City of Cockburn dated 5 March 2020. The letter came to the possession of the second defendant by way of a text from the second defendant's employer attaching a copy of the letter to which I have referred. The letter is addressed to the first defendants and is headed departure from approved plans Lot 93455 Fairbairn Road, Coogee WA 6166 and the text was as follows:
It has come to the City of Cockburn (City) attention that garage and alfresco locate on the northern side of the main residence has not been constructed as per the approved under the building permit (BP 132013).
For the City to assess the current situation you as the property owner are required to arrange an inspection of the above mention property within 14 days of the date of this letter.
Should you require any further clarification or assistance in regards to the matter please contact me on 94113601 or [email protected].

The letter was signed by an individual named Mr Singh. The evidence of the first named first defendant is that he found the letter in the letterbox of the property when he went there on 11 March 2020. The first named first defendant also deposes that he has been told by one Michael Ward the building services manager for the City of Cockburn and believes that the letter was sent from the City in its 3 pm mail collection on 6 May 2020.
It is notorious within Perth that mail deliveries are sluggish at best and it is fairly clear that the letter would not have come into the hands of the first defendants prior to the plaintiffs submitting the second of their offers. That however, is of little import in my mind. The first defendants were owner builders. They later made application for approval of the unauthorised work and additionally made application to the Water Board for approval of the erection of part of the garage over the sewerage connection. Both applications were granted. What is relevant however is the justification which was advanced by the first defendants for the failure to adhere to the approved permit. In that regard the justification offered was:
We required additional undercover and waterproof space to accommodate valuable vehicles which could have been damaged and lost value if kept in the elements. In addition to this, the storage space was a necessity for tools and other important items required for my working profession. It was imperative to have these items in a secure and locked area on our property.
What that makes clear is that the failure to comply with the requirements of the building licence was not an accident or an oversight but a deliberately undertaken course.
From these materials I now turn to examine the various cases which are advanced by the plaintiffs against these defendants.
I firstly examine the case which is mounted against the second defendant. I am unable to discern anything in the conduct of the second defendant which could be possibly regarded as misleading and deceptive conduct. She informed the plaintiffs of all information which she possessed in regard to the problems with the garage, workshop and alfresco area. It is said against her that she was aware of the demand, order or requirement relating to the property and the evidence is clear that she passed on as much information as she had to the plaintiffs in that regard, including the information which to my eyes enabled them to clearly discern that the various buildings intruded on parts of the sewerage access lines. It is also said that she breached the Australian Consumer Law by failing to advise the plaintiffs that the use of the property was unlawful. In my view all that the second defendant was required to do was inform the plaintiffs of the relevant facts. It was not her place to give legal advice and in any event it clear that following the cancelation of the first contract the plaintiffs made significant enquires of the relevant authorities to determine what the consequence of the situation would be. Having withdrawn from the original contract and then entering a new contract after those enquires had been made my view is that the plaintiffs cannot successfully allege that they relied on misrepresentations of the second defendant. In my view there were no misrepresentations and even if they had been the plaintiffs were relying on the outcome of their own enquiries and made a decision based on that information not that which was imparted to them at an earlier stage by the second defendant. Therefore insofar as the second defendant is concerned my view is that she has no case to answer and the case against her should be dismissed.
The situation however is somewhat different in relation to the first defendants. The first defendants well knew that they had breached the terms of the building permit, they had done so deliberately in order to advantage themselves by providing more space in the workshop and garage area. The only surprise which was caused by the letter from the City of Cockburn was not the complaint but the fact that the City was taking an active interest in the breach. The defendants rely upon the provision of cl 9.1 of the General Conditions for the Sale of Land which apply to the present contact which relevantly provide:
As at contract date and possession date, except to the extent disclosed in writing by the seller to the buyer before the contract date, or as otherwise specified in the contract, the seller represents and warrants to the buyer on the contract date and is taken to repeat those representations and warranties at the possession date that:
(a)the seller does not know of:
(i)any demand order requisition or requirement relating to the Property which:
(A)has been made by an Authority and remains current; or
(B) which an Authority proposes to make.
Those warranties not only apply to the date of the contract but the proposed date of possession. That date was the 9 April 2020 and it is clear that the first defendant were well and truly aware of the city's interest in their breach of their building permit and that they would not have been able to fulfil the warranty required of them under the term of the Offer and Acceptance Contract. Additionally, I have been referred by counsel for the plaintiffs to various statutory provisions and in particular to the provisions of the Building Act 2011 (WA) (the Act). Without going into great detail the basic regime when building a house is that the owner may occupy it when it is completed according to the requirements of the building permit. If however, it is not built in accordance with the building permit then a certificate of occupancy is required before it may be occupied. Section 51(1) of the Act defines:
unauthorised work
(a)that was done without an authority under a written law that was required by the written law applicable at the time the work was done; or
(b)that did not comply with an authority under a written law that was in effect in respect of the work.
Clearly the work in regard to the garage and worship was unauthorised work. Building work is defined to mean the construction erection assembly or placement of a building or an incidental structure, that being a definition which is relevant to the present circumstances.
In summary when because the first defendants erected the garage workshop in a manner which was not consistent with the building permit they did not achieve a right of occupancy on the completion of the works. No temporary occupation permit was ever granted as a consequence of which the plaintiffs, following the settlement of the contract of sale would not have been legally entitled to occupy the dwelling. That strikes me as a fundamental breach since the very purpose which one purchases a house, and in the present case it is clear, is to occupy it. In this case the affidavit evidence of the plaintiffs makes it clear that the purpose of purchasing the house was to live in it as their family home. Legally that would not have been possible, since no right of occupancy of that dwelling had been achieved. I make those comments being well aware of the fact that no doubt defacto occupancy had been taken at some stage but from the point of view of the legal situation the owners were not entitled to occupy the house.
In summary therefore my findings are, the second defendants has no case to answer and the case against her should be dismissed.
The case against the first defendant is however arguable. It seems to me that there is a real issue to be decided as to whether or not the warranty which was required to be maintained at the date of the settlement of the purchase could be satisfied and secondly, that in any event in the circumstances the plaintiffs would not have been legally entitled to occupy the dwelling which they bought, albeit the unauthorised works could eventually be approved, as happened or alternatively a temporary permit could have been obtained. Either way I am of the view that the contractual requirements which the first defendants were obliged to achieve were not achievable and that the plaintiffs have an arguable case against them.

I certify that the preceding paragraph(s) comprise the reasons for decision of the District Court of Western Australia.
DH
Court Officer
1 OCTOBER 2020