Guest v Smith
[2025] VCC 960
•11 July 2025
| IN THE COUNTY COURT OF VICTORIA AT MELBOURNE COMMERCIAL DIVISION | Revised Not Restricted Suitable for Publication |
GENERAL LIST
Case No. CI-24-03425
| JAMES DAVID GUEST | First plaintiff |
| & | |
| VIRGINIA MARGARET GUEST | Second plaintiff |
| v | |
| MICHELLE SMITH | Defendant |
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JUDGE: | JUDICIAL REGISTRAR BENNETT | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 6 May 2025 (written closing submissions filed 16 May, 13 June and 20 June 2025) | |
DATE OF JUDGMENT: | 11 July 2025 | |
CASE MAY BE CITED AS: | Guest v Smith | |
MEDIUM NEUTRAL CITATION: | [2025] VCC 960 | |
RULING
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Subject:REAL PROPERTY – CONTRACTS – DAMAGES
Catchwords: Sale of land – failure by purchaser to complete – termination by vendor – assessment of damages and interest payable
Legislation Cited: Civil Procedure Act 2010, s 61
Cases Cited:Tymstock Pty Ltd v Patrick [2019] VCC 1092; Grusauskas v Panourakis [2025] VCC 649; Victorian Economic Development Corporation v Clovervale Pty Ltd [1992] 1 VR 596; Ripani v Century Legend Pty Ltd (No 4) [2024] FCA 1211; McGorlick v Palmer [2022] VCC 1229; Coleston v Carney [2019] VCC 177; Palasty v Parlby [2007] NSWCA 345; Portbury Development Co Pty Ltd v Mackali [2011] VSC 69; Pettiona v Whitbourne [2013] VSC 205; Carpenter v McGrath (1996) 40 NSWLR 39; Bill v Clarke [2015] VCC 1721; Bensons Property Group Pty Ltd v Manderson and Tan (No 3) [2021] VCC 326; Song v Brady Lonsdale Pty Ltd [2023] VCC 239; McLennan v Dannaoui [2024] VCC 1786; Hungerfords v Walker (1989) 171 CLR 125; Statewide Developments Pty Ltd v Higgins [2011] NSWCA 35; Hadley v Baxendale (1854) 9 Ex 341; Riggall v Thompson [2010] QCA 144; Higgins v Statewide Developments Pty Ltd [2010] NSWSC 183
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiffs | Mr A Morrison | Guthrie & Associates |
| For the Defendant | Mr P Little | Sanicki Lawyers |
JUDICIAL REGISTRAR:
1The plaintiffs, Mr James Guest and his wife Mrs Virginia Guest, are the joint registered proprietors of the land set out in certificate of title volume 09718 folio 033 and known as 385 Five Mile Road, Pakenham South (the “Property”). The Property is a rural property of 31.46 hectares and includes a house, various equine facilities, various outbuildings and various paddocks and yards.
2On 22 January 2023, the plaintiffs entered into a contract with the defendant, Ms Michelle Smith, pursuant to which the defendant agreed to acquire the Property for $3,525,000.00 (the “Contract”). The defendant did not complete on the settlement date and the plaintiffs served a notice of default on 26 May 2023 (the “Default Notice”). The default was not remedied by the defendant and the Contract ended on 9 June 2023 upon the expiry of the fourteen-day period specified in the Default Notice.
3On 13 June 2024, the plaintiffs commenced this proceeding, seeking damages for the defendant’s default. A defence was filed on 6 August 2024.
4On 4 September 2024, the plaintiffs filed a summons seeking summary judgment pursuant to s 61 of the Civil Procedure Act 2010 with damages to be assessed under Order 51 of the County Court Civil Procedure Rules 2018. On 7 October 2024, her Honour Judge A Ryan ordered by consent that there be summary judgment for the plaintiffs against the defendant with damages to be assessed. Orders were thereafter made for a hearing to assess damages, which ultimately proceeded before me on 6 May 2025.
A. Evidence – overview
5The plaintiffs tendered 5 affidavits for the purposes of the assessment:
(a) affidavit of Mrs Guest sworn 30 August 2024, which was originally relied upon in support of the summary judgment application;
(b) affidavit of Mrs Guest sworn 24 February 2025, which was the primary affidavit dealing with the quantification of the plaintiffs’ loss;
(c) affidavit of Mrs Guest sworn 31 March 2025, which provided details of the recent resale of the Property;
(d) affidavit of Mr Benjamin Rose sworn 31 January 2025, attaching Mr Rose’s valuation report dated 13 November 2024. Mr Rose is the property valuation expert called by the plaintiffs; and
(e) affidavit of Mr Rose sworn 3 March 2025, dealing with the Expert Witness Code of Conduct and Mr Rose’s qualifications.
6The defendant tendered only one affidavit, namely, an affidavit of Mr Geoffrey Brown affirmed 5 May 2025, attaching Mr Brown’s valuation report dated 3 March 2025. Mr Brown is the property valuation expert called by the defendant.
7I note for completeness that Mr Rose initially prepared a report dated 16 May 2024 in which he valued the Property at $3.1 million as at 6 May 2024. That report was not tendered separately, but appeared as an annexure to Mr Brown’s report. When I asked whether the 16 May 2024 report was of any particular relevance, counsel for the plaintiffs responded:[1]
“Not really. I mean it showed – it’s of peripheral relevance insofar as it shows that 12 months after termination, the sale price remained the same, but when we realised that the case law directs us to the date of termination as the appropriate date, we asked Mr Rose to update his report.”
[1]T12.
8Mrs Guest was not cross-examined on her affidavits.
9Mr Rose and Mr Brown spent some time in conference together outside the courtroom on the morning of the assessment hearing with a view to identifying, and potentially narrowing, the areas of disagreement between them. The conference led to the experts’ production of a handwritten document identifying the principal matters on which they disagreed. They then gave oral evidence concurrently by reference to the matters identified in that document. I will say more about the experts and their evidence later in these reasons.
B. Relevant facts
10The relevant facts were largely undisputed. The facts set out in this section of the reasons constitute my findings of fact, except where otherwise indicated.
B.1 The Contract and its termination
11As I have recorded above, the Contract was entered into on 22 January 2023 and was for a purchase price of $3,525,000.00. The Contract provided for the payment of a $100,000.00 deposit (which represents about 2.8 per cent of the purchase price). It was not in dispute that the defendant had paid that amount, that the deposit was forfeited to the plaintiffs as a result of the termination of the Contract, and that the deposit was to be offset against the damages otherwise payable by the defendant.
12The general conditions of the Contract are in the standard Real Estate Institute of Victoria/ Law Institute of Victoria form dated August 2019. Of particular relevance are general condition (“GC”) 32 to GC 35.
13GC 32, headed “BREACH”, provides:
“A party who breaches this contract must pay to the other party on demand:
(a)compensation for any reasonably foreseeable loss to the other party resulting from the breach; and
(b) any interest due under this contract as a result of the breach.”
14GC 33, headed “INTEREST” provides:
“Interest at a rate of 2% per annum plus the rate for the time being fixed by section 2 of the Penalty Interest Rates Act 1983 is payable at settlement on any money owing under the contract during the period of default, without affecting any other rights of the offended party.”
15GC 34, headed “DEFAULT NOTICE”, provides:
“34.1A party is not entitled to exercise any rights arising from the other party’s default, other than the right to receive interest and the right to sue for money owing, until the other party is given and fails to comply with a written default notice.
34.2The default notice must:
(a)specify the particulars of the default; and
(b)state that it is the offended party’s intention to exercise the rights arising from the default unless, within 14 days of the notice being given –
(i)the default is remedied; and
(ii)the reasonable costs incurred as a result of the default and any interest payable are paid.”
16GC 35, headed “DEFAULT NOT REMEDIED”, provides:
“35.1All unpaid money under the contract becomes immediately payable to the vendor if the default has been made by the purchaser and is not remedied and the costs and interest are not paid.
35.2The contract immediately ends if:
(a)the default notice also states that unless the default is remedied and the reasonable costs and interest are paid, the contract will be ended in accordance with this general condition; and
(b)the default is not remedied and the reasonable costs and interest are not paid by the end of the period of the default notice.
35.3If the contract ends by a default notice given by the purchaser:
(a)the purchaser must be repaid any money paid under the contract and be paid any interest and reasonable costs payable under the contract; and
(b)all those amounts are a charge on the land until payment; and
(c)the purchaser may also recover any loss otherwise recoverable.
35.4 If the contract ends by a default notice given by the vendor:
(a)the deposit up to 10% of the price is forfeited to the vendor as the vendor’s absolute property, whether the deposit has been paid or not; and
(b)the vendor is entitled to possession of the property; and
(c)in addition to any other remedy, the vendor may within one year of the contract ending either:
(i)retain the property and sue for damages for breach of contract; or
(ii)resell the property in any manner and recover any deficiency in the price on the resale and any resulting expenses by way of liquidated damages; and
(d)the vendor may retain any part of the price paid until the vendor’s damages have been determined and may apply that money towards those damages; and
(e)any determination of the vendor’s damages must take into account the amount forfeited to the vendor.
35.5The ending of the contract does not affect the rights of the offended party as a consequence of the default.”
17The original settlement date prescribed by the Contract was 24 April 2023. On 15 February 2023, the parties agreed to vary the Contract to extend the settlement date to 25 May 2023.
18By email dated 24 May 2023, the plaintiffs’ conveyancing lawyers asked the defendant’s conveyancing lawyers whether the settlement would be proceeding the following day. On 25 May 2023, the defendant’s conveyancing lawyers responded:
“We refer to the above matter and advise that our client’s mortgagee is not in a position to settle this matter today.
Accordingly, our client requests an extension for settlement without penalties for 21 days from today in order to finalize matters outstanding with the Bank.”
19Consequently, settlement did not occur on 25 May 2023 and the plaintiffs’ conveyancing lawyers served the Default Notice on 26 May 2023. The Default Notice gave the defendant 14 days to remedy the default and concluded by stating that, unless the default was remedied and legal costs and interest paid in accordance with the notice, the contract would be rescinded pursuant to GC 35.2.
20The defendant did not remedy the default prior to the expiry of the 14 days on 9 June 2023. Accordingly, the Contract ended on that date.
21On 13 June 2023, the plaintiffs’ conveyancing lawyers wrote to the defendant confirming that the default had not been remedied and concluding that “therefore the contract is rescinded pursuant to General Condition 35.2 of the Contract”.
B.2 Resale of the Property
22On 20 June 2023, Mrs Guest spoke to Mr Ray Cullen, a real estate agent with Nutrien Harcourts Bunyip, and asked him to provide an updated appraisal and marketing proposal for the resale of the Property. Mr Cullen had previously provided an appraisal on 10 May 2022, but was not engaged by the plaintiffs for the marketing campaign which culminated in the Contract with the defendant.
23The plaintiffs went overseas in June 2023 but Mr Cullen commenced marketing the Property during this time on the basis of Mrs Guest’s verbal approval.
24Upon their return, the plaintiffs met with Mr Cullen and he provided them with an updated appraisal. His 10 May 2022 appraisal had specified an estimated selling range of $3,900,000.00 to $4,150,000.00. The updated appraisal, dated 8 August 2023, specified an estimated selling range of $3,500,000.00 to $3,600,000.00. Like the previous appraisal, the updated appraisal stated that “[w]ith an appropriate and effective marketing plan, the upper end of the price range may be achievable”. Under the heading “State of the market”, the updated appraisal stated:
“It must be stated that the sale of rural properties is being impacted from a price point of view and proving more difficult and slower to sell presumably, as a result of reduced purchasing power, the tightening of bank lending criteria and interest rate increases and other factors including the significant correction in the cattle industry which influences ‘anything grazing’.”
25The plaintiffs signed an exclusive sale authority with Mr Cullen on 31 August 2023, which specified the “Vendor’s price” as $3,900,000.00.
26On 10 September 2023, a physical “for sale” board was put in place and an online listing for the Property was created on the realestate.com.au and farmbuy.com websites.
27The plaintiffs signed an updated authority on 29 October 2023. Although the authority was not in evidence, Mrs Guest deposed that the updated authority set out the marketing costs which the plaintiffs had already incurred for the resale ($2,489.00) and that the plaintiffs had paid that sum.
28A feature article was run for the Property on the “Farmbuy” website on 27 November 2023.
29The plaintiffs signed a fresh authority on 24 April 2024 as a result of Mr Cullen having moved to Elders Delaney. Like the 31 August 2023 authority, the 24 April 2024 authority specified the “Vendor’s price” as $3,900,000.00.
30Mrs Guest deposed that a number of offers were made on the Property:
(a) On 14 May 2024, there was an offer of $2,900,000.00 with a twelve-month settlement or $3,300,000.00 with a three-year settlement and 10% deposit.[2] The plaintiffs did not accept this offer because the price was too low.
(b) On 17 June 2024, there was an offer of $3,000,000.00 with a three-year settlement.[3] The plaintiffs did not accept this offer because the price was too low and the settlement period was too long.
(c) On 7 October 2024, there was an offer of $3,500,000.00 with a six-month settlement. Whilst the plaintiffs accepted this offer verbally, it was subsequently withdrawn by the offeror.
(d) On 11 December 2024, there was an offer of $2,900,000.00 with a ninety-day settlement. The plaintiffs attempted to negotiate with the offeror, but the offer was then withdrawn.
(e) On 19 December 2024, there was an offer of $3,750,000.00 with a twelve-month settlement. Although the plaintiffs thought this was a good offer, they uncovered information which gave rise to concerns on their part about the bona fides and honesty of the offeror, and they accordingly rejected the offer.
[2]The exhibit to Mrs Guest’s affidavit contains a text message dated 14 May with an offer “for 2800000 for 6 months settlement and 3300000 for 5 years settlement with 10 percent deposit”. The apparent discrepancy between this and what Mrs Guest states in the body of her affidavit was unexplained. No point was taken about this and I do not consider the discrepancy to be relevant for present purposes.
[3]The exhibit to Mrs Guest’s affidavit contains a text message apparently dated 28 August (rather than 17 June) referring to a $3 million offer with 3 year settlement. Again, no point was taken about this and I do not consider the discrepancy between the two dates to be relevant for present purposes.
31As at the date of Mrs Guest’s 24 February 2025 affidavit, the Property remained on the market. However, in her 31 March 2025 affidavit, Mrs Guest deposed that the plaintiffs received an offer on 8 March 2025 to purchase the Property for $3,250,000.00. They accepted this offer and a contract was entered into on 25 March 2025. The $325,000.00 deposit provided for by that contract has been paid, with settlement due on 22 September 2025.
C. The plaintiffs’ damages claim – overview
32The plaintiffs’ written submissions identified 9 heads of loss and addressed each under a separate heading. I will follow the same approach in these reasons.
33The plaintiffs did not seek to rely upon the rights conferred upon them by GC 35.4(c). Instead, they sued for damages at common law. It is clear that a party in their position is entitled to do so,[4] and I did not understand the defendant to contend otherwise.[5]
[4]David P Lloyd and William F Rimmer, Victorian Land Contracts (Lawbook Co, 2020) at [GC35.50].
[5]Cf Tymstock Pty Ltd v Patrick [2019] VCC 1092 at [57]-[62].
34The general principles applicable to the assessment of common law damages for breach of contract are not in doubt. Insofar as they concern a proceeding of the present kind, I set out those principles recently in Grusauskas v Panourakis[6] and it is unnecessary to repeat them here.
[6][2025] VCC 649 at [112]-[113].
D. The plaintiffs’ heads of loss
D.1 Diminution on sale price
35The plaintiffs submitted that they were entitled to damages measured as the difference between the purchase price under the Contract and the market value of the Property at the date of the breach, namely, 25 May 2023. However, in Victorian Economic Development Corporation v Clovervale Pty Ltd,[7] which the plaintiffs cited in support of this submission, Tadgell J stated that the appropriate measure of damages in a case such as the present was the difference between the contract price and the value of the subject land “at the date of determination of the contract”. In the present case, that date was 9 June 2023. Ultimately, the distinction is of no practical consequence for present purposes, because neither valuer considered there to be any difference in the value of the Property between 25 May 2023 and 9 June 2023. Both parties essentially proceeded upon the basis that the relevant question to be determined, for the purpose of assessing this head of loss, was the market value of the Property as at late May to mid June 2023. I will do the same.
[7][1992] 1 VR 596 at 604.
36In his valuation report dated 13 November 2024, Mr Rose for the plaintiffs opined that the value of the Property as at 13 June 2023 was $3.1 million. Mr Brown for the defendant, in his valuation report dated 3 March 2025, opined that the value of the Property as at 25 May 2023 and also as at 9 June 2023 was $3.4 million. Accordingly, the parties’ valuations were $300,000.00 apart. If Mr Rose’s valuation were accepted, the plaintiffs’ damages under this head of loss would be $425,000.00.[8] If Mr Brown’s valuation were accepted, the damages would be $125,000.00.
[8]That is, the Contract price of $3,525,000.00 less the valuation of $3,100,000.00.
37In their written submissions, the plaintiffs contended that I should accept Mr Rose’s valuation and conclude that the value of the Property as at May/June 2023 was $3.1 million. The defendant contended in her written submissions that I should accept Mr Brown’s valuation and conclude that the value of the Property as at May/June 2023 was $3.4 million. That is to say, following the experts’ oral evidence, neither party contended for any different valuation figure than that which their respective witness had proffered in his expert report.
38The plaintiffs submitted, and the defendant did not suggest otherwise, that the Court’s task in deciding between competing valuations should be guided by the following statement by the learned author of Expert Evidence:[9]
“A court is not obliged to accept one out of several competing valuations. However, a trial judge must not allow herself or himself to function as a third valuer. The court may make such adjustments as are required by the evidence and arrive at a figure between two values offered by valuation witnesses, provided it is not merely an average or a mean. The task for a court is to be satisfied that the value of the property on the relevant date has been arrived at. If the value is different from the value ascribed to the property by expert witness valuers, this does not affect the validity of the court’s finding provided that proper principles have been applied.” (citations omitted)
[9]Ian Freckelton, Expert Evidence (Lawbook Co, 6th ed, 2019) at [16.0.160]
39During their conference on the morning of the hearing, the experts produced a joint document which identified four component matters which accounted for the $300,000.00 difference in their valuations:
(a) the rate adopted for the underlying value of the land (difference of $157,300.00);
(b) the value added by the horse arena (difference of $106,000.00);
(c) the value added by “sundry improvements” (difference of $25,000.00); and
(d) other minor differences (difference of $12,000.00).
40In their oral evidence, the valuers sought to explain the bases upon which they had arrived at their respective valuations and upon which they disagreed with their colleague’s approach or conclusions in relation to each of these components. The parties’ written submissions adopted a similar approach in relation to these components. Much of the discussion in the reports, and the debate at the hearing and in the written submissions, concerned the identification of appropriate comparable properties and the adjustments to be made to derive figures from the comparable properties which could properly be applied to the Property in ascertaining its value.
41The whole exercise was in my view pervaded with a degree of artificiality on essentially two levels. The first such level concerned the task which the parties expected the Court to undertake. It was clear from the reports, and particularly from their oral evidence, that the experts had relied upon their judgment and experience in arriving at the component parts of the valuation. Often their approaches, and/or the figures at which they arrived, were very similar and the (often minor) differences between them were in respect of matters upon which reasonable valuers’ minds might differ. The experts themselves made reference on numerous occasions to the very subjective nature of the exercises which each of them had undertaken and the differences between them. It was also recognised in the written submissions that there were components of the valuation where it would be difficult for the Court to discern from the material a basis for preferring one valuer’s position over the other. I consider it to be an exercise in artifice that the Court – which does not itself possess expertise or experience in property valuation – was expected to form views, in the circumstances of the present case, about which exercise of professional valuation judgment was to be preferred.
42It would have been far preferable in the circumstances, and would have resulted in significantly lower cost to the parties and a significant reduction in the Court’s time, if the parties had jointly engaged a single expert to report on the value of the Property as at the relevant date.
43The second aspect of artificiality in the present case arises from the fact of the resale of the Property on 25 March 2025. Mr Rose issued his report on 13 November 2024. Mr Brown issued his report on 3 March 2025. The resale was therefore not referred to in the experts’ reports. Consequently, whilst there was much discussion and debate in the reports, at the hearing, and in the written submissions, about appropriate comparable properties and the figures to be applied to the Property based upon such comparables, most of this debate and discussion occurred separately from consideration of what was arguably the most comparable sale of all – namely, the resale of the Property itself. Neither party suggested that there was anything about that sale which suggested that it was not at arms’ length or that it bore any other features which meant that it did not reflect the market value of the Property at the time of the sale. The only real issue regarding the relevance of the resale is the effect of the effluxion of time between the relevant valuation date of May/June 2023 and the resale date of 25 March 2025.[10]
[10]Because of the relatively long period in the present case between the termination of the Contract and the resale, the present case may be contrasted with other cases in which a resale price has simply been treated as a proxy for market value as at the date of termination. See, eg, Ripani v Century Legend Pty Ltd (No 4) [2024] FCA 1211 at [292]-[295]; McGorlick v Palmer [2022] VCC 1229 at [94]-[102]; Coleston v Carney [2019] VCC 177 at [20] (fn 2); Palasty v Parlby [2007] NSWCA 345 at [7]-[12].
44In their written submissions, the plaintiffs acknowledged – correctly – that the price of any resale of a property may have a bearing on the relevant market value and hence the assessment of damages.[11] Despite this, and presumably because of the fact that the experts’ reports had been prepared before the resale occurred, the parties treated the resale as something of a second-order issue, whereas in my view it is of considerable importance to the resolution of the question of the appropriate valuation as at May/June 2023. In this context I also consider the original failed sale of the Property in January 2023 to be of potential relevance. As Mr Brown said in his oral evidence, in the present case, there are in effect “book end” sales of the Property in question, both before and after the relevant valuation date. As Mr Rose explained in his evidence (see paragraph 50 below), the sale of the subject property is amongst the most valuable sales evidence a valuer can obtain.
[11]The plaintiffs cited Victorian Economic Development Corporation v Clovervale Pty Ltd [1992] 1 VR 596 at 604.
45Both valuers accepted in their oral evidence that the resale in March 2025 for $3.25 million was a relevant matter, provided that account was taken of any change in market circumstances between May/June 2023 and March 2025.
46The experts had slightly different views of what had occurred in the market during this period. Both experts were of the view that the peak of the market was in the first part of 2022 prior to a number of interest rate rises; as Mr Brown observed,[12] there was no issue between them as to this.
[12]T96.
47Mr Rose said that the market in March 2025 was “probably similar to what it was two years ago”.[13] His evidence was that the market peaked in early to mid 2022, declined quickly for a short time until around mid-2023, and thereafter remained in “the same sort of ballpark today”.[14]
[13]T95.
[14]T93, 95-96.
48Mr Brown opined that, after peaking in the first part of 2022, the market declined through 2022 and into 2023.[15] Mr Brown’s view was that the market continued to soften through 2023 and did not stabilise until the end of 2024. This was due to Mr Brown’s view that interest rate increase in November 2023 impacted the market because it had followed a period of interest rate stability and was somewhat unexpected.[16] (Mr Rose, on the other hand, did not consider this increase to impact the market at that time because the market was already flat and because there was insufficient sales evidence to form a conclusion one way or the other.[17]) Mr Brown’s evidence in this regard makes intuitive sense and I prefer it to Mr Rose’s somewhat tentative evidence that the November 2023 interest rate rise had no impact on the market. Mr Brown considered the subsequent stabilisation to have occurred in late 2024 as a result of discussions at that time about interest rate reductions, followed by an actual reduction of 0.25 per cent in February 2025.[18]
[15]T96-97.
[16]T93, 97-98.
[17]T93-94.
[18]T97-98.
49On either expert’s view of market movements, it is clear that the resale price of $3.25 million in March 2025 occurred at a time when the market was no higher than it was in May/June 2023. (On Mr Brown’s evidence, the market was lower in March 2025 than in May/June 2023. On Mr Rose’s evidence, the market was about the same in March 2025 as in May/June 2023.) Herein lies the difficulty in accepting Mr Rose’s valuation of the Property at $3.1 million as at May/June 2023. Even if Mr Rose’s evidence of market movements were to be preferred to that of Mr Brown, the March 2025 sale price of $3.25 million should be broadly consistent with the May/June 2023 market value – yet Mr Rose opined that that market value is only $3.1 million.
50Mr Rose gave the following evidence, which I consider to be highly relevant:[19]
“As valuers, we’ve always been indoctrinated that the sale of the subject property is some of the most valuable sales evidence that we can obtain. There are some provisos to that, and one is a period of time and it’s been two years since the date of default through to this final sale.”
[19]T104.
51This evidence about the significance of the sale of the subject property must be considered in the present case in light of Mr Rose’s opinion that the market had not relevantly moved between May/June 2023 and March 2025. Moreover, when I asked Mr Rose whether he would have expected the March 2025 resale to have been for a lower price than would have obtained two years prior, due to market conditions, he responded:[20]
“No. My feeling is that the market value today is probably similar to what it was two years ago, and if I had been presented with the evidence today that the property had sold at 3.25, then I may have used that to substantiate the value potentially higher than what I did back then at 3.1, because I don’t believe the market has changed, but I didn’t have that evidence in front of me.”
[20]T95.
52Similarly, when asked later about the potential impact of the resale, Mr Rose said:[21]
“If I were asked to value the property today, with this evidence in hand, I may have a slightly different opinion of the level of value as to where it sat based on my comments previously about I don’t believe that the market has, or that the market deteriorated further than at the date of non-settlement of the subject and, therefore, I’d be completely hypocritical to say that a value of $3.25 million wasn’t something that I would seriously consider if I were valuing the property on the 30th of June 2023. So, I would take it into consideration”.
[21]T104.
53These were frank and appropriate concessions. I consequently cannot accept the plaintiffs’ invitation to accept Mr Rose’s valuation and conclude that the value of the Property as at May/June 2023 was $3.1 million. I note that, despite inviting me to do that, the plaintiffs also accepted that, in light of the experts’ evidence about the resale, it may be conceded, “as Mr Rose quite properly did (T104:10-26), that the recent sale might require an upwards adjustment on Rose’s valuation”. However, they submitted that any such adjustment should only be modest because the underlying reasons given by Mr Rose for his $3.1 million valuation were sound and should be preferred to Mr Brown’s reasons. They did not identify any valuation figure which I should adopt as a consequence of any such “adjustment”. Moreover, the submission – as well as being somewhat half-hearted – seems to me to be unsound as a matter of approach. The question for me is not whether either valuer’s valuation report is sound or correct, but rather, what is the value of the Property. The subsequent resale of the Property, together with the experts’ evidence about the market movements, suggests that the valuation of the Property as at the relevant date should be at least $3.25 million.
54Mr Brown gave evidence that, because of his view that the market was declining through 2023 and into 2024 after the November 2023 interest rate rise, he “would expect the sale price today to be lower than the market value as at June/July 2024”.[22] It is apparent from the context that the reference to 2024 is incorrect and was intended to be a reference to 2023. I understand Mr Brown to have been saying in substance that it would be expected that the resale price of $3.25 million in March 2025 would have been lower than the value of the Property as at May/June 2023 because of the continued decline in the property market through November 2023 until late 2024. Having regard to my acceptance of Mr Brown’s evidence about market movements (see paragraph 48 above), I accept that this follows as a matter of logic. That is to say, the combination of the resale price and the evidence about market movements suggests that the value of the Property as at May/June 2023 should have been greater than $3.25 million. This lends credence to Mr Brown’s valuation of $3.4 million.
[22]T106.
55Having made reference to the sale price of the Property in March 2025, it is also relevant to consider the sale price in January 2023, that is, pursuant to the Contract now sued upon. The Property sold originally by the Contract dated 22 January 2023 for $3,525,000.00. The experts gave oral evidence about the relevance of that sale for the present valuation.
56Mr Rose opined that, because the deposit was just under 3 per cent rather than the usual 10 per cent, the January 2023 purchase price may have been inflated to reflect the risk to the vendor of the deposit being only 3 per cent rather than 10 per cent.[23] Accordingly, whilst a purchase price might ordinarily be treated as reflecting the market value (subject to any vitiating circumstances), Mr Rose was unable to embrace that this was so in the present case because of the potential effect of the smaller deposit. He did not point to any other factor which he considered may have rendered the purchase price an inaccurate reflection of the market value.
[23]T99-100.
57Mr Brown on the other hand perceived the January 2023 sale as fair and reasonable and reflective of market value. He acknowledged the low percentage deposit, but did not think this would have changed the contract price to a significant degree.[24] He considered the price of $3.525 million in January 2023 to be consistent with his valuation of $3.4 million several months later in May/June 2023, having regard to his views about how the market was moving at the time.[25] I note in this regard that Mr Rose also considered the market to have been in a state of decline until mid 2023. These common views about market movements at the time suggest that, insofar as the January 2023 sale reflected the market value at that time, the market value of the Property in May/June 2023 could be expected to have been somewhat lower than $3.525 million.
[24]T102.
[25]T101-102.
58I prefer Mr Brown’s evidence in relation to the relevance of the aborted January 2023 sale. I found Mr Rose’s evidence on this matter somewhat vague and speculative. Further, even allowing for some drop in price due to market movements between January 2023 and mid 2023, the corollary of Mr Rose’s evidence and his valuation of $3.1 million would be that the lower deposit accounted for a difference in value of multiple hundreds of thousands of dollars, which strikes me as somewhat unlikely.
59As I have already observed, Mr Brown described the January 2023 and March 2025 sales of the Property as constituting “book end sale prices” for the Property. He said that, having regard to his views about market movements, the relevant valuation for present purposes should be somewhere between those two “book end” prices and that those prices accordingly supported his valuation of $3.4 million.[26] I accept that this is so, having regard to the foregoing discussion and the findings which I have made therein.
[26]T104-105.
60That is to say, I accept that Mr Brown’s valuation of $3.4 million is supported by the two sales of what might be described as the most comparable property of all, namely, the Property itself. Mr Rose’s valuation of $3.1 million on the other hand simply cannot be accepted, for the reasons which I have given above.
61Neither party proffered a valuation figure at which the Court should arrive in substitution for the $3.1 million or $3.4 million contained in the reports. In essence, the task presented to the Court by the parties was to choose one or the other of the two competing valuations, save for the unspecified “adjustment” which the plaintiffs suggested “might” be required to Mr Rose’s valuation (see paragraph 53 above). Further, the plaintiffs did not suggest that Mr Brown had made fundamental errors of principle or approach which vitiated his report. On the contrary, counsel for the plaintiffs submitted[27] that neither expert had committed any error of principle and that the Court was faced with “two reasonable experts, with appropriate qualifications in their field, trying to define with precision something upon which reasonable minds may differ”.
[27]T17.
62Mr Brown’s report was orthodox in its form and content. Indeed, as the defendant submitted, it was preferable to Mr Rose’s report insofar as Mr Brown fully exposed his reasoning for arriving at the per hectare land values for the comparable properties. (Mr Rose, as he himself conceded,[28] did not do so in his report and nor did he bring his working notes with him to Court.) There was no challenge to Mr Brown’s qualifications or expertise. Having read the parties’ written submissions and the transcript of the oral evidence regarding the approaches taken by the experts, I do not consider there to be any reason not to accept Mr Brown’s valuation of $3.4 million.
[28]T48.
63It follows that this head of loss is assessed as the January 2023 sale price of $3.525 million less Mr Brown’s valuation of $3.4 million, giving a figure of $125,000.00.
D.2 Interest on balance of purchase price
64The plaintiffs claimed interest on the unpaid amount of the purchase price between the settlement date (25 May 2023) and the date on which the Contract ended (9 June 2023), a period of 16 days. In accordance with GC 33, they claimed this interest at a rate of 12 per cent per annum, being 2 per cent higher than the amount fixed at the relevant time under the Penalty Interest Rates Act 1983. Applying that interest rate for 16 days to the outstanding amount of $3,425,000.00[29], they claimed an interest sum of $18,016.44.
[29]That is, the $3,525,000.00 purchase price less the $100,000.00 deposit.
65In support of their entitlement to claim this amount, the plaintiffs cited Victorian Land Contracts,[30] which in turn cites Portbury Development Co Pty Ltd v Mackali.[31] They also relied upon Pettiona v Whitbourne.[32] The plaintiffs submitted that, while the Contract remained on foot, GC 33 governed their entitlement to interest and, accordingly, entitled them to interest between the settlement date and termination.
[30]David P Lloyd and William F Rimmer, Victorian Land Contracts (Lawbook Co, 2020) at [GC35.200].
[31][2011] VSC 69 at [27].
[32][2013] VSC 205 at [28].
66The defendant contended that the plaintiffs were not entitled to claim this amount. In her written submissions, the defendant submitted:
“the plaintiffs are not entitled to any form of default interest under the contract as the parties did not settle pursuant to the contract. Once the contract ended, there is no obligation to pay interest on [the] unpaid balance of the purchase price”.
67In his oral submissions, counsel for the defendant submitted that the decision of the NSW Court of Appeal in Carpenter v McGrath[33] stated the law applicable to the present issue. He submitted that Carpenter v McGrath has not been overturned and that I am bound to follow it as a decision of an intermediate appellate court regarding the common law. He also relied upon the decision of Judge Macnamara in Bill v Clarke[34] which, he submitted, was still good law because it followed the principles in Carpenter v McGrath. During the hearing, I queried whether the defendant’s submissions accurately reflected the current state of the law in relation to the standard general conditions applicable in Victoria, having regard to recent decisions of a number of judges of this Court. Having reviewed the authorities in more detail for the purposes of preparing these reasons, I am satisfied that the defendant’s submissions do not accurately reflect the current state of the law, for reasons which I will explain below.
[33](1996) 40 NSWLR 39.
[34][2015] VCC 1721.
68In Bill v Clarke, Judge Macnamara relied upon the decision of the NSW Court of Appeal in Carpenter v McGrath in concluding that the vendor was not entitled to interest on the unpaid balance of the purchase price under the equivalent of GC 32 and GC 33 during the period between the date on which settlement should have taken place and the date on which the contract ended. In doing so, his Honour gave consideration to authorities including those upon which the plaintiffs rely in the present case, namely, the decision of Kaye J in Portbury v Mackali and the decision of Davies J in Pettiona v Whitbourne.
69Of considerable significance for present purposes is the decision of Judge Woodward in Tymstock Pty Ltd v Patrick.[35] As I observed earlier in these reasons, GC 32 to 35 of the Contract are particularly relevant in the present case. GC 32 to 35 are identical to conditions 25 to 28 of the standard conditions in the contract in Tymstock, save that condition 26 of the Tymstock conditions does not contain the words “at settlement” which appear in GC 33. I will return to this difference later in these reasons.
[35][2019] VCC 1092.
70As to the issue presently under consideration, Judge Woodward in Tymstock v Patrick summarised his position as follows:[36]
“I have given anxious consideration to Macnamara J’s thorough reasons in Bill v Clarke and the detailed submissions of both parties on this issue. Having done so, I have concluded that, in the circumstances of this case, I should not follow the approach taken in Bill v Clarke, essentially for the reasons submitted by Tymstock, as developed further below. In my view, interest is payable by [the purchaser] on the balance of the unpaid purchase price from the extended settlement date on 20 November 2017, until 6 February 2018 when the contract of sale ended”.
[36][2019] VCC 1092 at [97].
71I understand his Honour’s reasons for departing from Billv Clarke to have been, by way of short summary:
(a) Both Bill v Clarke and Carpenterv McGrath were “clearly distinguishable” because, in those cases, the vendor did not resell the property but retained it, whereas in Tymstockv Patrick (as in the present case, I interpolate), there was a resale.[37]
(b) An important aspect of the decision in Carpenter v McGrath was that it was “fundamentally a decision about the construction of the ‘standard Agreement for Sale of Land – 1986 Edition’” and, although those provisions “had features in common with the contract of sale [in Tymstock v Patrick]”, they “also had potentially important differences”.[38]
(c) There was a difference in views on the relevant question even amongst the three members of the Court of Appeal in Carpenter v McGrath.[39]
(d) The Court of Appeal in Carpenter v McGrath was not determining a point of common law principle but was “merely construing the terms of the NSW contract (with varying results)” and it therefore followed that his Honour was not constrained to follow the decision in Carpenter v McGrath.[40]
(e) The approach taken by Cole JA in Carpenter v McGrath (and by Kaye J in Portbury v Mackali and Davies J in Pettiona v Whitbourne) was to be preferred to that of Judge Macnamara in Bill v Clarke.[41]
[37][2019] VCC 1092 at [100].
[38][2019] VCC 1092 at [100]-[102].
[39][2019] VCC 1092 at [103]-[108].
[40][2019] VCC 1092 at [109].
[41][2019] VCC 1092 at [111]-[113].
72Judge Woodward accordingly concluded that “interest will accrue under [the equivalent of GC 33] on the money owing comprising the unpaid balance of the purchase price from the original date of settlement until one of two events occurs: when the purchase price is paid in full or when the contract ends and the vendor becomes entitled to possession under [the equivalent of GC 35.4(b)]”.[42] This conclusion strongly supports the plaintiffs’ claim to interest in the present case.
[42][2019] VCC 1092 at [114]. See also at [117].
73In Bensons Property Group Pty Ltd v Manderson and Tan (No 3),[43] Judge Woodward applied his earlier reasoning in Tymstock v Patrick in relation to interest on the unpaid purchase price between the due date for settlement and the termination of the contract.
[43][2021] VCC 326 at [36].
74In Song v Brady Lonsdale Pty Ltd,[44] Judge Macnamara was faced with a claim for interest up to the date on which the contract was terminated by the vendor. His Honour said this:[45]
“I dealt with this matter in some detail in my decision in Bill v Clarke [2015] VCC 1721. According to that decision, no such award of interest as is claimed here should be made. If the principal on which it was calculated was not payable by reason of the termination of the contract, how could the interest be? This reasoning did not commend itself to Judge Woodward in Bensons Property Group Pty Ltd v Manderson and Tan (No 3) [2021] VCC 326. Mr Tennant referred to the decision of Ginnane J in Ironbridge Holdings Pty Ltd (administrators appointed) (receivers and managers appointed) v O’Grady [2020] VCC 344. At 374, in analogous circumstances, his Honour held that Mrs O’Grady was entitled ‘to recover interest as an accrued debt. She does not have to establish damages. Debt is a separate cause of action.’ The claim, which was unsuccessful in McDonald v Dennys Lascelles Ltd, was a claim in debt; namely, a claim for the overdue instalment of the purchase price. I remain respectfully unpersuaded that, as a matter of principle, the award of interest sought by the plaintiff should be made. However, since other judges of this Court and a judge of the Trial Division of the Supreme Court have taken the opposite approach, I propose following their lead and awarding the interest, despite the view which I continue to hold that no such award ought be made”. (emphasis added)
[44][2023] VCC 239 at [306].
[45][2023] VCC 239 at [306].
75The issue arose again in this Court in McLennan v Dannaoui,[46] which involved a contract containing standard general conditions identical to GC 32 to 35 of the Contract. In that case, the purchaser relied principally upon Bill v Clarke to contend that the words “payable at settlement” in GC 33 meant that the liability of the defaulting purchaser to pay interest during the period of default was conditional upon a settlement of the sale actually occurring.[47] His Honour Judge Wise rejected that submission, instead construing GC 33 “as imposing on a defaulting purchaser an independent obligation to pay interest to the vendor during the period commencing on the default – in this case the missed contractual settlement date – and ending on the termination of the contract 14 days after service of the notice of rescission”.[48] In summarising his conclusions at the outset of his reasons, his Honour said:[49]
“GC 33 creates an independent obligation upon the purchaser to pay interest at the agreed rate during the period that she was in default of her obligation to complete settlement and until the contract terminated by way of rescission. That obligation is not conditional on a settlement actually occurring”.
[46][2024] VCC 1786.
[47]See [2024] VCC 1786 at [21]-[23].
[48][2024] VCC 1786 at [25].
[49][2024] VCC 1786 at [13].
76This conclusion, like the conclusion of Judge Woodward to which I referred in paragraph 72 above, strongly supports the plaintiffs’ claim to interest in the present case. Judge Wise reached this conclusion via a detailed consideration of the text of GC 33, relevant contextual matters, and the commercial purpose of GC 33.[50] His Honour then noted[51] that Bill v Clarke (upon which the purchaser in McLennan v Dannaoui relied) and Carpenter v McGrath had both been given “detailed consideration” by Judge Woodward in Tymstock v Patrick. Judge Wise expressed the view[52] that the additional words “at settlement” contained in GC 33, but absent from condition 26 in Tymstock v Patrick, were immaterial and that Tymstock v Patrick was “on all fours with” McLennan v Dannaoui. After noting that Judge Woodward in Tymstock v Patrick did not consider himself bound to follow Carpenter v McGrath, Judge Wise briefly summarised the bases upon which Judge Woodward had distinguished both Bill v Clarke and Carpenter v McGrath.[53]Judge Wise then said:[54]
“I agree with Woodward J that those cases are distinguishable and adopt his reasoning.
I also note that Macnamara J in a subsequent decision Song v Brady Lonsdale Pty Ltd noted Woodward J’s decision in Tymstock and, without recanting his own reasoning, decided to follow Tymstock rather than his own earlier decision in Bill v Clarke.
In view of these decisions I would regard Bill v Clarke as attendant with sufficient doubt as to put it aside.”
[50]See [2024] VCC 1786 at [26]-[52].
[51][2024] VCC 1786 at [55].
[52][2024] VCC 1786 at [55]-[57].
[53][2024] VCC 1786 at [58]-[59].
[54][2024] VCC 1786 at [60]-[62].
77Finally, I note that in the very recent case of Grusauskas v Panourakis[55], I allowed the plaintiff’s claim for interest under GC 33 on the unpaid purchase price for the period between settlement and termination on the basis that that claim was supported by both Tymstockv Patrick and McLennan v Dannaoui.
[55][2025] VCC 649 at [121]-[126]. Grusauskas had not yet been published as at the date of the trial assessment hearing in the present case.
78In light of the multiple recent Victorian authorities to which I have referred above, I am unable to see how I could accept the defendant’s submission that I am bound instead to follow Carpenter v McGrath. That is particularly so in circumstances where Judge Woodward, in a detailed judgment regarding substantially identical contractual provisions to those in the present case, expressed the view that he was not bound by Carpenter v McGrath. I do not accept the defendant’s submissions in relation to this head of loss. The applicable authorities strongly support the plaintiffs’ claim, and I will allow it.
79Accordingly, I find that the plaintiffs are entitled to interest on the unpaid purchase price for the period from 25 May 2023 until 9 June 2023, in the sum of $18,016.44.
D.3 Interest on ANZ loan balance
80Mrs Guest deposed that, as at May 2023, the plaintiffs owed $120,581.07 on a loan with ANZ and that it was their intention to pay out the loan from the proceeds due at settlement of the sale to the defendant. The relevant interest rate on the loan as at May 2023 was 9.16 per cent and increased to 9.41 per cent on 16 June 2023.
81The plaintiffs claimed the interest payable on the loan between the date of termination of the Contract (9 June 2023) and the date on which they commenced this proceeding (13 June 2024). They quantified this by applying the interest rate of 9.16 per cent[56] to the loan balance of $120,581.07, giving a total amount of $11,166.27. There was no documentation in evidence regarding the loan – such as bank statements – but the defendant took no issue with this.
[56]Although the interest rate increased on 16 June 2023, the plaintiffs were prepared to use the lower rate for ease of calculation.
82The plaintiffs submitted that the interest in question was recoverable based on the principles in Hungerfords v Walker[57] and that their claim was supported by the decisions of the NSW Court of Appeal in Palasty v Parlby[58] and Statewide Developments Pty Ltd v Higgins.[59]I recently discussed those authorities, together with relevant observations made by Judge Wise in McLennan v Dannaoui,[60] in allowing a similar claim made by a vendor in Grusauskas v Panourakis.[61] It is unnecessary to repeat that discussion here, other than to note in particular the following observation of Mason P in Palasty v Parlby:[62]
“The primary judge was therefore correct in awarding interest damages for the delayed receipt of the balance of the purchase money between the date of termination and the date when the relevant loss came to an end with completion of the resale contract. Interest damages spanning this full period depended upon the vendor showing, as he did, that he acted diligently in his efforts to resell.”
[57](1989) 171 CLR 125.
[58][2007] NSWCA 345.
[59][2011] NSWCA 35.
[60][2024] VCC 1786 at [97]-[98].
[61][2025] VCC 649 at [155]-[170].
[62][2007] NSWCA 345 at [54].
83In the present case, the plaintiffs do not claim interest up until the date of completion of the resale, which is due to occur on 22 September 2025. Rather, “to limit argument”, they have adopted a more conservative approach and claimed interest only up to the date on which they commenced this proceeding (13 June 2024).
84The defendant challenged this head of loss on a number of bases. In her written submissions, she contended:
“The plaintiffs are not entitled to on-going interest on loans and other on-going costs as Clarke JA said in Carpenter v McGrath:
‘The claim for interest paid by the respondent to their mortgagee did not arise because of the breach of contract. The obligation to continue paying the interest followed the decision of the respondents not to sell the property. It is wrong in principle to regard an obligation which arises because a vendor makes a commercial decision to retain a property as flowing from the breach of contract by the purchaser.’”
85I consider the defendant’s reliance upon this passage from Carpenter v McGrath to be inapposite. The relevant facts in Carpenter v McGrath are clearly distinguishable from those of the present case. Unlike the respondents in Carpenter v McGrath, the plaintiffs did not make a commercial decision to retain the Property. Rather, they put it back on the market promptly after the termination of the Contract and ultimately sold it.
86The defendant similarly contended in her oral submissions that the plaintiffs elected not to sell the Property and that the defendant could therefore not be subjected to an open-ended liability for interest. With respect, I had some difficulty in following the defendant’s submissions in relation to this point, which seemed to be at odds with the uncontroverted evidence that the plaintiffs promptly re-marketed the Property and ultimately sold it. Counsel also submitted in this context that the plaintiffs had decided to “land bank” the Property. However, there was no evidence to that effect and it was contrary to Mrs Guest’s unchallenged evidence regarding the plaintiffs’ attempts to resell the Property.
87The defendant also contended in her oral submissions that the sale of the Property was delayed because, in substance, the plaintiffs had unrealistic price expectations. That submission could only be relevant to the period up to 13 June 2024, which is the terminal date of the plaintiffs’ interest claim. In that period, there was only one offer for the Property (see paragraph 30(a) above). Whether that offer was for $2.8 million or $2.9 million, I do not consider the plaintiffs to have acted unreasonably or to have been unrealistic in refusing it. Those amounts are well less than each of the Contract price ($3,525,000.00), the values ascribed to the Property by Mr Rose ($3,100,000.00) and Mr Brown ($3,400,000.00), and the price for which the Property resold in March 2025 ($3,250,000.00). Further, I am satisfied that the plaintiffs acted diligently in their efforts to resell during this period. As I have observed earlier in these reasons, the plaintiffs initiated the resale marketing process with Mr Cullen very shortly after the termination of the Contract.[63] The marketing process appears to have been conventional. Mrs Guest’s evidence about that process was not challenged, and the defendant did not otherwise advance any criticism of the process itself.
[63]Cf Statewide Developments Pty Ltd v Higgins [2011] NSWCA 35 at [69].
88The defendant also contended in her written submissions that “the plaintiffs would have paid for the service of the loan that they are required to pay anyway and, therefore, this cannot be claimed as damages”. I do not accept this contention, which is contrary to Mrs Guest’s unchallenged evidence that the plaintiffs would have paid out the loan if they had received the sale proceeds from the defendant at settlement. It follows from that evidence that, if the defendant had not breached the Contract, the plaintiffs would have paid out the loan and avoided incurring interest on the balance of that loan from the settlement date.
89Finally, the defendant contended in her oral submissions that the second limb of Hadley v Baxendale[64] was not satisfied because there was no evidence to suggest that the defendant was aware of the loan in question. Whilst this submission correctly reflects the state of the evidence, it overlooks that the Court of Appeal in Palasty v Parlby held that a claim for interest of this nature falls within the first limb of Hadley v Baxendale rather than the second.[65]
[64] (1854) 9 Ex 341.
[65][2007] NSWCA 345 at [53]. See also Grusauskas v Panourakis [2025] VCC 649 at [164].
90Accordingly, I find that the plaintiffs are entitled to interest damages reflecting the interest accrued on their ANZ loan between 9 June 2023 and 13 June 2024, being the sum of $11,166.27.
D.4 Agent’s fees on resale
91The plaintiffs claim the $71,500.00 commission payable to Mr Cullen on the resale of the Property. The defendant conceded that the plaintiffs were entitled to this amount. That was an appropriate concession having regard to the authorities.[66]
[66]See David P Lloyd and William F Rimmer, Victorian Land Contracts (Lawbook Co, 2020) at [GC35.230].
92Accordingly, the plaintiffs are entitled to recover $71,500.00 as general damages in respect of agent’s fees on the resale of the Property.
D.5 Advertising costs on resale
93On the basis of the principles applicable to the recovery of agent’s fees, the plaintiffs also claim the advertising costs incurred by them in relation to the resale of the Property. As I have recorded in paragraph 27 above, Mrs Guest deposes that the plaintiffs had incurred and paid those costs in the sum of $2,489.00. It became apparent on the day of the hearing that Mrs Guest’s affidavit failed to exhibit the 29 October 2023 updated authority recording those costs, although the plaintiffs’ counsel had a copy of that authority in electronic form. It was agreed that the parties would discuss the position after the hearing and that the defendant would thereafter advise my chambers of her position in relation to this head of loss. By email dated 8 May 2025, the defendant’s solicitors advised that she accepts the plaintiffs’ claim for advertising expenses in the amount of $2,489.00.
94Accordingly, the plaintiffs are entitled to recover $2,489.00 as general damages in respect of advertising expenses on the resale of the Property.
D.6 Holding costs
95The plaintiffs claimed holding costs for the period between the settlement date (25 May 2023) and the date on which this proceeding was commenced (13 June 2024).
96Mrs Guest deposed to holding costs of $24,986.83[67] during this period, comprising the following categories:
(a) Bayles Spraying:[68] $2,125.20;
(b) water rates: $361.40;
(c) council rates: $8,152.48; and
(d) insurance: $14,347.75.
[67]The plaintiffs’ written submissions referred to holding costs of $35,490.98. In response to a query from the Court the day after the hearing, the plaintiffs confirmed by email dated 9 May 2025 that this was an error and that the correct amount claimed by them under this head is $24,986.83.
[68]I understand this to relate to weed spraying.
97The plaintiffs contended, by reference to Riggall v Thompson,[69] that holding costs are compensable for a reasonable period. The Queensland Court of Appeal in that case upheld the primary judge’s decision to award the vendors their holding costs, mostly comprising body corporate fees, on the basis that the holding costs “flowed directly from [the purchaser’s] default of her obligations under the contract and were therefore recoverable by [the vendors]”. The Court of Appeal observed that those costs were recoverable as damages under general law principles, and noted that similar costs had been allowed in Higgins v Statewide Developments Pty Ltd.[70]
[69][2010] QCA 144 at [39].
[70][2010] NSWSC 183; (2010) 14 BPR 27,293 at [119]. (An appeal from this decision was dismissed: Statewide Developments Pty Ltd v Higgins [2011] NSWCA 35.)
98Barrett J in Higginsv Statewide held[71] that the vendor was entitled to claim by way of damages “direct costs of holding the property, that is, costs that would have been avoided had the [purchaser’s] breach not occurred and which were occasioned by the continued ownership.” His Honour noted that those costs in Higgins were made up of strata levies, local government rates, water rates and land tax.
[71][2010] NSWSC 183; (2010) 14 BPR 27,293 at [119].
99The defendant did not dispute that the plaintiffs had incurred the costs in question. Rather, she submitted that the claim for these costs satisfied neither limb of Hadley v Baxendale.
100The plaintiffs responded that the correct analysis was that the holding costs fell within the first limb of Hadley v Baxendale. They submitted in this regard that the ordinary consequences of a failure to settle would include that the vendor would still have the Property and incur costs associated with continuing to hold it. They further submitted that the costs in question were unavoidable and were the natural and ordinary costs of holding land.
101I accept the plaintiffs’ submission. Where a contract for sale of land is terminated as a result of the purchaser’s failure to complete, an obvious consequence is that the vendor will be left holding a property which would otherwise have changed hands. The vendor’s continued incurring of holding costs in those circumstances is something which in my view could be said to arise “according to the usual course of things”. I also consider that conclusion to be consistent with what was said by the Queensland Court of Appeal in Riggall v Thompson in the passage which I have quoted above.
102On the basis of the authorities to which I have referred, I am satisfied that the plaintiffs are entitled to the holding costs claimed. As I have stated earlier in these reasons, I am satisfied that the plaintiffs acted diligently in their efforts to resell during the relevant period (that is, the period up to 13 June 2024) and I do not consider their refusal of the one offer received for the Property during this period to have been unreasonable.
103Accordingly, I find that the plaintiffs are entitled to recover $24,986.83 as general damages in respect of their holding costs for the Property during the period from 25 May 2023 to 13 June 2024.
D.7 Legal fees
104The plaintiffs claim legal fees incurred as a result of the defendant’s breach, in the sum of $3,469.02. Those legal fees relate to the Default Notice and estimated conveyancing costs on the resale. The plaintiffs contend, citing Riggall v Thompson,[72] that such amounts are recoverable. The defendant conceded this head of loss.
[72][2010] QCA 144 at [20]. See also at [27]-[28].
105Accordingly, the plaintiffs are entitled to recover $3,469.02 as general damages in respect of legal fees.
D.8 Agistment fees (deduction)
106Mrs Guest deposed that the plaintiffs had received agistment fees of $6,638.71 in respect of the Property during the period May 2023 to June 2024. It was common ground that these fees should be deducted from the amounts otherwise claimed by the plaintiffs.
107Accordingly, the plaintiffs’ damages should be reduced by $6,638.71 to account for the agistment fees.
D.9 Forfeited deposit (deduction)
108It was not in dispute that the forfeited deposit of $100,000.00 should be deducted from the amounts otherwise claimed by the plaintiffs.
E. Conclusion
109For the reasons discussed above, the plaintiffs are entitled to damages in the total sum of $149,988.85, made up as follows:
Diminution on sale price
$125,000.00
Interest on balance of purchase price
$18,016.44
Interest on ANZ loan balance
$11,166.27
Agent’s fees on resale
$71,500.00
Advertising costs on resale
$2,489.00
Holding costs
$24,986.83
Legal fees
$3,469.02
(Agistment fees)
($6,638.71)
(Forfeited deposit)
($100,000.00)
TOTAL
$149,988.85
110The plaintiffs made no submissions as to the question of statutory interest. The defendant’s written submissions accepted that the plaintiffs were entitled to interest on their damages at the rate of 10 per cent fixed under the Penalty Interest Rates Act, from the date of the commencement of the proceeding to the date of judgment. The parties should seek to reach agreement on the question of interest.
111Unless any party wishes to contend otherwise, I consider that the defendant should be ordered to pay the plaintiffs’ costs of the trial assessment on the standard basis.
112The parties are directed to provide my associate, within 14 days of the delivery of these reasons, an agreed draft order disposing of the proceeding consistent with these reasons or, if agreement cannot be reached, their competing draft orders. Depending upon what is received from the parties, I will then consider the necessary next steps to finalise the matter, including whether any further submissions are required.
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Certificate
I certify that these 33 pages are a true copy of the ruling of Judicial Registrar Bennett delivered on 11 July 2025.
Dated: 11 July 2025
Tae Fabricato
Associate to Judicial Registrar Bennett
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