Holland v Roperti
[2009] VSC 378
•4 September 2009
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMON LAW DIVISION
No. 4234 of 2007
| PHILLIP ROBERT HOLLAND | Plaintiff |
| v | |
| NICOLINO ROPERTI | Defendant |
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JUDGE: | HANSEN J | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 26 - 27 March 2009 | |
DATE OF JUDGMENT: | 4 September 2009 | |
CASE MAY BE CITED AS: | Holland v Roperti | |
MEDIUM NEUTRAL CITATION: | [2009] VSC 378 | |
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PROPERTY LAW – Contract for sale of land – Purchaser was employee of estate agent that had listed vendor’s property – Purchase prohibited by statute - Purchaser sought specific performance – Illegality – Termination - Abandonment - Delay – Laches – Estate Agents Act 1980, s 55.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr D Lloyd | Oakleys McKenzie-McHarg |
| For the Defendant | Mr B Debuse | Sevdalis Lawyers & Conveyancers |
HIS HONOUR:
Introduction
Phillip Robert Holland (“the plaintiff”) seeks specific performance of a contract of sale dated 22 February 2001 whereby Nicolino Roperti (“the defendant”) agreed to sell two adjoining lots of vacant land (Lots 406 and 407) at 9 and 11 Market Place, Cape Patterson (“the properties”) for $60,000. In the alternative, the plaintiff seeks damages in lieu of specific performance pursuant to s 38 of the Supreme Court Act 1986.
In order to understand the pleadings, issues and submissions, it is convenient to first set out the factual background in some detail. In the next section, the facts stated are as I find them to be. In making factual findings, for reasons stated below, I prefer the defendant’s evidence to that of the plaintiff and his witnesses wherever there is a conflict.
The facts
Since 2000 the plaintiff has been employed as a salesman at PBE Real Estate Pty Ltd (“PBE”) in Wonthaggi[1]. He has acquired many properties over the years. He described himself in evidence as a “collector” of properties, who “mainly buys, seldom sells”.
[1]PBE also has offices in several other towns including Inverloch and Cape Patterson.
The defendant also owns several properties. In November 1994 he gave PBE an authority to sell the subject properties at a price of $50,000[2]. The authority states that the authority period is “60 days from the date of this agreement”. The authority expired, and no subsequent authority was ever provided by the defendant. I do not accept the plaintiff’s evidence that the properties remained on PBE’s stock list in 2001 if that was intended to mean that there was a current authority. Nor do I accept that the properties were marketed by PBE after the authority expired in 1994. What is at least apparent is that the plaintiff was able to ascertain from PBE’s records that the defendant’s properties had previously been listed for sale, upon which information he acted.
[2]$25,000 per block.
In January 2001 a couple by the name of Glenn and Tracey McGill listed their vacant lot at 15 Market Place for sale through PBE. The plaintiff became interested in buying the McGill’s property as well as the defendant’s properties which, it will be noted, are separated by only one block of land in the same street.
To this end, the plaintiff spoke to Ross Splatt who was a director of PBE and branch manager of the Inverloch office. The plaintiff told Splatt that he was interested in purchasing the properties, and asked Splatt to approach the defendant to negotiate a purchase on his behalf[3].
[3]T 32.
Splatt telephoned the defendant to say that he had a potential buyer if the defendant still wished to sell the properties. This call came out of the blue as far as the defendant was concerned, accepting as I do his evidence that this was the first offer he had received on the properties. I also accept the defendant’s evidence that Splatt did not tell him in this conversation that the potential buyer was an employee of PBE. The defendant told Splatt that he was interested in selling, subject to agreeing on price. I accept the defendant’s evidence that Splatt said that he thought that he could get “in the mid-$30,000’s per block”, although nothing turns on this because, after negotiations in several telephone discussions between Splatt and the defendant over the next few days, they ultimately agreed on a total price of $60,000 less expenses.
On 16 January 2001, Splatt sent a fax to the defendant confirming that the plaintiff was offering $30,000 per block on a 60 day settlement, that the defendant would receive $57,800 (being $60,000 for the two properties less $2,200 agent’s commission) less legal expenses, and that “all other fees regarding section 55 of the sale of land will be born by the purchaser who is an employee of our firm … if you would like to proceed please advise so we can get all the relevant paper work done.” I find that this was the first time the defendant was advised that the buyer was an employee of PBE.
The reference to “section 55” was a reference to s 55 of the Estate Agents Act 1980 (“the Act”) which, in essence, prohibited an employee of an estate agent from purchasing a property his employer was commissioned to sell unless the employee was granted permission to do so by the Director of Fair Trading.
Section 55 relevantly provides as follows:
“(3) An employee of an estate agent shall not whether directly or indirectly purchase or be in any way concerned or beneficially interested in the purchase of any real estate or business which his employer is by any owner thereof commissioned to sell.
Penalty:120 penalty units.
(4)Any person who is convicted of an offence against subsection (3) shall in addition to any penalty imposed by the court, be ordered by the court to account for and pay over to his employer's principal all profits resulting or which in the opinion of the court may result from the purchase and any subsequent dealings with that real estate or business.
(5)An estate agent, a partner of an estate agent, an agent's representative or any other employee of an estate agent shall not accept title to any property which the estate agent is commissioned by any principal to sell.
Penalty: 120 penalty units.
(6)Any person who is convicted of an offence against subsection (5) shall in addition to any penalty imposed by the court, be ordered by the court to transfer title in the property to the estate agent's principal or to account for and pay over to the principal all profits resulting or which in the opinion of the court may result from the acceptance of title and any subsequent dealings with that property.
(14)A person may make a purchase that would otherwise be prohibited by this section if—
(a)the person applies in writing to the Director before the contract of sale is signed for permission to make the purchase; and
(b)the Director notifies the person in writing that the Director is satisfied that the purchase would not be contrary to the interests of the owner of the real estate or business to be sold if the conditions (if any) imposed by the Director are complied with.
(15)If a person makes a purchase after receiving a notice under subsection (14)(b), the person must comply with any conditions imposed by the Director that are set out in the notice.
Penalty:25 penalty units.”
On about 25 January 2001 the defendant telephoned Luscombe Colahan solicitors and engaged the firm to act for him on the transaction. I accept the defendant’s evidence that Splatt had recommended Luscombe Colahan to him. It is to be noted that, unbeknown to the defendant at this time, Luscombe Colahan were at that time (or shortly thereafter) also acting for the plaintiff on the purchase. There is no evidence that the defendant ever signed a consent form authorising Luscombe Colahan to continue acting for him despite the conflict of interest[4].
[4]The Court Book merely contains an unsigned acknowledgment in an unsigned letter from Luscombe Colahan to the defendant dated 18 April 2001 which, in any event, I am not satisfied was received by the defendant.
At around this time, the defendant was asked to provide a copy of his certificate of title, which prompted him to search for it whereupon he realised that he could not find it. At around this time Luscombe Colahan prepared a contract of sale which was provided to PBE and forwarded to the defendant by Splatt. I refer below to the terms of the contract, but for present purposes note that the contract contains a special condition which makes reference to s 55 of the Act. Accordingly, I reject the suggestion made by Peter Colahan (a principal of Luscombe Colahan) that the contract was prepared before the firm had been instructed that a s 55 application needed to be made.
Splatt called the defendant in early February and asked whether he had signed and returned the contract. The defendant said that he had not, as he had misplaced the certificate of title. Splatt said that that would not be a problem as a replacement could be obtained, as to which he would find out the cost. Splatt called back a few days later and said a replacement title could be obtained for $600. The defendant said that he was not prepared to pay for that, as the sale price was already low, and that he would keep looking for the certificate of title. Splatt told the defendant to sign the contract and that he would have a word with the purchaser.
By 12 February 2001, the defendant had located a copy of the certificate of title, which he sent in a facsimile of that date marked to “Kerry Anderson, PBE Real Estate Ltd”[5], stating that “we are unable to locate the original, as yet. Please proceed with the sale, as discussed over the phone”.
[5]Kerrie Anderson (now known as Kerrie Bramall) was actually a legal secretary at Luscombe Colahan, and the facsimile number on the letter was that of Luscombe Colahan. The defendant said in evidence that he had spoken on the telephone to a male person at Luscombe Colahan, who he had assumed was Kerry Anderson. I accept that this facsimile advised the plaintiff, by his agent Luscombe Colahan, that the defendant had misplaced the certificate of title.
Splatt telephoned the defendant and said that he needed to sign the contract and send it back. The defendant reiterated that he did not want to pay for a replacement title, as to which Splatt replied “Sign the contract and send it back and if you still can’t find the Certificate of Title then the client will pay for it”. I accept the defendant’s evidence that he asked Splatt whether there should be something in the contract to that effect, as to which Splatt said there was no need because if the purchaser would not pay for the new title “we will just throw the contract in the bin”.
On 15 February 2001 an application was made to the Director for permission to make the purchase. The plaintiff did not make the application himself. He said, and I accept, that Splatt wanted to do the application, being the director of PBE. The application took the form of a letter, written by Colin McDonald (who wrote in his capacity as Officer in Effective Control of PBE) addressed to Mr Reg Brown at the Office of Fair Trading, which relevantly stated:
“Dear Mr Brown
RE:- Purchase of Real Estate by an Employee
Sub Sections 55(14) Estate Agents Act
This is to advise that I agree to the purchase of a parcel of land currently listed through our Wonthaggi Office.
AT:- 15 Market Place, Cape Paterson for an amount of $27,000 for which we shall charge a selling commission of $1000 plus GST.
AND Lots 406 and 407 Market Place, Cape Paterson for a combined amount of $60,000 for which we shall charge a selling commission of $2000 plus GST.”
It is to be noted that the letter refers to both the McGill property and the defendant’s properties. It is apparent from the Director’s file[6] that the documents lodged in relation to the application include, among other things, an unsigned and undated contract in the same terms as the contract sought to be enforced, an unsigned and undated s 32 statement, valuations, a selling agent’s statutory declaration made by Splatt on 15 February, and a “Consent of Vendor” by which the defendant acknowledged that he had been informed that the purchaser was an employee of PBE.
[6]Exhibit 4.
It is not clear which documents were included with McDonald’s letter, and which documents were provided to the Director later. For example, the “Consent of Vendor” form was apparently not faxed to the defendant by Peter Colahan until 16 February and was then faxed back to Colahan by the defendant on 21 February. The likelihood seems to be that some documents were sent with McDonald’s letter while Colahan sent other documents to the Director later. In this regard, I accept Colahan’s evidence that he did not make the application for the s 55 permission, but I consider that he was involved in it. Further, he prepared the contract in the knowledge that a s 55 was required, and provided that contract to PBE who made the s 55 application by McDonald’s letter.
On 22 February 2001, the parties signed the contract of sale. I interpolate that the contract date was agreed on the pleadings, and counsel conducted the case on that basis. I note, however, that the vendor statement purports to have been signed by the defendant on 6 March 2001 (and by the plaintiff on 22 February 2001), which might have given rise to an inference that the defendant did not sign the contract until 6 March 2001. The contract relevantly provided that the purchase price was $60,000, as to which a deposit of $6,000 was to be paid (and was in fact paid[7]) on the signing of the contract, with the residue of $54,000 payable within 60 days of the contract date. The contract contained a nominee clause (cl 5), and the particulars of sale stated that the purchaser was the plaintiff “and/or nominee”. Special condition 1 provided that:
“This contract is subject to and conditional upon the Director of Consumer and Business Affairs consenting to this Contract pursuant to section 55(14) of the Estate Agents Act 1980 prior to the settlement date.”
[7]This was not disputed.
It is to be noted that as at the contract date the Director had not granted permission for the purchase.
On 27 February 2001 the Director granted written permission to purchase in an undated letter[8] to McDonald. The letter identified the plaintiff as the purchaser, identified the defendant’s properties (but not the McGill property), and identified the McGills (but not the defendant) as the vendor. The permission to purchase was subject to several conditions, relevantly “that any clause to give effect to the sale, that provides for the appointment of a substitute purchaser, be removed from the contract and no substitute purchaser is to be or will be nominated”.
[8]The fax header in the Director’s file indicates that it was sent on 27 February.
The defendant was not provided with a copy of the Director’s permission until after the litigation commenced. Nor was the nominee clause removed from the contract; the omission to do so was not satisfactorily explained. Further, the plaintiff later nominated his wife as purchaser. And, as I have mentioned, the contract was signed several days before the Director granted written permission to purchase. As counsel conceded, by entering into the contract before he had the Director’s permission to do so, the plaintiff breached s 55. I refer below to the consequences of this breach. For the moment I note that neither Splatt nor Colahan gave the defendant advice about the Director’s permission, or as to whether the contract complied with it, or as to the efficacy of the nomination of the plaintiff’s wife.
As mentioned, the contract provided for settlement 60 days after the contract date, which meant 23 April 2001. One might have expected Luscombe Colahan to have contacted the defendant well in advance of the settlement date to ensure that all necessary steps had been taken to enable settlement to proceed. But that did not occur, as to which I accept the defendant’s evidence. In so concluding, I do not overlook that the Court Book contains two unsigned letters from Luscombe Colahan to the defendant dated 18 April 2001. The first letter advised that the firm had been retained to act for Karen Julie Holland[9], referred to the potential conflict of interest entailed by their so acting, and provided a space for the defendant to sign an acknowledgment that he had read and understood the advice. The second letter is a pro-forma which thanked the defendant for his instructions to act on the sale, and, among other things, confirmed “the details of the contract note dated 22/02/2001”, referred to payment of the balance of purchase price on 23 April, stated that requisitions on title are enclosed and requests that they be returned “as soon as possible”, enclosed a statutory declaration for stamp duty purposes, and enclosed a transfer of land for signing. The transferee in the transfer is stated to be the plaintiff’s wife. Finally, the letter stated that “we will also require the original certificate of title to be delivered to us as soon as possible”. There is no reference to the fact that the certificate of title was lost. Apart from the fact that the letter provided a short time to prepare for settlement (five days, which included the weekend), I accept the defendant’s evidence that he did not receive either letter or the enclosed documents at around the date of the letter. The fact is that the defendant never received the first letter, and it was common ground that on 24 May 2002 (more than a year later), Colahan faxed to the defendant a covering letter enclosing the second letter, the transfer and various other statutory declarations.
[9]The plaintiff’s wife and purported nominee, although there is no suggestion that the defendant was ever advised that she had been nominated by the plaintiff as purchaser.
Given the absence of communication from Luscombe Colahan, the defendant telephoned Splatt on about 17 April 2001 to ask what was happening with the sale. I accept the defendant’s evidence that Splatt told him that the plaintiff was “no longer interested in purchasing the properties”. The bluntness of the statement is consistent with the verbal manner of Splatt as I observed him in the witness box.
The defendant suggested to Splatt that he (the defendant) telephone Luscombe Colahan to advise that the sale was not going ahead, but Splatt said that that was not necessary as he would advise them. The defendant told Splatt that he could do that, but that in any event he (the defendant) would also call Luscombe Colahan because he needed to find out how much he owed them. The defendant duly telephoned Luscombe Colahan and advised Peter Colahan that Splatt had said the purchaser was no longer interested in buying the properties. The defendant asked Colahan to work out how much he owed and to send him a bill, as to which Colahan looked at the file whilst on the telephone and said that not a great deal had been done in the matter and that if any money was owing it would only be out of pocket expenses, as to which the defendant said “Please let me know if there is and I will send you a cheque”. In my view, it is likely that this conversation was the reason why the 18 April letters were not sent out.
After the April 2001 conversations with Splatt and Colahan, the defendant heard nothing further about the transaction until October 2001. In making that finding, I do not overlook a letter from Luscombe Colahan to the plaintiff’s wife dated 4 May 2001 which referred to the defendant having lost the certificate of title and stated that he “has advised that he needs a further 5-6 weeks to search for it”. However, the letter does not state when or to whom the defendant said that he needed further time to search for the title, no witness had any present recollection of a conversation to that effect with the defendant, and the defendant denied that such a conversation took place in May 2001, as that was after the deal was called off by Splatt. It is likely, and I find, that the May letter was referring to the earlier conversations about the lost certificate of title. That is consistent with the shoddy way in which Luscombe Colahan handled the matter in relation to the defendant.
In late October 2001, someone from Luscombe Colahan left a telephone message for the defendant, whereupon he called back and spoke to a male person at the firm who asked whether he still wanted to get a replacement certificate of title, as to which the defendant said that there was no need, as the sale didn’t go ahead. The person said “if ever you want to do this just call and we can arrange it”.
On 20 December 2001 the defendant received a letter from Luscombe Colahan advising that the plaintiff was now prepared to contribute towards the cost of a new certificate of title.
I accept the defendant’s evidence that he did not respond to that letter because he had been told by Splatt that the sale was cancelled, he (the defendant) “understood that the whole thing was off”, and he (the defendant) was by then no longer interested in selling the properties.
On 19 February 2002 Colahan wrote to the defendant stating that the purchaser wished to expedite the matter as soon as possible, and noting that “the purchaser has advised that she will undertake to apply for the Lost Title Application on your behalf and cover all associated costs with the application” (emphasis added). The letter attached a transfer and statutory declaration and requested that they be signed and returned to Luscombe Colahan.
Having received no response to that letter, on 9 May 2002 Colahan wrote to the defendant advising that “the purchaser has now agreed to pay all costs and indemnity fund contributions in relation to the lost title application”. The letter enclosed the statutory declaration required for the title application and requested that it be signed and returned, along with the previous statutory declaration and transfer.
Although the letter of 9 May mentioned nothing about any caveat, that very day Colahan lodged a caveat on the properties on behalf of the plaintiff’s wife, stated to be pursuant to a contract dated 22 February 2001 between the defendant and the plaintiff’s wife. That was factually incorrect, and flew in the face of the terms of the Director’s permission. It is also to be noted that Colahan did not have the defendant’s authority to place a caveat on the title.
On 24 May 2002 the defendant telephoned Luscombe Colahan to find out what was going on. I accept the defendant’s evidence that Colahan advised “You have to go through with the sale. You cannot pull out”. Colahan then faxed the defendant a copy of the second 18 April 2001 letter with enclosures and, when the defendant telephoned Colahan the next day, Colahan said “You will need to find another solicitor as I cannot act for both parties”. The defendant spoke to Splatt a few days later, who also said that he could not get out of the deal and that he better get himself a solicitor.
In late May 2002, the defendant did just that, seeking advice from a firm of solicitors in Sydney, McCooe Raves & Poole (“McCooe”).
On 12 August 2002 (and again on 30 August in the absence of any reply) McCooe wrote to Luscombe Colahan seeking details of the transaction and an explanation as to why the plaintiff’s wife had lodged a caveat on the properties.
On 7 October 2002, Luscombe Colahan responded to McCooe stating that:
“We refer to your letter of 12 August 2002 in relation to the above matter.
We confirm that we are acting on behalf of both Nicolina [sic] Roperti as Vendor and Karen Holland as Purchaser in this matter.
Our firm has lodged a caveat on title protecting Karen Holland’s interest as a Purchaser of the land.
We note that the Contract provides that settlement be effected on 22 February 2001 [sic].
We advise that some time ago Mr Roperti instructed us that he had lost the original title to the property. We received instructions from Karen Holland that she would pay for the costs for applying for a new title and the relevant paperwork has been prepared and forwarded to Mr Roperti for signing. Mr Roperti has failed to return the paperwork to us and it [sic] would now appear not to effect settlement of this matter.
Karen Holland wishes to proceed with settlement as soon as possible and if necessary our firm may have to cease to act for Mr Roperti in the event that we are instructed to institute proceedings for specific performance of the Contract by Mr Roperti.
Would you please provide us with Mr Roperti’s instructions as soon as possible.
Yours faithfully
[signed]
Luscombe Colahan”
Notwithstanding the threat of commencing a proceeding for specific performance, and the fact that McCooe apparently did not respond to the letter, another ten months passed with no further action from Luscombe Colahan.
On 19 August 2003 Luscombe Colahan wrote to McCooe, advising that they had not received a reply to the 7 October letter and that:
“Our client now requires time to be of the essence in relation to this matter. Accordingly, our client requires settlement of this matter to be effected at your office Monday 15 September 2003.
…
We note that in the event that your client is not prepared to effect settlement on that day that we have instructions to institute proceedings for specific performance of the Contract of Sale.”
Despite the threat of legal action, another year passed without developments.
The plaintiff retained Ian Symonds & Associates and requested that they arrange settlement as soon as possible.
On 20 September 2004, Ian Symonds & Associates wrote to McCooe stating that “we act for Karen Holland”. They asserted that the properties were now worth $120,000 more than the contract price, and that they had recommended to their client that “we should first contact your firm to discuss this matter further and in the event that the vendor still failed to honour the contract, issue proceedings for specific performance and/or damages. Please seek instructions and Ian Symonds of our office will contact you shortly to discuss the above matter”.
On 10 January 2005 Ian Symonds & Associates sent a letter to McCooe, stated to be a notice to complete the settlement of the sale at McCooe’s office by 11 February 2005.
On 21 January 2005 Ian Symonds & Associates lodged a caveat on the properties on behalf of the plaintiff pursuant to the contract of sale.
On 9 March 2005, McCooe wrote to Ian Symonds & Associates, disputing the validity of the notice to complete and asserting that the plaintiff’s wife “has no basis whatsoever” to issue a Notice to Complete to the defendant or to call upon him to transfer the properties to her. The letter also stated that the previous solicitors, Luscombe Colahan, had not provided any details as to her right to lodge a caveat in response to their request for such information, and accordingly they requested removal of the caveat within 7 days failing which proceedings to remove the caveat would be commenced.
On 15 March 2005 Ian Symonds & Associates wrote to McCooe, stating that they acted for the plaintiff, that it was only the plaintiff (and not his wife) who may enforce the contract, that the caveat would be removed immediately, and that the plaintiff proposed “to settle on the basis of the nomination to Karen Holland, pursuant to his contractual rights”. The letter proposed a settlement date of 28 March, which they subsequently stated should be 30 March. Settlement did not occur on that date, or ever.
Correspondence continued between McCooe and Ian Symonds & Associates over the next few months, the essence of which was that Ian Symonds & Associates continually asserted the plaintiff’s right to enforce the contract and to that end proposed settlement dates, while McCooe maintained their position that the plaintiff had no basis whatsoever to call on the defendant to transfer the properties. On 4 August 2005 McCooe confirmed that the defendant would not execute the transfer provided by Ian Symonds & Associates on 26 July 2005 and would not attend settlement on 8 August 2005. Ian Symonds & Associates issued a default notice on 25 August 2005 and, by further letter dated 21 September 2005, requested settlement of the sale and noted that they had instructions to issue proceedings for specific performance if the matter was not settled.
Another year and several months passed before, on 18 January 2007, the plaintiff commenced the present proceeding.
The pleadings
Statement of claim
The plaintiff pleaded the terms of the contract, followed by a series of matters, events and correspondence which are set out in the facts above. The essence of the pleading was as follows. The defendant, by the letter dated 4 August 2005, repudiated the contract; the plaintiff did not accept the repudiation[10]; the defendant failed to comply with the default notice dated 25 August 2005[11]; the plaintiff was at all relevant times ready, willing and able to perform his obligations under the contract[12]. The prayer for relief sought specific performance, damages in addition to or in substitution for specific performance pursuant to s 38 of the Supreme Court Act 1986, a declaration to the effect that the plaintiff is entitled to maintain a caveat over the properties until completion of the sale, and costs.
Defence
[10]Paras 15 and 16.
[11]Paras 17 and 18.
[12]Para 19.
The defence denied many of the plaintiff’s allegations, and made a series of further allegations, many of which are difficult to follow. The defence also pleaded a case in misleading or deceptive conduct under the Fair Trading Act 1999 and a collateral warranty case, both of which counsel abandoned during final address. Counsel’s final address significantly simplified the defendant’s case, and it is therefore not necessary to set out the defence in full. In essence, the defence was as follows. The defendant admitted execution of the contract but denied that the agreement was binding or effectual[13]; the contract of sale was “void and unenforceable” because the sale was prohibited by s 55 of the Act, in circumstances where the plaintiff had not obtained the Director’s permission for the purchase prior to signing the contract of sale[14]; alternatively, if the contract was enforceable, the defendant had terminated or rescinded the contract[15]. It was also alleged that “by reason of the plaintiff’s failure to perform and refusal to pay the relevant costs the defendant terminated the alleged contract”[16]. Particulars to this plea alleged that “the termination was communicated orally to an employee of Luscombe Colahan who was acting for the plaintiff and was accepted orally by the plaintiff’s agent; at all material times between May 2001 and October 2002 the plaintiff “either knew that the defendant had terminated the contract or did not intend to enforce the contract”[17]. The plaintiff by his silence elected to either waive performance or accept the defendant’s termination[18]. The defence also denied that the plaintiff was at all times ready, willing and able to perform his obligations under the contract, particulars to this plea relevantly alleging that neither the plaintiff nor his wife (who was nominee) had the consent of the Director to the purchase[19]. In the circumstances, the Court should refuse to enforce the contract[20]. Then followed three alternative pleas. The first was “laches and or abandonment”, particulars to which alleged that following the conversation where the defendant orally communicated the termination to the Luscombe Colahan employee, the plaintiff “took no action to enforce the contract until October 2002 over a year later”[21]. Secondly, the plaintiff had purported to nominate his wife as purchaser by letter dated 7 October 2002 and no subsequent notice from her had been received accepting the withdrawal of that nomination[22]. Thirdly, the plaintiff had failed to mitigate his loss[23].
Reply
[13]Paras 1 and 2.
[14]Paras 12 to 18.
[15]Para 5; see also para 18 which alleges that the defendant has “terminated and avoided” the contract.
[16]Para 28.
[17]Para 29.
[18]Para 30.
[19]Para 9.
[20]Para 32.
[21]Para 33.
[22]Para 34.
[23]Para 35.
The plaintiff did not file a reply. As a result, the pleadings were uninformative as to the real issues raised between the parties. To this end, during opening addresses and again at the commencement of closing addresses, I required counsel to state succinctly the issues for determination.
The issues
Counsel broadly agreed that the following issues arose:
a) What is the effect of the plaintiff’s breach of s 55 of the Act? Is the contract void or voidable as a consequence? Does breach of s 55 preclude specific performance?
b) If the contract was enforceable, was it nevertheless abandoned by the parties or rescinded by the defendant?
c) If the contract was enforceable and was not abandoned or rescinded, was there nevertheless such delay, or laches as would disentitle the plaintiff to specific performance?
d) If an order for specific performance was not appropriate in the circumstances, was the plaintiff entitled to damages in lieu thereof?
Witnesses
Apart from giving evidence himself, the plaintiff called evidence from Splatt, Colahan, Kerrie Lilian Bramall who is a legal secretary at Luscombe Colahan, and Timothy Barlow who sought to give expert valuation evidence. The defendant gave evidence and called no other witnesses.
As I have already noted, and as will be apparent from my factual findings set out above, where there is any conflict between the evidence of the defendant and that of the other witnesses, I prefer the defendant’s evidence.
The defendant impressed me as an honest witness who gave his best present recollection of events. Although he owned other properties, he had never sold properties before. He impressed me as a trusting and somewhat naïve person who had been taken advantage of by the plaintiff and Splatt, and who had not received proper advice from Luscombe Colahan.
As to the plaintiff’s witnesses, leaving aside Barlow, they shared a common vice, namely a desire to distance themselves from, and minimise the extent of their respective roles in, the relevant events, fully aware of conflicts of interest which affected them.
The plaintiff impressed me as overbearing and arrogant. His evidence reflected an indifference to the conflict of interest, and a lack of care and attention in relation to the s 55 application consistent with his attitude that the s 55 application was a mere procedural hoop standing between himself and getting a good deal on the defendant’s properties. Without setting out his evidence in detail, I note that he agreed in cross-examination that the permission was important to him, as it permitted him to do something which was otherwise an offence, and he knew that the Director could impose conditions in the permission. He initially said that he “would have seen” the Director’s permission, although he also said “I don’t recall it at the moment”. He agreed that the permission was addressed to McDonald and that it referred to the McGills (rather than the defendant) as the vendor, yet when asked whether he looked at the permission to make sure that he had permission to buy the defendant’s properties, he said that he thought “standard procedure was we normally ring Consumer Affairs and we talk to somebody and they verbally say, yes, everything’s fine, and then they fax it through or mail it”. As to why the nominee clause was not removed from the contract, as required by the Director, counsel put to the plaintiff that that did not happen because he signed the contract before he knew what the Director’s conditions were. The plaintiff said he could not answer that, and was not 100 percent sure. He added “I put a nominee clause there because I wasn’t exactly sure on what name I was going to put on it”. He later said “I don’t remember reading the letter, to be honest. I would have been told that I would have had permission to purchase the blocks. So I probably never read the letter”.
Splatt also impressed me as overbearing and arrogant. I consider that he too was indifferent to the conflict of interest and tailored his evidence to suit the plaintiff’s case and to protect the reputation of PBE. Although he claimed to have only a limited recollection of his negotiations with the defendant, he was emphatic in denying certain matters he perceived to be damaging to the plaintiff’s case and the reputation of PBE. Most notably, he denied that he was negotiating on behalf of the plaintiff, and when he gave instructions for a valuation to be prepared for the purpose of the s 55 application, he did not tell the valuer (nor the defendant during the course of the negotiations for that matter) that the plaintiff intended to purchase the McGill’s property in the same street, and was interested in acquiring other properties in the locality for development purposes. He asserted that he did not consider those matters to be relevant, as they were different transactions “and every transaction is private between the vendor and the purchaser”. In my view Splatt was well aware that an estate agent, doing the best he could for his vendor, would be expected to inform the vendor of other sales and relevant movements in the market that might affect the value of the property. I considered Splatt’s evidence was contrived and sought to downplay the fact that he had allowed himself to become the plaintiff’s agent in the very transaction in respect of which he was charging the defendant an agent’s commission.
Colahan was an unimpressive witness. It is axiomatic that he was professionally obliged to give the defendant independent advice and generally keep him informed of the progress of the transaction. Given the conflict of interest which was apparent from the beginning of the transaction, he should not have continued acting for both parties without the defendant’s informed consent. But that is what he did. Not only was he in a position of conflict but he consistently failed to give the defendant considered independent advice about his rights under the contract, the significance of the special condition requiring the Director’s consent and the conditions imposed by the Director. Colahan did not inform the defendant of what was required in preparation for settlement, did not send relevant letters including confirming that the contract had been brought to an end, and generally allowed the matter to drift. His evidence sought to downplay, if not ignore, this reality. He had a poor recollection of the transaction. In cross-examination he initially only recalled speaking to the defendant on one occasion, in May 2002, but later said there was a subsequent phone call, “the upshot of which effectively was it may be appropriate that Mr Roperti seek independent advice”. Colahan said in cross-examination that the defendant asked whether the contract could be terminated as to which he advised that the contract was unconditional, that it could only be cancelled by agreement, and the only outstanding issue in relation to settlement was the lost title matter. Colahan said that he had looked at the contract and the permission before giving this advice (although it later became apparent that this “looking” occurred some time before April 2001), and insisted that he had given appropriate advice, that there was no doubt that the conditions in the contract had been fulfilled, and thus the contract was unconditional. Counsel suggested that this was plainly incorrect on the face of the contract and in view of the conditions imposed by the Director, which Colahan denied. In response to some questions I asked, Colahan said that the advice was given over the telephone in the same conversation in which the defendant had requested the advice. In other words, there was no fresh consideration of the contract and Director’s permission at the time the advice was sought by the defendant. Further, Colahan conceded that he had overlooked the fact that the presence of the nominee clause in the contract meant that the contract did not comply with the Director’s conditions, and that that was a relevant matter to consider when advising the defendant as to his rights under the contract. In my view, this was an obvious matter and to deny it in the face of counsel’s cross-examination indicated a stubborn inability to face up to his failure to properly advise the defendant on the transaction. Colahan’s ultimate concession was only made once I had, in effect, indicated to him that his denials of the obvious were untenable.
Kerrie Bramall had very little present recollection of relevant events. Her evidence was generally based on looking at relevant correspondence. For example, she asserted that the letters dated 18 April 2001 were “definitely sent out” and “would have got sent out for sure”. She was confident of that because “I believe I am very thorough with my files”. However, as counsel pointed out in cross-examination, in the ordinary course of events the letters should have been sent to the defendant much earlier when the firm began to act for the defendant. The fact that they were dated much later is consistent with my view that the conduct of this file was anything but thorough. In short, I reject her evidence.
Timothy Barlow purported to give expert evidence to the effect that the value of the properties as at 28 August 2006 was $250,000.
Submissions
It is convenient to set out counsel’s submissions on each of the four issues identified above.
Plaintiff
As to (a), counsel conceded that there was non-compliance with s 55, but submitted that the contract was not void. He relied on s 97 which provides that “save as otherwise provided in this Act no contract or civil liability shall be affected by reason only of the fact that an offence against this Act has been committed”. He contrasted the position under the Act with the position of a defective vendor statement under s 32 of the Sale of Land Act 1962, as to which s 32(5) states unequivocally that a purchaser may rescind a contract if the vendor statement is defective. The legislature could have done the same in s 55 of the Act but did not. Counsel relied on Mahoe Developments Pty Ltd v Lionbound Pty Ltd[24] and Madders v Walker[25] for the proposition that breach of legislation similar to s 55 did not render the contract illegal or unenforceable.
[24][1992] ANZ Conveyancing Reports 199, 202.
[25][1995] 2 QdR 386.
As to (b), the contract was not abandoned by either party, and no one had ever accused the plaintiff of breaching or repudiating the contract. And although the plaintiff had not formally tendered the purchase price, that was not required here because the defendant had indicated he was unwilling to perform; see Foran v Wight[26].
[26](1989) 168 CLR 385.
As to (c), counsel submitted that a purchaser of land (as opposed to other commodities more readily compensable in damages) is ordinarily entitled to the remedy of specific performance, and that equity does not refuse specific performance unless the plaintiff has abandoned his rights. Delay of itself was no bar to relief, as to which he referred to Fitzgerald v Masters[27] where specific performance was ordered some 26 years after the date of the contract. In the present case, the plaintiff had continually (albeit slowly) sought performance of the contract. Blame for the delay “might lie more with others than with himself, principally his legal advisers”, and the defendant was also guilty of delay. In any event, the existence of gaps “of a year here, a year there” did not mean abandonment. Further, while in Lamshed v Lamshed[28] the High Court observed that a purchaser must act promptly in approaching a court of equity where a vendor denies that he was ever bound by the contract, in the present case the defendant never unequivocally stated that he was not bound by the contract.And the fact that the value of the land had increased (from $60,000 to $250,000 he submitted) did not militate against specific performance. The defendant had suffered no prejudice as a result of the delay, and no third party interests were affected.
[27](1956) 95 CLR 420.
[28](1963) 109 CLR 440.
As to (d), counsel conceded that damages were a discretionary remedy, as was specific performance. He submitted that the plaintiff was entitled to the difference between the contract price ($60,000) and the value of the land at the time of commencing the proceeding ($250,000), notwithstanding that the expert evidence was not perfect.
Defendant
As to (a), counsel submitted that, to this day, the Director has not consented to the contract which the plaintiff seeks to enforce. The Director’s consent was to a different contract, namely one with no nominee clause. It followed that the plaintiff did not have the Director’s consent to the contract and was thus not permitted to enter into it. Counsel submitted that the plaintiff’s breach of s 55 meant that entry into the contract was illegal, and performance of the contract and calling for the performance of the contract was illegal. The contract was either void or voidable as a result, and should not be enforced by reason of the illegality. This was a conclusive defence, in the sense that the Court would not assist the plaintiff in the performance of a contract which was illegal. He referred to Australia Meat Holdings Pty Ltd v Kazi[29].
[29][2004] QCA 147.
As to (b), the Court should find that, objectively, accepting the defendant’s evidence, the contract was abandoned. Counsel referred to DTR Nominees Pty Ltd v Mona Homes Pty Ltd[30]. It is to be noted that the defence pleaded that the defendant had avoided, terminated, or rescinded the contract, whereas counsel said nothing about these pleas in final address, seeming to rely only on the doctrine of abandonment[31].
[30](1978) 138 CLR 423.
[31]T 170, 200.
As to (c), if the contract was not abandoned, there were such periods of delay and failure to enforce rights, and consequent prejudice to the defendant, that the Court should in its discretion refuse to grant specific performance. The relevant prejudice was, first, the defendant’s inability over seven years to know his rights under the contract. The original contract called for performance in April 2001, and the defendant having said in 2001 that he would not perform the contract, he was effectively left in limbo for an extended period of time, the proceeding not being commenced until 2007. Secondly, there were a series of points in the chronology of events (particularly in 2002) where the defendant may have had rights to validly terminate the contract (because of the plaintiff’s breach of s 55 and failure to comply with the Director’s conditions), but those rights were never explained to him because Colahan did not provide the defendant with the considered independent advice he was entitled to. Counsel submitted that the present case was analogous to the situation in Lamshed v Lamshed[32].
[32](1963) 109 CLR 440.
As to (d), if the plaintiff was not, as a matter law, entitled to specific performance at the time he commenced the proceeding, he was not entitled to damages in lieu. Counsel referred to Mills v Ruthol Pty Ltd[33]. He submitted that here the plaintiff was not entitled to specific performance, as the contract was illegal and that was a conclusive defence to the suit for specific performance. If, however, it was considered that illegality was merely a discretionary factor operating against specific performance, the Court would have jurisdiction to award damages. Nevertheless, damages should not be awarded in circumstances where the plaintiff had effectively stood by and watched the price of the land go up “without making any election or substitution”, by which I understood counsel to mean that the plaintiff had failed to mitigate his loss. There was nothing special about the property, and there was no reason why the plaintiff should not have accepted the defendant’s repudiation[34] and purchased an alternative investment property, and thus be kept to the return of his deposit. In any event, there was no proper evidence as to the value of the properties at the time of the trial. In this regard, counsel submitted that the expert valuation evidence filed on behalf of the plaintiff was inadmissible.
[33](2004) 61 NSWLR 1.
[34]The plaintiff pleads that the first repudiation by the defendant was on 24 March 2005.
Decision
It is convenient to deal in turn with the issues identified by counsel.
As to (a), counsel conducted the case on the basis that the contract was entered into on 22 February 2001, which was before the Director granted written permission, and the plaintiff had therefore breached s 55. Relevantly, the breach consisted of (a) the plaintiff’s purported purchase of the properties before the Director had given written permission, which was a breach of s 55(3), and (b) his failure to comply with the conditions imposed by the Director, which was a breach of s 55(14). As I mentioned earlier, the critical issue is whether the breach of s 55 means that the contract is void and unenforceable.
The leading authority on this issue is Yango Pastoral Co. Pty Ltd v First Chicago Australia Ltd[35] where Gibbs ACJ said that[36]:
“Where a statute imposes a penalty upon the making or performance of a contract, it is a question of construction whether the statute intends to prohibit the contract in this sense, that is, to render it void and unenforceable, or whether it intends only that the penalty for which it provides shall be inflicted if the contract is made or performed.”
In the same case, Mason J observed that[37]:
“In deciding this question the court will take into account the scope and purpose of the statute and the consequences of the suggested implication with a view to ascertaining whether it would conduce to, or frustrate, the object of the statute.”
[35](1978) 139 CLR 410.
[36]At 413.
[37]At 426.
Here, in submitting that the legislative intention was that a contract entered into in contravention of s 55 was void and unenforceable, counsel for the defendant pointed to the fact that if the plaintiff was convicted of an offence against s 55(3) (making the prohibited purchase) or s 55(5) (accepting title to the properties), the Act required[38] that in addition to any penalty imposed, the court passing conviction order him to account for and pay over to the vendor all profits resulting from the purchase. In effect, an order for specific performance would lead to the plaintiff doing the very acts (making the purchase and accepting title) which were offences yet, if convicted of those offences, a criminal court would be required to make orders effectively undoing the transaction. That, he submitted, was an absurd result and supported the conclusion that the legislation intended that a contract which required the doing of acts prohibited by s 55 was void and unenforceable.
[38]See sub-ss (4) and (6) respectively.
I do not accept this submission. It is clear that the object of s 55 is to prevent an employee of an estate agent from getting into a situation where his duty and interest conflict[39]. For that reason, a purchase such as the present one is prohibited, and the purchaser is prohibited from accepting title to the property, unless certain steps are taken to ensure that the vendor’s interests are protected. Breach of sub-ss (3), (5) and (14) have defined penal consequences. But it does not follow that the offending contract is void and unenforceable. On the contrary sub-ss (4) and (6), which immediately follow the relevant offence provisions, do not require the whole transaction to be set aside. Sub-s (4) requires the offending purchaser to disgorge to the vendor all profits resulting from the purchase and any subsequent dealings with the property. Sub-s (6) requires the offending purchaser (having wrongly accepted title) to transfer the title back to the vendor or to disgorge to the vendor all profits resulting from the acceptance of title and any subsequent dealings with the property. In effect, sub-s (4) requires the disgorging of profits while sub-s (6) requires the disgorging of profits or a transfer back of the title. In the latter scenario, it would be correct to say that the effect of the breach was that the transaction be set aside. However, the disgorging of profit scenarios contemplate that the relevant contract has been completed, the purchaser has accepted title, and the property may have been sold to a third party. All of that is inconsistent with the proposition that an offending contract is without more void and unenforceable.
[39]Phillips v Estate Agents Board [1988] VR 179.
Similar conclusions were reached in a number of Queensland cases relied on by the plaintiff. In Mahoe Developments Pty Ltd v Lionbound Pty Ltd[40] which concerned a similar provision for the disgorgement of profits in s 62(3) of the Auctioneers and Agents Act 1971 (Q), Spender J concluded that “implicit in that provision … is a recognition that the contract is not void or unenforceable”. That reasoning was followed in Madders v Walker[41] which concerned s 62(2) of the Auctioneers and Agents Act 1971 (Q) which relevantly provided that an estate agent selling property in which he has a beneficial interest “shall, before making any agreement in respect of the sale of the property, notify the prospective purchaser” of his interest in the property and obtain acknowledgment from the purchaser of receipt of the notice. The vendors had not made disclosure and thus breached s 62(2). Williams J concluded[42] that the failure to comply with s 62(2) “does not have the consequences of making the contract illegal”. See also the decision of Connolly J in Lees v Fleming[43]. I have also had regard to the decision in Australia Meat Holdings Pty Ltd v Kazi[44], where a majority of the Queensland Court of Appeal held that a contract of employment with an “unlawful non-citizen” was void and unenforceable, as its direct object was to do an act prohibited by s 235(3) of the Migration Act 1958 (Cth). In my view, the facts and relevant statutory scheme in that case are readily distinguishable from the present case.
[40][1992] ANZ Conveyancing Reports 199, 202.
[41][1995] 2 QdR 386.
[42]At 388.
[43][1980] QdR 162.
[44][2004] QCA 147.
I also note that the defendant’s proposed construction of s 55 could work to the disadvantage of a vendor. If breach of s 55 meant that a contract was void and unenforceable, transactions would have to be undone with a vendor effectively forced to take back their property, perhaps in circumstances where they would rather maintain the status quo and keep the profits. The fact that sub-s (6) requires that title be transferred back or that profits be disgorged, suggests that the legislature did not intend the transaction to be void, but to allow that consequence in the circumstances provided for.
Further, I accept the plaintiff’s submission that if the legislation intended the result suggested by the defendant, it could have stated that a contract entered into in contravention of s 55 was void and unenforceable, or otherwise stated the vendor’s rights to rescind the contract along the lines of s 32(5) of the Sale of Land Act.
It follows that the contract is not void and unenforceable by reason of the plaintiff’s breach of s 55.
I now deal with issue (b), namely whether the contract was abandoned or rescinded by the defendant. It is to be noted that although the defendant pleaded that he had terminated and rescinded the contract, counsel referred only to abandonment in his final address.
In my view, the proper characterisation of what occurred in the present case is that the parties acted in such a way as to manifest an intention to bring their obligations under the contract to an end. In short, for the reasons set out below, they terminated the contract by consent.
From the beginning of the transaction in January 2001, the defendant’s main point of contact was Splatt. I am satisfied that, as a matter of law, Splatt acted as the plaintiff’s agent in his negotiations and discussions with the defendant both before and after the contract was entered into. I find that before the contract was entered into, the plaintiff, by his agent, was told that the defendant had misplaced the certificate of title. And whether or not the plaintiff actually authorised Splatt to do so, Splatt told the defendant (with ostensible authority from the plaintiff) that the plaintiff would pay for a new certificate of title if the defendant could not find the title. I also accept that on or about 17 April 2001 Splatt told the defendant that the plaintiff was “no longer interested in purchasing the properties”. In circumstances where, as far as the defendant was concerned there was no issue as to who was paying for the certificate of title, Splatt’s statement that the plaintiff was “no longer interested in purchasing the properties” was reasonably to be understood, and was understood by the defendant, as meaning that the plaintiff wished that the sale be called off.
I accept the defendant’s evidence that he trusted Splatt and accepted what he was told as a statement of the purchaser’s position. The defendant’s response, I find, was to accept this position that the contract was at an end. The defendant’s subsequent conduct in telephoning Luscombe Colahan to advise as to what Splatt had said, and to ask for his bill, was consistent with the defendant’s consent to the contract being terminated at that point, and I find that this is the correct characterisation of what occurred.
The other possibility in the circumstances is that the plaintiff repudiated his obligations under the contract on or about 17 April 2001, and that the defendant accepted the repudiation and terminated the contract in his conversations with Colahan, or Colahan and Splatt. The subsequent absence of communication for six months and the terms of the October 2001 communication are confirmatory of the fact that the contract had been terminated.
If these conclusions be wrong, the issue of abandonment arises. As to that, counsel relied on DTR Nominees Pty Ltd v Mona Homes Pty Ltd[45]. In that case, the parties to a contract for the sale of land each purported to terminate for breach by the other (although neither was entitled to do so), and several months of inactivity followed leading up to the commencement of the proceeding. The High Court concluded that both parties had abandoned or abrogated the contract by their conduct. Stephen, Mason and Jacobs JJ, in a joint judgment with which Aickin J agreed, said that “Neither party had effectively rescinded” but by the time the proceeding was commenced, “neither party … regarded the contract as being still on foot. Neither party intended that the contract should be further performed. In these circumstances the parties must be regarded as having so conducted themselves as to abandon or abrogate the contract”[46]. See also Summers v The Commonwealth[47]; Fitzgerald v Masters[48]; and for a recent review of the authorities see CGM Investments Pty Ltd v Chelliah[49].
[45](1978) 138 CLR 423.
[46]At 434 per Stephen, Mason and Jacobs JJ.
[47](1918) 25 CLR 144 at 151 per Isaacs J.
[48](1956) 95 CLR 420 at 432-433 per Dixon CJ and Fullagar J.
[49][2003] FCA 79 at [18] per Finkelstein J.
In my view, the facts in the present case, in particular Splatt’s statement to the defendant on about 17 April 2001 that the plaintiff no longer wished to purchase the properties, followed by the defendant’s actions based on an acceptance of that advice, the subsequent absence of communication for six months and then the terms of the October communication, lead to the conclusion that, regarded objectively, the parties conducted themselves in such a way as to manifest an intention to abandon the contract. Objectively considered, it can be inferred that the parties regarded the contract as no longer being on foot.
Hence, however the matter be regarded, the contract was no longer on foot. It follows that the claim for specific performance must fail.
Having reached this conclusion, it is not strictly necessary to consider issues (c) and (d). For the sake of completeness, however, I make the following observations.
As to (c), the remedy of specific performance lies in the discretion of the Court, to be exercised in the light of all the relevant facts and circumstances.
The stand-out feature of the present case is the extraordinary delay and the plaintiff’s failure to promptly approach the Court to seek specific performance.
As to this, the defendant’s counsel pointed to particular observations in Lamshed v Lamshed[50] which he said were apposite to the present case. In Lamshed the High Court reversed a trial judge’s decision to grant specific performance to the respondents who had commenced their proceeding promptly (in April 1957 in respect of a contract dated September 1956), but had then effectively allowed the action to lie dormant until 1962 when they sought to have the case set down for trial. Kitto J referred to the doctrine that “the special remedy of specific performance is available to those only who are prompt to claim it”[51] and observed that “the degree of promptness required depends on the nature of the case and all its circumstances”[52]. After referring to the position where a defendant has denied that he is bound by the contract and that in such circumstances the plaintiff should sue promptly, his Honour observed that[53]:
“Equity will not allow the possibility of its making such a decree to be held unfairly long over the head of the party who denies the existence of the contract and asserts a right to deal with the property as his own. This is a particular application of the general principle of laches as expounded in Lindsay Petroleum Co v Hurd (1874) L.R. 5 P.C. 221 at pp. 239, 240. and Erlanger v New Sombrero Phosphate Co (1878) 3 App Cas. 1218 at 1279. To repeat words from the latter case, ‘a court of equity requires that those who come to it to ask its active interposition to give them relief, should use due diligence, after there has been such notice or knowledge as to make it inequitable to lie by’.”
[50](1963) 109 CLR 440.
[51]At 452.
[52]At 453.
[53]At 453.
In the present case, almost six years elapsed from the original settlement date to the commencement of the proceeding. As I have concluded, the contract was terminated in April 2001. But assuming that the contract remained on foot throughout, the plaintiff allowed months to pass after the original settlement date before seeking to revive the matter. This was followed by further long periods of delay and numerous threats to bring proceedings which simply hung in the air. As to that, Luscombe Colahan first intimated bringing a proceeding in the letter of 7 October 2002, and then on 19 August 2003, while Ian Symonds & Associates threatened a proceeding on 20 September 2004, and again on 21 September 2005, before waiting another year and several months to actually commence the proceeding. In short, the defendant had the threat of legal proceedings (and a caveat in fact) hanging over him for almost four and a half years before the plaintiff actually commenced the proceeding. He has not been able to deal with the properties and has thus been prejudiced.
Moreover, the evidence provided no satisfactory explanation for the delay and failure to approach the Court promptly. In my view, the delay resulted from the fact that the plaintiff had decided he no longer wished to purchase the properties and regarded the contract as at an end. Many months later, he made some efforts through Luscombe Colahan to revive the contract, with threats of specific performance thrown in for good measure, but it all moved at such a glacial pace with the plaintiff blowing hot and cold to the point that it must be inferred that he was in two minds as to whether he wanted to seek specific performance. Ultimately, he took a chance and issued a proceeding. In my view, in the circumstances I have described, the plaintiff’s delay would be fatal to his claim.
As to (d), s 38 of the Supreme Court Act 1986 provides that “If the Court has jurisdiction to entertain an application for an injunction or specific performance, it may award damages in addition to, or in substitution for, an injunction or specific performance.” The contract having ceased to be enforceable, specific performance is not available. Hence the plaintiff is not entitled to damages under s 38. If, on the other hand, the contract remained on foot, and damages arose for consideration, the plaintiff has the insuperable difficulty that he has not established by admissible evidence the measure of such damages. I agree with the defendant’s counsel that Barlow’s report is inadmissible. It does not state the comparative sales data relied upon and provides no process of reasoning. And even if it were admissible, it would carry no weight. The only other evidence as to the value of the properties was the plaintiff’s assertion that he bought another property in Market Place (on the other side of the McGill property) at a later date and it cost “a hell of a lot more”.
Conclusion
For these reasons the proceeding will be dismissed.
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