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Kelly v Galafassi

Kelly v Galafassi

Case [2013] NSWSC 680 31 May 2013

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Supreme Court

New South Wales

Medium Neutral Citation: Kelly v Galafassi & Anor [2013] NSWSC 680
Hearing dates: 13-15 May 2013
Decision date: 31 May 2013
Jurisdiction: Equity Division
Before: Windeyer AJ
Decision:
Refer to para [53] of judgment.

Catchwords: CONTRACTS - general contractual principles - remedies for breach - availability of damages for repudiation when plaintiff has commenced and later abandoned suit for specific performance - mitigation - extent of plaintiff's obligation to act reasonably so as to mitigate loss
CONVEYANCING - breach of contract for sale and remedies - vendor's remedies - whether notice to complete required before vendor can terminate if purchaser has indicated it is unable to complete - measure of damages - election to claim loss on resale - availability of interest under contract for late completion when completion does not occur - availability of costs of sale and resale
Legislation Cited: Supreme Court Act 1970
Cases Cited: Holland v Wiltshire (1954) 90 CLR 409
Ogle v Comboyuro Investments Pty Ltd (1976) 136 CLR 444
Carr v J A Berriman Pty Ltd (1953) 89 CLR 327
Jampco Pty Ltd v Cameron (No. 2) (1985) 3 NSWLR 391; (1986) NSW ConvR 55-275
Hansmar Investments Pty Ltd v Perpetual Trustee Co Ltd [2007] NSWSC 103
Falcone v Mentyn [2003] TASSC 79
Bydand Holdings Pty Ltd v Pineland Property Holdings Pty Ltd [2009] NSWSC 1159
Karacominakis v Big Country Developments Pty Ltd & Ors [2000] NSWCA 313
Carpenter v McGrath (1996) 40 NSWLR 39
Zografakis v McCarthy [2007] NSWSC 144
Hearse v Pallister [2008] NSWSC 504
Texts Cited: J W Carter, Carter's Breach of Contract, LexisNexis, 2011
R P Meagher, J D Heydon and M J Leeming, Meagher Gummow & Lehane's, Equity: Doctrines & Remedies, LexisNexis, 2002, 4th ed
Category: Principal judgment
Parties: Susan Kelly (Plaintiff)
David Galafassi (1st Defendant)
Toni Galafassi (2nd Defendant)
Representation: Counsel:
B A Coles QC with C G Carroll (Plaintiff)
J Stoljar SC with J C Hewitt (Defendants)
Solicitors:
Osbornes Lawyers (Plaintiff)
David Carr, Lawyer (Defendants)

File Number(s): 2012/21377

Judgment

Outline

HIS HONOUR: The plaintiff was the owner of property 40-42 Stewart Street, Paddington. She sold that property to Mr and Mrs Galafassi by contract of sale dated 30 September 2011 for a purchase price of $6,350,000. Settlement did not take place on the date fixed for settlement because the purchasers advised they did not have the funds necessary to enable them to complete. The vendor commenced proceedings for specific performance. The proceedings for specific performance were abandoned and the vendor purported to terminate the contract on the ground of repudiation by the purchasers. The vendor then resold the property and by an amended pleading seeks to recover the loss on resale and other expenses. The question is whether she can do so.

Facts

The contract provided for completion on 30 December 2011. The vendors were ready to complete, but the purchasers' solicitors advised on that day they "would not be able to proceed with the purchase". There was…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Kelly v Galafassi

Details

AGLC: Kelly v Galafassi [2013] NSWSC 680
Case: [2013] NSWSC 680
Decision Date: 31 May 2013

CaseChat Overview and Summary

The case of Kelly v Galafassi involved the plaintiff, Kelly, and the defendant, Galafassi, before the Supreme Court of New South Wales. Kelly sought damages for breach of contract after Galafassi repudiated a contract for the sale of a property. The dispute centred around the availability of damages for repudiation when the plaintiff had commenced and subsequently abandoned a suit for specific performance, as well as the extent to which Kelly was required to mitigate his loss.

The primary legal issues were whether Kelly could claim damages for repudiation after abandoning his specific performance suit, and the extent of Kelly's obligation to mitigate his loss. Additionally, the court had to determine whether a notice to complete was required before Galafassi could terminate the contract, the measure of damages, and the availability of interest under the contract for late completion.

The court held that Kelly was entitled to claim damages for repudiation despite having previously sought specific performance, as the abandonment of the specific performance suit did not preclude a claim for damages. The court also found that Kelly had adequately mitigated his loss by promptly seeking a new buyer. Regarding the vendor's remedies, the court ruled that a notice to complete was not necessary before terminating the contract if the purchaser had indicated an inability to complete. The measure of damages was determined to be the loss on resale, and the court found that interest under the contract for late completion was not payable as the completion did not occur. The court also held that costs of sale and resale were recoverable.

In conclusion, the court awarded Kelly damages for the breach of contract, including loss on resale and costs of sale and resale, but did not award interest under the contract for late completion.

Orders