Kerrell-Vaughan v Ravenscroft
[2021] WADC 35
JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA
IN CHAMBERS
LOCATION: PERTH
CITATION: KERRELL-VAUGHAN -v- RAVENSCROFT [2021] WADC 35
CORAM: REGISTRAR KINGSLEY
HEARD: 22 JANUARY 2021
DELIVERED : 23 APRIL 2021
FILE NO/S: CIV 2770 of 2020
BETWEEN: GUY WILLIAM KERRELL-VAUGHAN
First Plaintiff
FIONA JANE KERRELL-VAUGHAN
Second Plaintiff
AND
PETER EDWARD RAVENSCROFT
First Defendant
PENELOPE ISOBEL RAVENSCROFT
Second Defendant
Catchwords:
Practice - Breach of contract for sale of land - Summary judgment application
Legislation:
Rules of the Supreme Court 1971 (WA)
Result:
Judgment given for damages to be assessed
Leave to defend on the issue of damages
Representation:
Counsel:
| First Plaintiff | : | No appearance |
| Second Plaintiff | : | No appearance |
| First Defendant | : | No appearance |
| Second Defendant | : | No appearance |
Solicitors:
| First Plaintiff | : | Peter May Commercial Lawyer |
| Second Plaintiff | : | Peter May Commercial Lawyer |
| First Defendant | : | In person |
| Second Defendant | : | In person |
Case(s) referred to in decision(s):
Mann Judd (a firm) v Papers Sales Australia (WA) Pty Ltd (Unreported, WASCA, Library No 980565, 25 September 1998
Newmarket Corporation Pty Ltd v Kee-Vee Properties Pty Ltd [2003] WASC 157
The Solholt [1983] 1 Lloyd's Rep 603
REGISTRAR KINGSLEY:
Background
The plaintiffs were the registered proprietors of 5 Redwood Close, West Busselton and on or about 8 June 2018 the plaintiffs agreed to sell 5 Redwood Close to the defendants for the sum of $840,000.
The agreement to sell is constituted by the written contract dated 8 June 2018, a variation of the contract dated 16 August 2018 and incorporation of the 2011 general conditions for the sale of land. Settlement was to be effected on or before 14 September 2018.
The contract for the sale of the land was conditional upon finance approval for the defendants however, on 24 July 2018 the defendants waived the requirement for finance approval. The contract had then become unconditional.
The defendants failed to settle on or before 14 September 2018 and by notice of default dated 4 October 2018 (Notice) the plaintiffs required the defendants to remedy the default by proceeding to settlement within the time stated in the Notice. The defendants failed to remedy the default.
On 5 February 2020 the plaintiffs then issued a notice of termination of the contract to the defendants.
Pursuant to the notice of termination the plaintiffs forfeited the deposit paid by the defendants and elected to re-sell the land. The land was resold on 7 February 2020 in the sum of $750,000.
By a writ issued 29 July 2020 the plaintiffs claim loss and damage being the difference in the sale price, holding costs of the land between 14 September 2018 and the date of settlement of resale being 7 February 2020, interest on the purchase price between 14 September 2018 and 7 February 2020, interest on the shortfall between the purchase price and the resale purchase price, costs of default and interest on the holding cost and default costs.
The plaintiffs brought an application pursuant to O 14 Rules of the Supreme Court 1971 (WA) (RSC) and at a hearing on 21 January 2021 orders were made, including an order that the plaintiffs' application be heard on the papers. These reasons are the determination of the plaintiffs' application.
The evidence
The first plaintiff has filed an affidavit on 12 October 2020 and a further affidavit filed 10 February 2021.
The defendants have filed, individually, affidavits on 14 October 2020 and, again individually on 26 February 2021.
Extension of time
The plaintiffs seek an extension of time within which to apply for summary judgment. The first defendant entered an appearance on 24 August 2020 and the second defendant entered an appearance on 26 August 2020.
Counsel was briefed on 4 September 2020 but did not respond to the plaintiffs' solicitors until 8 October 2020 requesting a number of minor amendments to the affidavit and application. The chamber summons was then lodged on 12 October 2020.
I am satisfied there is reasonable explanation for the delay in filing the application for summary judgment and leave is given.
Order 14 RSC principles
The principles to be applied on a summary judgment application are now well established. Summary judgment will only be granted where there is no real question to be tried and should be exercised with great care. There needs to be a high degree of certainty about the ultimate outcome of the proceedings if it went to trial and summary judgment should only be granted in the clearest of cases.
The first plaintiff's affidavit affirmed 12 October 2020 verifies the facts on which the plaintiffs' claim is based and states in his belief that the defendants had no defence to the plaintiffs' claim.
I am satisfied then that the plaintiffs have satisfied the pre‑condition for the exercise of the power to order summary judgment and to have established a prima facie entitlement to judgment.
The burden passes to the defendants to satisfy me that there is no reason why judgment ought not be granted. The defendants filed a defence on 13 October 2020. At par 10 of their defence the defendants plead they were unable to settle by the date stated in the Notice dated 4 October 2018. The defendants plead, and I take note the defendants are self-represented, they interpreted the Notice that if they could not settle the contract would be terminated, they would forfeit the deposit, and the plaintiffs, as sellers, would commence court proceedings. There is nothing in the evidence of the defendants nor the defence to support a conclusion that judgment ought not be entered.
Accordingly, I enter judgment for damages to be assessed.
The assessment of damages
The plaintiffs claim for damages is under six headings:
1.The difference in the sale price of the land and the resale price of the land.
2.Holding costs of the land between the date prescribed for settlement being 14 September 2018 and the date of settlement of the resale being 7 February 2020.
3.Interest on the purchase price between 14 September 2018 and 7 February 2020.
4.Interest on the shortfall between the purchase price and the resale purchase price until judgment.
5.Costs of default.
6.Interest on the holding cost and default costs from the date they were incurred until judgment.
By his affidavit affirmed 12 October 2020, the first plaintiff states that the defendants failed to settle on or before 14 September 2018 and a Notice was issued on 4 October 2018. The Notice dated 4 October 2018 requires the defendants' default be remedied by completion of settlement within 10 business days after date of service, or deemed service, of the Notice. At the expiration of that period and default continues, the plaintiffs had the right to resell the property. The Notice was posted to the defendants by a clerk at the plaintiffs' solicitors' office so by mid-October 2018 there was an entitlement by the plaintiffs to exercise their remedies.
The first plaintiff states that from 13 September 2018 until 7 February 2020 the property remained vacant. The first plaintiff states it was not reasonable for the plaintiffs to rent the premises as the defendant could, at any time, have responded to the Notice and proceeded to settlement. This would not have been possible if the property had been tenanted.
The defendants have filed a defence which is more by way of evidence than fact. I accept that the defence has not been deposed to by the defendants. However, the defendants are in person and some leniency is to be afforded to the defendants.
Consistent with letters annexed to the defendants' affidavits, the defendants had sought to vary or extend the settlement date and to pay rent and penalty interest on the property until settlement. These overtures to the plaintiffs were rejected.
In their defence, the defendants say that throughout 2018 and 2019 the appearance of the house had declined in that the lawns were not being maintained. The defendants in their defence do not accept that it is their fault that the plaintiffs had to accept a lower offer because of the lack of maintenance by the plaintiffs on the house.
Often it is stated that there is a duty to mitigate damage, however this notion is misconceived. A plaintiff is under no duty to mitigate their loss. However, a defendant is not liable for all loss suffered by the plaintiff in the consequence of their actions. A defendant is only liable for such part of the plaintiffs' loss as is properly caused by the defendant's breach of duty (The Solholt [1983] 1 Lloyd's Rep 603 (CA)). McClure J in Newmarket Corporation Pty Ltd v Kee-Vee Properties Pty Ltd [2003] WASC 157 [163] stated that in a damages claim the issues of causation, remoteness and mitigation can overlap. Although it is necessary to show that the loss would not have occurred 'but for the breach relied on' that may not in all the circumstances be sufficient if there are reasons of justice or policy against attributing causal responsibility.
McClure J goes on to say that damages cannot be recovered for any loss which could have been prevented by reasonable mitigating action by the injured party. There seems to be no reason in principle why a failure to terminate a contract at law for breach may not amount to a failure to mitigate if the continued operation of the contract would lead to further loss [170] - [171] citing Mann Judd (a firm) v Papers Sales Australia (WA) Pty Ltd (Unreported, WASCA, Library No 980565, 25 September 1998.
In this matter the plaintiffs had from at least mid-October 2018 the opportunity to terminate the contract. They did not do so. The explanation by the plaintiffs that the defendants could at any time have responded to the Notice and proceeded to settlement is not, in my opinion, satisfactory. The plaintiffs could have issued their Notice and proceeded to resell the property by November or December 2018.
In my opinion, there may well be an arguable case by the defendants that in not terminating the contract in a more timely fashion, that the plaintiffs have failed to mitigate their loss. The obligation is on the defendants to prove the failure to mitigate loss by the plaintiff. The defendants are self-represented, and in that instance the court must be careful to ensure that, because of a lack of legal skill, arguments that may fairly be raised are not stifled.
For this reason I am not prepared to assess the damages on the papers and give leave to the defendants to defend the claim on the assessment.
I certify that the preceding paragraph(s) comprise the reasons for decision of the District Court of Western Australia.
MEB
Associate
23 APRIL 2021
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