Kerrell-Vaughan v Ravenscroft [No 2] - [2021] WADC 71

JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA
IN CIVIL

LOCATION:   PERTH
CITATION:   KERRELL-VAUGHAN -v- RAVENSCROFT [No 2] [2021] WADC 71
CORAM:   WHITBY DCJ
HEARD:   23 JUNE 2021
DELIVERED          :   8 JULY 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:

Appeal from registrar - Plaintiffs' application for summary judgment for quantified amount - Order 14 of the Rules of the Supreme Court 1971 (WA) - Contract for the sale of land - Defendants failed to settle - Shortfall upon sale - 12 months before contract terminated - Ordinary measure of damages - Whether plaintiffs failed to mitigate loss

Legislation:

District Court Rules 2005 (WA)
Rules of the Supreme Court 1971 (WA)
Supreme Court Act 1935 (WA)

Result:

Appeal allowed
Judgment for the plaintiff for a quantified amount

Representation:

Counsel:

First Plaintiff	:	Mr T O Coyle
Second Plaintiff	:	Mr T O Coyle
First Defendant	:	In person
Second Defendant	:	In person

Solicitors:

First Plaintiff	:	Peter May Commercial Lawyer
Second Plaintiff	:	Peter May Commercial Lawyer
First Defendant	:	Not applicable
Second Defendant	:	Not applicable

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

Agar v Hyde [2000] HCA 41; (2000) 201 CLR 552
Ansearch Ltd v Wavtech Pty Ltd [2006] WASC 184
Blythe v The State of Western Australia [2008] WASCA 10
Cheney v Moore [2020] WASC 227
Fancourt v Mercantile Credits Ltd (1983) 154 CLR 87
Gel Custodians Pty Ltd v Dewar [2014] WASC 177
General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125
Gerrard v Wang [2015] WASC 173
Hazart Pty Ltd v Rademaker (1993) 11 WAR 26
Kezic v St John of God Health Care Inc [2015] WASCA 220
Miles v Bull [1969] 1 QB 258
Moscow Narodny Bank Ltd v Mosbert Finance (Aust) Pty Ltd [1976] WAR 109
Newmarket Corporation Pty Ltd v Kee-Vee Properties Pty Ltd [2003] WASC 157
Webster v Lampard (1993) 177 CLR 598
Wedge v Service Finance Corp Ltd in its capacity as responsible entity for the Countrywide Select Mortgage Income Trust [2002] WASCA 54
Westpac Banking Corporation v Anderson [2017] WASC 106

WHITBY DCJ:

This is an appeal from a decision of Registrar Kingsley on 23 April 2021 dismissing the plaintiffs' application for summary judgment in relation to quantum of damages pursuant to O 14 of the Rules of the Supreme Court 1971 (WA) (RSC). This appeal is made pursuant to r 15 of the District Court Rules 2005 (WA) (DCR). As I propose to allow the appeal and order summary judgment for a quantified amount, I make it clear at the outset that the material before me was more expansive than the material that was before the learned registrar.

Overview

The plaintiffs owned 5 Redwood Close in West Busselton (Property). On 8 June 2018, the plaintiffs and the defendants entered into a written contract (Contract) for the sale of the Property for $840,000…

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.

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Details

Case: [2021] WADC 71
Decision Date

CaseChat Overview and Summary

Kerrell-Vaughan v Ravenscroft [No 2] is a decision of the Supreme Court of Western Australia, which addresses issues of mitigation of loss and damages for breach of a contract for the sale of property. The plaintiffs, Kerrell-Vaughan, sought damages for the defendant's, Ravenscroft, failure to complete the sale of a property in accordance with a contract. The defendants argued that the plaintiffs did not mitigate their loss by failing to furnish and stage the property for sale. The court examined whether the plaintiffs were required to take any specific steps to mitigate their loss, such as furnishing and staging the property, and whether the delay in terminating the contract led to further loss.

The legal issues before the court were whether the plaintiffs had failed to mitigate their loss by not furnishing and staging the property and whether the delay in terminating the contract led to further loss. The court found that the plaintiffs were not required to resort to costly measures to resell the property, such as furnishing and staging. The continued operation of the contract did not lead to further loss as the plaintiffs were attempting to sell the property. The court held that the plaintiffs did not fail to mitigate their loss and that the delay in terminating the contract did not lead to further loss. The court found that the defendants had not satisfied the onus of establishing a failure to mitigate.

The court's reasoning was based on the principles set out in Newmarket Corporation Pty Ltd v Kee-Vee Properties Pty Ltd. The court held that the plaintiffs were not required to take any specific steps to mitigate their loss, such as furnishing and staging the property. The court found that the plaintiffs were not obliged to act otherwise in the ordinary course of business and that the standard for mitigation was not a high one because the defendants were the wrongdoers. The court held that the plaintiffs had taken reasonable steps to mitigate their loss by engaging the services of an agent to sell the property. The court found that the delay in terminating the contract did not lead to further loss as the plaintiffs were attempting to sell the property.

The court ordered the defendants to pay damages to the plaintiffs in the ordinary measure, which would put the plaintiffs back in the position they would have been had the contract been performed. The court ordered the defendants to pay the plaintiffs damages in the amount of $75,000 plus interest and costs. The court held that the damages were to be assessed as at the date of judgment, 15 May 2020.

Orders

Orders of the court

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Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

In Newmarket Corporation Pty Ltd v Kee-Vee Properties Pty Ltd [2003] WASC 157 (Newmarket), McClure J set out a number of principles relating to the mitigation of loss:170Damages cannot be recovered for any loss which could have been prevented by reasonable mitigating action by the injured party. The party in breach has the onus of establishing the failure to mitigate. 171There 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.172However, an injured party is only obliged to take such steps as are reasonable and need not resort to measures that are costly, complex or extravagant as where the expenditure in mitigation would exceed the loss. A plaintiff is not obliged to act otherwise in the ordinary course of business and the standard is not a high one because the defendant is the wrongdoer.(citations omitted) (emphasis added) By their defence, the defendants plead, at par 10:As the months went by, we drove past the property a number of times (throughout 2018/2019) and the appearance of the house had declined.We noticed many weeds, dead patches in the lawns and grass growing in the gutters. …We believe that a furnished, visually staged and well‑maintained house is easier to sell and attracts a higher offer and sale. There is no admissible evidence in support of this plea. Even accepting this plea at its highest, it does not provide an arguable defence to the effect that these factors had a negative impact on the ability of the defendants to sell the Property. The plaintiffs had the Property available for sale from December 2018 to December 2019 and engaged the services of the Agent. As set out in Newmarket, the plaintiffs were not required to resort to costly measures to resell the Property, such as furnishing and staging, and the continued operation of the Contract did not lead to further loss as the plaintiffs were attempting to sell the Property. I find that the plaintiffs did not fail to mitigate their loss. The delay in terminating the Contract did not lead to further loss. The defendants have not satisfied me that they have any reasonable defence to the plaintiffs' claim for damages in the ordinary measure, that is an amount which would put the plaintiffs back in the position they would have been had the Contract been performed. This gives rise to the issue as to the date at which the damages are to be assessed. In Gerrard v Wang [2015] WASC 173 (Gerrard), Martin CJ considered this issue. The Gerrards entered into a contract for the sale of land with Ms Wang. Ms Wang failed to complete the contract. The Gerrards sold the land to another purchaser for $840,000 less than the original contract price. The relevant dates in Gerrard were: settlement was due to occur on 10 September 2000, a notice of default was served on 20 September 2002, the notice of termination was served on 4 October 2002 and the land was resold on 26 June 2003.