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Leakes Road Property Development Pty Ltd v Brasse

Leakes Road Property Development Pty Ltd v Brasse

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Case Copied 26 March 2024 73 min read

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SUPREME COURT OF VICTORIA

COURT OF APPEAL

S EAPCI 2022 0091
S EAPCI 2022 0101

LEAKES ROAD PROPERTY DEVELOPMENT PTY LTD (ACN 620 781 106)	Applicant/ Cross-Respondent
v
JEAN-FRANCOIS BRASSE TRADING AS ROWSON BRASSE & CO	Respondent/ Cross-Applicant

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JUDGES:	EMERTON P, NIALL and KENNEDY JJA
WHERE HELD:	Melbourne
DATE OF HEARING:	15 November 2023
DATE OF JUDGMENT:	26 March 2024
MEDIUM NEUTRAL CITATION:	[2023] VSCA 34	First Revision (17 April 2024): [220]
JUDGMENT APPEALED FROM:	[2022] VSC 440 (McDonald J) [2022] VSC 505 (McDonald J)

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DAMAGES – Causation of loss – Proof of counterfactual – Sale of land transaction – Vendor’s solicitor negligently drafted section 32 statement required under Sale of Land Act 1962 – Solicitor failed to attach certificate disclosing growth areas infrastructure contribution liability – Deposit paid by purchaser to vendor – Purchaser sought to rescind contract of sale on grounds of failure to supply information in section 32 statement and claimed repayment of deposit – Purchaser’s claim against vendor settled on reasonable terms – Vendor partially repaid deposit to purchaser and retained the remainder as part of settlement – Vendor sought to recover from negligent solicitor deposit repaid to purchaser – Whether error in distinguishing Unity Insurance Brokers Pty Ltd v Rocco Pezzano Pty Ltd (1998) 192 CLR 603 – Whether vendor must prove counterfactual that the purchaser would have entered into the sale of land contract but for solicitor’s negligence – Leave to appeal granted – Appeal dismissed.

DAMAGES – Causation of loss – Proof of counterfactual – Whether error in failure to draw inference from established facts and circumstances about causation because of failure of vendor to call evidence from purchaser’s director – Where witness is hostile to vendor – Whether incorrect question of causation identified – Leave to appeal granted – Appeal allowed.

Sale of Land Act 1962, ss 32, 32K; Wrongs Act 1958, ss 44, 51, 52.

Unity Insurance Brokers Pty Ltd v Rocco Pezzano Pty Ltd (1998) 192 CLR 603, discussed and applied.

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Counsel
Applicant/ Cross-Respondent:	Mr S Stuckey KC with Mr W Rimmer
Respondent/ Cross-Applicant:	Mr C Caleo KC with Mr T Mitchell SC
Solicitors
Applicant/ Cross Respondent:	Zervos Lawyers
Respondent/ Cross-Applicant:	Colin Biggers & Paisley

TABLE OF CONTENTS

EMERTON P AND KENNEDY JA:
PART A:. INTRODUCTION
PART B:. LEAKES’ APPEAL

Relevant statutory provisions

Growth Areas Infrastructure Contribution (‘GAIC’)

Sale of Land Act 1962

Factual and procedural background

The agreements

Proceeding below

Reasons for judgment

Proposed grounds of appeal

Ground 1

Leakes’ submissions

Brasse’s submissions

Discussion

Grounds 2, 3 and 4: The counterfactual — evidence and inference

Submissions

Discussion

Ground 5: Offsetting damages against retained deposit

Submissions

Discussion

PART C:. CROSS APPEAL

Submissions

Discussion

Conclusion

NIALL JA:

The pleaded case

Ground 1

The settlement

EMERTON P
KENNEDY JA:

PART A:INTRODUCTION

In April 2018, the applicant, Leakes Road Property Development Pty Ltd (‘Leakes’), agreed to sell to Leakes Rise Pty Ltd (‘the purchaser’)[1] a plot of land at 1212 Leakes Road, Rockbank, Victoria (‘the land’) for…

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: [2024] VSCA 34
Decision Date: 26 March 2024

CaseChat Overview and Summary

In the matter of Leakes Road Property Development Pty Ltd v Brasse, the dispute was centred around the sale of a property where the vendor's solicitor had negligently drafted a section 32 statement required under the Sale of Land Act 1962. The purchaser, having paid a deposit, sought to rescind the contract of sale due to the failure to provide complete information in the section 32 statement. The vendor settled the claim with the purchaser, partially repaying the deposit and retaining the rest as part of the settlement. The vendor then sought to recover from the negligent solicitor the deposit that had been repaid to the purchaser. The court was required to determine whether the vendor was required to prove a counterfactual that the purchaser would have entered into the sale of land contract but for the solicitor's negligence, and whether there was an error in distinguishing a previous case.

The legal issues involved the principles of causation in damages, particularly the proof of a counterfactual, and whether the vendor needed to demonstrate that the purchaser would have proceeded with the contract in the absence of the solicitor's negligence. Additionally, the court needed to consider whether the vendor had correctly identified the causation issue and whether there was an error in the failure to draw an inference about causation due to the lack of evidence from the purchaser's director. The court considered these issues in light of the case of Unity Insurance Brokers Pty Ltd v Rocco Pezzano Pty Ltd and the provisions of the Sale of Land Act 1962 and the Wrongs Act 1958.

The court found that the vendor had not correctly identified the question of causation and had failed to draw an inference from the established facts and circumstances due to the absence of evidence from the purchaser’s director. This failure was compounded by the fact that the director was hostile to the vendor. Consequently, the court allowed the appeal on this basis, but dismissed the appeal on the issue regarding the requirement to prove a counterfactual. The court concluded that the vendor had not established that the purchaser would have entered into the contract in the absence of the solicitor's negligence.

The final orders of the court were to allow the appeal in part, dismissing the appeal in respect of the requirement to prove a counterfactual, and allowing the appeal in respect of the failure to draw an inference about causation due to the lack of evidence from the purchaser's director. This outcome meant that the vendor could not recover the deposit from the solicitor, as the necessary proof of causation was not established.

Orders