Lentana Pty Ltd v Boilerhouse Development Group Pty Ltd
[2020] VCC 902
•24 June 2020
| IN THE COUNTY COURT OF VICTORIA AT Melbourne commercial DIVISION | Revised Restricted Suitable for Publication |
Case No. CI-19-04884
| Lentana Pty Ltd (ACN 106 946 249) | Plaintiff |
| v | |
| Boilerhouse Development Group Pty Ltd (ACN 605 084 384) | Defendant |
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JUDGE: | Judicial Registrar Tran | |
WHERE HELD: | MELBOURNE | |
DATE OF HEARING: | On the papers | |
DATE OF RULING: | 24 June 2020 | |
CASE MAY BE CITED AS: | Lentana Pty Ltd v Boilerhouse Development Group Pty Ltd | |
MEDIUM NEUTRAL CITATION: | 2020 VCC 902 | |
REASONS FOR RULING
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Subject: Civil Procedure
Catchwords: Application for a stay on the grounds of VCAT proceedings
Legislation Cited: Civil Procedure Act2010 (Vic); Instruments Act 1958 (Vic); Planning and Environment Act 1987 (Vic); Property Law Act 1958 (Vic);
Cases Cited:Commonwealth v Amann Aviation (1991) 174 CLR 64; Deeny v Gooda Walker [1995] WLR 1206
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr T J D Chalk | Morgan Couzens Legal Pty Ltd |
| For the Defendant | Mr C E Shaw with Mr B Parker | Litton Legal Pty Ltd |
JUDICIAL REGISTRAR:
Background
1 The Plaintiff (Lentana) and the Defendant (BDG) own neighbouring blocks of land in Beechworth. Lentana owns Lot 4. Beechworth owns Lot 1.
2 Lentana alleges that in February 2018, Beechworth orally agreed (through a director) that Beechworth would transfer a ‘sliver’ of Lot 1 to Lentana, in return for Lentana constructing a retaining wall and fence on the (new) boundary between the two lots.
3 The retaining wall and fence was built. The sliver of land was not transferred.
4 This proceeding was commenced by writ filed 16 October 2019. Lentana seeks specific performance of the alleged agreement to transfer the sliver of land. Damages are sought as an alternative to the claim for specific performance.
5 The proceeding was listed for a directions hearing on 23 January 2020. BDG sought a stay of the proceeding until June 2020 on the basis that its director was undergoing what was said to be a high-risk pregnancy. Lentana strenuously opposed the stay. Ultimately, no stay of proceeding was granted, BDG was ordered to file and serve a defence and any counterclaim by 13 March 2020 and the proceeding was listed for trial on 27 July 2020. BDG was ordered to pay Lentana’s costs of the directions hearing.
6 On 3 June 2020, Lentana sought a stay of the proceeding. Lentana’s application for a stay relies upon a VCAT proceeding commenced by BDG in March or April 2020, in the following circumstances.
7 Both Lot 1 and Lot 4 are affected by an agreement under s 173 of the Planning and Environment Act 1987 (Vic) (the s 173 agreement). The s 173 agreement required the demolition of an “insignificant building” on Lot 4. On 11 November 2019, following negotiations with Lentana, the Shire issued a notice of proposal to amend the s 173 agreement, so as to remove the demolition requirement. As I have already indicated, on 23 January 2020, this proceeding was set down for trial on 27 July 2020. On 4 February 2020, BDG formally objected to the Shire’s proposal. On 3 March 2020, the Shire gave notice of its decision to amend the s 173 agreement, so as to remove the demolition requirement. BDG then commenced VCAT proceeding P522/2020 seeking a review of this decision (VCAT proceeding). The VCAT proceeding is currently listed for hearing on 5 March 2021. On 12 March 2020, BDG filed and served its defence and counterclaim. BDG’s defence contended that any alleged agreement was unenforceable under s 126 of s 53 of the Property Law Act 1958 (Vic) and/or s 126 of the Instruments Act 1958 (Vic). On 27 March 2020, Lentana filed and served its reply. Lentana relied upon part performance and estoppel.
8 Lentana contends that this proceeding should be stayed until after determination of the VCAT proceeding on the following grounds:
a)the “nature and extent” of the detriment it has suffered as a result of reliance on BDG’s representations will not be known until the VCAT proceeding is determined; and
b)the outcome of the VCAT proceeding will affect the quantum of the loss and damage suffered by Lentana by reason of BDG’s breach of the alleged agreement.
The overarching purpose
9 In determining this application, I am required to seek to further the overarching purpose in the Civil Procedure Act 2010 (Vic), to “facilitate the just, efficient, timely and cost-effective resolution of the real issues in dispute”.[1] It is clear that the paramount consideration remains the interests of justice, but it is the interests of justice as determined through a lens which recognises that factors such as delay, expense and concerns of case management may be relevant to the determination of what is in the interests of justice in a particular case. Part of the relevant context in the present case is that:
[1]Civil Procedure Act 2010 (Vic), s 7.
a)the proceeding was commenced by Lentana in the expedited cases list;
b)the proceeding was the subject of an application for a stay and for removal from the expedited cases list by BDG which was strenuously opposed by Lentana at a time when the demolition requirement still formed part of the s 173 agreement; and
c)the uncertain situation in relation to the s 173 agreement was squarely raised in an affidavit filed by BDG in support of its application for a stay:
“Any 'late' resolution of an alleged 'gifting' of land the subject of Lot 1 by the Defendant to the Plaintiff will not result in delays to Lot 4's development. This is because Lot 4's development is being delayed by the Council's proposal to amend the Section 173 Agreement which applies Lot 4”;[2] and
d)this application was brought less than two months before trial;
e)if granted, will likely have the effect that the trial is adjourned for at least 12 months (the orders actually sought are that the trial date be vacated any the Court informed when the VCAT proceeding has been resolved. Assuming this to occur in March 2021, the proceeding will then need to be re-timetabled for trial which would be unlikely to be before July 2021).
[2] Affidavit of Rebecca Ann Litton sworn 23 January 2020, para 8.
10 In light of the above background, I will address each of the two grounds relied upon to consider whether, having regard to the overarching purpose in the Civil Procedure Act 2010 (Vic), they justify the vacation of the trial date fixed for 27 July 2020 and the stay of this proceeding pending determination of the VCAT proceeding.
Detriment for estoppel
11 Lentana relies upon two forms of detrimental reliance for its estoppel plea:
a)the expense of building the retaining wall and fence; and
b)the purchase of windows for its proposed development of lot 4 at a cost of $35,000.
12 Lentana submits that the result of the VCAT proceeding may impact on the nature and extent of the detriment suffered by Lentana as a result of the purchase of the windows. Lentana does not submit that the result of the VCAT proceeding impacts on the expense of building the retaining wall and fence.
13 In submissions filed 17 June 2020, Lentana submitted that if VCAT determined the demolition requirement ought to be maintained (i.e.: BDG was successful) “it might be that the construction of the Proposed Apartments is uneconomical”. In supplementary submissions filed 19 June 2020, Lentana withdrew any submission that the cost of the windows would be thrown away if VCAT upholds the Shire’s decision to remove the demolition requirement. However, Lentana now submits that if VCAT determines the demolition requirement ought to be maintained, then “Lentana will have thrown away at least a proportion of the cost of the Windows”.
14 I make the following observations:
a)the assessment of “detriment” for the purposes of estoppel does not require a precise quantification of quantum of loss, Lentana does not rely upon any authorities to suggest that the considerations which may justify a delay in assessment of damages apply to the same extent to assessment of detriment;
b)Lentana does not yet have a planning permit for the proposed development. It apparently purchased these windows at a time when it did not have such a planning permit and when Lot 4 was subject to the demolition requirement in the s 173 agreement;
c)at the time these proceedings were commenced; and at the time Lentana opposed BDG’s application for a stay, Lot 4 was subject to the demolition requirement in the s 173 agreement;
d)even on Lentana’s own submissions the impact of the determination of the VCAT proceeding on the detriment it has suffered is at best speculative and unclear;
e)it is unlikely any clear answer will be able to be provided to the question of “the extent to which it is able to use the Windows in the redesigned Proposed Apartments”[3] until:
i.the VCAT proceeding is resolved (including any appeal);
ii.Lentana makes a decision as to whether the construction of the Proposed Apartments is economical or the extent to which the development proposal must be redesigned; and
iii.a planning permit for Lentana’s proposed development is obtained (including resolution of any objection).[4]
If resolution of this proceeding must await all these matters, there is a very real probability that it will be delayed far longer than 12 months.
[3] Para 20 of the Plaintiff’s Submissions dated 17 June 2020.
[4] Even taking into account the evidence relied upon by Lentana in relation to an oral conversation with a
Council officer.
15 Having considered all of the above, I am not satisfied any difficulties in assessing the detriment suffered by Lentana pending the resolution of the VCAT proceeding justify staying this proceeding.
Loss and Damage suffered by Lentana
16 Lentana also submits that the outcome of the VCAT application will affect the quantum of the loss and damage suffered by Lentana by reason of BDG’s breach of agreement.
17 The primary claim made by Lentana in its statement of claim is for specific performance of the agreement. The claim made by Lentana for damages is put as an alternative to the claim for specific performance. BDG does not plead any facts in its Defence that would render specific performance inappropriate in the circumstances.
18 Lentana effectively submits that the loss or damage it has suffered as a result of BDG’s breach of Agreement cannot be assessed until the Court knows whether or not Lentana is required to comply with the demolition requirement. I do not accept this submission. The Court must do its best to assess damages on the basis of the evidence before it at trial. This may include difficult assessments of matters such as loss of a chance. The uncertainty of future losses does not in and of itself prevent a Court from making an assessment of damages when called upon to do so.[5]
[5]Commonwealth v Amann Aviation (1991) 174 CLR 64 at 83 per Mason CJ and Dawson J, at 102 per
Brennan J, at 125 per Deane J, at 135 per Toohey J and at 153 per Gaudron J.
19 Of course, the fact that at some point in the foreseeable future the quantum of damages may become easier to assess may be a relevant factor in determining whether a stay or adjournment should be granted. In the present case, however, Lentana applies for a delay in the trial of the entire proceeding for at least 12 months. It is probable that if the proceeding is to await clarity of the loss and damage said to be suffered by Lentana, the delay will need to be significantly longer than this in order to allow for the VCAT proceeding to be determined; any potential appeal; planning approval; Lentana’s decision on whether the development is “economical”; and of course expert evidence of the impact of all this information. All of this in relation to a claim for damages which is an alternative to the primary claim for specific performance.
20 In the circumstances, I would not permit a delay of the assessment of the quantum of these damages, unless it were possible for the matter to proceed to trial on all other issues on 27 July 2020.[6]
[6] As to which, see Deeny v Gooda Walker [1995] WLR 1206.
Conclusion
21 Having considered the affidavit material and submissions filed on behalf of the parties, and the two grounds relied upon by Lentana, both separately and taken as a whole, I have concluded that it would not further the overarching purpose to vacate the trial date in this proceeding. To the contrary, it is in the interests of justice that this proceeding continue to an expeditious resolution on, or prior to, 27 July 2020. Accordingly, I will dismiss Lentana’s application. I will also list the proceeding for a pre-trial directions hearing. Any application for deferral of the question of the quantum of any damages suffered by Lentana to a later date can be determined at this directions hearing.
22 Finally, I note that there are numerous reported cases which demonstrate the legal expense, delays and difficulties which can beset disputes between neighbours. Unfortunately, it seems there is something about neighbourhood disputes that leads parties to suspend commerciality, even where, as here, the dispute concerns a property ear-marked for development. It is apparent from my review of the file in this proceeding that there are significant risks for both Lentana and BDG in this proceeding and that a sensible and commercial resolution of the dispute would be in the interests of all concerned. I hope I do not need to remind the parties’ legal practitioners of their obligations under the Civil Procedure Act2010 (Vic) to co-operate and communicate in an endeavour to achieve such an outcome.
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Certificate
I certify that these 8 pages are a true copy of the reasons for ruling of Judicial Registrar Tran, delivered on 24 June 2020.
Dated: 24 June 2020
Randa Rafiq
Associate to Judicial Registrar Tran
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