JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CIVIL
CITATION: LORDS -v- VON THOMANN [No 2] [2014] WASC 320
CORAM: BEECH J
HEARD: 14, 15, 18 & 19 AUGUST 2014
DELIVERED : 12 SEPTEMBER 2014
FILE NO/S: CIV 2409 of 2012
BETWEEN: DONNA JEAN LORDS
WAYNE FRANCIS GRIMSHAW
PlaintiffsAND
JOHN VON THOMANN
LISA BENWELL
Defendants
Catchwords:
Contract - Contract for sale of land - Whether Sellers' agent made misrepresentations to Buyers - Turns on own facts
Contract - Damages - Date for assessment - Sale of land - Default by Buyers - Sellers attempted to resell - Resale took over two years - Whether damages assessed by reference to market value at date of termination or contract price on resale
Legislation:
Nil
Result:
Judgment for the plaintiffs
Damages awarded to plaintiffs
Category: A
Representation:
Counsel:
Plaintiffs: Mr R R Cywicki
Defendants: Mr N D C Dillon
Solicitors:
Plaintiffs: Holborn Lenhoff Massey
Defendants: Vogt Graham Lawyers
Case(s) referred to in judgment(s):
Alexander v Cambridge Credit Corp Ltd (1987) 9 NSWLR 310
Baltic Shipping Co v Dillon [1993] HCA 4; (1993) 176 CLR 344
BGL Operations Pty Ltd v Allied Express Transport Pty Ltd [2011] NSWCA 41
Burns v MAN Automotive (Aust) Pty Ltd [1986] HCA 81; (1986) 161 CLR 653
Carpenter v McGrath (1996) 40 NSWLR 39
Castle Constructions Pty Ltd v Fekala Pty Ltd [2006] NSWCA 133; (2006) 65 NSWLR 648
Commonwealth v Amann Aviation Pty Ltd [1991] HCA 54; (1991) 174 CLR 64
European Bank Ltd v Evans [2010] HCA 6; (2010) 240 CLR 432
Flamingo Park Pty Ltd v Dolly Dolly Creation Pty Ltd (1986) 65 ALR 500
Golden Strait Corporation v Nippon Yusen Kubishika Kaisha [2007] 2 AC 353
Hadley v Baxendale (1854) 9 Exch 341; (1854) 156 ER 145
Hooper v Oates [2013] EWCA Civ 91; [2014] Ch 287
HTW Valuers (Central Qld) Pty Ltd v Astonland Pty Ltd [2004] HCA 54; (2004) 217 CLR 640
Hungerfords v Walker [1989] HCA 8; (1989) 171 CLR 125
Jamal v Moolla Dawood Sons & Co [1916] 1 AC 175
Johnson v Perez [1988] HCA 64; (1988) 166 CLR 351
Koufos v C Czarnikow Ltd (The Heron II) [1969] 1 AC 350
Laird v Pim (1841) 7 M & W 474
Lake Cumbeline Pty Ltd v Effem Foods Pty Ltd (Unreported, FCA, 29 June 1995)
Luxer Holdings Pty Ltd v Glentham Pty Ltd [2007] WASCA 209; (2007) 35 WAR 254
National Australia Bank Ltd v Nemur Varity Pty Ltd [2002] VSCA 18
Palasty v Parlby [2007] NSWCA 345
Radford v De Froberville [1977] 1 WLR 1262; [1978] 1 All ER 33
Robinson v Harman (1848) 1 Ex 850; (1848) 154 ER 363
Smith New Court Securities Ltd v Scrimgeour Vickers (Asset Management) Ltd [1997] AC 254
South Sky Investments Pty Ltd v Luppi [2012] QSC 27
Continue reading LORDS -v- VON THOMANN [No 2]
Sign in free to access the full text
- AGLC
- Lords v Von Thomann [No 2] [2014] WASC 320
- Case
- [2014] WASC 320
- Decision Date
CaseChat Overview and Summary
The court examined the evidence presented by both parties and concluded that there was insufficient proof to establish that the sellers' agent had made the representations as alleged by the buyers. Therefore, the sellers were found not to have breached the contract. In assessing the damages, the court considered whether the sellers had taken reasonable steps to mitigate their loss after the buyers defaulted on the contract. The sellers had attempted to resell the property but took over two years to do so. The court referenced previous cases that suggested that if a seller takes all reasonable steps to sell the property and is unable to do so for a substantial period, this could justify a departure from the general rule on damages. The court assessed the damages at $830,000, reflecting the contract price on resale.
The final orders of the court included a declaration that the sellers were not in breach of contract due to the lack of evidence supporting the buyers' claims of misrepresentation. The court also ordered that the sellers were entitled to damages in the amount of $830,000. The parties were directed to provide further submissions on the orders to be made and the allocation of costs.
Orders
Orders of the court
Full text does not contain this section.
Background
Background to the litigation
Full text does not contain this section.
Evidence
Evidence Before The Court
Full text does not contain this section.
Decision
Reasons for decision
Ratio Decidendi
Legal Principle Established
There are indications in some cases that if a seller demonstrates that it took all reasonable steps to sell the property and was unable to do so, for a substantial period, or at all, this may justify departure from the general rule.[138][138] BGL Operations Pty Ltd v Allied Express Transport Pty Ltd [58] ‑ [59]; Statewide Developments Pty Ltd v Higgins [71] ‑ [73]; and see the cases discussed in the balance of this section of these reasons. In HTW Valuers v Astonland, the plaintiff took advice from valuers before purchasing a shopping arcade. The advice was misleading, negligent and in breach of contract. Although damages were not ultimately assessed on this basis, an alternative approach to damages invited by the plaintiff received approval from the High Court. By the time of trial, the plaintiff still owned the shopping centre because 'despite its best efforts, it has not succeeded in effecting a sale'.[139] The plaintiff contended that it was entitled to recover the purchase price it paid less the value of the shopping centre at the time of trial. The High Court stated that there was merit in this approach. The court said, in effect, that where a plaintiff cannot bring into account the proceeds of sale because it has acted reasonably in retaining the asset, or has, despite its best efforts, failed to effect a sale, it would be appropriate to deduct the value of the asset at the time of trial from the purchase price in order to assess the plaintiff's damages.[140] The court noted that the trial judge had found that the decline in value of the shopping centre had no cause other than the subject matter of the valuers' breach of contract.[141][139] HTW Valuers v Astonland [64].[140] HTW Valuers v Astonland [63] ‑ [67].[141] HTW Valuers v Astonland [65]. In Vieira v O'Shea, in January 2007 the appellant bought a horse on the advice of the respondent. It was held that that advice was given in breach of contract. The trial judge assessed damages on the basis of the difference between the amount paid by the appellant and the value of what he acquired as at 31 March 2009. The respondent cross‑appealed against that assessment, contending that the comparison should have been between the price paid and the value at the time of purchase, or alternatively the value as at July 2007 when the appellant became aware of the horse's condition. The Court of Appeal rejected that contention, for the following reasons:In this case, as the primary judge held at [172], the appellant did not become aware of the horse's condition until July 2007. At that time the horse was undergoing surgery and until its condition settled down the appellant was effectively 'locked in'. The primary judge's assessment that it was unreasonable to expect the appellant to have sold before March 2009 has not been shown to be an error. By that time the appellant had also incurred expenditure in relation to the horse's condition. Accordingly, to compensate the appellant fairly it was necessary to assess damages as at March 2009 and to include in that compensation the additional expenditure incurred to that time.[142][142] Vieira v O'Shea [46].