Moore v Regal World Pty Ltd No. DCCIV-95-1552

ARTHUR MOORE & AALTJE MOORE v REGAL WORLD PTY LTD & PUBLIC TRUSTEE
[2000] SADC 76

Judge Lunn
Civil

Introduction

The plaintiffs have sued the defendants for damages arising out of a contract for them to reside in the Chippendale Retirement Village (“Chippendale”). The 2nd defendant was originally Arthur Alfred Mann (“Mann”) but he died on 1 February 1998. At the commencement of the trial before me Public Trustee was substituted as the 2nd defendant in its capacity as the executor of the estate of Mann. At the trial the 1st defendant Regal World Pty Ltd (“Regal”) was not legally represented, but it was represented pursuant to leave under Rule 36.11 by its managing director, Joseph Christopher Badge. Regal had brought a counterclaim against the plaintiffs for damages, but that counterclaim was struck out by a Master on 5 June 2000. This trial has been only on the issues raised on the plaintiffs’ claim and I refused to allow Mr Badge to adduce evidence which was relevant only to the former counterclaim. At the commencement of the trial, with my leave, counsel for Public Trustee withdrew after he had indicated that Public Trustee merely put the plaintiffs to strict proof of their claim against Mann.

The Chippendale Retirement Village

Chippendale is a retirement village which has been set up and operated under the Retirement Villages Act 1987. Its administering authority has always been Regal. In broad terms intending residents of units in the village enter into a contract with Regal whereby they lend a substantial capital sum interest free to Regal for their right to occupy a particular unit for life and to enjoy the amenities of the village. If at any point they wish to leave the village they are only entitled to recover part of the loan which they initially paid, but the amount depends ultimately on what the administering authority can obtain from a similar contract with a new resident for that unit.
The land at Modbury on which Chippendale is situated, which is about 1.4 hectares in size, had been owned by the Mann family for many years and had been used as paddocks for horses. It was regarded as a good location for a retirement village. Mann transferred the land to Regal. He and his wife were the only directors of Regal. Mann was the driving force behind the establishment of Chippendale although he was also carrying on business as a land agent and a land broker.
After some difficulties, on 12 December 1986 Regal, through Mann, obtained planning approval from the Tea Tree Gully Council (“the Council”) for the construction of Chippendale. The approval was based on a plan which showed that the village was to comprise forty two units, a community hall and various other amenities for the use of the residents. In subsequent years there have been some minor variations to this plan, but they are not material to anything in issue in this action. The planning approval was subject to a condition that the construction of the village should be substantially completed within 3 years.
It was common ground that Chippendale was to be constructed progressively in stages, but what was to comprise each of the stages changed substantially over the course of time. The planning approval was given for the construction of the whole village within three years, and not merely for some initial stages of it in that period. The financial resources then available to Regal did not enable it to finance the construction of the whole village. It only had a small capital base. Mann always envisaged that once the first stage had been completed the further stages would be financed from the proceeds of the sales of the preceding stages. Thus the speed at which the whole project was to be completed was dependent upon how quickly the units in each preceding stage were sold. Mann displayed confidence that they would be sold quickly and acted on the basis of this expectation, although it was not shown that he had any reasonable grounds for it. With hindsight his expectations were ill-founded.
The first stage of the Chippendale village consisted of units 1 to 9 which were built on the western side of the site by Devon Constructions and were completed in about mid 1988. At that time Regal envisaged that the project would be completed by two further stages, the first of which would include the hall. The units in stage one did not sell quickly and were only finally disposed of in about 1991 after their prices had been substantially reduced.
The initial planning approval for the project lapsed on 17 September 1989. The Council wrote to Mann on 15 February 1990 pointing this out and stating that no more building work could be done unless a further planning approval was obtained. A further approval in similar terms was obtained by Regal on 22 June 1990, and it included a similar condition that the whole development had to be substantially completed within three years from that approval. However, the financial position of Regal was such in 1990 that it could not afford to embark on any further stages for the village.
In 1991 Regal had Devon Constructions build ten further units around the southern perimeter of the site including unit 35. These were completed in about March 1992. Foundations were also laid for units 37 and 38, but the construction of those units was not pursued as part of that stage. Contrary to the previous proposal that the hall would be included in this stage, nothing was done to construct it at this time. These ten units in stage two did not sell readily, and the last of them was apparently not sold until at least 1995. The financial position of Regal continued to be precarious. Mrs Mann died on 18 July 1993 and her daughter, Mrs Badge, was appointed to be a director of Regal in her place.
In April 1994 Mann sought an extension of time from the Council for the completion of the development on the basis that he would construct a further six units before the end of that year, but the Council refused to agree and required that the hall should be built as part of any next stage. In 1994 Chippendale consisted of a partly constructed complex of nineteen units of which six remained unsold. The north eastern quadrant of the site was unsightly bare ground which was muddy in winter and dusty in summer and on part of which earth from previous construction works had been mounded. On the part of the land where the hall was to be built the old horse stables still stood in a dilapidated condition. Proper letter boxes had not been provided at the entrance to the village for the units built in the second stage.
In early 1995 Mann was facing serious criminal charges of forging and uttering documents, although that had nothing to do with the affairs of Chippendale. He ceased his land agent’s and land broker’s practices and largely withdrew from the affairs of Regal, although his resignation as a director did not occur until 19 January 1996. On 18 April 1995 Mr Badge, the son-in-law of Mann, was appointed to be a director of Regal and took over the general control of its operations.
On 30 May 1995 the Council granted another development approval for a further stage of Chippendale of fourteen units and the hall, but on condition that the building of the remaining ten units to complete Chippendale could not be undertaken until the hall was completed. On 10 December 1995 Mann was still asserting that the hall would be commenced with the next stage of the units and completed at or near the same date.
In 1995 and 1996 Regal remained in a parlous financial position. There were no sales of units in those years including resales where some residents had left. A mortgage to the Bank of South Australia became overdue and Mr and Mrs Badge had to sell personal assets to raise the money to pay it out. Four further units were completed by about September 1996. The hall was completed by late 1996 and had an official opening in March 1997. Mann had been convicted in the District Criminal Court of forging and uttering documents in June 1996 after he changed his plea part way through his trial. He died on 1 February 1998. At the time of this trial six of the forty two units had still not been built, but three of them were then under construction.

The plaintiffs’ dealings with Chippendale

Mr Moore was born in 1919 and was 80 years of age at trial and Mrs Moore was born in 1920 and was 79 years of age at trial. Mr Moore was in the Army during World War 2 and on his discharge he was certified as having a 10% disability in his feet because of clawed toes, but no mental or psychological disorders. Mr and Mrs Moore were married in 1963. They had each previously been married. In 1977 Mr Moore suffered substantial depression as a result of demotion in his employment and underwent psychiatric shock treatment. He retired at that time from work and Mrs Moore retired in 1978. They then owned their own home at Tea Tree Gully. Mr Moore recovered from his depression and they both enjoyed an active social life and travelling in their retirement. Mr Moore played a lot of bowls.
In about 1986 the plaintiffs started investigating the possibility of moving into a retirement village. They inspected a number of them. In May 1988 they inspected Chippendale on several occasions where the first nine units were almost completed. They there met Fred Burns, a land agent employed by Regal, and Mann. They were shown the plans for the completed village and were impressed by them. They were not prepared to take any of the units in the first stage, but they indicated that they would be interested in taking unit 35 which they were told would be built in the near future as part of stage two.
In about early August 1989 Mr Moore was approached by a person who was interested in buying his house at Tea Tree Gully. He rang Mann about what was occurring in the building of stage two at Chippendale and an arrangement was reached whereby the plaintiffs would immediately take unit 7 at Chippendale which they would occupy until unit 35 was completed and then they would go into unit 35 as had been previously discussed. On 5 August 1989 the plaintiffs entered into a contract to sell their house at Tea Tree Gully for $79,000. They retained Mann to be their land broker for completing this sale. On 21 August 1989 the plaintiffs entered into a licence agreement with Regal for them to lend $125,000 to Regal and to be entitled to occupy unit 7 and to become residents of Chippendale. At the same time they entered into an addendum agreement for the purpose of transferring their occupancy to unit 35 when it was completed without any additional payment. At settlement on 15 September 1989 Mann acting as the broker for the plaintiffs, and for Regal, applied $78,733 from the settlement of the sale of the plaintiffs’ Tea Tree Gully house to the loan due to Regal under the plaintiffs’ agreement with it and the plaintiffs supplied the balance of $46,266 from their other funds.
The plaintiffs moved into unit 7 and took an active part in the community life of the partially completed village. Mr Moore became friendly with Mann, often visited his home and did odd jobs for him. While in unit 7 Mr Moore’s health deteriorated significantly. In December 1989 he was hospitalised with an angina attack which, although it did not recur, caused him to scale down his physical activities. In 1991 he was diagnosed with gout and leukemia, but the latter did not have significant symptoms.
During the construction of unit 35 in late 1991 the plaintiffs paid for numerous extras for it totalling about $12,000. They moved into unit 35 in March 1992. No further documents were entered into to give effect to this change and it was implicitly accepted by them and by Regal that they were substituting their entitlement to unit 7 for that to unit 35.
In late 1992 there was a major breakdown in the previous good relations between the plaintiffs and Mann. This was precipitated by at least two incidents. One was when the burglar alarm on unit 35 rang for an extended period while the plaintiffs were overseas in October 1992 and Mann could not get access to unit 35 to be able to shut it off. The other was when Mr Moore had irately told Mann’s grandchildren, who were playing on the undeveloped area outside unit 35, to leave the village. Considerable hostility and antagonism thereafter developed between the plaintiffs on the one hand and Mann and the Badges on the other.
Up to about the end of 1992 the plaintiffs had been patient and acquiescing in Regal’s failure to complete the village, and in particular to build the hall which would be the centre of the village’s community life. The plaintiffs must have been aware well before the end of 1992 that Chippendale was not going to be completed by that time, but they made no complaint about it. However, by mid 1993 and thereafter, Mr Moore was complaining vehemently to Members of Parliament, the Council, public authorities and others about the failure of Regal to complete the village and he was a leading player in group protests by most of the residents. The protests did not achieve any action from Regal. In August 1993 the plaintiffs retained their present solicitor who has acted for them ever since in the matter.
By mid 1994 Mr Moore had become frustrated, obsessed and depressed about the plaintiffs’ situation in the partly completed village. Mann was saying that the village would not be completed unless there were more sales of the vacant units and this was not occurring. The outlook from unit 35 across the bare paddock to the dilapidated stables was not scenic and not what the plaintiffs had been led to expect. On 24 June 1994 Dr Hardy, who had been the plaintiffs’ general practitioner since 1971, diagnosed Mr Moore as suffering from depression. He began to take antidepressant medication which assisted him to some extent, but it did not resolve the problem. He could not sleep properly, he lost his appetite and he became socially withdrawn and difficult to live with. The lack of progress in the completion of the village exacerbated his depression. On 22 December 1995 this action was commenced. In January 1996 Dr Hardy referred Mr Moore to Dr Czechowicz, a psychiatrist, who thereafter treated him for his depression.
There were a number of incidents between the parties in these years but they are of no significance on what I have to decide. Matters came to a head in April 1997 when Mr Badge demanded entry to unit 35 to inspect it and this was refused by the plaintiffs. It was obviously an emotionally charged incident and the plaintiffs over-reacted to it. It deepened Mr Moore’s depression and made him potentially suicidal. It led to an inevitable decision that the plaintiffs had to leave Chippendale.
On 14 April 1997 the plaintiffs purchased a unit in a block of two units at 79B Bowker Street, Warradale, for $167,000. They paid for it by withdrawing many of their existing investments and by borrowing $40,000 from the CPS Credit Union. They moved out of Chippendale in May 1997, although a number of inconsistent dates in May were given for it in the evidence. Regal refused to pay any of the money due to the plaintiffs under the agreement and eventually $68,716 of it was paid into Court.
On 23 June 2000 the moneys in court of $75,941 were paid out to the plaintiffs of which $7,225 was the nett amount earned on the $68,716 which had originally been due to them.

The witnesses

Mann would have been an important witness in the trial if he had still been alive. While claims which involve oral statements allegedly made by deceased persons are not viewed by Courts with suspicion, the statements of living witnesses about what deceased persons said and did will be scrutinised by the Court with great care to see whether they are true or not: Halsburys Laws of Australia, volume 13, para 195-8340 and the cases cited in footnote 1.
I did not find Mr or Mrs Moore to be particularly impressive or convincing witnesses. They gave their evidence in a rehearsed, and on occasions in a somewhat theatrical, manner. Some of what each of them said corresponded so closely to what the other had said on the same topic that I conclude that they had previously discussed their recollections, and what they would say in evidence, on many occasions.
I accept the evidence of Mr Comley about what he had told Mr Moore concerning the circumstances in which Mann had left the police force many years before. I find that Mr and Mrs Moore both exaggerated and embellished their evidence on this topic in an effort to disparage Mann’s character. Mr Moore’s reluctance to name Mr Comley as his informant was an effort to avoid his evidence on this topic being undermined by enquiries from Mr Comley.
I am satisfied there was a good deal of exaggeration and embellishment generally in the stories told by both Mr and Mrs Moore. They were not objective, impartial or particularly reliable witnesses. I am not prepared to act on their evidence on disputed matters unless it is otherwise plausible or supported by other credible evidence.
I generally accept the evidence of each of Mr and Mrs Badge where they were speaking of matters which were within their own knowledge. As a consequence of Regal not being legally represented much of what was put forward by Mr and Mrs Badge was reconstruction, speculation and hearsay which had no probative force. They were unable to give direct evidence about many of the matters which constitute the plaintiffs’ causes of action.
I accept the evidence of Mr Anderson, although he was not particularly reliable about dates. I accept the evidence of Mr Maslac, the planner from the Council, Mr Lucas, the valuer and Mr Wynne, the builder.

The representations

I find that in about early August 1989 in the negotiations leading up to the agreement of 21 August 1989 Mann orally represented to the plaintiffs that the proposed village of forty two units, the hall and the associated amenities, as laid out in the site plan, were to be completed by the end of 1992. This is consistent with what Mann was telling the Council and with what he said in subsequent correspondence. It is likely that Mann in his own mind, albeit with undue optimism, believed at that time that Chippendale would then be completed. In paragraph 3.4.3.6. of their Defence the defendants pleaded:
“The defendants hoped that the construction of the Village would be completed within 2-1/2 to 3 years but that completion was dependant upon sales because of the policy of the defendants of not commencing construction of subsequent stages until rights to occupy all units in the preceding stage had been sold.”

I reject the defendants’ plea that any representation about the time of completion was subject to a condition that that would only occur if all units in the preceding stage had been sold. That assertion is inconsistent with what the defendants were telling both the Council and Mr Anderson at the time. If there had been such a significant qualification on the time for completion, and one that could have meant that the village may never have been completed, it would be expected that Mr Fred Burns, who was retained earlier by Regal as a salesman for the units, would have told this to the plaintiffs and other prospective purchasers when he spoke to them. However, the defendants did not call Mr Burns, who was their agent, or satisfactorily account for his absence from the witness box. It is quite implausible that Regal would ever have made such a disclosure as it would have been a serious impediment to any sales of the units. The time for completion was not expressed as a hope, but as a fact. The truth of the matter is that while that was subjectively their position the defendants gambled on being able to sell the units quickly enough to finance the completion of Chippendale within the time frame represented, which if it could have occurred, would have been for their financial benefit. This representation constituted false and misleading conduct by Regal and Mann. Insofar as it was a statement of future intention they have not established any reasonable grounds for making the representation within s51A(2) of the Trade Practices Act 1975 or s54(2) of the Fair Trading Act 1987. The representation was false when it was made and Mann must have either known it was false or was reckless about its truth because from the history of the project to about August 1989 it was clear that the sales of units could not occur quickly enough so as to generate enough finance to complete the village by anything like the end of 1992. Furthermore it was made at a time when Mann knew that the planning approval for the balance of the village was to expire in less than two months and there was then no guarantee that a further approval could be obtained from the Council.

The plaintiffs relied upon this representation in entering into the contract with Regal. The nature of Chippendale as a retirement village, as distinct from a collection of residences, was significant for them. They wanted to be able to enjoy the amenities available through the hall and the other common facilities shown on the plan. They also wanted to be in a village of about the size of forty two units which would provide greater opportunities for social intercourse than in a much smaller village. If they had been told in August 1989 that only nineteen units would be completed by the end of 1992, and that there would then be no hall, they would not have entered in to the contract.
Mann also represented in a similar fashion that the hall would be constructed as part of the next stage of the development of Chippendale, ie stage two. This did not occur. However, I do not find that the plaintiffs relied upon this representation in entering into the contract in that if they had been told that the hall would not be built with unit 35, but was to be built before the end of 1992, they would have reluctantly accepted this and would still have entered into the contract. This follows from their failure to make any complaint about any of the delays which occurred prior to late 1992.

The claim in contract

The contract of 21 August 1989, with its associated documents, is a long and complex agreement. It was drawn up on behalf of Regal. It is clear from its express terms that the plaintiffs were not merely to receive the right to occupy a unit in the village, but that they were to obtain in common with the other residents the benefits of the village as a whole and the facilities which it was stated to contain. On the face of the documents the plaintiffs were entitled to the benefit of all of the facilities in the village as a whole from when they took up occupation on 15 September 1989. (Recital B assumed that the village as laid out in the plan was already in existence and the agreement did not make provision for any entitlement to such part of Chippendale as was not already built only becoming available to the plaintiffs in the future.) However, the agreement is to be interpreted in accordance with the matrix of facts against which it was negotiated as at August 1989. This includes that the village was then only partly constructed. A term is to be implied that a village as laid out in the site plan shown to the plaintiffs was to be provided by Regal within a reasonable time: Hogan v Regional Centres Pty Ltd [1964] NSWLR 699. In assessing what was a reasonable time in the circumstances account is not to be taken of the matters subjective to Regal which it had not disclosed to the plaintiffs about its lack of resources to be able to complete the village other than from the sales of existing units. In the circumstances which were made known to the plaintiffs it is reasonable to hold that the implied term was that the village was to be completed by the end of 1992.
Regal was in breach of that implied term. The reasons why it was in breach of it are not legally relevant. The plaintiffs did not waive their right to rely on that breach and the defendants have not pleaded any waiver or like defences.

The claim against Mann

It is unclear whether Mann acted for the plaintiffs as their broker in them entering into the contract with Regal and in completing it. They did not have any other broker acting for them. However, it does not matter. Mann was retained as their broker for the contemporaneous sale of their Tea Tree Gully house and as their representative he procured them to apply the whole of the nett proceeds of the sale of that house towards their loan to Regal. In that situation he owed a fiduciary duty to the plaintiffs to act in their best interests: McKessor v Mortimer (1989) 154 LSJS 288. In his capacity as a director of Regal, Mann knew that Regal would be unable to complete Chippendale within the time allowed under the then current development consent from the Council, that Regal did not have the resources available to it to complete Chippendale within the represented time by the end of 1992 and in entering into the contract with Regal it was unlikely that the plaintiffs would be able to obtain the whole of the benefits from Chippendale which they expected to receive and to which they were legally entitled. To fulfil his fiduciary obligation Mann should have disclosed all this to the plaintiffs, but he did not. If he had made proper disclosure to the plaintiffs, they would not have entered into the contract with Regal. Accordingly, Mann through his estate is liable to the plaintiffs for the damage which they have suffered as a result of entering into that contract.

Limitation of actions defence

The copy documents provided to me contained the Defence filed by both of the then defendants on 5 November 1997 on the basis that it was the operative Defence. Counsel for the plaintiffs also believed that this was the last Defence filed by Regal. On the fourth day of the trial I ascertained that Mr Badge was working from a subsequent version of the Defence. Indeed, it transpired that such an Amended Defence had been filed on 9 June 2000 by Caldicott & Co as solicitors who were then acting for Regal, although it is unclear whether that firm had ever become the solicitors for Regal on the record of the Court. The plaintiffs’ solicitor denied that he had ever been served with a copy of this amended Defence.
I was informed that on 12 May 2000 a Master had given the plaintiffs leave to amend their Statement of Claim by expanding their pleadings about their damages and had given the defendants leave to make consequential amendments to their Defence within fourteen days of service of the Amended Statement of Claim. I was told that the Amended Statement of Claim had been served on Caldicott & Co on 23 May 2000, but that would not have been valid service if their offices were not then the address for service for Regal under Rule 5. If the Amended Statement of Claim was validly served on 23 May, then Regal was out of time by 9 June to have made any consequential amendments. I need not go into the vexed question of whether an amendment made after the time for doing so has expired is of no effect or whether it is only an irregularity which is subject to disallowance.
The only amendment in this further document which is of any significance is a part of its paragraph 11 which had not previously been pleaded, which reads:
“In addition, in respect of the claims for relief under the various statutory heads the first defendant says that the claims have been instituted out of time and should be dismissed on that basis.”

This is an embarrassing and vexatious pleading. If leave had been sought to add it to the Defence, it would have been refused because it did not identify the statutory limitation provisions relied upon as required by Rule 46.10(1). Furthermore, it was not consequential to the amendments raised by the plaintiffs as their statutory causes of action had already been pleaded in earlier versions of the Statement of Claim. Therefore, any such amendment was outside of the leave given.

I accept the submission of the plaintiffs’ counsel that even if a three year limitation period applied, which is the best that Regal could have achieved, the causes of action on which the plaintiffs have succeeded on their statutory claims all arose within that three year period, and therefore could not be statute barred. The action was commenced on 22 December 1995. The breaches of contract, and the loss suffered by the plaintiffs, which are when any limitation periods began to run (Kenny & Goode v MGICA (1999) 163 ALR 611), did not occur until after 22 December 1992. Accordingly, the point need not be pursued further as even if it was properly pleaded it could not have benefited Regal.

The plaintiffs’ joint primary loss

The primary measure of the plaintiffs’ joint loss on their causes of action in tort and under statutes is what amount of money would be needed to put them into the position they would have been in if the defendants had not committed the actionable wrongs. Here that is the difference of $20,000 between the $125,000 they paid to Regal under the contract of 21 August 1989 and the $105,000 which the new resident of unit 35 paid to Regal. I reject the plaintiffs’ additional claim on this head of the approximate sum of $8,000 which they had paid for extras on the construction of unit 35. As Mr Lucas, the valuer, acknowledged the extras added to unit 35 by the plaintiffs would only have increased its value by between 3.5 and 5%. The plaintiffs probably would have expended similar amounts on any property which they purchased to have it conform to their idiosyncratic desires. In any event the extras were only arranged in late 1991 and early 1992 when the plaintiffs probably were aware that the representations about the completion of the whole village by the end of 1992 would not be fulfilled and when they knew the hall was not to be part of stage two.
The primary measure of the plaintiffs’ joint damage in contract is what amount would be required to put them in the position in which they would have been if Regal had not breached the contract. Mr Lucas found that the value of unit 35, if Chippendale had been developed as required by the contract and the plan, would have been $120,000. The measure of the loss in contract is that sum less his valuation of the unit of $100,000, and not less its actual sale price of $105,000. Thus the measure of the primary joint loss in contract is also $20,000.

Consequential joint loss

The plaintiffs claim joint consequential loss on the following heads:

(1)... Their expenses incurred in purchasing of the Warradale unit.
The gross expenses were $6,725. The plaintiffs would not have had to expended this sum if they had remained in Chippendale. However, I do not accept the plaintiffs’ submission that it was reasonably certain that if they had entered another retirement village instead of Chippendale, where the administering authority performed its contract and was not guilty of any torts, they would have been reasonably certain to have stayed in that village for the rest of their lives. I reject the plaintiffs’ evidence to this effect. From the type of people which I observed them to be in the course of their evidence there is some prospect that in any retirement village which they entered they would have been in conflict with either the administering authority or with other residents to such an extent that they would have left it. It is significant that after their experiences in Chippendale they elected not to go into any other retirement village. Therefore, there is some chance that they would have expended these moneys in any event.

Although the point was not explored in evidence or argument, it seems that the Warradale unit was a better property than unit 35 in Chippendale. Even though it did not have the ancillary amenities of a retirement village, its superiority is measured by it having a market price of $167,000 compared with a value at best of unit 35 in Chippendale of $125,000. It gave the plaintiffs a title in fee simple to the property and not merely a licence to occupy. Of the expenses for the purchase of the Warradale unit, $5,510 was for stamp duty, $639 was for registration of the transfer and about $177 was for future Council and water rates. These are payable on scales proportionate to the value of the property. On this head of damage the plaintiffs should not be allowed more than would have been payable for them having acquired alternative accommodation which was the equivalent in value of unit 35 in Chippendale. On this head of damage I allow $4,200.

Interest, expenses and taxes paid to the CPS Credit Union for the mortgage on the Warradale unit.
The $40,000 borrowed on this mortgage roughly represented the amount by which the value of the Warradale unit exceeded the value of unit 35 in Chippendale. For the reasons set out in (1) no damages are to be allowed on this head as they are attributable to the plaintiffs having improved their position by the purchase of the Warradale unit.
The income the plaintiffs lost by having applied the moneys which they would otherwise have invested to the purchase of the Warradale unit.
I accept that in purchasing the Warradale unit the plaintiffs applied about $130,000 of their financial resources to funding that purchase. If they had remained in the Chippendale unit they would have earned interest on that money by depositing it with various financial institutions. As mentioned in (1) above some allowance must be made for the chance that they would have applied that money in that same way in any event if they had left some other retirement village. However, as will be dealt with in (5) below, about $36,000 of this $130,000 represents money which would have been expended by them in any event for their accommodation in the period in which they were in Chippendale, and so notionally their nett assets would have been otherwise depleted by that amount. Accordingly, it is only the loss of income on about $94,000 which is to be compensated on this head of damage. It is also likely that they would have spent some of this money on travel and enjoying themselves which they were prevented from doing by the situation in which they found themselves in Chippendale. I accept that Mr Moore was a good financial manager and that from May 1997 until judgment he could probably have earned about 4% per annum on the money in the types of investments which he had previously utilised. This would have been subject to income tax, but it would have been minimal. This loss continued from May 1997 until judgment. If the plaintiffs had received their entitlement under the contract on the resale of unit 35 that amount would have been offset against the amount on which this head of damage is calculated as from its receipt. However, as Regal deprived the plaintiffs of this money by requiring that it be paid into court, the plaintiffs’ loss is assessed on the whole of the $94,000 but crediting the nett interest of $7,225 which was earned on the moneys in Court since they first became payable to the plaintiffs. (I treat this interest as being taxable income of the plaintiffs.) I allow $2,000 damages on this head.
Loss from not having an appreciating asset.
I accept the opinion of Mr Lucas that in relation to other comparable retirement villages in the period from 1989 to 1997 there was a significant capital appreciation overall in the value of units in those villages, but this was not the case in Chippendale. He did not say what the rate of appreciation was, but from the examples which he gave it seems that about 3% per annum was the average. If the plaintiffs had entered another retirement village, and had paid $125,000 for a unit there, it is likely there would have been a capital appreciation by 1997 of about $30,000 on their investment which is more than the $120,000 that unit 35 could then have been sold for. As the plaintiffs have had the benefit of significant capital appreciation on the Warradale unit since May 1997, I reject their claim for damages on this head for any subsequent period. I allow $25,000 damages on this head.
The $36,084 which Regal deducted from the repayment of the loan by the plaintiffs to Regal.
Under the terms of the agreement of 21 August 1989 the plaintiffs were only entitled upon giving up their unit to be repaid 80% of the amount of the loan received by Regal from the new resident and less the expenses of its resale and less an amount of 1% of their loan for each year they were in occupation. Here from the subsequent licence fee of $105,000 Regal only refunded $68,716 having deducted amounts including $21,000 being 20% of the new loan amount and $10,000 being 1% of $125,000 for eight years. While it is true that the plaintiffs would not have paid the $125,000 to Regal if the true position about the village had not been misrepresented to them, it must also be brought into account that they had the benefit of accommodation in what they conceded were nice units for about eight years. Under the terms of the agreement the plaintiffs were required to pay a monthly maintenance fee for their share of all the outgoings attributable to their unit and to their share of the common facilities, but that did not include an allowance for the substantial amount of capital that Regal had applied to the building of the unit and the common facilities in the village. Under the terms of the agreement the reduction of the amount payable on their vacation of the unit was part of the quid pro quo for the plaintiffs’ use of what was represented by the capital sum during their period of occupation. If they had gone into any other retirement village similar deductions would have been made when they either died or vacated their unit. The $31,000 deducted represents a return to Regal of just over $70 per week for the period in which the plaintiffs occupied the units 7 and 35. Although there is no evidence on the topic, I consider that this is not an unreasonable return for Regal after taking into account the maintenance fee payable and the benefit of the interest free loan. There is no reason why the plaintiffs should be able to recover the costs of the repairs of $1,234. Therefore, the only amounts to be brought into account on this head are the expenses of sale of $3,450 and the contribution to the maintenance fund after vacation and before resale of $600, but I discount these to some degree for the chance that the plaintiffs might have vacated in any event. I allow $3,500 damages on this head.
Accordingly, there will be an award of $54,700 damages to the plaintiffs jointly.

Claims for personal injury and distress

The plaintiffs have separate, and not joint, claims for personal injury and distress arising out of their causes of action against the defendants. The contract with Regal was one to provide for their pleasure, enjoyment and relaxation, and thus they are entitled to damages where Regal’s breach of contract has caused them disappointment, distress or illness: Baltic Shipping Co v Dillon (1993) 176 CLR 344. Likewise they are entitled to recover for such loss as a result of causes of action against the defendants in misrepresentation and for misleading and deceptive conduct: Steiner v Magic Carpet Tours Pty Ltd (1984) ATPR 40-490. Insofar as it is necessary for these causes of action I find that the types of damage suffered by the plaintiffs were reasonably foreseeable: Copping v ANZ McCaughan (1987) 67 SASR 525 at 589.
From the beginning of 1993 until May 1997 the plaintiffs each suffered distress, disappointment and frustration and were deprived of the benefits of amenities which would otherwise have been available to them through the community hall and additional residents in the village if Regal had completed it by the end of 1992. The outlook from their unit across the undeveloped paddock was an eyesore for them. Regal’s failure to provide a proper letter box for unit 35 was also an irritation and an inconvenience for the plaintiffs.
From about mid 1994 Mr Moore was suffering from clinical depression and a post traumatic distress disorder. These resulted from, and would not have occurred but for, Regal’s breaches of contract and tortious acts as I have found above. I do not find him to have been suffering from such psychiatric disorders prior to June 1994 as Dr Hardy did not consider that he was then depressed and he had been seeing him regularly in that period. Dr Czechowicz said it was major depression and Dr Clayer said it was mild depression. It is likely that his degree of depression fluctuated from time to time and on some occasions it was more severe than on others. The condition was only partly controlled by medication. The depression largely resolved within about twelve to eighteen months of Mr Moore leaving Chippendale. Insofar as he still believes that he is not back to his former self this is in part substantially attributable to the ongoing stresses of this litigation which hopefully will now resolve.

The depression caused Mr Moore to become socially withdrawn, distressed, anxious, miserable and on occasions potentially suicidal. The plaintiffs’ case was opened on the basis that the depression had caused him to give up his sporting and social activities. However, I do not accept this and find that he had given up most of them before the onset of the depression. Rather this was attributable to the angina, gout, leukemia and worsening of his clawed feet most of which pre-dated the depression. He had given up playing bowls well before 1994. Dr Hardy’s notes, which are the most reliable source of information about Mr Moore’s medical history, show that in mid 1992 he also was having major problems with his hips and was then referred to specialists for possible hip replacements. This is possibly inconsistent with Mr Moore’s own evidence which suggested that the hip replacements were in 1984 and 1998. The point was not pursued in his cross examination. However, it seems that in mid 1992 major problems with his hips were also causing him to withdraw from his social and sporting activities. It is also significant that since he has largely recovered from his depression he has not sought to resume any of his previous sporting or social activities. I find that his depression only contributed to the loss of his social and sporting activities to a small extent.
I assess general damages for Mr Moore arising out of his causes of action against the defendants at $7,500. This includes an allowance for the past and future costs of his antidepressant medication.
Mrs Moore did not suffer from depression, but the stresses from the breaches of contract by Regal and its tortious act caused her mental well-being to deteriorate and she had difficulty in sleeping and in eating properly.
I assess the general damages for Mrs Moore arising out of her causes of action against the defendants at $800.

Interest

On their joint judgment against the defendants the plaintiffs are entitled under Section 39 of the District Court Act to interest at a commercial rate from when their various losses arose until judgment. The period on the whole of each head of such loss runs from May 1997 except on (3) where it has been progressive over that period. I fix a lump sum in lieu of such interest at $11,200.

On their individual claims for non economic loss the plaintiffs are entitled to interest at 4% per annum on their damages from when their losses accrued until judgment. I fix lump sums in lieu of such interest of $1,700 for Mr Moore and $180 for Mrs Moore.

Judgment

Thus there will be judgment for the plaintiffs jointly against Regal and Public Trustee as the executor of the estate of Mann for $65,900. There will be a further judgment for Mr Moore against Regal and Public Trustee as the executor of Mann for $9,200. There will be a further judgment for Mrs Moore against Regal and Public Trustee as the executor of Mann for $980. I will hear the parties before making any order about costs.

[2000] SADC 76

7 August 2000