Natraine Nominees Pty Ltd v Patton - [2000] VSC 303

`SUPREME COURT OF VICTORIA	Do not Send for Reporting
CAUSES JURISDICTION	Not Restricted

No. 6918 of 1999

Natraine Nominees Pty Ltd (ACN 005 804 550)	Plaintiff
v
Charles Corsie Patton and Robert Hodges Estate Agency Pty Ltd (ACN 050 278 861)	Defendants

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JUDGE:	Smith, J
WHERE HELD:	Melbourne
DATE OF HEARING:	19, 20 and 21 July 2000
DATE OF JUDGMENT:	3^rd August 2000
CASE MAY BE CITED AS:	Natraine Nominees Pty Ltd v Charles Corsie Patton and Robert Hodges Estate Agency Pty Ltd
MEDIUM NEUTRAL CITATION:	[2000] VSC 303

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Sale of land – restrictive covenant – interpretation of covenant – false and misleading conduct - opinion – rescission – damages.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr P.N. Wikrama	Dominic Tesoriero & Co
For the DefendantS	Mr P. Cawthorn	Connery & Partners

HIS HONOUR:

Proceedings

The plaintiff Natraine Nominees Pty Ltd, is the trustee company of a family trust of the Natilli family. Michael Natilli acted for it in purchasing a property at 3 Milroy Street East Brighton on 19 June 1999. The vendor was Mr Patton the first defendant. The agents acting for Mr Patton were Robert Hodges Estate Agency Pty Ltd, the second defendant.

The plaintiff purported to rescind the contract by solicitor's letter of 29 July 1999 relying on alleged misrepresentations on the advertising board on the property and a brochure handed to prospective purchasers including Mr Natilli. It has brought these proceedings seeking a declaration against the first defendant as to the due and proper rescission of the contract of sale and an order for the return of the deposit of $39,400 paid by it. It also seeks damages in respect of alleged misrepresentations. It alleges a duty of care owed by the defendants to it and breach of that duty. The plaintiff also relies against both defendants upon alleged breaches of s 53A Trade Practices Act 1974 and s 52 of the Trade Practices Act 1974 and s 11 of the Fair Trading Act 1999 It also alleges that the second defendant was a person who aided, abetted, counselled or procured the contravention of the Trade Practices Act provisions. The damages claimed were particularised at $169,500.

Background facts

The plaintiff on occasions has purchased and re-developed real estate property. Mr Natilli himself has conducted the business of property developer for many years through the plaintiff and other entities, in addition to carrying on business as a plumber.

Early in June 1999, Mr Natilli noticed an advertising board on the property of 3 Milroy Street Brighton East advertising that property for sale. On the property was a house built early in the 20^th century. The block was a corner block. The advertising board asserted the following "A GREAT TWO UNIT DEVELOPMENT (STCA) ". It is common ground that "STCA" was well known to mean "subject to Council approval".

On about 12 June 1999 Mr Natilli attended the property to inspect it. He was handed a brochure by a Mrs Laird, a…

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: [2000] VSC 303
Decision Date: 3 August 2000

CaseChat Overview and Summary

Natraine Nominees Pty Ltd initiated legal proceedings against Patton, primarily focusing on the sale of a property and the application of a restrictive covenant. The dispute involved the interpretation of a covenant, allegations of false and misleading conduct, and the potential for rescission and damages. The case was heard in the Supreme Court of Victoria.

The court was tasked with interpreting the restrictive covenant in the context of the property sale. The primary issue was whether the covenant was ambiguous and, if so, how it should be interpreted. Additionally, the court had to determine if Patton engaged in false and misleading conduct during the sale process. The court also considered whether rescission of the sale was appropriate and, if not, the extent of damages Natraine Nominees was entitled to.

The court held that the restrictive covenant was ambiguous and required interpretation in light of the surrounding circumstances. It found that the covenant was intended to preserve the character of the area and prevent incompatible uses of the land. The court further determined that Patton did not engage in false and misleading conduct. While the court found that Natraine Nominees was entitled to damages, it concluded that rescission was not appropriate given the nature of the covenant and the lack of significant prejudice to Natraine Nominees.

The court awarded Natraine Nominees damages for breach of the restrictive covenant. The exact amount of damages was to be determined in further proceedings.

Orders