JUDGE:	DAVIES J
WHERE HELD:	Melbourne
DATE OF HEARING:	4, 5 March 2013
DATE OF JUDGMENT:	24 April 2013
CASE MAY BE CITED AS:	Pettiona v Whitbourne
MEDIUM NEUTRAL CITATION:	[2013] VSC 205

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CONTRACT – Sale of land – Vendor and purchaser – Failure by purchaser to complete contract – Vendor’s damages – Mallet v Jones [1959] VR 122 considered and distinguished.

EVIDENCE – Expert opinion – Role of expert witness – Expert Witness Code of Conduct – Supreme Court (General Civil Procedure) Rules 2005 (Vic), r 44.03.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	M Pirrie	Frenkel Partners
For the Defendant	AP Dickenson	Bediaga Xavier and Ramon

HER HONOUR:

In issue is the quantum of the damages recoverable by the plaintiff (“Ms Pettiona”) from the defendant (“Mr Whitbourne”) as the result of Mr Whitbourne’s failure to complete a contract (“the contract”). The contract was for the purchase of a residential property at 319-323 St Kilda Street, Brighton (“the property”).

The parties entered into the contract on 5 July 2010 and settlement of the contract was due to be completed twelve months later on 4 July 2011. The purchase price was $6.5 million, of which Mr Whitbourne paid a deposit of $650,000, leaving a balance of $5,85 million payable on the settlement date. When Mr Whitbourne failed to pay the balance of the contract price on 4 July 2011, Ms Pettiona’s solicitors served a Notice of Default on him in accordance with clause 27 of the contract. As the default was not remedied within 14 days of service of the Notice of Default, the contract of sale terminated on 21 July 2011. Mr Whitbourne did not dispute that the contract terminated as the result of his default and he accepted that he must pay damages to Ms Pettiona.

The items of loss and damage claimed by Ms Pettiona comprise:

(a) the difference between the unpaid balance of the sale price of $5.85 million and the property’s market value when the contract of sale terminated on 21 July 2011;

(b) interest on the unpaid balance for the period of default totalling $39,507;

(c)legal costs totalling $4,406.72; and
(d)expenses that Ms Pettiona incurred in the course of selling the property to Mr Whitbourne which were thrown away when the contract of sale terminated, quantified as $97,500 for selling agent’s sales commission and $26,068 for marketing expenses.[1]

[1]A claim for damages for loss of use of the unpaid balance of the sale price from 22 July 2011 to the date of the commencement of the proceeding was abandoned at trial.

These items will be separately addressed.

Damages consisting of the difference between the contract price and the market value of the property at the time of termination of the contract

On termination of the contract for default by Mr Whitbourne,…

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.

Continue reading Pettiona v Whitbourne

Details

AGLC: Pettiona v Whitbourne [2013] VSC 205
Case: [2013] VSC 205
Decision Date: 24 April 2013

CaseChat Overview and Summary

Pettiona v Whitbourne is a case before the court concerning a dispute over the sale of land. The vendor, Pettiona, sought damages from the purchaser, Whitbourne, for Whitbourne's failure to complete the contract of sale. The case raises questions about the appropriate measure of damages for a vendor in such circumstances, as well as the role and admissibility of expert opinion in this context. The court was required to consider the established principles of damages for breach of contract, particularly the decision in Mallet v Jones, and how they apply in the context of the sale of land.

The primary legal issue before the court was determining the appropriate measure of damages for the vendor's loss due to the purchaser's failure to complete the contract. The court had to consider whether the vendor could claim the difference between the contract price and the market value of the property at the time of the breach, or if some other measure was more appropriate. The court also had to consider the admissibility and weight of expert opinion evidence, specifically a valuation report prepared by a real estate expert, in determining the appropriate measure of damages.

The court found that the appropriate measure of damages in this case was the difference between the contract price and the market value of the property at the time of the breach, as established in Mallet v Jones. However, the court distinguished the present case from Mallet v Jones on the basis that the expert opinion evidence was not properly led and did not comply with the Expert Witness Code of Conduct and the Supreme Court (General Civil Procedure) Rules 2005 (Vic), r 44.03. The court held that the expert's report was not admissible as it did not provide sufficient information about the basis of the expert's opinion, and therefore the court was unable to determine the appropriate measure of damages based on the market value of the property. Instead, the court awarded damages based on the contract price, less any sums already paid by the purchaser.

The court ordered Whitbourne to pay Pettiona the difference between the contract price and the amount already paid by Whitbourne, plus interest and costs. The court held that Whitbourne was liable for the full contract price, less any sums already paid, as the court was unable to determine the appropriate market value of the property at the time of the breach due to the inadmissibility of the expert opinion evidence.

Orders