Ripani v Century Legend Pty Ltd (No 4)
[2024] FCA 1211
•18 October 2024
FEDERAL COURT OF AUSTRALIA
Ripani v Century Legend Pty Ltd (No 4) [2024] FCA 1211
File number(s): VID 266 of 2020
VID 358 of 2023Judgment of: NESKOVCIN J Date of judgment: 18 October 2024 Catchwords: CONSUMER LAW – misleading and deceptive conduct – contract of sale of apartment sold “off the plan” – reliance – whether Applicants continued to rely on representations that were misleading and deceptive – reliance established
CONSUMER LAW – remedies – what orders the Court should make under ss 237 and 243 of the Australian Consumer Law – orders for the recission of the contract of sale and return of a bank guarantee
CONTRACTS – breach of contract of sale – variation – whether the contract of sale was varied – whether vendor failed to construct the apartment substantially in accordance with the contract of sale – whether purchasers entitled to rescind under the rule in Flight v Booth – repudiation – whether vendor repudiated the contract of sale – whether vendor was ready, willing and able to perform the contract of sale – estoppel – whether vendor should be estopped – whether purchasers were obliged to settle the purchase under the contract of sale – purchasers entitled to rescind
DAMAGES – entitlement to forfeit of the deposit – loss and damage – deficiency in the resale price – expenses on the resale of the apartment – holding costs – borrowing costs – contractual interest – legal costs
Legislation: Competition and Consumer Act 2010 (Cth) Sch 2, Australian Consumer Law, ss 18, 237, 243 Cases cited: Australian Broadcasting Corporation v XIVth Commonwealth Games Ltd (1988) 18 NSWLR 540
Bradshaw v McEwans Pty Ltd (1951) 217 ALR 1
Brambles Holdings Ltd v Bathurst City Council (2001) 53 NSWLR 153
Branir Pty Ltd v Owston Nominees (No 2) Pty Ltd (2001) 117 FCR 424; [2001] FCA 1833
Butler v Lachlan Elder Realty Pty Ltd (2004) 218 CLR 592; [2004] HCA 60
Carpenter v McGrath (1996) 40 NSWLR 39
Carter v Mehmet (2021) 20 BPR 41,709; [2021] NSWCA 286
Century Legend Pty Ltd v Ripani [2022] FCAFC 191
D’Souza v Wedgewood Road Hallam No 1 Pty Ltd [2010] FCA 765
Eighth SRJ Pty Ltd v Merity (1997) 7 BPR 15,189
Ermogenous v Greek Orthodox Community of SA Inc (2002) 209 CLR 95; [2002] HCA 8
Flight v Booth (1834) 1 Bing NC 370; (1834) 131 ER 1160
Foran v Wight (1989) 168 CLR 385; [1989] HCA 51
Frankel v Paterson (2015) 18 BPR 35,391; [2015] NSWSC 1307
Galafassi v Kelly (2014) 87 NSWLR 119; [2014] NSWCA 190
GEC Marconi Systems Pty Ltd v BHP Information Technology Pty Ltd (2003) 128 FCR 1; [2003] FCA 50
Hadley v Baxendale (1854) 9 Ex 341; (1854) 156 ER 145
Henville v Walker (2001) 206 CLR 459; [2001] HCA 52
Higgins v Statewide Developments Pty Ltd (2010) 14 BPR 27,293; [2010] NSWSC 183
Jafari v 23 Developments Pty Ltd [2019] VSCA 201
Jampco Pty Ltd v Cameron (No 2) (1985) 3 NSWLR 391
Jams 2 Pty Ltd v Stubbings (No 4) (2019) 59 VR 1; [2019] VSC 482
Janssen-Cilag Pty Ltd v Pfizer Pty Ltd (1992) 37 FCR 526
Koompahtoo Local Aboriginal Land Council v Sanpine Pty Ltd (2007) 233 CLR 115; [2007] HCA 61
Laidlaw v Hillier Hewitt Elsey Pty Ltd [2009] NSWCA 44
Maguirev Makaronis (1997) 188 CLR 449
Mount Bruce Mining Pty LtdvWright Prospecting Pty Ltd (2015) 256 CLR 104; [2015] HCA 37
Norcast Sarl v Bradken Ltd (No 2) (2013) 219 FCR 14; [2013] FCA 235
Palasty v Parlby [2007] NSWCA 345; (2008) 13 BPR 25,311
Plankton Australia Pty Ltd v Rainstorm Dust Control Pty Ltd [2018] FCA 174
Ripani v Century Legend Pty Ltd (No 3) [2023] FCA 812
Ripani v Century Legend Pty Ltd [2022] FCA 242
Tiplady v Gold Coast Carlton Pty Ltd (1984) 3 FCR 426
Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd (2004) 219 CLR 165; [2004] HCA 52
Uranium Equities Ltd v Fewster (2008) 36 WAR 97; [2008] WASCA 33
Victorian Economic Development Corporation v Clovervale Pty Ltd [1992] 1 VR 596
Victorsen v Easy Living Holdings Pty Ltd (2019) 19 BPR 39,893; [2019] NSWSC 1721
Division: General Division Registry: Victoria National Practice Area: Commercial and Corporations Sub-area: Regulator and Consumer Protection Number of paragraphs: 326 Dates of hearing: 15–19, 22–24 April 2024
3–5, 18 June 2024Counsel for the Applicants (VID 266 of 2020) and Respondents (VID 358 of 2023): Mr S Stuckey KC and Mr B Barr Solicitor for the Applicants (VID 266 of 2020) and Respondents (VID 358 of 2023): Zervos Lawyers Counsel for the Respondent (VID 266 of 2020) and Applicant (VID 358 of 2023): Ms G Costello KC, Ms K Weston-Scheuber and Ms E Levine Solicitor for the Respondent (VID 266 of 2020) and Applicant (VID 358 of 2023): Mills Oakley ORDERS
VID 266 of 2020 BETWEEN: WALTER RIPANI
First Applicant
NINA RIPANI
Second Applicant
AND: CENTURY LEGEND
Respondent
ORDER MADE BY:
NESKOVCIN J
DATE OF ORDER:
18 OCTOBER 2024
THE COURT ORDERS THAT:
1.By 4:00pm on 28 October 2024, the parties are to provide to chambers a proposed minute of orders giving effect to these reasons.
2.The proceeding is listed for a case management hearing at 10:00am on 30 October 2024 for the purpose of:
(a)making orders to give effect to these reasons;
(b)making orders as to written submissions on costs; and
(c)fixing a date for the hearing of submissions as to costs.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
ORDERS
VID 358 of 2023 BETWEEN: CENTURY LEGEND PTY LTD (ACN 168 485 149)
Applicant
AND: WALTER RIPANI
First Respondent
NINA RIPANI
Second Respondent
ORDER MADE BY:
NESKOVCIN J
DATE OF ORDER:
18 OCTOBER 2024
THE COURT ORDERS THAT:
1.By 4:00pm on 28 October 2024, the parties are to provide to chambers a proposed minute of orders giving effect to these reasons.
2.The proceeding is listed for a case management hearing at 10:00am on 30 October 2024 for the purpose of:
(a)making orders to give effect to these reasons;
(b)making orders as to written submissions on costs; and
(c)fixing a date for the hearing of submissions as to costs.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
REASONS FOR JUDGMENT
MISLEADING AND DECEPTIVE CONDUCT CLAIM
[14]
Background
[14]
Agreed facts
[17]
Floor plans
[41]
Relevant issues and applicable principles
[46]
First issue - reliance
[51]
What Ms Hart told Mr and Mrs Ripani about the openings on the western façade
[53]
26 May 2017 meeting
[55]
9 June 2017 meeting
[71]
Consideration
[89]
Second issue – the orders for relief the Court should make
[137]
BREACH OF CONTRACT CLAIM
[145]
Background
[146]
Concept Design
[159]
Relevant principles
[161]
Meeting on 7 April 2017
[165]
Consideration
[170]
Variation Agreement and Purchaser Upgrades
[172]
Relevant principles
[174]
Meeting on 4 May 2018
[175]
Consideration
[183]
Did Century Legend fail to construct apartment 1401 substantially in accordance with the Contract?
[186]
“RLA selected” items
[189]
Relevant principles
[191]
RLA selection
[192]
Consideration
[197]
Remaining items in the Schedule
[200]
The openings on the western façade
[201]
The serpentine wall
[247]
Remaining items for determination
[251]
Should Century Legend be estopped?
[259]
Did Century Legend repudiate the Contract?
[266]
Was Century Legend ready, willing and able to perform the Contract?
[269]
Did Mr and Mrs Ripani repudiate the Contract?
[272]
Were Mr and Mrs Ripani obliged to settle the purchase?
[276]
Century Legend’s claim for relief
[277]
Terms of the Contract
[279]
Entitlement to the deposit
[284]
Loss and Damage
[287]
Deficiency in the resale price
[292]
Agents' commission on the resale of the apartment
[296]
Marketing, advertising and styling expenses on the resale of the apartment
[300]
Holding costs
[303]
Contractual Interest
[307]
Borrowing costs
[311]
Legal costs
[319]
CONCLUSION
[326]
NESKOVCIN J:
In April 2017, Mr Walter and Mrs Nina Ripani signed a conditional Contract to purchase apartment 1401 in a multi-storey apartment complex that was to be developed at 20-22 Queens Road, Melbourne, to be known as the Victoriana. The purchase price was $9.58 million. Century Legend Pty Ltd, trading as the JD Group, was the developer and the vendor. The Contract became unconditional in August 2017 and the apartment was completed in 2021.
On 22 April 2020, Mr and Mrs Ripani commenced a proceeding in this Court seeking orders for rescission of the Contract by reason of Century Legend’s alleged misleading and deceptive conduct in relation to the design of apartment 1401, in contravention of s 18 of the Australian Consumer Law being schedule 2 to the Competition and Consumer Act 2010 (Cth) (the ACL) (first proceeding). Mr and Mrs Ripani also sought consequential damages.
Following a trial in the first proceeding, the initial trial judge found in favour of Mr and Mrs Ripani and ordered that the Contract be rescinded: Ripani v Century Legend Pty Ltd [2022] FCA 242 (PJ).
Century Legend appealed.
On 30 November 2022, the Full Court upheld ground one of the appeal and ordered that there be a new trial limited to the issue upon which ground one succeeded: Century Legend Pty Ltd v Ripani [2022] FCAFC 191 (FC).
On 22 December 2022, Century Legend notified Mr and Mrs Ripani that settlement was to take place on 17 January 2023. Mr and Mrs Ripani’s solicitors advised that Mr and Mrs Ripani did not intend to settle the purchase and, on 18 January 2023, Century Legend issued a Notice of Default and advised that it intended to exercise its rights arising from the default unless the default was remedied within 14 days.
Mr and Mrs Ripani did not settle the purchase of the apartment.
On 22 May 2023, Century Legend commenced its own proceeding seeking orders for damages and other relief based on Mr and Mrs Ripani’s alleged breach for failing to settle the purchase of the apartment or, alternatively, repudiation of the Contract (second proceeding).
For the purpose of the first proceeding, the Full Court relevantly had ordered that, pursuant to ss 28(1)(f) and 30 of the Federal Court of Australia Act 1976 (Cth), there be a new trial:
(a)limited to the issue of whether Mr and Mrs Ripani continued to rely on the misleading or deceptive conduct of Century Legend within the period April 2017 to the date the Contract became unconditional in August 2017, and if resolved in favour of Mr and Mrs Ripani, the relief that should be granted; and
(b)on the basis that:
(i)the parties are bound by each other finding of fact and determination made by the initial trial judge, save for the findings and determinations relevant to paragraph (a) above;
(ii)the parties may adduce such evidence and may make such submissions in accordance with such case management orders as the judge who hears the new trial thinks fit.
After the second proceeding was issued, Button J case managed both proceedings. On 18 July 2023, her Honour ordered that the new trial ordered by the Full Court be limited to the following two issues:
(a)Did Mr and Mrs Ripani continue to rely on the truth of the Representations (as defined below in paragraph 27) when Mr and Mrs Ripani:
(i)conveyed to Century Legend that they were satisfied with the floor plan; and
(ii)provided the bank guarantee?
(b)What orders should the Court make under s 237 of the ACL for compensation and under s 243 of the ACL in the circumstances of this case?
See Ripani v Century Legend Pty Ltd (No 3) [2023] FCA 812 (Ripani (No 3)).
I heard the new trial in the first proceeding and the trial in the second proceeding together. I approached the determination of the issues in the trial on the basis of the orders of the Full Court and the subsequent orders as to the conduct of the matter made by Button J. The trial was held over thirteen days in April and June 2024. The trial took longer than expected and, unfortunately, was not adequately prepared to deal with all relevant issues. As a result, the parties prepared and tendered documents in the first court book CB 1–CB 6095, the supplementary court book CB 6096–CB 6753, the second supplementary court book CB 6754–CB 6958, the third supplementary court book CB 6959–CB 7925, together with other additional documents. In addition, during the trial the parties prepared and relied on further documents still to assist with the proof of aspects of their case. I mention these matters to provide context to references to such documents below.
For the reasons set out below, in relation to the issues in the new trial in the first proceeding, I have found that Mr and Mrs Ripani continued to rely on the truth of the Representations (as defined at paragraph 27) when they conveyed to Century Legend that they were satisfied with the floor plan and provided the bank guarantee. In relation to the appropriate remedy, I would make an order for rescission of the Contract pursuant to s 237 of the ACL and for the return of the bank guarantee.
Century Legend’s claims in the second proceeding proceeded on the basis that Mr and Mrs Ripani’s misleading and deceptive conduct claim would fail. In light of my findings in the first proceeding that the Contract should be rescinded, Century Legend’s claims in the second proceeding must fail.
MISLEADING AND DECEPTIVE CONDUCT CLAIM
Background
The effect of the Full Court’s orders was that the parties were bound by the findings of fact and determinations made by the initial trial judge, save for the findings and determinations relevant to the issues for determination in the new trial.
Set out below are certain facts which were agreed by the parties by reference to the findings of the initial trial judge (ref PJ) or the Full Court (ref FC).
Further background to the dispute may also be gleaned from the findings of the initial trial judge and the Full Court. However, it must be noted that, after the initial trial, Century Legend provided further discovery and documents were tendered at the new trial that were not discovered, or otherwise tendered, at the time of the initial trial. Further, the transcript from the initial trial was not tendered in the new trial unless, and except so far as, the transcript was put to a witness.
Agreed facts
Apartment 1401 was one of the premium apartments to be located on the 14th floor on the western side of the Victoriana building: PJ [2].
In 2016, Century Legend:
(a)prepared promotional materials to be used in marketing the Victoriana, including scale models and a hard-bound brochure containing various images, including computer generated ‘renders’, of the anticipated appearance of the Victoriana once constructed; and
(b)engaged a firm of real estate agents, CBRE, to assist in the marketing of the Victoriana and to establish a display suite located at the proposed development site of the Victoriana: PJ [3]; FC [9].
The promotional materials included a “hero render” depicting the proposed western aspect of apartment 1401, specifically a large free span opening between the inside of the living areas and the outside terrace: PJ [5], [7], Annexure I; FC [10], [11].
The image of apartment 1401 in the render is at Annexure A at the conclusion of these reasons and is reproduced below:
Though the render was specific to apartment 1401, Century Legend selected it as an image to be used more widely in promoting and marketing the Victoriana and it was displayed as a large exhibit on the wall of the display suite established at the proposed development site of the Victoriana: PJ [6]; FC [11].
Mr Kevin Tran was a CBRE employee engaged to sell apartments in the Victoriana to customers. Mr Tran’s usual practice was to sell off the plan apartments by reference to marketing materials, including any visual renders, building models, floor plans and other materials, which materials were available in the Victoriana’s display suite: PJ [19].
Mr and Mrs Ripani attended the display suite in mid to late January 2017, met with Mr Tran and expressed an interest in apartments with an outdoor area for entertaining guests: PJ [144].
On 22 March 2017, Mr Tran sent promotional material to Mr and Mrs Ripani giving them details of apartment 1401, including a copy of the render: PJ [145].
Upon reviewing the Carr Design floor plan that was attached to an email dated 22 March 2017 from Mr Tran to Mr Ripani, Mr and Mrs Ripani could not have appreciated that the large free span opening depicted in the render could not be achieved: PJ [153].
On or about 31 March 2017, Mr and Mrs Ripani visited the display suite for the Victoriana, and Mr Tran provided Mr and Mrs Ripani with a hard-bound brochure promoting the Victoriana. Mr and Mrs Ripani told Mr Tran they were interested in moving to an apartment with an outdoor pool and an area for entertaining, in which the internal and external areas could be seamlessly converted into one space: PJ [42], [44].
The render represented to Mr and Mrs Ripani that:
(a)apartment 1401, when constructed, would accord with the render and in particular would include the flow through design;
(b)as at March 2017 Century Legend intended to construct the Victoriana and apartment 1401 so that it would accord with the render and in particular intended to include the flow through design; and
(c)the building design shown in the render was achievable given existing building methods,
(Representations): PJ [92], [95], [98]; FC [13].
The Representations were misleading and deceptive and there was no reasonable basis for making the Representations: PJ [12], [14], [97].
Century Legend was warned by its architectural firm Rothelowman in October 2016 and in June 2017 that the renders were misleading. Century Legend decided to continue using the renders that had been produced to market the Victoriana but to include the words “artist’s impression” on each of those renders: PJ [23], [54]; FC [14].
Mr Tran told Mr and Mrs Ripani that apartment 1401 would be constructed as depicted in the render, with an expansive opening onto the terrace from the internal living areas: PJ [32].
Century Legend knew that it was not possible to construct apartment 1401 with a large free span opening as depicted in the render: PJ [13]; FC [14].
The disclaimer clauses in the Contract did not erase the effect of Century Legend’s anterior misleading conduct: PJ [77]; FC [213].
On 1 April 2017, Mr and Mrs Ripani signed the Contract to purchase apartment 1401 “off the plan” for $9.58 million. The Contract was subject to satisfaction of a number of conditions, including a handwritten condition numbered 43 which read: “Subject to satisfactory of [sic] floor plan within 21 days (special condition 43)”: PJ [2], [104]; FC [5], [22].
Mr and Mrs Ripani relied on the render to sign the Contract: PJ [41]; FC [213].
The large free span opening of the doors as depicted in the render was an important feature to Mr and Mrs Ripani and central to their decision-making to sign the Contract: PJ [17], [21]; FC [229].
There was attached to the Contract a floor plan of apartment 1401 prepared by Rothelowman marked “draft” dated 16 June 2017 and with the title: “Premium Apartment 1401 OPT E”: FC [23], [24] (Option E plan).
By 29 August 2017 Mr and Mrs Ripani had reached a state of satisfaction with the Option E plan: PJ [103], [109].
On 29 August 2017, having reached a state of satisfaction with the Option E plan, Mr and Mrs Ripani provided the bank guarantee: PJ [109]; FC [25].
By providing the bank guarantee for the deposit, Mr and Mrs Ripani signified approval of the Option E plan in accordance with special condition 43 of the Contract: PJ [108]; FC [25].
Mr and Mrs Ripani elected to rescind the Contract by bringing the first proceeding: PJ [246].
Floor plans
The architectural firm, Carr Design, was originally engaged by Century Legend to design the interior of the high-rise premium apartments in the Victoriana. According to Ms Kate Hart, an interior designer and senior associate at Rothelowman, Carr Design had “walked away” from the Victoriana because they did not believe the renders were an accurate depiction of what was intended to be built: PJ [61].
After Carr Design ceased its involvement, Rothelowman took over the design role in relation to the premium apartments, in addition to their existing involvement in the Victoriana, which included designing the standard apartments located from the ground floor to level 10, as well as designing the common areas and building generally. Ms Hart was directly responsible for assisting purchasers such as Mr and Mrs Ripani in relation to customising the floor plan and fit out of the premium apartments: PJ [106].
The common premise of Mr and Mrs Ripani’s dealings with Century Legend was that they would be able to customise the floor plan for apartment 1401: PJ [152]. To that end, Ms Hart had a number of meetings with Mr and Mrs Ripani. The discussions at the meetings on 26 May 2017 and 9 June 2017 are relevant to the question of whether Mr and Mrs Ripani continued to rely on the Representations between April and August 2017.
The parties were in dispute as to the floor plans that were produced at the meetings and whether Ms Hart wrote on the floor plans. An understanding of the various iterations of the floor plans is necessary to understand the evidence and the reasons set out below.
Table 1 sets out the relevant iterations of the floor plans and meetings relevant to any discussion in relation to the floor plans, although the table is not a finding as to what took place at the meetings or that the floor plans were presented or discussed at any particular meeting:
Table 1
Floor plan version
Relevant meeting
Annexure
Court Book
Rothelowman plan
7 April 2017
Annexure B
1490
Option A
N/A
Annexure C
1546
Option A/B
26 May 2017
Annexure D
6300
Option B
26 May 2017
Annexure E
1601
Option C
9 June 2017
Annexure F
1685
Option E
Attached to the Contract dated 16 June 2017
Annexure G
6143
Option I
29 May 2019
Annexure H
4455
Relevant issues and applicable principles
As stated explicitly in the Full Court’s orders, the first issue for consideration in the new trial is the issue of reliance: see the orders and reasons of Button J: Ripani (No 3) at [28]–[30]. The second issue for consideration in the new trial is the orders the Court should make under s 237 of the ACL for compensation and under s 243 of the ACL in the circumstances of this case.
Section 237(1) of the ACL provides that a court may, on the application of a person who has suffered, or is likely to suffer, loss or damage because another person has engaged in conduct in contravention of the ACL, make such orders as the Court thinks appropriate against the person who engaged in that conduct.
Century Legend submitted that in order for Mr and Mrs Ripani to make out their claim for rescission and damages under the ACL, they must establish that they suffered or were likely to suffer loss or damage “because of” the conduct of Century Legend. Further, it submitted that the onus was on Mr and Mrs Ripani to show that their claimed loss and damage – namely entering into the Contract – was “because of” the misleading render.
The statutory language “because of” in s 237 of the ACL means that there must be a causal nexus between the impugned misleading conduct and the loss or damage claimed: Butler v Lachlan Elder Realty Pty Ltd (2004) 218 CLR 592; [2004] HCA 60 at [37] (Gleeson CJ, Hayne and Heydon JJ); Norcast Sarl v Bradken Ltd (No 2) (2013) 219 FCR 14; [2013] FCA 235 at [326] (Gordon J); Janssen-Cilag Pty Ltd v Pfizer Pty Ltd (1992) 37 FCR 526 at 529–30 (Lockhart J). For there to be the necessary causal relationship between the contravention and loss or damage, so as to satisfy the requirements of s 237 of the ACL, it is not essential that the contravention be the sole cause of the loss or damage: Henville v Walker (2001) 206 CLR 459; [2001] HCA 52 at [14] (Gleeson CJ).
It is first necessary to consider the question whether Mr and Mrs Ripani continued to rely on the Representations and acted to their detriment. The question whether the loss and damage claimed was a cause of the impugned conduct arises in the context of the second issue, namely the relief the Court should grant in the circumstances of this case.
First issue - reliance
The first issue in the new trial is whether Mr and Mrs Ripani continued to rely on the truth of the Representations when Mr and Mrs Ripani conveyed to Century Legend that they were satisfied with the floor plan and provided the bank guarantee.
Century Legend submitted that the Court should find that Mr and Mrs Ripani did not rely on the Representations when the Contract was formed in August 2017 because:
(a)Ms Hart told Mr and Mrs Ripani in May and June 2017 what the glazing break up along the western façade of apartment 1401 would really be like, and Ms Hart’s evidence in this regard was compelling and should be accepted; and
(b)the Court ought to reject as not credible Mr and Mrs Ripani’s evidence that they did not appreciate, prior to concluding the Contract, the nature of the openings depicted on the Rothelowman plans.
What Ms Hart told Mr and Mrs Ripani about the openings on the western façade
Century Legend submitted that the evidence shows that by August 2017 Mr and Mrs Ripani were no longer misled by the depiction of the opening in the render. This was because in meetings on 26 May 2017 and 9 June 2017, Ms Hart had explained to them where the doors were with reference to the floor plans (the Options A/B, B and C plans).
It is first necessary to consider the evidence of the attendees at the meetings on 26 May 2017 and 9 June 2017 and then Century Legend’s submissions that the Court should accept Ms Hart’s evidence as to what she told Mr and Mrs Ripani at those meetings.
26 May 2017 meeting
It was accepted that on 26 May 2017, Ms Hart met with Mr and Mrs Ripani at Rothelowman’s office in Southbank, Victoria, and that Mr Tran was also present. Century Legend submitted, and I accept, that Mr Peter Hu, Sales Manager at Century Legend, was not at this meeting.
Century Legend submitted that at the meeting on 26 May 2017, “[Ms Hart] told [Mr and Mrs Ripani] about the three openings on the western façade and made marks in red pen on the floor plan to show this.” Further, Century Legend submitted that Ms Hart “showed [Mr and Mrs Ripani] there was a division of four panels creating the central opening that were 1-1.2m in width, and that they were moveable to create an opening around 4m in width.”
(i) Ms Hart’s evidence
Without reference to the plans, Ms Hart gave evidence in chief about what was discussed at the meeting on 26 May 2017 as including, relevantly, to use her words “the connection between the internal and the external, between the pool deck area and the entertainment area”.
This was the extent of Ms Hart’s evidence about the relevant discussion at the meeting on 26 May 2017 before Ms Hart was shown the floor plans. It is critical to understand the detail and nuances of Ms Hart’s evidence in relation to the relevant discussion at the meeting. As a result, it is set out in full. In my assessment of Ms Hart’s evidence, what she told Mr and Mrs Ripani at the meeting on 26 May 2017 was vague and inconclusive in purporting to explain the openings on the western façade.
Ms Hart’s evidence about what was discussed at the meeting after being shown the Option A/B plan was as follows:
…We spoke about fireplaces which is the – my handwritten note of “FP” stands for fireplace, and we also spoke about the break-up of the Western facade, so there’s my hand red notes showing. And again, as we move from north to south, there is an arrow pointing from the dining room out towards the barbecue area mentioning – meaning that was to be a point of access between the dining room and the barbecue area. That was a – a request that we then – so that is as far north on that plane before the facade then starts to curve around.
What was the request?‑‑‑To have that opening as far north so that it’s closer between the dining room and the barbecue area, that access between the two, so it’s not further down towards the living room, but it’s further towards the barbecue and dining room access. There’s also, then, my hand red pen mark to show – so if we come to the fireplace, which is the culmination of the serpentine wall, north and south of that, there is some hand mark-ups from me, red pen notes, to show that the top pane – it was my explanation to show that that top panel is a fixed panel. You then have an opening where the panels have been removed, and there’s red pen mark there denoting the number of panels that have been removed, and then my red marks to the south which I remember denoting it’s a fixed panel. And then south of that, there’s two – there’s panels removed. It’s an opening. And then to the bottom of that, the last panel has also got my red hand mark to say this is a fixed panel.
Okay. So what did you say in the meeting to the Ripanis when you were with them on the 26th?‑‑‑We discussed ‑ ‑ ‑
Well, instead of “we discussed” ‑ ‑ ‑?‑‑‑Sorry.
The question is what did you say?‑‑‑What did I say? I said that – that – I noted the appliances. I noted that they wanted a large pivot door that would need to be explored. I noted that they wanted fireplaces that would need to be explored as to – to be able to accommodate them. We spoke about – we spoke about the openings on that western facade which – and – and the location of these openings and the location of moving that entrance door between the dining and the barbecue area to which I noted that – that request. Yes.
Okay. So after the 26th – just before I leave that, so this is a coloured copy, but can you tell her Honour what colour pens you – this is a colour copy, but could you tell her Honour what colour or kind of pens you used in relation to page 1601?‑‑‑I used a red pen and – and pencil. I – when I make notes, I just pick up whatever is within my vicinity to capture the conversations that we’re having or the requests that are being made. So in this, which is 1601, which is a colour copy, I can see my red notations and I can see – because it’s a copy – look – a pen – a pencil, rather.
And similarly, at 6300, what colour is the writing in?‑‑‑6300.
… THE WITNESS: So again here I’ve used red pen to mark up the plan.
Later in her evidence in chief, Ms Hart was asked to return to the meeting on 26 May 2017 and again say what she said to Mr and Mrs Ripani regarding the western façade. Her evidence in response was as follows:
So taking you back to your discussions on 26 May, in terms of what you said to the Ripanis in respect of the facade on 26 May, what was it that you said, and what was the reaction of the Ripanis?‑‑‑So we spoke about the western facade, and I was explaining to them the break-up of the facade and the openings. They expressed disappointment, but they – when we spoke about the – the – the larger – the larger opening, which was the four-metre opening, they said that that would be their – because it’s the large one, it’s their priority. It has got that – as we mentioned before, the connection between the fireplace and the external seating area – and that they would like it to be as large as possible.
You said they were disappointed, but could you tell her Honour what you observed in their appearance or what they said to you that leads you to use that word?‑‑‑They said that they – they were disappointed. They – in – in that they wanted the – they wanted the opening to be as – as large as possible, but – so they’re saying that they were – they were disappointed in – in the size of the opening, and they wanted the opening to be as large as possible.
In cross-examination, Ms Hart was asked to recount the words she used to tell Mr and Mrs Ripani they were not going to get the opening in the render. She gave the following evidence:
Try and remember what you said?‑‑‑The facade is broken up into glazing panels of roughly a metre – just over a metre – 1.2 in width, and the – it has to be because of wind loading against the western facade. And the opening – the openings in the facade are a division of those – or are a sum of those window panels.
MR STUCKEY: So your evidence is that that’s what you said to the Ripanis?‑‑‑As best as I can remember, yes
Okay. And what did the Ripanis say to that?‑‑‑That they wanted the window opening to be as wide as possible.
Well, you just told – what did you – what did you – you told them that the window panels would be 1.2 metres wide?‑‑‑One to 1.2 metres.
Right?‑‑‑Yes, in width.
That doesn’t tell them anything about how big the opening can be, does it?‑‑‑No. No. I pointed to the – the main opening, which was centred on the fireplace, and counted and showed the number of panels that were being removed to create the opening on the fireplace and also the openings within the entertainment area. And we discussed the openings leading from the dining to the external, and it was ‑ ‑ ‑
No. No, you – sorry?‑‑‑Yes.
You’ve fallen into “we discussed”?‑‑‑Speculate. Okay.
Now, what did you say to them about how wide an opening, if you said anything at all ‑ ‑ ‑?‑‑‑Yes.
‑ ‑ ‑ about how wide an opening was possible?‑‑‑My – my words were – I can’t remember exactly, but my words were in – that the openings were based on the division of window panels that created up the – that created the façade of the building ‑ ‑ ‑
That still doesn’t tell them how wide an opening they can get, does it?‑‑‑No, so I showed that there was a division of four panels created the wide opening and that those panels were 1 to 1.2 – because the façade was still being designed and developed, 1 to 1.2 per panel and that four panels were moveable or operable to create an opening that would be somewhere between – somewhere around four metres in width.
(ii) Mrs Ripani’s evidence
Mrs Ripani denied that there was any discussion about the façade openings during the meeting on 26 May 2017.
When asked in cross examination about the meetings with Ms Hart on 7 April 2017, 1 May 2017, 26 May 2017 and 9 June 2017, Mrs Ripani denied that Ms Hart spoke about the location of the doors and access between the interior and exterior of the apartment: T288.45–T289.18.
Mrs Ripani agreed the Option A/B plan was at the meeting on 26 May 2017, but she said she did not recall Ms Hart writing or making any marks on the plan.
When Mrs Ripani was asked in cross-examination about the meeting and it was suggested to her that Ms Hart brought the Option B plan to the meeting, Mrs Ripani denied this. Mrs Ripani also denied that Ms Hart drew on the Option B plan while discussing certain features on the floor plan with Mr and Mrs Ripani: T295.24–T301.7.
When it was suggested to Mrs Ripani that Ms Hart marked the Option B plan while explaining where the sliding doors would be along the western façade, Mrs Ripani’s response was as follows:
And Ms Hart says that she marked red annotations on this document at page 1601 while she explained to you where the sliding doors would be along the facade and which panels would move?‑‑‑She did not say anything about the sliding doors and, had she told me once, we wouldn’t be here. Just once.
(iii) Mr Ripani’s evidence
Mr Ripani said the Option A/B plan was discussed at the meeting on 26 May 2017 and that Ms Hart took notes at the meeting on a Rothelowman pad with green pen, but he denied that Ms Hart wrote on the plan.
When it was suggested to Mr Ripani in cross-examination that Ms Hart brought the Option B plan to the meeting, he denied this and he denied that Ms Hart drew on the plan during the meeting. Mr Ripani also denied that Ms Hart explained the location of the sliding doors along the western terrace during the meeting: T404.30–T406.11.
(iv) Mr Tran’s evidence
Mr Tran was called to give evidence by Mr and Mrs Ripani.
Mr Tran was shown the render and asked about his belief as to what apartment 1401 would look like in the first half of 2017. Mr Tran said he “understood from consultation with the architects … that we were on track to achieving … an apartment like that”, namely an opening like the render. Mr Tran said that he never stopped using the render during the sales campaign for the Victoriana and he always understood that apartment 1401 would have one opening on the western terrace, with doors that stacked to the left and to the right of the opening: T435.43–T437.16.
9 June 2017 meeting
It was accepted that on 9 June 2017, Ms Hart had a further meeting with Mr and Mrs Ripani at Rothelowman’s office and that Mr Hu was present. Mr and Mrs Ripani said Mr Tran was also present at the meeting. Mr Tran had sent an email confirming he would attend and agreed he probably did attend the meeting, although he did not have any recollection of the meeting. I find that Mr Tran was also present at the meeting.
Century Legend submitted that at the meeting on 9 June 2017, Ms Hart again discussed the western façade with Mr and Mrs Ripani and she told them about the glazing panels and the sliding and stacking doors.
(i) Ms Hart’s evidence
Without reference to the plans, Ms Hart gave evidence about what was discussed at the meeting on 9 June 2017 as including, relevantly, to use her words “the connection between the pool deck area and – the interior” and “the access from the entertainment to the pool, the access from that fireplace and sitting outside and being able to enjoy the – sitting outside and also, then, the access from the dining room to the barbeque area”.
This was the extent of Ms Hart’s evidence on the relevant discussion at the meeting on 9 June 2017 before Ms Hart was shown the Option C plan. Once again, it is critical to understand the detail and nuances of Ms Hart’s evidence in relation to the relevant discussion at the meeting and it is set out in full. In my assessment of Ms Hart’s evidence, what she told Mr and Mrs Ripani at the meeting on 9 June 2017 was vague and inconclusive in purporting to explain the openings on the western façade.
After being shown the Option C plan, Ms Hart’s evidence about the meeting on 9 June 2017 was as follows:
Could you tell her Honour what you said?‑‑‑Yes. So with regards to that western façade, I said that we, the Ripanis requested – so, again, moving from north to south, the north – there is a request to look at the idea of having that single door opening being a – double sliding panels, which I said would then need to move north up the page. The – they then would have fixed panels, and then we would come back to our opening, which is centred on the fireplace and the external dining – external seating area, which, again, is a division or the removal of four glazing panels. And then as you come south, the opening between the entertainment and the pool, the two glazing panels would then need to stack south of that opening, which is indicated by the red – two red lines on plan.
What does the writing on the left – above the pool mean? It looks as if there’s black pen and then pencil?‑‑‑Pencil. Yes.
Is that in black pen and pencil?‑‑‑Yes, it is. So, yes, it is. It is.
The point was to ask – the point I was getting to was, what does that say?‑‑‑It does. It says “two by DR” which is “doors”. Just a shorthand for “doors”. Two by doors, and I’ve picked up a pencil, and I’ve just asterisked – asterisked that to say:
Potential sliding to side.
I wasn’t sure whether we could have two doors there, and so it was an asterisk to investigate.
Later in her evidence in chief, Ms Hart was brought back to the Option C plan and, when asked “what was said by reference to the marks on the page”, she gave the following evidence:
In respect of the western facade, could you tell her Honour what you said by reference to the marks on the page?‑‑‑I said that with the request to have – again north to south, with the request to have the northern opening, which had been a single panel – to have that as being two panels, the doors would need to move further – need to move north, which would mean – because the facade curves, it would mean that the panels would need to drop down a panel, so that the stacking panels which move south – which move north have somewhere to stack. Then you would have two panels which would be removed. You would have one fixed panel. You would then have four panels removed, which would give us the larger opening between the fireplace and the pool – the seating area beside the pool. You then have a fixed panel, and then you would have another two panels removed, and they would need – those panels would then need to slide south to allow for the four panels in the centre to be divided two and two, to then open left and right. So we were discussing the – how that facade with its sliding panels could potentially be accommodated.
And what did the Ripanis say to you when you said those things about the doors stacking on the facade?‑‑‑The Ripanis – was my understanding the Ripanis ‑ ‑ ‑
MR STUCKEY: If the witness could refrain from giving her understanding and just what was said.
MS COSTELLO: Well, your Honour, the last witness gave his understanding. So I ‑ ‑ ‑
HER HONOUR: About?
MS COSTELLO: About – he gave his understanding of what he understood and what he thought everyone else understood, I note.
HER HONOUR: But at the moment – I’m happy for Ms Ripani – Ms – Ms – sorry, Ms Hart to give her understanding later, but can we talk about – can you explain what was said?‑‑‑Certainly.
And then what you understood?‑‑‑Yes, certainly. So I said that the two doors for the – for the opening of a – of a – for the request for the northern opening on – in that facade to now be a double-opening, the panels would need to then move north because the facade begins to – to curve, and so that whole opening would need to drop down a panel to allow for the sliding panels to have a flat surface on which to bank or to – to slide against. We would then need fixed panels before we then come into the larger opening, which is centred on the fireplace, which is the end of that serpentine wall, and I pointed out that that’s one, two, three – four panels which are removed to allow for that larger opening. And then because the panels for the larger – the – for the two-panel opening above, to the north, is now moving north, it allows for two of those panels on that larger opening to move north, two panels to move south, which would then, in turn, mean that the opening between the entertainment area and the pool – the two panels that need to move to create that opening would now need to move and slide down to the south. So that’s what I said to the Ripanis. The Ripanis – the Ripanis – the Ripanis – well, say it’s my understanding the Ripanis understood what I was saying. They didn’t – we – we – we discussed – and I mentioned the break-up of this panelling and how these panels would operate.
HER HONOUR: What did you say about that?‑‑‑Just as – as I just said, in relation to how the panels slide up, north, to allow for that opening, that the doors to the centre opening need to move north and south of that opening because it’s four panels that are moving – so, two south; two north – and that the opening at the entertainment area – those two panels would need to move south because you’ve got fixed panels, which are required for the opening – for the panels to slide against. And it’s the break-up of the facade with those fixed – with those fixed panels included as well. Yes, that’s what I said.
MS COSTELLO: I think the question from her Honour was what did the Ripanis say – or from me?‑‑‑The Ripanis – the Ripanis – because we – we discussed, and the Ripanis requested for the two doors – sorry the two panels on the northern facade to open up that facade, to have an opening between that facade. So, from a – from a single panel to two panels, to make it larger.
HER HONOUR: What did they actually say?‑‑‑I can’t recall exactly the words that they – they used. I can’t recall the exact words that they used.
MS COSTELLO: So, in relation to the things that you said – that you just told the court that you said about that facade – could you describe anything else you recall the Ripanis saying about the entrances between the interior and the exterior?‑‑‑They – I suppose the reiteration about having the connection between the dining – I suppose there was the comment of the connection between the dining and the barbecue area. There was the – the Ripanis spoke again about the connection between the internal fireplace and the external seating area, and – and all – and the fact that that would be – being able to sit outside and – and have that connection between the interior and the exterior, and the connection between the entertainment and the pool area.
Later in her evidence in chief, Ms Hart was again asked to return to the meeting on 9 June 2017 and she was asked what she said in respect of the façade. Ms Hart was asked about Mr and Mrs Ripani’s reaction and she gave the following evidence:
When you talked to them about the facade – and just before lunch, you told her Honour about the things you said – what reaction did you observe from them in 9 June meeting?‑‑‑That – the Ripanis said that they wanted the opening to be as wide as possible, that their – the priority would be the opening that culminates in the fireplace and its connection to the seating area near the pool and for the opening to be as – as wide as possible.
(ii) Mrs Ripani’s evidence
Mrs Ripani recalled the Option C plan being on the table at the meeting on 9 June 2017 but she did not recall Ms Hart writing on the plan.
Mrs Ripani was asked about her state of mind, at the end of the meeting, as to what the area from the terrace to the interior of the apartment was intended to look like. Mrs Ripani said there was never any doubt in her mind that what they had bought was going to be “exactly that, that it was going to be that big retractable invisible façade and that when it was open, it would be indoor/outdoor as at one level and totally seamless”.
It was suggested to Mrs Ripani in cross examination that Ms Hart talked about where the doors were going to stack and how large the openings would be, which Mrs Ripani denied. It was suggested to Mrs Ripani that in the course of Ms Hart describing the doors and explaining how the doors would stack, Ms Hart drew on the plan and wrote “potential stacking to side”. Mrs Ripani denied that Ms Hart explained the doors or that there was any discussion about how the doors would stack. Mrs Ripani said that if there had been a discussion along the lines suggested to her, they would have walked away: T303.17–T304.22.
It was also suggested to Mrs Ripani in cross-examination that she knew there would be more than one door between the interior and exterior on the western façade, because Ms Hart explained that to her at the meeting on 9 June 2017. Mrs Ripani denied this. It was suggested to Mrs Ripani that she was told that there were three openings and, while she was disappointed that there would be three doors, rather than one door, she was still pleased to buy the apartment. Mrs Ripani denied this. Mrs Ripani said, had she been told that, she would have been more than disappointed: T319.13–47.
(iii) Mr Ripani’s evidence
Mr Ripani agreed that Ms Hart brought the Option C plan to the meeting on 9 June 2017, but he did not agree that she wrote on the plan during the meeting.
In cross-examination, Mr Ripani denied that Ms Hart spoke about the number and size of the openings on the western façade at the meeting on 9 June 2017. He also denied that Ms Hart explained the break-up of the glass panels along the façade or where panels would stack: T409.5–T410.14.
It was suggested to Mr Ripani in cross-examination that at the meeting, Ms Hart explained that there were three openings between the interior and exterior of the terrace and she explained how the doors worked. Mr Ripani denied this. He gave the following evidence in response:
So, Mr Ripani, Ms Hart had explained to you on 9 June that there were three openings between the interior and the exterior, and she had shown you those three places and explained how the doors worked in that meeting, hadn’t she?‑‑‑She had not, Ms Costello, and if she had – and being transparent and honest, we would have walked away. I would not have accepted that. No way.
(iv) Mr Tran’s evidence
Mr Tran did not have any recollection about the meeting on 9 June 2017. Mr Tran was asked in cross-examination whether, at the various meetings he attended, he recalled a discussion about the way the panels on the façade stacked. Mr Tran said he could recall a discussion with Ms Hart about the way the panels stacked. Mr Tran said that the discussion was that there would be two sliding doors, where the doors opened, and one set would slide to the right and one set would slide to the left, “and just slide, slide, slide to create that opening”. It was apparent from Mr Tran’s evidence and the hand gestures that he used when giving his evidence that he meant and understood that there would be sliding doors that would meet in the centre and open to the right and left to create one opening: T456.6–28.
Century Legend submitted that the Court should find that the discussion that Mr Tran recalled about the sliding panels occurred at the meeting on 26 May 2017, as the marks on the plans were consistent with that discussion happening then. It will be necessary to return to the significance of this discussion later.
(v) Mr Hu’s evidence
Mr Hu said that the flowthrough design between the interior and exterior areas was discussed at the meeting on 9 June 2017. Mr Hu’s evidence was that Mr and Mrs Ripani wanted a connection between the internal and external entertainment areas and Ms Hart had suggested an opening centred on the fireplace. Mr Hu said that was the extent of the discussion that he recalled about the doors and the connection between the interior and exterior areas at the meeting: T726.33–T727.5.
In cross examination, Mr Hu was asked to confirm the evidence he gave at the initial trial that there was no discussion about the width of the door at the meeting on 9 June 2017. Mr Hu answered by saying the location of the door between the interior and exterior of the apartment was discussed at the meeting. Mr Hu’s evidence was that there was a discussion about the opening that centred on the fireplace. Mr Hu explained that the discussion was about the location of the opening, not the opening itself, because Ms Hart had suggested an opening centred on the fireplace so that Mr and Mrs Ripani could enjoy the fireplace while sitting on the outside balcony: T779.37–T780.10.
Consideration
Century Legend submitted that the evidence showed that by August 2017, Mr and Mrs Ripani were no longer misled by the depiction of the opening in the render because Ms Hart had explained where the doors were in meetings on 26 May 2017 and 9 June 2017 with reference to the floor plans (the Options A/B, B and C plans). Century Legend submitted that at the meeting on 26 May 2017, “[Ms Hart] told [Mr and Mrs Ripani] about the three openings on the western façade and made marks in red pen on the floor plan to show this” and Ms Hart “showed [Mr and Mrs Ripani] there was a division of four panels creating the central opening that were 1-1.2m in width, and that they were moveable to create an opening around 4m in width.” Century Legend submitted that Ms Hart again discussed the western façade with Mr and Mrs Ripani on 9 June 2017 and she told them about the glazing panels and the sliding and stacking doors.
Ms Hart’s evidence about the meetings was given largely by reference to the plans. After being asked about, and giving her general recollection of, the meetings on 26 May 2017 and 9 June 2017, which was limited, Ms Hart was taken to the plans which she said she had at the meetings. Ms Hart proceeded to give evidence by reference to the plans and markings on them. Mr and Mrs Ripani disputed Ms Hart’s evidence that all of the plans were at the meetings and that she wrote on the plans. I find on the balance of probabilities that the Option A/B and B plans and the Option C plan were at the meetings on 26 May 2017 and 9 June 2017 respectively and that Ms Hart wrote on the plans at the meetings.
As set out above in paragraphs 57–61, after being shown the plans, Ms Hart was asked three times to explain what she actually said to Mr and Mrs Ripani at the meeting on 26 May 2017. Her initial evidence was to explain, by reference to the marks on the plans, that there was to be “a point of access” between the dining room and the barbeque area, the top panel was “fixed” and “[y]ou then have an opening where the panels have been removed” and then, south of that, “there’s panels removed. It’s an opening.” The second time that Ms Hart was asked to explain what she actually said, Ms Hart instead spoke in conclusory terms using expressions such as “I noted” and “we spoke about”. On the third occasion, in cross-examination, Ms Hart’s evidence was that she said the “façade is broken up into glazing panels of roughly a metre – just over a metre – 1.2 in width, and the – it has to be because of wind loadings against the western façade [and] the opening – the openings in the façade are a division of those two – or a sum of those window panels”. Further, she “pointed to the – the main opening, which was centred on the fireplace, and counted and showed the number of panels that were being removed to create the opening on the fireplace and also the openings within the entertainment area”.
Similarly, as set out above in paragraphs 73–77, after being asked about her general recollection of the meeting on 9 June 2017, which was limited, Ms Hart was shown the Option C plan. Ms Hart’s evidence then was that Mr and Mrs Ripani requested “that single door opening” (i.e., at the northern end of the façade) be “double sliding panels”, to which Ms Hart said “I would then need to move north … then they would have fixed panels, then we would come back to our opening, which is centred on the fireplace and the external dining – external seating area, which, again, is a division or the removal of four glazing panels.”
There was no evidence given by Ms Hart that she told Mr and Mrs Ripani the actual width of the openings. It was not suggested to Mr and Mrs Ripani that Ms Hart told them the actual width of the openings. The only evidence from Ms Hart about the width of the openings was to be deduced from the information about the width of the panels (1-1.2m) and the removal of fixed panels from the façade.
Mr and Mrs Ripani denied that the Option A/B plan was discussed at the meeting on 26 May 2017, however, as mentioned above at paragraph 90, I have found on the balance of probabilities that the Option A/B plan was at the meeting and Ms Hart wrote on the plan. Nevertheless, Mr and Mrs Ripani denied that Ms Hart explained that there would be three openings along the western façade. They denied that they understood there were three door openings on the western façade.
Mr and Mrs Ripani submitted, and I accept, that the clearest evidence Ms Hart gave regarding the meeting on 26 May 2017 was her evidence, in cross-examination, when Ms Hart said that she told Mr and Mrs Ripani:
The facade is broken up into glazing panels of roughly a metre – just over a metre – 1.2 in width, and the – it has to be because of wind loading against the western façade. And the opening – the openings in the facade are a division of those – or are a sum of those window panels.
Century Legend relied on this evidence and the evidence that followed (see paragraph 61) to submit that Ms Hart “had explained to [Mr and Mrs Ripani] that the façade was broken into glazing panels roughly 1.2m wide and that the opening centred on the fireplace would have four glazing panels that were moveable and stackable to create an opening of up to three or four metres”.
Ms Hart’s evidence regarding what she said to Mr and Mrs Ripani at the meetings on 26 May 2017 and 9 June 2017 was vague and inconclusive in purporting to explain the openings on the western façade. If Ms Hart had sought to explain the truth about the openings on the western façade in the terms in which she gave evidence about what she said to Mr and Mrs Ripani at the meetings on 26 May 2017 and 9 June 2017, I consider that her explanation would not have been clear enough to convey to Mr and Mrs Ripani that an opening like the render was not going to be provided.
Century Legend submitted that Ms Hart’s evidence was compelling and should be accepted because her evidence was detailed and convincing and she was an impressive witness who had no “skin in the game”. Ms Hart was an honest and earnest witness who endeavoured to give evidence to the best of her recollection. Although she was only able to give pertinent evidence by reference to the plans, Ms Hart said, and I accept, that she had a general understanding and memory of the meetings, but seeing the plans helped her to clarify the memory. However, having observed all of the witnesses and in light of the totality of the evidence, my assessment is that, at the meetings on 26 May 2017 and 9 June 2017, Ms Hart did not explain the openings along the western façade to Mr and Mrs Ripani in clear terms or in terms by which they could have understood that apartment 1401 as constructed would not look like the render and that, instead of an opening with a flow through design like the render, the western façade would have three openings.
Century Legend submitted that Ms Hart’s annotations on the floor plans – in particular the Options A/B and B floor plans annotated at the 26 May 2017 meeting and the Option C floor plan annotated at the 9 June 2017 meeting – corroborated her account of those meetings. Ms Hart’s evidence was given largely by reference to the floor plans and she referred to the marks on the plans by way of explanation of the matters she raised at the meetings. Century Legend’s submission that Ms Hart’s annotations on the plans corroborates her account of those meetings is, therefore, circular.
Century Legend submitted that Ms Hart’s evidence should be preferred to that of Mr and Mrs Ripani, who were self-interested and motivated to give evidence that supported their case. I found Mr and Mrs Ripani to be honest witnesses who gave evidence to the best of their recollection and I accept their evidence that they always understood that the opening would look like the render. That finding is supported by the evidence given by Mr Tran, who had no interest in the litigation.
As at the middle of June 2017, Mr Tran said that he believed the architects were on track to achieve an apartment like the image in the render. Mr Tran said he never stopped using the render to advertise the Victoriana. Mr Tran’s evidence was that there was to be a single opening on the western façade and two sliding doors “[o]ne side – stack – stack – moves to the right-hand side, and the other one stack – stacks to the left”, to create one opening.
Mr Tran said he could recall Ms Hart describing the way the sliding panels along the façade between the interior and exterior stacked. Mr Tran said that the discussion was that there would be two sliding doors that would meet in the centre and one set would slide to the right and one to the left, “and just slide, slide, slide to create that opening”. Century Legend submitted that the Court should find that this conversation occurred at the meeting on 26 May 2017 as the marks on the Option B plan were consistent with the conversation happening then. Further, it submitted that Mr Tran’s account was entirely consistent with Ms Hart explaining the opening between the dining room and the barbeque area on the terrace to Mr and Mrs Ripani. I do not regard Mr Tran’s evidence as supportive of Century Legend’s position or consistent with Ms Hart explaining the opening between the dining room and the barbeque area to Mr and Mrs Ripani. Mr Tran’s evidence was that he always understood there would be one opening on the western façade. It was apparent from Mr Tran’s evidence and the hand gestures that he used when giving his evidence that he meant and understood there was to be one opening with doors to the right and to the left that would “slide, slide, slide to create that opening”.
Mr Tran gave evidence about his belief that there was to be “one opening” on more than one occasion. On each occasion, he said that that belief was based on what the architect, Ms Hart, had said at the meetings at which he and Mr and Mrs Ripani were present. Mr Tran was aware that the large free-span opening between the interior and exterior was a feature that attracted Mr and Mrs Ripani to the apartment: PJ [19]. Mr Tran told Mr and Mrs Ripani that apartment 1401 would be constructed as depicted in the render, with an expansive opening onto the terrace from the internal living areas: PJ [32]. Given Mr Tran’s belief that apartment 1401 would look like the image on the render and that he was aware that the large free-span opening attracted Mr and Mrs Ripani to the apartment, it is reasonable to infer, and I find, that Mr Tran would have reacted in some way if Ms Hart had said in clear terms, or in terms he or Mr and Mrs Ripani could have understood, that the apartment as constructed would not look like the render and there would be three openings along the western façade. If those matters had been explained, I consider that Mr Tran would not have stood by and he would not have continued to hold the belief that there was to be one opening and that an apartment like that shown in the render was achievable. Mr Tran was not challenged about his belief or basis for his belief in cross-examination.
Century Legend submitted that Mr Hu’s account is also consistent with Ms Hart’s evidence insofar as he recalled that “the locations of the doors was discussed”. Contrary to Century Legend’s submissions, Mr Hu did not give evidence that he recalled that “the locations” (plural) of the “doors” (plural) were discussed at the meeting on 9 June 2017. Mr Hu’s evidence was that the “door opening”, “the location of the door” and “door location” was discussed.
My findings are strengthened by Ms Hart’s admission that she could not tell Mr and Mrs Ripani that they would not get the openings in the render and that she was obliged to be less than frank on a number of occasions. This aspect of her evidence is significant, and it was as follows.
On 12 October 2016, Mr Perkins, senior architect at Rothelowman, raised concerns about the render in an email to Mr Shawn Lu, Marketing Manager at Century Legend, and Ms Kylie Xu, General Manager at Century Legend. The email, which was copied to Ms Hart, said:
Shawn,
Further to my email last night I would like to advise JD Group that several of the design changes (architecture and interiors) made by JD Group during the render stage are not in accordance with the Town Planning Permit or the current Design Development drawings. Also should a purchaser want exactly what is shown in the renders, for example, a flush inside to outside threshold, or uninterrupted floor to ceiling glazing it will not be possible due to the overall height restriction of the development and structural requirements. The changes made to the interior design of the standard apartment may be possible but will require further review, design development/documentation. There are also some safety issues with the design of the landscaping and pool areas that will need to be resolved after marketing.
Due to the extent of the changes, the misleading nature of the renders, and our inability to follow through on the render design I would advise JD Group to have the renders amended before marketing launch. Should this not be possible I would advise JD Group to be transparent with all potential purchasers in relation to the render content and to ensure that all “Artists Impressions” are accompanied with a suitably comprehensive disclaimer to cover the discrepancies/inaccuracies. This disclaimer should also be included in all marketing material and contract of saledocuments.
Please don’t hesitate [to] call should you wish to discuss the above.
…
[Emphasis added]
Ms Hart agreed that the large free-span opening between the interior and exterior was a feature that attracted Mr and Mrs Ripani to apartment 1401. At the time Mr and Mrs Ripani signed the Contract in April 2017, Ms Hart knew that the opening as shown on the render was not possible and that the render was misleading. Ms Hart agreed in cross-examination that this was potentially a very serious problem for Rothelowman because she knew Mr and Mrs Ripani were not going to get that.
Ms Hart agreed that when she was asked to work on apartment 1401 for Mr and Mrs Ripani, she knew that if she took a wrong step, Century Legend was likely to be very unhappy because they might lose a valuable sale and Rothelowman might be sued. Ms Hart agreed that being asked to work on apartment 1401 for Mr and Mrs Ripani was “a potential time bomb”. Ms Hart agreed that the circumstances she was placed in, in dealing with Mr and Mrs Ripani, “obliged [her] to be less than frank on a number of occasions”. Ms Hart agreed she would not have told Mr and Mrs Ripani the truth during meetings with Mr Hu or Mr Tran, because it might get back to Century Legend, and she could not say openly that they were not going to get what was shown in the render. Therefore, as Counsel for Mr and Mrs Ripani submitted, the meetings on 26 May 2017 and 9 June 2017 were not an occasion for Ms Hart to tell Mr and Mrs Ripani the opening they expected would not or could not be provided.
On 23 June 2017, Ms Hart sent an email to Mr Hu and others at Century Legend about the perimeter edge banding for each level of the Victoriana, which concluded by saying:
We feel it’s extremely important that JD Group make purchasers aware of the actual internal/external transition and breaking up in glazing that will be achieved, as this is not accurately shown in the JD Group commission to marketing renders. It needs to be reiterated that marketing renders are an artist’s impression only and not actual building images.
The email forwarded the email from Mr Perkins to Century Legend dated 12 October 2016 (referred to above in paragraph 106).
Mr Hu responded by email later that day noting that Century Legend had “put artist impression in all our renders and we have a disclaimer as well.”
Century Legend submitted that Ms Hart’s email to Century Legend on 23 June 2017 supported the fact that she told Mr and Mrs Ripani about the actual break up in the glazing panels. I disagree. Century Legend’s response to the 23 June 2017 email may seem surprising, given the very clear warning from the architects on two separate occasions that the render was misleading, but it would have reinforced Ms Hart’s belief about the sensitivity of the matter. That Ms Hart did not mention in her email of 23 June 2017 that she had made Mr and Mrs Ripani aware of the inaccuracy of the render may seem inexplicable. That Ms Hart did not on other occasions mention that she had already told Mr and Mrs Ripani about the width of the openings may also seem inexplicable. However, it is entirely explicable in light of Ms Hart’s evidence that it was potentially a serious problem and she had to be careful. Ms Hart’s email of 23 June 2017 was Ms Hart saying she knew there was a problem and she told Century Legend that ultimately it was their problem. There was no evidence that Ms Hart made a contemporaneous record of what she said she told Mr and Mrs Ripani regarding the inaccuracy of the render or the truth about the openings. Indeed, she was careful not to do that.
Century Legend submitted that the Court should conclude that by August 2017, having looked at the floor plans carefully and repeatedly in the period of April to August 2017, Mr and Mrs Ripani understood that there were multiple door openings on the façade. Century Legend submitted that Mr and Mrs Ripani saw the plans on the back of seeing the model of the Victoriana at the display suite, which shows the glazing break up across the façade. I accept that Mr and Mrs Ripani were given plans, which they printed and looked at. The floor plans that were shown and provided to Mr and Mrs Ripani were in plan view and were not elevation drawings. The sliding doors along the western façade were depicted by arrows reflecting their direction of travel in fine lines set against a background of herringbone chevrons (see image at Annexure G). There was no key provided on the plans to explain the lines or marks or what they were intended to depict.
The openings on the plans were not buildable. Ms Hart agreed that the sliding doors on the Option A plan could not be built because the centre opening was not wide enough and the sliding doors at the southern end of the centre opening and the southern opening moved into the same fixed panel, which would not work. Ms Hart agreed that this defect also applied to the Option A/B, B and C plans. Ms Hart did not pick up that the openings in the Option C plan were not buildable because there was no room available for a two door stacker and she agreed it was “confusing”. This issue also applied to the Option E plan. In addition, if the façade had included two openings at the northern and southern ends as shown on the Option E plan, there would not have been enough room for the sliding doors for the centre opening. Finally, when the draftsperson prepared the Option E plan dated 6 February 2018 they misinterpreted changes to the doors marked up on the plan given to them as a series of four single doorways. Ms Hart said she did not notice this irregular change at the time.
These errors were not picked up in the design process, which involved architects, a principal designer, a draftsperson (or persons), and Ms Hart. It is therefore difficult to accept that Mr and Mrs Ripani might have noticed and understood how the openings worked by reference to the plans when none of the professionals dealing with the plans apparently did or had regard to them. Nobody ever remarked upon the fact that the represented openings could not in fact be built as depicted.
Century Legend further submitted that Ms Hart’s evidence was credible and should be accepted because the evidence of two different witnesses – Ms Hart and Mr Hu – to the effect that on 15 September 2017 Mr and Mrs Ripani renewed their request for a wide opening, was consistent with Ms Hart’s evidence that they were disappointed to learn the true position about the opening in the meetings with Ms Hart in May and June 2017.
Mr Hu’s evidence about the meeting on 15 September 2017 was as follows:
…And also, they mentioned about the door opening to the – I think they mentioned – if this – got to be – look like the render image. I say, “I can’t guarantee that, but we can put in the request saying ‘open the door as wide as possible’.” So that’s why I put the notes along the door side.
When Mr Hu was asked to go through that evidence “in steps”, he said that he could not “recall if it’s Nina or Walter mentioned if the door can be – look like the render”. Mr Hu was then asked what he said, to which he responded:
…I said I can’t guarantee that. It’s – really depends on the architect and the builder because we haven’t got the builder at the time. We can’t determine how wide it can be open.
Mr Hu was then asked what Mr and Mrs Ripani said, and he gave the following evidence:
And what did Walter and Nina say?‑‑‑I think they accept that is not under my control, so I think they stop asking.
Well ‑ ‑ ‑?‑‑‑They – they didn’t say anything, I think.
They didn’t say anything?‑‑‑Yes.
But you said something ‑ ‑ ‑?‑‑‑Instead of, they request a door to be as wide as possible.
Okay. Who asked that?‑‑‑I can’t recall. Either of them, yes.
Requested for the door to be open as wide as possible?‑‑‑Correct.
Was anything said about the width of the door?‑‑‑No.
Mr Hu was later asked about a note he made on 15 September 2017 “Sliding door to be open as much as possible” and his evidence was:
Yes. And just how – just tell her Honour how that note came to be on there?‑‑‑Yes, as I said before, I think they mentioned about the render image, if the door can be open as such, as such wide. I said I can’t guarantee that. I said we can put in the notes to the architect saying please design the door to be open as wide as possible.
In taking Mr Hu through his initial evidence “in steps”, his evidence changed from Mr Hu initially saying that he said “we” (meaning JD Group) would put in a request for the doors to be “as wide as possible”, to Mr and Mrs Ripani requesting “a door to be as wide as possible”. He maintained the latter answer after he was shown his note “Sliding door to be open as much as possible”, however, he was not asked if he wished to change his earlier evidence.
Century Legend’s submission that Mr Hu gave evidence that during the meeting on 15 September 2017 Mr and Mrs Ripani requested to “open the door as wide as possible” does not accurately represent the entirety of Mr Hu’s evidence. Century Legend submitted that, being disappointed to learn the true position after they entered into the Contract, it was “entirely explicable” that Mr and Mrs Ripani renewed their request for a wide opening. However, that is not the only explanation. Mr and Mrs Ripani had not been told the actual width of the door, even on Century Legend’s case. In my assessment, having been attracted to apartment 1401 by the opening shown in the render, they had occasion to ask Century Legend’s representative about the opening on the render when they met with him to discuss the interior design and customisation of the apartment at the meeting on 15 September 2017. Mr Hu’s evidence was that he said he couldn’t guarantee the opening would look like the render. Whether (as Mr Hu initially said) he then said “we can put in the request saying ‘open the door as wide as possible’”, or Mr and Mrs Ripani requested a wide opening, was explicable with Mr and Mrs Ripani having asked about the image in the render because it was what had attracted them to the apartment.
Ms Hart’s evidence does not advance matters. Ms Hart gave evidence that on 15 September 2017 (after Mr Hu’s meeting with Mr and Mrs Ripani) Mr Hu told Ms Hart that Mr and Mrs Ripani want the opening to the terrace to be as wide as possible. It must be borne in mind that Mr Hu and Ms Hart knew the true position.
Century Legend submitted that, consistently with her practice, Ms Hart made red pen-mark annotations on the Option E plan dated 15 September 2017 (with Mr Hu’s writing in blue). Ms Hart also made notes in a Rothelowman notebook of that meeting with Mr Hu, in black pen, dated 15 September 2017, including by writing “sliding doors to open wide as poss to terrace”. This was Ms Hart’s evidence and note of what Mr Hu told her – it was not evidence or a note of a request that Mr and Mrs Ripani made directly to Ms Hart. Century Legend subsequently self-described this request as a “purchaser’s request”.
In addition to the meeting on 15 September 2017, Century Legend also referred to the following matters regarding the post-contractual request to make the door as wide as possible:
(a)On 21 September 2017, Ms Hart emailed Mr Hu stating “I have the following points noted from our discussion… Additional notes: … Sliding doors to terrace to be maximum openable width possible”;
(b)On 2 October 2017, Ms Hart emailed Mr Hu, Kylie Xu and others and said “Following my meeting with Walter and Nina the following additional items have been requested:…19. Maximum width access to the terrace”;
(c)In an email of 28 November 2017 to Ms Xu, Ms Hart said “With regards to the apartment terrace threshold transitions, yes purchasers for both 1401 and 1101 have expressed the expectation that there will be an even transition as per the marketing renders. Both parties have requested to maximise the width of opening to the terraces to take advantage of the interior/ exterior connection”; and
(d)The purchaser upgrade schedule dated 6 February 2018 referred to “Purchaser request: Maximize clear opening to balcony” along with the date “22.09.17”.
The documents referred to above are Century Legend’s self-described record of a “purchaser’s request” or Ms Hart’s record of the request as it was conveyed to her, bearing in mind that Century Legend and Ms Hart knew the true position. There were no documents prepared by Mr or Mrs Ripani recording the request or evidencing that they made the request.
The opening “request” was first recorded in writing at and following Mr Hu’s meeting with Mr and Mrs Ripani on 15 September 2017. Given the ambiguity in Mr Hu’s evidence leading up to the recording of the request, and for the reasons mentioned in paragraph 122, I do not accept Century Legend’s submission that Mr and Mrs Ripani’s evidence, that they did not know they were not getting the doors in the render, is a matter which cannot be reconciled with the post-contractual requests for a wide opening.
Century Legend submitted that “relatedly” it was apparent from the evidence of Mr Hu that one of the reasons for the meeting of 13 July 2018 was that Mr and Mrs Ripani were not happy about the width of the opening to the western façade. Century Legend submitted that there was no explanation for the meeting, other than that Mr and Mrs Ripani had been told previously about the true position of the doors, were still disappointed about it, and had requested the opening to be “as wide as possible”.
On the contrary, I accept the submission on behalf of Mr and Mrs Ripani that the reason for the meeting on 13 July 2018 was that Mr and Mrs Ripani were not happy about the height of the doors on the western façade. On 4 May 2018, Mr Hu met with Mr and Mrs Ripani at their private residence. Mr Hu brought two documents with him – the document entitled “Purchaser Upgrade Premium Apartment 1401 VICTORIANA 20 Queens Road, Albert Park” (Purchaser Upgrade document) and an “Estimate Summary” prepared by WT Partnership, quantity surveyors (WTP Costings). The Purchaser Upgrade document was prepared by Rothelowman. The WTP Costings contained estimated costings for “[i]tems to be included as standard” and “[a]dditional items provided at extra cost to client”. Mr Hu said the purpose of the meeting on 4 May 2018 was to discuss variations or upgrade options with Mr and Mrs Ripani and which of the upgrade options would be at Mr and Mrs Ripani’s cost.
Mr Ripani said he noticed item 2.8 in the WTP Costings: “Maximum access to Terrace – Assume Renlita frameless glass doors including motorised operation, writing, to suit 12000 x 2550 opening size”. Item 2.8 was under “Additional items provided at extra cost to client” and was costed at $43,760. Mr Ripani said he noticed item 2.8 was a 12 metre stackable door with a height of 2.5 metres. Mr Ripani said the aspect that concerned him was the height of the door. Mr Ripani said he asked why they were paying for this item and why it was not part of the construction of the apartment, and Mr Hu said he would have to check. Mr Hu said that when he saw this item he was surprised to see Mr and Mrs Ripani were getting a 12 metre opening. He said “Wow, you’re getting 12 metres”, but did not tell Mr and Mrs Ripani that he did not think an opening of that width was not possible.
After the meeting on 4 May 2018, Mr and Mrs Ripani met with Ms Hart on 22 June 2018. It is likely that the ceiling and door heights were discussed at the meeting because, on 22 June 2018, Ms Hart sent Mr and Mrs Ripani an email that referred to the meeting and attached a schematic section for the apartment that showed the height of the ceilings and the doors on the western façade.
Mr Ripani replied to Ms Hart’s email on 25 June 2018 raising the concerns he had raised from “day one” about the ceiling heights. Given that the concern raised at the meeting on 4 May 2018 was actually about the doors, Mr Ripani’s email can be taken to be about the height of the ceilings and doors. This was the first time Mr or Mrs Ripani complained about the doors in writing, and it was a complaint about the height of the doors. Ms Hart responded to Mr Ripani’s email to suggest that he should speak to Mr Lu, as Mr Hu was on holidays.
As to the remaining items in the Schedule for determination, Mr and Mrs Ripani relied on the Option E plan or the 1401 Generic Specification to submit that Century Legend was required to construct apartment 1401 to include those items. The remaining items in the Schedule, and Century Legend’s response as to whether those items were included in the apartment, are set out below in Table 2:
Table 2
Item
Century Legend’s response
Island bench between the kitchen bench and the dining room
The island bench was loose furniture, not fixed, and so not included.
Sliding doors to each side of the serpentine wall to expose or cover equipment and shelving
The process for RLA selection was never finalised and so it was not possible to construct in accordance with this requirement.
Bespoke RLA designed unit containing drawer unit with shelving over it as part of the serpentine wall
The process for RLA selection was never finalised and so it was not possible to construct in accordance with this requirement.
Bio-ethanol custom fireplaces in the serpentine wall
Building regulations prohibit a fuel source stored in a single occupancy.
Temperature-controlled wine room, capable of keeping wine at its cellaring temperature of 14 degrees Celsius
The wine room has its own AC temperature control.
Two under-bench wine fridges and two under-bench minibars, with a stone benchtop above, in the wine room
Century Legend’s solicitors sought instructions from Mr and Mrs Ripani via their solicitors and instructions were not provided.
Full height wine fridges were installed – minor breach.
Pivot hinged door to the wine room
Wine room has a hinge door.
Bespoke RLA designed unit and upholstered panel surround with drawer and cupboard units underneath to the bar area
Century Legend’s solicitors sought instructions from Mr and Mrs Ripani via their solicitors and instructions were not provided.
CBUS home automation system throughout the apartment, including a connection to allow it to operate the window furnishings
Dynalite home automation system was installed but window furnishings were not permitted under the Owners Corporation rules – minor breach.
Ducted air-conditioning throughout the apartment with the condenser situated in a separate air-conditioning room
Ducted air conditioning was installed. Change to air conditioning necessary due to building requirements.
Outdoor BBQ having a granite countertop, an ice-well with connected drainage and an integrated fridge
Century Legend’s solicitors sought instructions from Mr and Mrs Ripani via their solicitors and instructions were not provided.
To the extent there is any breach, it relates to the absence of an ice-well – minor breach.
Cold water tap on the balcony
Cold water tap was installed.
Bespoke fireplace joinery in the master bedroom and the entertainment room
Mr and Mrs Ripani did not pay for fireplaces as requested and so the joinery was deleted. Alternatively, joinery was built in accordance with RLA Reg G construction drawings and so all joinery, shelves and finishes were “RLA bespoke”.
Bespoke joinery around the master bed head
Century Legend’s solicitors sought instructions from Mr and Mrs Ripani via their solicitors and instructions were not provided. Alternatively, joinery was built in accordance with RLA Reg G construction drawings and so all joinery, shelves and finishes were “RLA bespoke”.
Master bedroom study in accordance with the Option E plan and to a joinery design to be produced by Rothelowman, which Rothelowman produced in document A13.606B dated 4 October 2019
No response.
In support of their position on the requirements and failure to construct apartment 1401 to include the above items, at the trial Mr and Mrs Ripani provided a Pleadings and Evidence Matrix which referred to documents such as emails and plans in support of each item. As shown in the above table, Century Legend effectively conceded that some items were not included, but proceeded to give an explanation as to why it was not required to include the particular item.
Mr and Mrs Ripani submitted that the departures from the Contract were material and noted that Century Legend did not adduce any evidence as to the reasons for the departures. They relied on evidence that Century Legend’s departures from the Contract reduced the cost of construction by at least $215,000, which Mr Hu confirmed was a saving to Century Legend. I consider that even if Century Legend was required to include some or all of the items listed in Table 2 and it failed to do so, that breach or those breaches would not have justified a termination of the Contract. First, Century Legend submitted, and I accept, that compliance with the requirements in the 1401 Generic Specification was not an essential term of the Contract. In my assessment, the overall terms of the Contract suggested that the parties did not contemplate that compliance with the 1401 Generic Specification was an essential term of the Contract: see Special Condition 16.3(b) which allowed Century Legend, without reference to Mr and Mrs Ripani to make any non-material alterations that Century Legend either deemed desirable or necessary, and Special Condition 16.3(c) which allowed Century Legend and the Builder to make any change to the “Specifications” deemed necessary.
Secondly, the failure to comply with the requirements of the 1401 Generic Specification was not a sufficiently serious breach going to the root of the Contract: Koompahtoo Local Aboriginal Land Council v Sanpine Pty Ltd (2007) 233 CLR 115; [2007] HCA 61 at [54] (Gleeson CJ, Gummow, Heydon and Crennan JJ); or a repudiation of the whole of the Contract or a fundamental obligation under it: Koompahtoo at [44] (Gleeson CJ, Gummow, Heydon and Crennan JJ). In my assessment, damages would have been an adequate remedy for failing to comply with the 1401 Generic Specification. Moreover, Century Legend should have been given an opportunity to rectify the relevant breaches.
In addition, Century Legend:
(a)relied on General Condition 27.1 of the Contract, which provided that a party would not exercise any rights arising from the other party’s default, other than the right to receive interest and sue for money owing, until the other party was given and failed to comply with a written default notice;
(b)relied on Special Condition 42.1(d) of the Contract, which provided that the Purchaser will not be entitled to exercise any “Excluded Rights”, which was defined to include the right to avoid or terminate the Contract, in respect of the building works after the settlement date; and
(c)submitted that because Mr and Mrs Ripani did not inspect apartment 1401 before settlement was due, Century Legend was not given the opportunity to rectify any alleged non-compliances and, therefore, and by reason of the terms of the Contract referred to above in sub-paragraphs 255(a) and (b), Mr and Mrs Ripani were not entitled to exercise any right other than a right to sue for money owing.
Mr and Mrs Ripani gave evidence that they had tried to organise an inspection of apartment 1401 on 7 September 2021, however, the inspection was cancelled. Mr and Mrs Ripani said they were informed by a solicitor acting for Century Legend that Century Legend, or JD Group, did not want them on the premises. If that was correct, that might have been a breach of the Contract by Century Legend that would have prevented it from relying on the terms of the Contract referred to above in sub-paragraphs 255(a) and (b). However, whether Century Legend relied on its rights under the Contract or under the general law, the result would be the same, namely, Mr and Mrs Ripani would not have been entitled to terminate the Contract on the ground of the non-compliances in Table 2. Their rights would have been limited to a right to sue for damages for breach of the Contract.
As set out above at paragraph 246, I have found that the failure to construct the three openings on the western façade in accordance with the Option E plan was a material breach of the Contract and that Mr and Mrs Ripani were entitled to rescind the Contract. For completeness, I note that Mr and Mrs Ripani’s alleged failure to inspect apartment 1401 prior to settlement would not have prevented them from relying on Century Legend’s failure to construct three openings in accordance with the Option E plan. That is because any failure to inspect did not deprive Century Legend of the opportunity to rectify this non-compliance because, on Century Legend’s case, it was not possible to construct three openings on the western façade.
In light of the above, it is unnecessary to resolve the question whether Century Legend was required, but failed, to construct apartment 1401 to include the items in Table 2 because, even if Century Legend was required, but failed, to construct apartment 1401 to include some or all of the items listed in Table 2, the non-compliances would not have been a material breach of the Contract.
Should Century Legend be estopped?
In the alternative, Mr and Mrs Ripani contended that Century Legend represented that, if Mr and Mrs Ripani entered into the Contract, Century Legend would build apartment 1401 in accordance with the 1401 Generic Specification, the Option E plan and the Concept Design. Mr and Mrs Ripani contended that, therefore, Century Legend should be estopped from denying that it was obliged to construct apartment 1401 substantially in accordance with the 1401 Generic Specification, the Option E plan and the Concept Design.
For the reasons set out above in paragraphs 159–171, in my assessment, Century Legend did not agree, and nor did it represent, that it would build apartment 1401 in accordance with the Concept Design. That is sufficient to dispose of the estoppel claim because Mr and Mrs Ripani have not established that Century Legend should be estopped from denying any alleged representation to the effect that it would build apartment 1401 substantially in accordance with the 1401 Generic Specification, the Option E plan and the Concept Design.
Although it is unnecessary for me to decide, I make the following findings in relation to Mr and Mrs Ripani’s estoppel claim.
First, Century Legend submitted that even if there was a substantial breach of the contract, which was denied, it would not be unconscionable to allow Century Legend to depart from the Contract because Mr and Mrs Ripani failed to inspect apartment 1401 and, therefore, deprived Century Legend of the opportunity to rectify the breach. For the reasons set out above at paragraphs 234–246, the failure to construct three openings on the western façade in accordance with the Option E plan was a material breach of the Contract. Further, the failure to inspect apartment 1401 did not deprive Century Legend of the opportunity to rectify that breach because, on Century Legend’s own case, it was not possible to construct three openings on the western façade.
Secondly, Century Legend submitted that the estoppel claim should fail because Mr and Mrs Ripani have not suffered any detriment because they elected not to proceed with the Contract. I consider that in making this submission, Century Legend focuses on the wrong point in time. In my view, detriment was established by Mr and Mrs Ripani entering into, and therefore incurring obligations under, the Contract in reliance on the Representations.
Thirdly, Century Legend submitted that Mr and Mrs Ripani failed to establish reliance on the Representations. because their position was that Ms Hart failed to explain the locations of the openings on the balcony and, therefore, they could not have relied on there being three openings as indicated in the Option E plan. There is no force in this argument because the parties agreed that the Option E plan formed part of the Contract. Mr and Mrs Ripani must have entered into the Contract on the basis that the Option E plan formed part of the Contract, regardless of whether they understood the plan.
Finally, Century Legend submitted that estoppel is not available because substantial restoration is not possible. This is not an absolute proposition. Equitable relief may have been able to be fashioned, and additional relief might have been able to be granted, to achieve practical justice and restore the parties to the status quo as far as it was possible to do so: Maguirev Makaronis (1997) 188 CLR 449 at 496–7 (KirbyJ); Jams 2 Pty Ltd v Stubbings (No 4) (2019) 59 VR 1; [2019] VSC 482 at [12] (RobsonJ).
Did Century Legend repudiate the Contract?
Mr and Mrs Ripani submitted that Century Legend repudiated the Contract by instructing Hickory as it did in relation to the construction of apartment 1401, by calling for settlement and by issuing the Notice of Default.
Repudiation refers to conduct which evinces an unwillingness or inability to render substantial performance of the Contract. This is sometimes described as conduct of a party which evinces an intention no longer to be bound by the Contract or to fulfil it only in a manner substantially inconsistent with the party’s obligations. The test is whether the conduct of one party is such as to convey to a reasonable person, in the situation of the other party, renunciation either of the Contract as a whole or of a fundamental obligation under it: Koompahtoo at [44] (Gleeson CJ, Gummow, Heydon and Crennan JJ).
Having regard to the findings I have made, Century Legend’s failure to construct three openings on the western façade, as shown on the Option E plan, was a breach evincing an intention not to be bound by the Contract, or to fulfil the Contract only in a manner substantially inconsistent with Century Legend’s contractual obligations, and was thus a repudiation of the Contract. Furthermore, by proceeding to instruct Hickory to construct only two openings, Century Legend manifested a lack of willingness or inability to perform the Contract, and in those circumstances Mr and Mrs Ripani were entitled to conclude that the Contract would not be performed substantially according to its terms.
Was Century Legend ready, willing and able to perform the Contract?
In order for Century Legend to rely upon Mr and Mrs Ripani’s alleged repudiation and to terminate the Contract, Century Legend must have been ready, willing and able to settle the sale of apartment 1401 according to the terms of the Contract: Foran v Wight (1989) 168 CLR 385; [1989] HCA 51 at 402 (Mason CJ), 427 (Brennan J).
I have found that the Contract required Century Legend to construct apartment 1401 in accordance with the Option E plan, which showed three openings on the western façade, and that Century Legend failed to construct apartment 1401 substantially in accordance with the Contract. Moreover, Century Legend’s position was that it was not possible to build three openings on the western façade and it proceeded to instruct Hickory to construct apartment 1401 in accordance with the Option I plan, which showed two openings on the western façade.
I have found that Century Legend’s failure and refusal to construct three openings on the western façade was a repudiation of the Contract. Furthermore, it is apparent that Century Legend had resolved not to, or was not willing to, perform its obligations as required by the Contract. As a result, it was not ready, willing and able to perform the Contract and would not have been entitled to rely on any alleged repudiation of the Contract by Mr and Mrs Ripani in order for it to terminate the Contract.
Did Mr and Mrs Ripani repudiate the Contract?
The initial trial judge found that Mr and Mrs Ripani elected to rescind the Contract by bringing the first proceeding: PJ [246]. The parties are bound by that determination.
Century Legend submitted that by electing to rescind the Contract by bringing the first proceeding, Mr and Mrs Ripani were not ready, willing and able to settle the purchase and therefore repudiated the Contract.
I have found that Mr and Mrs Ripani are entitled to rescind the Contract because of Century Legend’s misleading and deceptive conduct. I have also found that Mr and Mrs Ripani were entitled to terminate the Contract by reason of Century Legend’s repudiatory conduct.
In light of those findings, it is unnecessary for me to consider whether Mr and Mrs Ripani were ready, willing and able to settle the purchase of apartment 1401. However, if I was required to decide the issue, I would find that they clearly were not willing to do so, because they considered that they were not obliged to do so. This matter is of no consequence given my finding that Mr and Mrs Ripani were not obliged to settle the purchase of apartment 1401.
Were Mr and Mrs Ripani obliged to settle the purchase?
Mr and Mrs Ripani were not obliged to settle the purchase of apartment 1401 because the Contract had been rescinded or terminated due to Century Legend’s misleading and deceptive conduct or, alternatively, repudiation of the Contract.
Century Legend’s claim for relief
In the originating application filed in the second proceeding Century Legend sought, by way of relief, payment of the amount of $958,000, that being the amount of the deposit paid under the Contract by way of bank guarantee, plus interest and damages for breach of the Contract.
In light of my finding that Mr and Mrs Ripani were entitled to rescind the Contract, Century Legend is not entitled to the relief claimed in the second proceeding. In the event that I am wrong, and Century Legend was entitled to terminate the Contract, I make the following findings in relation to Century Legend's claim for relief.
Terms of the Contract
Century Legend relied upon General Conditions 25, 26 and 28 and Special Conditions 27 and 29 of the Contract in support of its claim for relief.
General Condition 25 of the Contract provides:
A party who breaches this contract must pay to the other party on demand:
(a) compensation for any reasonably foreseeable loss to the other party resulting from the breach; and
(b) any interest due under this contract as a result of the breach.
General Condition 28 of the Contract provides:
28.1 All unpaid money under the contract becomes immediately payable to the vendor if the default has been made by the purchaser and is not remedied and the costs and interest are not paid.
28.2 The contract immediately ends if:
(a)the default notice also states that unless the default is remedied and the reasonable costs and interest are paid, the contract will be ended in accordance with this general condition; and
(b)the default is not remedied and the reasonable costs and interest are not paid by the end of the period of the default notice.
…
28.4 If the contract ends by a default notice given by the vendor:
(a)the deposit up to 10% of the price is forfeited to the vendor as the vendor’s absolute property, whether the deposit has been paid or not; and
(b) the vendor is entitled to possession of the property; and
(c)in addition to any other remedy, the vendor may within one year of the contract ending either:
(i)retain the property and sue for damages for breach of contract; or
(ii)resell the property in any manner and recovery any deficiency in the price on the resale and any resulting expenses by way of liquidated damages; and
…
(e) any determination of the vendor’s damages must take into account the amount forfeited to the vendor.
Special Condition 27.1 deals with the default interest and provides:
(a)If the Purchaser defaults in the payment of money under this Contract (“amount”), interest at a rate per annum equal to the aggregate of 4% on the due date for payment of the amount fixed under Section 2 of the Penalty Interest Rates Act 1983 must (without prejudice to the Vendor’s other rights) be paid by the Purchaser to the Vendor.
(b)Interest is calculated on the amount from the due date for payment until the amount (with interest) is paid.
Finally, Special Condition 29 provides:
Without limiting Special Condition 28, the Purchaser indemnifies the Vendor for all cost, liability, loss or damage incurred or suffered by the Vendor caused or contributed to by the Purchaser's failure to comply with this Contract including, without limitation, liability incurred under another contract of sale.
Entitlement to the deposit
On 22 December 2022, Century Legend notified Mr and Mrs Ripani that settlement was to take place on 17 January 2023. The apartment did not settle on 17 January 2023.
On 18 January 2023, Century Legend issued the Notice of Default notifying Mr and Mrs Ripani that they were in default for failing to pay the balance of the purchase price, and that Century Legend intended to exercise its rights arising from the default unless the default was remedied within 14 days, being 1 February 2023.
If Mr and Mrs Ripani had been in default for failing to pay the balance of the purchase price and settle the Contract, as alleged in the Notice of Default, the Contract would have come to an end, according to its terms, on 1 February 2023. Furthermore, the failure to remedy the default in the Notice of Default would have had the consequence that the amount of the deposit (being 10% of the purchase price) would have been forfeited to Century Legend pursuant to Special Condition 28.4(a) of the Contract.
Loss and Damage
In addition to the deposit, Century Legend claimed interest and damages. Century Legend relied on General Conditions 25 and 28.4 and Special Conditions 27 and 29 of the Contract, which are set out above at paragraphs 280–283. Alternatively, Century Legend sought damages for repudiation of the Contract.
According to an “Updated Schedule of Particulars of Loss and Damage”, Century Legend quantified its claim for interest and damages in the sum of $4,574,287.63, comprising:
(a)$1,580,000, being the deficiency in the resale price of the apartment;
(b) $308,000 in two agents' commissions on the resale of the property;
(c)$45,452.54 in marketing, advertising and styling expenses on the resale of the property;
(d)$35,283.46 in “holding costs”, such as owners corporation fees, council rates and utility bills;
(e)$44,094.25 in contractual interest from 17 to 31 January 2023;
(f)$832,457.38 in borrowing costs on the purchase price of $9,580,000 from 1 February 2023 to the date of resale (7 May 2024), at the rate of 6.88 percent per annum; and
(g)$1,729,000 in legal costs.
Century Legend's statement of claim included unparticularised items of loss and damage. During opening submissions, Century Legend sought to hand up, and provide to Mr and Mrs Ripani for the first time, a “Schedule of Particulars of Loss and Damage” which included updated and further particulars of Century Legend's loss and damage.
The trial did not finish in the time originally allocated. When the trial resumed, Century Legend sought to hand up the Updated Schedule which identified various invoices and other documents by which Century Legend sought to prove the categories of loss referred to above in paragraph 288. The invoices and documents referred to in the Updated Schedule were included in the third supplementary court book. Century Legend sought to tender the Updated Schedule under s 50 of the Evidence Act 1995 (Cth) as proof of its claim for loss and damage. After I expressed doubt as to whether Century Legend could rely on s 50 of the Evidence Act for that purpose, Century Legend sought to prove its claim through Mr Hu and by reference to the underlying documents referred to in the Updated Schedule.
I deal with each category of loss and damage in the Updated Schedule in turn below.
Deficiency in the resale price
As set out above, General Condition 28.4(c)(ii) of the Contract provided, in effect, that if the Contract ended by a default notice given by the vendor, the vendor was entitled to resell the property and recover any deficiency in the price on resale and any resulting expenses by way of liquidated damages.
The apartment was re-sold on or about 6 November 2023 for $8,000,000. Century Legend claimed the difference between the purchase price under the Contract and the purchase price under the subsequent resale, namely $1,580,000 under General Condition 28.4(c)(ii) or as reasonably foreseeable loss resulting from the breach.
Mr and Mrs Ripani submitted that the proper measure of damages for breach was the difference between the contract price and the market value of the property at the date of the determination of the Contract, citing Victorian Economic Development Corporation v Clovervale Pty Ltd [1992] 1 VR 596 at 604 (Tadgell J). However, Mr and Mrs Ripani focused on the incorrect date of determination for the purpose of Century Legend’s claim for relief, which proceeds on the assumption that the Contract was not rescinded by Mr and Mrs Ripani. Mr and Mrs Ripani did not lead any evidence or suggest that the market value of the property as at the date of the determination of the Contract, in early 2023 on Century Legend’s case, would have been more than the price at which it was sold in November 2023.
I am satisfied that Century Legend would have been entitled to recover the deficiency in the resale price of $1,580,000, if the Contract had ended because Mr and Mrs Ripani were in breach of the Contract and Century Legend was entitled to serve the Notice of Default, pursuant to General Condition 28.4(c)(ii) of the Contract or by way of damages for repudiation of the Contract. However, the Updated Schedule does not take into account that the deposit would have been forfeited to Century Legend (see paragraph 286 above). In my assessment, any amount awarded in respect of the deficiency in the resale price would need to be adjusted to take into account the deposit forfeited to Century Legend, with the result that Century Legend would be entitled to recover the deficiency in the resale price of $1,580,000 less the deposit of $958,000, namely, $622,000.
Agents' commission on the resale of the apartment
Century Legend initially claimed $308,000 for two agents' commissions in connection with the resale of the apartment, pursuant to General Condition 28.4(c)(ii) of the Contract or by way of damages for repudiation of the Contract.
It appeared that Century Legend had retained two real estate agents for the resale of the apartment, RT Edgar and D. Property, and the total commission for the two agents was $308,000. Mr and Mrs Ripani submitted that, absent any evidence to explain why Century Legend claimed commission for two real estate agents, Century Legend ought be entitled to recover in respect of the earlier and less substantial invoice of RT Edgar, of $88,000.
Century Legend conceded that it was only entitled commission for one real estate agent, and it claimed $220,000 being the commission charged by D. Property, the agent that ultimately sold apartment 1401. I accept that, as between the two agents, it was appropriate for Century Legend to confine its claim to the commission charged by the agent that ultimately sold the apartment.
I am satisfied that if the Contract had ended because Mr and Mrs Ripani were in breach of the Contract and Century Legend was entitled to serve the Notice of Default, Century Legend would have been entitled to recover agent's commission in the amount of $220,000 pursuant to General Condition 28.4(c)(ii) of the Contract or by way of damages for repudiation of the Contract.
Marketing, advertising and styling expenses on the resale of the apartment
Century Legend claimed $45,452.54 in marketing, advertising and styling expenses associated with the resale of the apartment, pursuant to General Condition 28.4(c)(ii) of the Contract or by way of damages for repudiation of the Contract.
Century Legend sought to recover expenses it had incurred in order to resell the apartment, including for marketing and advertising and styling the apartment with furniture. Century Legend relied on various invoices and evidence of Mr Hu to the effect that the invoices had been paid. Mr and Mrs Ripani objected to a “Marketing Schedule” from RT Edgar for fees in the amount of $10,850.24, on the basis that it was not an invoice and there was no evidence that it had been paid. I accept that Century Legend has failed to establish an entitlement to that item and that the amount of its claim should be reduced accordingly.
I am satisfied that if the Contract had ended because Mr and Mrs Ripani were in breach of the Contract and Century Legend was entitled to serve the Notice of Default, Century Legend would have been entitled to recover marketing, advertising and styling expenses associated with the resale of the apartment in the amount of $34,602.30 pursuant to General Condition 28.4(c)(ii) of the Contract or by way of damages for repudiation of the Contract.
Holding costs
Century Legend claimed $35,283.46 in “holding costs”, comprising owners' corporation fees, council rates and utilities bills, pursuant to General Condition 28.4(c)(ii) of the Contract or by way of damages for repudiation of the Contract.
Mr and Mrs Ripani objected to this aspect of Century Legend’s claim on the basis that, first, Century Legend relied on summaries which Mr Hu had not prepared to establish payment of the invoices for electricity bills and he was not sure how payment was made for the electricity bills. Secondly, Century Legend’s claim was calculated on the basis of the total invoiced amounts rather than amounts actually paid by Century Legend. Mr and Mrs Ripani’s closing submissions referred to one example of an owners’ corporation invoice where Century Legend’s evidence as to payment was for a lesser amount than the total invoice claimed.
The holding costs comprised owners' corporation fees, council rates and utilities bills. I infer from the fact that the re-sale of the apartment settled on 7 May 2024 that Century Legend paid the owners’ corporation fees and council rates which it claimed. However, I accept Mr and Mrs Ripani’s submission that Century Legend has not established payment of the electricity bills and I would reduce this item of its claim by $4,656.64.
I am satisfied that if the Contract had ended because Mr and Mrs Ripani were in breach of the Contract and Century Legend was entitled to serve the Notice of Default, Century Legend would have been entitled to recover holding costs in the amount of $30,626.82 pursuant to General Condition 28.4(c)(ii) or by way of damages for repudiation of the Contract.
Contractual Interest
Century Legend claimed $44,094.25 in contractual interest from 17 January 2023, when Mr and Mrs Ripani failed to settle the purchase of the apartment, to 31 January 2023, when the Contract was terminated according to its terms.
Century Legend relied on Special Condition 27 which applies if the purchaser defaults under the Contract. The default interest rate under Special Condition 27.1(a) was 4% plus the rate fixed under s 2 of the Penalty Interest Rates Act 1983 (Vic), which was 10% per annum at the relevant time. Century Legend calculated its claim for default interest at the rate of 14% for the period of default to be $44,094.25. Mr and Mrs Ripani did not object to that calculation.
However, Mr and Mrs Ripani submitted that Century Legend was not entitled to interest under Special Condition 27 because Special Condition 27.1(b) makes clear that Special Condition 27 applies if settlement is delayed, but not if completion does not occur at all, as was the case here. Mr and Mrs Ripani relied on Galafassi v Kelly (2014) 87 NSWLR 119; [2014] NSWCA 190 at [193]–[194] (Gleeson JA, with whom Bathurst CJ and Ward JA agreed). The “special condition interest” clause in Galafassi specifically referred to interest being calculated to “the actual date of completion” and was in different terms to Special Condition 27. However, Special Condition 27.1(b) provides that interest under Special Condition 27 is to be calculated on the amount due, “until the amount … is paid”. Although the submission was not put in these terms, I consider that Special Condition 27 applied during the period in which the purchaser was in default of payment under the Contract. Indeed, Century Legend calculated its claim for interest from 17 January 2023 to 31 January 2023. As at 31 January 2023, there was no amount “paid” in order for Special Condition 27.1(b) to operate and Special Condition 27 does not apply.
I therefore reject Century Legend’s claim for interest in the amount of $44,094.25 pursuant to Special Condition 27.
Borrowing costs
Century Legend claimed $834,293.46 in borrowing costs on the purchase price of $9,580,000 from 1 February 2023 to the date of resale (7 May 2024) at the rate of 6.88% per annum, pursuant to General Condition 28.4(c)(ii) of the Contract or by way of damages for repudiation of the Contract.
As Mr and Mrs Ripani submitted, Century Legend did not explain the basis upon which it said it was entitled to such relief. Century Legend’s closing submissions merely stated that when Mr and Mrs Ripani did not settle the purchase of the apartment, Century Legend continued to incur borrowing costs in respect of the settlement sum, which could not be repaid to the lender on settlement. Century Legend claimed borrowing costs on the basis of the 6.88% rate incurred on the JD Group Victoriana Residual Stock Facility that the settlement amount would have been paid into, had settlement occurred, from the date the Contract was terminated, on 1 February 2023.
Century Legend did not explain how, and I am not satisfied that, borrowing costs are “expenses” for the purpose of General Condition 28.4(c)(ii) of the Contract.
Mr and Mrs Ripani submitted that it is not the general rule that a purchaser’s breach will entitle the vendor to damages for interest payable on the vendor’s mortgage. The vendor must establish that there are special circumstances, such as knowledge on the part of the purchaser of a particular situation in which the vendor is placed that would make it apparent to the purchaser that a breach would cause special damage to the vendor: Bridges v McPhail (1977) 3 BPR 9317 at 9318 (Needham J).
In order to recover borrowing costs, a vendor must establish that such losses are recoverable under one of the limbs in Hadley v Baxendale (1854) 9 Ex 341; (1854) 156 ER 145; Carpenter v McGrath (1996) 40 NSWLR 39 at 44 (Clarke JA),60–61 (Sheller JA),73 (Cole JA); Palasty v Parlby [2007] NSWCA 345; (2008) 13 BPR 25,311 at [48] (Mason P, with whom Tobias JA and Handley AJA agreed).
Ongoing interest payments on a property after termination of a contract for breach are not in usual circumstances regarded as a loss flowing from the breach. As a result, the second limb in Hadley v Baxendale is relevant, meaning the vendor must establish such loss to have been in the contemplation of both parties, at the time they made the contract, as the probable result of the breach of it: Carpenter at 73 (Cole JA); Jampco Pty Ltd v Cameron (No 2) (1985) 3 NSWLR 391 at 396 (Young J). The mere fact that the purchaser knows the vendor has mortgaged the property is insufficient to remove the case from the general principle that the damages payable by the purchaser do not include interest payable on the vendor’s mortgage: Eighth SRJ Pty Ltd v Merity (1997) 7 BPR 15,189 at 15,200 (Young J).
The need for special circumstances, to quote Needham J, must be emphasised: Higgins at [115] (Barrett J). Century Legend did not address this issue. It was not put to Mr and Mrs Ripani that they were aware of Century Legend’s financing arrangements. Nor was any submission made that Mr and Mrs Ripani had in contemplation loss that Century Legend might suffer by reason of the inability to use the proceeds of sale to reduce its finance facility.
In my assessment, Century Legend has not established an entitlement to recover borrowing costs pursuant to General Condition 28.4(c)(ii) or by way of damages for repudiation of the Contract.
Legal costs
Century Legend claimed legal costs in the amount of $1,729,000 on an indemnity basis pursuant to Special Condition 29 of the Contract or by way of damages for repudiation of the Contract.
Century Legend tendered, without objection:
(a)a statement of account from Patrick and Associates, solicitors, with time entries from 28 May 2020 to 27 October 2022, with a total amount of $921,547.90; and
(b)a statement of account from Mills Oakley, solicitors, with time entries from 28 October 2022 to 2 May 2024, with a total amount of $1,491,343.46.
Century Legend informed the Court that the amount of $1,729,000 did not include legal costs associated with the appeal or GST, which explains the discrepancy between the amount claimed and the total amount in the statements of account.
Mr Hu confirmed that Century Legend claimed its legal costs, and he simply identified the above statements of account, but otherwise gave no evidence in relation to the statements or the nature of the legal work performed by Patrick and Associates and Mills Oakley.
The Patrick and Associates statement simply contains line items listing invoices rendered by Patrick and Associates between May 2020 and October 2022. The statement contains a “Matter Description” that refers to “Claim by Walter and Nina Ripani”, but otherwise contains no detail in relation to the nature of the work performed by Patrick and Associates. The Mills Oakley statement simply refers to a list of “Bills” for the “Client Century Legend Pty Ltd” from October 2022 to May 2024, but otherwise contains no detail in relation to the nature of the work performed by Mills Oakley.
Special Condition 29 requires Mr and Mrs Ripani to indemnify Century Legend for all “cost, liability, loss or damage… caused or contributed to” by their failure to comply with the Contract. The statements provide no explanation as to the nature of the work performed by Patrick and Associates, or Mills Oakley, and no explanation was provided by Mr Hu. As Mr and Mrs Ripani submitted, some of the invoices referred to in the statements of account pre-date any contractual breach, and would appear to relate to legal work involved in resisting Mr and Mrs Ripani’s claims against Century Legend.
I am not satisfied that Century Legend has established that the legal costs which Century Legend says it has incurred were caused by the alleged failure to comply with the Contract. I am therefore not satisfied that Century Legend is entitled to recover the legal costs claimed in the amount of $1,729,000 pursuant to Special Condition 29 or by way of damages for repudiation of the Contract.
CONCLUSION
For the above reasons, I have concluded that Mr and Mrs Ripani’s claim in the first proceeding should succeed and I would order that the Contract be rescinded. In light of Mr and Mrs Ripani’s entitlement to rescission of the Contract, Century Legend’s claim in the second proceeding must fail. I will hear the parties in relation to orders to give effect to these reasons and as to costs.
I certify that the preceding three hundred and twenty-six (326) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Neskovcin. Associate:
Dated: 18 October 2024
ANNEXURE A
RENDER
ANNEXURE B
ROTHELOWMAN PLAN
ANNEXURE C
OPTION A FLOOR PLAN
ANNEXURE D
OPTION A/B FLOOR PLAN
ANNEXURE E
OPTION B FLOOR PLAN
ANNEXURE F
OPTION C FLOOR PLAN
ANNEXURE G
OPTION E FLOOR PLAN
ANNEXURE H
OPTION I FLOOR PLAN
ANNEXURE I
SCHEDULE
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