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
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- Case
- [2024] FCA 1211
- Decision Date
CaseChat Overview and Summary
The court found that the applicants continued to rely on the misleading representations regarding the size and configuration of the opening between the interior and exterior areas of the apartment. The court held that the applicants were entitled to rescind the contract of sale under the rule in Flight v Booth, as the vendor failed to construct the apartment substantially in accordance with the contract of sale. The court also found that the vendor did not repudiate the contract of sale but was ready, willing, and able to perform it. However, the court rejected the vendor's estoppel argument and held that the applicants were not obliged to settle the purchase under the contract of sale. Regarding damages, the court determined that the applicants were not entitled to forfeit the deposit, but were entitled to compensation for the deficiency in the resale price, expenses on the resale, holding costs, borrowing costs, contractual interest, and legal costs.
The court ordered that the contract be rescinded and that the applicants return the bank guarantee. The proceeding was listed for a case management hearing to make orders to give effect to these reasons, make orders as to written submissions on costs, and fix a date for the hearing of submissions as to costs. The parties were required to provide a proposed minute of orders by a specified date.
Orders
Orders of the court
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.
Background
Background to the litigation
Evidence
Evidence Before The Court
Decision
Reasons for decision
Ratio Decidendi
Legal Principle Established
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”.