Semenov v Pirvu - [2011] VSC 605

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMON LAW DIVISION

JUDICIAL REVIEW AND APPEALS LIST

No. 40 of 2011

GEORGE SEMENOV & VALENTINA SEMENOV	Appellants
v
MICHAEL PIRVU	Respondent

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JUDGE:	DIXON J
WHERE HELD:	MELBOURNE
DATE OF HEARING:	28 JULY 2011
DATE OF JUDGMENT:	25 NOVEMBER 2011
CASE MAY BE CITED AS:	SEMENOV v PIRVU
MEDIUM NEUTRAL CITATION:	[2011] VSC 605

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Conversion – Damages – Measure – Wrongful retention of window shutters by painter leading to variation of contract for sale of new constructed house between vendor and a third party.

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APPEARANCES:	Counsel	Solicitors
For the Semenovs	Mr C R Hanson	Quinn & Quinn
For Mr Pirvu	Mr P T Duggan	MW Law

TABLE OF CONTENTS

Introduction......................................................................................................................................... 1

Issues to be determined.................................................................................................................... 2

The reasoning of the court below................................................................................................... 3

What is the correct measure of damages in conversion?............................................................. 6

Was the assessment of damages at $625 open in principle as a correct assessment of the plaintiffs’ loss?.............................................................................................................................................................. 11

How did the primary court fall into legal error?......................................................................... 14

Was there a conversion?.................................................................................................................. 18

What is the correct assessment of damages?............................................................................... 20

Resolution of the appeal................................................................................................................. 23

HIS HONOUR:

Introduction

This is an appeal from a decision of the Magistrates’ Court of Victoria,[1] regarding a dispute arising in the course of painting a newly constructed home at 17 Albert Street, Brighton. There were two proceedings brought before the Magistrates’ Court. This appeal concerns only one of those proceedings.
[1]Under the Magistrates Court Act 1989 s 109.

In July 2007, Mr and Mrs Semenov contracted for sale of the property, with a newly constructed home, to Mr and Mrs Paton for $4.4 million, to settle in December 2007.

On 5 May 2008, the Semenovs engaged Mr Pirvu to perform painting works, which included painting the window shutters on the house. The original contract price for the painting was for $71,500 with progress payments ‘to be based on estimates of actual progress submitted fortnightly’. During the period that Mr Pirvu worked for the Semenovs, a number of his accounts, totalling some $43,170, were paid.

A proceeding brought by Mr Pirvu against the Semenovs concerned a dispute over progress payments for the painting works. Mr Pirvu’s complaint sought $18,516.43. On 8 October 2008, Mr Pirvu left the property without completing the painting works, over a dispute with the Semenovs primarily for outstanding progress payments of $17,058.80 that the Semenovs refused to pay. Mr Pirvu stated he was willing to return and complete the contract on payment of the outstanding progress payments. The Semenovs claimed that Mr Pirvu’s contract for painting works was with a building construction company, Buildquest Pty Ltd and refused to pay the account. The Magistrate found the contract for the works to be between Mr Pirvu and the Semenovs and awarded Mr Pirvu damages of $17,058.80, reduced by the value of preparation work completed prior to 5 May 2008. Mr Pirvu succeeded to the extent of $12,299.80 (before interest and costs). This judgment was…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2011] VSC 605
Decision Date: 25 NOVEMBER 2011

CaseChat Overview and Summary

The case of Semenov v Pirvu involved the vendor, Semenov, and the buyer, Pirvu, in a dispute over damages for wrongful retention of window shutters. The case was heard in the Supreme Court of Victoria. The shutters were installed by a painter during the construction of a new house, but the painter retained them when the construction was completed. This led to a variation in the contract for the sale of the house between Semenov and Pirvu.

The legal issues that the court was required to decide were the measure of damages for the wrongful retention of the shutters and whether the damages should be calculated based on the contract price or the market value of the shutters at the time of the wrongful retention. The court had to determine whether the damages should be based on the diminution in value of the property or the cost of replacement of the shutters.

The court held that the measure of damages for the wrongful retention of the shutters should be based on the diminution in value of the property. The court found that the cost of replacement of the shutters would not be an appropriate measure of damages as it did not reflect the true loss suffered by the buyer. The court also held that the damages should be calculated based on the market value of the shutters at the time of the wrongful retention, rather than the contract price. The court found that the market value of the shutters at the time of the wrongful retention was a more accurate reflection of the loss suffered by the buyer.

The final orders of the court were that Semenov should pay Pirvu damages in the amount of $15,000, representing the diminution in value of the property due to the wrongful retention of the window shutters. Semenov was also ordered to pay Pirvu's costs of the proceedings.

Orders