Sim Development Pty Ltd v Greenvale Property Group Pty Ltd - [2017] VSC 335

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE
COMMON LAW DIVISION
PROPERTY LIST

S ECI 2016 000034

SIM DEVELOPMENT PTY LTD (ACN 165 339 524)	Plaintiff
v
GREENVALE PROPERTY GROUP PTY LTD (ACN 159 975 498)	Defendant

AND BETWEEN

GREENVALE PROPERTY GROUP PTY LTD (ACN 159 975 498)	Plaintiff by Counterclaim
and
SIM DEVELOPMENT PTY LTD (ACN 165 339 524) & ANOR (ACCORDING TO THE SCHEDULE)	Defendants by Counterclaim
AND BETWEEN GREENVALE PROPERTY GROUP PTY LTD (ACN 159 975 498) and SIM DEVELOPMENT PTY LTD (ACN 165 339 524) and THE REGISTRAR OF TITLES	S CI 2016 00373 Plaintiff First Defendant Second Defendant

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JUDGE:	SIFRIS J
WHERE HELD:	Melbourne
DATES OF HEARING:	3-6 April 2017, 10 April 2017, 19 April 2017
DATE OF JUDGMENT:	16 June 2017
CASE MAY BE CITED AS:	Sim Development Pty Ltd v Greenvale Property Group Pty Ltd
MEDIUM NEUTRAL CITATION:	[2017] VSC 335

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CONTRACT – Construction – Consultancy and management agreement – Agreement terminated prior to completion of property development project – Whether consultant entitled to 20% of net profit arising on sale of property – Entitlement to 20% net profit contingent on completion of project – Entitlement of consultant to be paid at agreed hourly rate for Services performed up to the date of termination – Contractual definition of Services – Whether evidence supports hourly amount claimed.

TORT – Negligence – Concurrent duties in contract and tort – Whether failure to advise of electricity substation constituted breach of duty – Whether failure to advise caused loss and damage.

REAL PROPERTY – Caveats – Application for removal of caveat – Whether amounts owing pursuant to consultancy and management agreement were secured by a charge over property – Whether the charge constituted a caveatable interest – Whether caveat lodged without reasonable cause.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr S V Palmer with Mr P J Rule	Moray & Agnew
For the Defendant	Mr A Kirby	Brand Partners

HIS HONOUR:

A Introduction

These reasons relate to two proceedings that were heard together: S CI 2016 00373 (‘the Principal Proceeding’) and S ECI 2016 00034 (‘the Caveat Proceeding’).

Both the Principal Proceeding and the Caveat Proceeding relate to a project to develop property located at 617-643 Spencer Street, West Melbourne (‘the Property ’).

Greenvale Property Group Pty Ltd (‘Greenvale’) is the registered proprietor of the Property.

Greenvale engaged Sim Development Pty Ltd (‘Sim Development’) to provide consultancy and management services in relation to a proposed townhouse development on the Property (‘the Project’). The engagement of Sim Development by Greenvale was effected by a written agreement dated 29 May 2013 (‘the Sim Consultancy and Management Agreement’).

In the Principal Proceeding, Sim Development claims the sum of $380,280 from Greenvale under the Sim Consultancy and Management Agreement. The sum relates to claims for:

(a) services rendered at the contractually agreed rate of $330 per hour; and

(b) outstanding monthly payments of…

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: [2017] VSC 335
Decision Date: 16 June 2017

CaseChat Overview and Summary

Sim Development Pty Ltd (the plaintiff) brought an action against Greenvale Property Group Pty Ltd (the defendant) concerning a consultancy and management agreement. The plaintiff sought compensation for its services, alleging it was entitled to 20% of the net profit from the sale of a property and was owed for services performed up to the termination of the agreement. The plaintiff also claimed damages for the defendant's alleged negligence in failing to inform it of the presence of an electricity substation, which allegedly caused delays and additional costs. Additionally, the plaintiff sought an order for the removal of a caveat lodged by the defendant over the property, asserting that the amounts owing were secured by a charge and that the caveat was lodged without reasonable cause.

The court was required to determine whether the plaintiff was entitled to 20% of the net profit from the sale of the property, given that the agreement was terminated prior to the completion of the project. The court also had to decide whether the plaintiff was entitled to payment at the agreed hourly rate for services performed up to the termination date, and whether the evidence supported the hourly amount claimed. Furthermore, the court needed to assess whether the defendant's failure to advise the plaintiff of the electricity substation constituted a breach of its contractual and tortious duties, and if such breach caused the plaintiff any loss or damage. Finally, the court had to consider whether the amounts owing under the consultancy and management agreement were secured by a charge over the property, whether the charge constituted a caveatable interest, and whether the caveat was lodged without reasonable cause.

The court held that the plaintiff was not entitled to 20% of the net profit from the sale of the property, as this entitlement was contingent upon the completion of the project, which did not occur. The court found that the plaintiff was entitled to be paid at the agreed hourly rate for services performed up to the date of termination, provided the evidence supported the claimed hourly amount. Regarding the plaintiff's negligence claim, the court determined that the defendant's failure to advise of the electricity substation did not constitute a breach of its contractual or tortious duties, and that the plaintiff had not proven that such failure caused any loss or damage. Lastly, the court found that the amounts owing were secured by a charge over the property, which constituted a caveatable interest, and that the caveat was lodged without reasonable cause. Therefore, the court ordered the removal of the caveat.

The court ordered that the defendant pay the plaintiff the amount owed for services performed up to the termination of the agreement, and that the caveat lodged over the property be removed. The court dismissed the plaintiff's claims for 20% of the net profit from the sale of the property, for damages for negligence, and for an injunction.

Orders