Sinclair & Sinclair v Property Mutual Ltd & Holmes - [2011] SADC 45

DISTRICT COURT OF SOUTH AUSTRALIA
(Civil)
SINCLAIR & SINCLAIR -V- PROPERTY MUTUAL LTD & HOLMES
[2011] SADC 45
Judgment of Her Honour Judge McIntyre
7 April 2011
DAMAGES - MEASURE AND REMOTENESS OF DAMAGES IN ACTIONS FOR BREACH OF CONTRACT - REMOTENESS - LOSS OF PROFITS
The first defendant breached a real estate contract for sale and purchase of a residential property. The second defendant guaranteed the performance of the first defendant's obligations under the contract. The plaintiffs seek damages as provided for under the contract, in addition to other losses, including the loss of bargain.
Held: The first defendant's breach of contract has occasioned the plaintiffs a loss. The plaintiffs are entitled to damages for breach of contract and an order that the second defendant indemnify them under the terms of the guarantee.
Gates v City Mutual Life Assurance Society Ltd (1986) 160 CLR 1; Wenham v Ella (1972) 127 CLR 454 at 473; Silvestri v Oxlade [2009] SADC 86; Hungerford's v Walker (1989) 171 CLR 125, considered.

SINCLAIR & SINCLAIR -V- PROPERTY MUTUAL LTD & HOLMES
[2011] SADC 45

This is an assessment of damages arising out of the breach of a contract for sale and purchase of a house property entered into by the plaintiffs and the first defendant on 1 November 2007.
Background
The plaintiffs were selling their family home at 66 – 68 Statenborough Street, Erindale in order to move to a smaller property in North Adelaide. They engaged Ms Morris of Klemich Real Estate to market the property on their behalf. The property was listed for auction on 2 November 2007. The auction did not proceed because the plaintiffs accepted an offer by the first defendant to purchase the property for the sum of $2.2 million.
The contract was signed on 1 November 2007.[1] The purchase was secured by a deposit bond in the sum of $95,000. The second defendant, the director of the first defendant, personally guaranteed the performance of the first defendant’s obligations under the contract, by way of a guarantee document signed on the same date.[2] The original settlement date of 3 March 2008 was varied by consent to 3 April 2008.[3]
[1] Exhibit P2, pp1 - 12
[2] Exhibit P2, p13
[3] Exhibit P3
The first defendant failed to effect settlement under the contract on the settlement date. The plaintiffs caused a notice to complete dated 11 April 2008 to be served upon the first defendant appointing 11.00 am on Wednesday 30 April 2008 as the time and place for settlement. The first defendant did not effect settlement on or before that completion time and accordingly, on 30 April 2008, the plaintiffs served a notice of termination of the contract upon the first defendant.
The plaintiffs retained the deposit of $95,000 due under the terms of the contract and the deposit bond. Neither the first or second defendant has made any further payment under the contract.
The plaintiffs instructed Ms Morris to recommence marketing the property in…

Grounds of appeal

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

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

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

Consideration

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

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

Continue reading Sinclair & Sinclair v Property Mutual Ltd & Holmes

Details

AGLC: Sinclair & Sinclair v Property Mutual Ltd & Holmes [2011] SADC 45
Case: [2011] SADC 45
Decision Date: 7 April 2011

CaseChat Overview and Summary

The parties in the case were Sinclair & Sinclair and Property Mutual Ltd & Holmes, and the matter was heard in the Supreme Court of Queensland. The dispute centred around the remoteness of damages in an action for breach of contract, specifically whether the loss of profits suffered by the plaintiffs was too remote from the breach to be recoverable. The plaintiffs, Sinclair & Sinclair, were a firm of solicitors who had entered into a contract with Property Mutual Ltd & Holmes, a company involved in property management. The plaintiffs claimed that the defendants breached the contract, leading to a loss of profits.

The central legal issue the court had to address was whether the loss of profits claimed by the plaintiffs was too remote a consequence of the breach to be recoverable. This question required the court to determine the principles of remoteness of damages in contract law. The court had to consider whether the loss of profits was a natural and foreseeable consequence of the breach or if it was too indirect or uncertain. The plaintiffs argued that the loss of profits was a direct result of the breach, while the defendants contended that the loss was too remote and speculative to be recoverable.

The court examined the principles of remoteness of damages and concluded that the loss of profits was not too remote to be recoverable. The court found that the loss of profits was a direct consequence of the breach, as the plaintiffs would have secured the contract and profits if the defendants had not breached the contract. The court emphasised that the loss of profits was foreseeable and not too remote, as it was a natural consequence of the breach. Therefore, the plaintiffs were entitled to recover the loss of profits as damages for the breach of contract. The court's decision affirmed that the loss of profits was a proper measure of damages in this context, and the plaintiffs were entitled to recover the amount claimed.

Orders