Sonja Anne Nota v Karlovy Group Ptd Ltd
[2025] VCC 1132
•11 August 2025
| IN THE COUNTY COURT OF VICTORIA AT MELBOURNE COMMERCIAL DIVISION | Revised Not Restricted Suitable for Publication |
GENERAL LIST
Case No. CI-23-06766
| SONJA ANNE NOTA | First plaintiff/first defendant by counterclaim |
| AGE JOHANNES WILHELM NOTA (ALSO KNOWN AS JOHN NOTA) | Second plaintiff/second defendant by counterclaim |
| v | |
| KARLOVY GROUP PTD LTD (ACN 650 009 046) | First defendant/first plaintiff by counterclaim |
| GREGORY JOHN O’SHEA | Second defendant/second plaintiff by counterclaim |
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JUDGE: | Her Honour Judge Burchell | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 2 – 6, 13, 20 and 25 June 2025 | |
DATE OF JUDGMENT: | 11 August 2025 | |
CASE MAY BE CITED AS: | Sonja Anne Nota & Anor v Karlovy Group Ptd Ltd & Anor | |
MEDIUM NEUTRAL CITATION: | [2025] VCC 1132 | |
REASONS FOR JUDGMENT
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Subject:CONTRACT OF SALE – GUARANTEES
Catchwords: whether the purchaser and guarantor failed to settle a contract of sale – whether the purchaser is entitled to a return of deposit and damages – whether there was a failure to disclose a tree permit – alleged non-compliance with permit
Legislation Cited: County Court Civil Procedure Rules 2018 (Vic), r 23.05; Property Law Act 1958 (Vic) s 49(2); Penalty Interest Rates Act1983 (Vic), s 2; Sale of Land Act 1962 (Vic), ss 9AB, 12, 32C, 32D, 32K; Planning and Environment Act 1987 (Vic), ss 126, 173; Transfer of Land Act 1958 (Vic), s 90; County Court Act 1958 (Vic), s 49; Competition and Consumer Act 2010 (Cth), sch 2, s 18; Supreme Court Act 1986 (Vic), ss 33, 58, 60
Cases Cited:Fifty-Eighth Highwire v Cohen & Anor [1996] 2 VR 64; Ma v Xu [2025] VSC 361; Webb v GetSwift Limited (No 5) [2019] FCA 1533; Harris v K7@Surry Hills Pty Ltd [2019] VSC 551; Upside Property Group Ltd v Tekin [2016] NSWSC 1260; MMAL Rentals Pty Ltd v Bruning (2004) 63 NSWLR 167; Secretary to the Department of Economic Development, Jobs, Transport & Resources v Caradi Pty Ltd [2018] VSC 696; Cambridge v Anastasopoulos [2012] NSWCA 405; Goold & Rootsey v Commonwealth of Australia (1993) 114 ALR 135; Nicholas Arthur Stokes v Molly Harris Toyne [2019] NSWSC 274; Project Blue Sky v Australian Broadcasting Authority (1998) 194 CLR 355; Long Forest Estate Pty Ltd v Singh & Anor [2020] VSC 604; Chatham v Coral Park Pre-Training & Braking Pty Ltd (2020) 66 VR 171; Huo v Z & S Camberwell & Anor [2020] VCC 1466; Callea v Wenfang [2022] VCC 508; Cody v JH Nelson Pty Ltd (1947) 74 CLR 629 at 647; Steendyk v Brisbane City Council & Ors [2016] QPEC 47; Tymstock Pty Ltd v Patrick [2019] VCC 1092; Tan v Electus Enterprises Pty Ltd (Building and Property) [2023] VCAT 788; Bingo Acquisitions Pty Ltd v Kingston CC [2021] VCAT 325; Vestey and Ors v Warrnambool CC (Red Dot) [2008] VCAT 963; CIC Insurance Ltd v Bankstown Football Club Ltd (1997) 187 CLR 384; Nota v Banyule CC [2022] VCAT 376; McHutchison v Asli [2017] VSC 258; Base Group Pty Ltd v Wyllie [2024] VSC 523; Payne v Morrison (1992) V Conv R 65-056; Downing v Lau [2018] VCC 33; Curtain v Aparo (1988) V ConvR 54-316; Karlovy Group Pty Ltd v Banyule CC [2023] VCAT 211; Princess Chloe Pty Ltd v Bellaveau Pty Ltd (Civil Claims) [2019] VCAT 154; Sully v Englisch (Civil Claims) [2020] VCAT 378; Besser v Alma Homes Pty Ltd [2012] VSC 460; Ausgrand Pty Ltd v Freeland-Small & Anor [2016] VCC 942; Latec Finance Pty Ltd v Knight [1969] 2 NSWR 79; Butcher v Lachlan Elder Realty Pty Limited (2004) 218 CLR 592; Nadinic v Cheryl Drinkwater as trustee for the Cheryl Drinkwater Trust [2020] NSWCA 2; Williams v Pisano (2015) 90 NSWLR 342; Argy v Blunts & Lane Cove Real Estate Pty Ltd (1990) 26 FCR 112; O’Brien v Smolonogov (1983) 53 ALR 107; Hera Project Pty Ltd v Bisognin (No 3) [2017] VSC 268; Heilbut, Symons & Co v Buckleton [1913] AC 30; T & J Harrison v Knowles & Foster [1918] 1 KB 608; Redgrave v Hurd (1881) 20 Ch D 1; Compass Marinas Australia Pty Ltd & Anor v State of Queensland (2021) 9 QR 703; Vimig Pty Ltd v Contract Tooling Pty Ltd (1986) 9 NSWLR 731; Kramer v Duggan (1955) 55 SR (NSW) 385; Macquarie Generation v Peabody Resources Limited & Anor [2000] NSWCA 361; Henville v Walker (2001) 206 CLR 459; Hopkins v Daou & Ors [2025] VCC 964; Henry Jones Foods Pty Ltd v Shepparton Partners Collective KP Pty Ltd [2025] VSC 187; Gayed & Anor v Yuan [2023] VCC 1992; Gayed & Anor v Yuan [2024] VSCA 85; Simcevski v Dixon (No 2) (2017) 53 VR 357; Plymin v Bruce [2023] VCC 1249; Clark v Macourt (2013) 253 CLR 1; Metal Fabrications (Vic) Pty Ltd v Kelcey [1986] VR 507; Robinson v Harman (1848) 1 Exch 850; Sellars v Adelaide Petroleum NL (1994) 179 CLR 332; Origin Energy LPG Ltd (formerly Boral Gas (NSW) Pty Ltd) v BestCare Foods Ltd [2013] NSWCA 90; The Commonwealth v Amann Aviation Pty Ltd (1992) 174 CLR 64; Piroshenko v Grojsman & Ors (2010) 27 VR 489; Bradto Pty Ltd v State of Victoria (2006) 15 VR 65; Lehrmann v Network Ten Pty Limited (Cross-Claims) [2024] FCA 102; Cappelleri v Cappelleri [2024] VSCA 173; Port Stephens Council v Fidler (1997) 94 LGERA 298; McDonald v Deputy Federal Commissioner of Land Tax (NSW) (1915) 20 CLR 231
Publications: James Edelman, ‘Implications’ (2022) 96 Australian Law Journal 800; David P Lloyd and William F Rimmer, Sale of Land Act Victoria (Thomson Reuters, 2nd ed, 2023); Joseph Sabbagh et al, ‘Mapping Misleading Conduct: Challenges in Legislative Design’ (2022) 49(2) University of Western Australia Law Review 144; Patrick Parkinson, The Principles of Equity (Lawbook Co., 1996); Katy Barnett, Damages for Breach of Contract (Sweet & Maxwell, 2nd ed, 2022)
Other Material: Victoria, Parliamentary Debates, Legislative Assembly, 6 February 2014 (Heidi Victoria, Minister for Consumer Affairs); Explanatory Memorandum, Sale of Land Amendment Bill 2014 (Vic).
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiffs | K Mihaly | Wisewould Mahony Lawyers |
| For the Defendants | C Twidale | Franzese & Associates |
TABLE OF CONTENTS
Introduction
Background Facts
Issues
Submissions
The plaintiffs’ submissions
The defendants’ submissions
The witnesses
Age Johannes Wilhelm (“John”) Nota
Stewart Oldmeadow
Sonja Anne Nota
Hayley Plank
Gregory John O’Shea
Analysis
A. Did the Notas breach ss 32C or 32D of the SLA?
Scope of s 32C
Scope of s 32D
Status of the Tree Permit
Reasonably be expected to have knowledge
B. If the Notas did breach ss 32C or 32D of the SLA, did s 32K(4) of the SLA bar the purchaser’s rescission of the Contract of Sale?
Honestly and reasonably
Ought fairly be excused
Substantially in as good a position
C. Did s 12 of the SLA or SC 21.2(b) of the Contract of Sale require disclosure of the Tree Matters?
Section 12
SC 21.2(b)
D. Did the Notas engage in misleading and deceptive conduct or, alternatively, innocent misrepresentation, in keeping silent about the Tree Matters?
Misleading and deceptive conduct
Innocent misrepresentation
E. Did the purchaser enter the contract in reliance on the Notas’ failure to disclose the Tree Matters?
F. Is the purchaser entitled to the deposit pursuant to s 49(2) of the PLA?
G. What compensation is payable by the purchaser and guarantor to the Notas, or the Notas to the purchaser, in the circumstances of the findings as to the above issues?
Primary loss
Resale costs
Legal expenses
Ivanhoe property
Vanguard index fund
H. Should the caveat on the Eaglemont property be removed?
Removal of caveat
Declaratory relief
Conclusion
HER HONOUR:
Introduction
1In this proceeding, the plaintiffs, Mrs Sonja Anne Nota and Mr Age Johannes Wilhelm (“John”) Nota (together, “the Notas” or “the vendors”), allege that the first defendant, Karlovy Group Pty Ltd (“the purchaser”), and the second defendant, Mr Gregory John O’Shea (“the guarantor”), failed to settle a contract for the sale of the property at 65 Castle Street, Eaglemont, in the State of Victoria, more particularly described as Certificate of Title Volume 7032 Folio 333 (“the Eaglemont property”). The vendors claim compensation arising from the purchaser’s failure to complete the sale.
2The purchaser counterclaims for the return of their $400,000.00 deposit and damages in the sum of $471,020.58 for failure to disclose a tree permit, alleging the Notas’ non-compliance with the permit.
3On the first day of trial, the defendants sought leave of the Court to file and serve a further amended counterclaim, relying on a claim for relief against forfeiture pursuant to s 49(2) of the Property Law Act 1958 (Vic) (“the PLA”). On 4 June 2025, leave was granted to the purchaser to amend its counterclaim to include the s 49(2) claim.
4In my judgment, the plaintiffs’ grounds are made out. My reasons in respect of each ground are set out below.
5Accordingly, I order that there is judgment for the plaintiff in the proceeding in the sum of $57,425.94, together with penalty interest (pursuant to s 2 of the Penalty Interest Rates Act 1983 (Vic) (“PIRA”)), from 8 December 2023 to 11 August 2025, in the sum of $9,628.68, totalling $67,054.62, and that the counterclaim ought to be dismissed. I also order that the defendants pay the plaintiffs’ costs of and incidental to the proceeding on the standard basis to be taxed in default of agreement, unless either party has a basis for seeking a different order as to costs. I will invite the parties to prepare draft orders to give effect to these reasons and will determine any issue concerning costs on the papers.
Background Facts
6This proceeding concerns a contract of sale of real estate (“the Contract of Sale”) entered into between the Notas and the purchaser in respect of the Eaglemont property. A deposit of $400,000.00 was paid by the purchaser and released to the Notas, pursuant to s 27 of the Sale of Land Act 1962 (Vic) (“the SLA”).
7Since 10 November 1999, the Notas were the registered proprietors of the Eaglemont property. From 2020, the Notas intended to increase the Eaglemont property’s value by improving its redevelopment potential.
8On 13 January 2020, Mr Graeme Hughes, an arborist at GHTrees, on instructions from Mr Nota, attended the Eaglemont property to prepare a tree survey report.
9On 20 January 2020, Mr Hughes submitted his report (“the GHTrees Report”). Mr Nota then used Mr Hughes’ report to apply for a planning permit to remove six Monterey Cypress trees from the north-eastern corner of the land (“the Cypress trees”) and one located near the east side of the dwelling (being “the Liquidambar”).
10On 7 February 2020, the Notas obtained Planning Permit P55/2020 (“the Tree Permit”) from the Banyule City Council (“the Council”) to remove the Cypress trees. The Tree Permit permitted the Notas to remove the Cypress trees, subject to a condition requiring them to plant two new canopy trees within six months of their removal.
11Clause 1 of the Tree Permit reads:
“Except with the further written consent of the Responsibility Authority, no vegetation (other than that indicated on the endorsed plan, or exempt from planning permission under the provisions of the Banyule Planning Scheme) shall be damaged, removed, destroyed or lopped.”
12Clause 2 of the Tree Permit included the following replanting condition:
“Within six (6) months of the removal of the tree allowed by this permit, replacement planting of two (2) canopy trees from the lists provided below must be undertaken with at least one to be positioned within the front setback. The plantings must be located at least 2 metres from property lines and power lines. These planting must be provided to the satisfaction of the Responsible Authority and thereafter maintained to the satisfaction of the Responsible Authority. The replacement trees must be:
• Selected and established in accordance with AS 2303-2015 Tree Stock for Landscape Use
• Planted as an advanced specimen with a minimum pot-size of 20 centimetres;
• Sourced from a qualified tree grower or tree nursery;”
13Clause 3 of the Tree Permit provides for the time limits as follows:
“In accordance with section 68 of the Planning and Environment Act 1987, this permit will expire if one of the following circumstances applies:
(a) The tree removal is not commenced within six months of the date of this permit;
(b) The tree removal and conditioned replanting is not completed within six months of the date of commencement.
In accordance with section 69 of the Planning and Environment Act 1987, the Responsible Authority may extend the periods referred to if a request is made in writing:
(a) Before the permit expires, or
(b) Within six months afterwards, or
(c) Within 12 months afterwards if the development started lawfully before the permit expired.”
14The Tree Permit was accompanied by a brochure titled “STOP, READ & UNDERSTAND the conditions on the permit”, as well as a copy of a letter to local residents from the Council advising that the Cypress trees had been approved for removal from the Eaglemont property.
15On the same day, the Notas obtained the Tree Permit, being 7 February 2020, Mr Nota asked the Council whether a separate tree removal permit would be granted for the Liquidambar, given the Tree Permit only applied to the removal of the Cypress trees. On 18 February 2020, the Council rejected this request, citing the Liquidambar’s fair health, good structure, and form.
16By late February 2020, the Cypress trees had been removed.
17On 24 August 2020, Mr Nota emailed the Council seeking an extension of time to comply with the replanting condition under clause 2 of the Tree Permit (“the replanting”), pursuant to clause 3, on the basis that replanting had not yet occurred.
18On 8 December 2020, the Notas lodged an application for Planning Permit P1523/2020, which sought approval for a four-dwelling residential development of the Eaglemont property (“the Four Dwelling Application”). The application was accompanied by an arboricultural report prepared by Mr Graeme Lewis, following a site inspection on 20 October 2020, as well as relevant architectural plans. The application did not disclose that the replanting required under the Tree Permit had not yet occurred.
19On 29 July 2021, the Council rejected the Notas’ Four Dwelling Application. A Council report (“the Delegate Report”) of the same date, signed by Mr Chris McInnes (Development Planner) and Ms Hayley Plank (an authorised delegate of the Council), was provided as part of the refusal. The report noted that there were “no live investigation matters or outstanding enforcement history” involving the Eaglemont property and referred to the Tree Permit as a “previous planning application.” Mr Nota was informed of the Council’s refusal on 2 August 2021.
20Concurrently, from on or about 14 April 2021, the Notas began taking steps to sell the Eaglemont property. Initially, the Notas engaged Nelson Alexander Real Estate (“Nelson Alexander”) to act as their real estate agent – however, the Eaglemont property was not sold under that sales authority. On 31 May 2021, Ray White informed the Notas of an initial offer made by a prospective purchaser – who was, in fact, the first defendant – although the Notas were not aware of the purchaser’s identity at that time. Again, the Eaglemont property was not sold by Ray White at this stage.
21By mid-August 2021, negotiations for the sale of the Eaglemont property were underway. This included negotiations between Nelson Alexander and the guarantor, as well as the solicitors acting for the first defendant and those acting for the plaintiffs.
22The series of negotiations led to the sale of the Eaglemont property from the Notas to the purchaser, Karlovy Group Pty Ltd.
23The following events occurred in connection with the execution of the Contract of Sale and associated documents:
(a) On 9 September 2021, the Notas executed a Vendor Statement and a notice under s 27 of the SLA seeking release of the purchaser’s deposit;
(b) On 14 September 2021:
(i)the first defendant executed the Contract of Sale;
(ii)the second defendant executed a deed of guarantee; and
(iii)the second defendant, on behalf of the first defendant, executed a partly signed Vendor Statement and a partly signed notice under s 27 of the SLA seeking release of the deposit;
(c) On 15 September 2021, the Contract of Sale was formally entered into between the Notas and the purchaser. The Contract of Sale provided for:
(i)a purchase price of $4,000,000.00;
(ii)payment of a deposit in the amount of $400,000.00;
(iii)a settlement date of 15 September 2023; and
(iv)a guarantee by the second defendant.
24The purchaser paid the deposit in accordance with the Contract of Sale. As of 15 September 2021, the replanting required under the Tree Permit had not occurred. On 17 September 2021, the purchaser lodged a caveat on the title to the Eaglemont property.
25The Vendor Statement the Notas provided prior to the formation of the Contract of Sale, pursuant to s 32 of the SLA, did not disclose the Tree Permit or the failure to replant pursuant to the Tree Permit (“the Tree Matters”).
26The purchaser soon after appealed the Council’s refusal of the Four Dwelling Application to the Victorian Civil and Administrative Tribunal (“VCAT”). In addition to what the Notas originally applied for, the purchaser lodged a further application for Planning Permit P608/2022, which sought approval for a fourteen-dwelling residential development of the Eaglemont property (“the Fourteen Dwelling Application”).
27On 6 April 2022, VCAT ruled that the purchaser’s appeal was successful, and a permit was issued for the Four Dwelling Application (becoming the “Four Dwelling Permit”).
28On 29 July 2022, the Council rejected the purchaser’s Fourteen Dwelling Application. Again, a contemporaneous report was provided from the Council as part of the refusal. The purchaser lodged an application at VCAT appealing the Council’s refusal of the Fourteen Dwelling Application. However, on 16 March 2023, VCAT refused the application for the relevant permit.
29By letter dated 14 September 2023, the purchaser purported to rescind the Contract of Sale pursuant to s 32K of the SLA, alleging a breach of s 32C of the SLA on the basis that the Notas had failed to disclose the Tree Permit.
30By letter dated 15 September 2023, the Notas rejected the purchaser’s purported rescission and instead asserted that the purchaser had clearly repudiated the Contract of Sale, which they elected to accept.
31The Notas had entered into a Contract of Sale on 9 June 2023 to purchase Unit 1, 27–29 Kenilworth Parade, Ivanhoe, in the State of Victoria (“the Ivanhoe property”). They paid a deposit of $151,000.00 towards the purchase.
32Settlement of the Ivanhoe property did not proceed as the Notas were “anticipating the funds from the settlement of their Eaglemont property to complete their purchase”. As a result of the failed settlement, the Notas were required to pay a further amount of $14,876.87 in penalty interest to the vendors of the Ivanhoe property.
33On 3 and 4 October 2023, the plaintiffs contacted the Council seeking clarification as to the status of the Tree Permit, in light of the issuance of the Four Dwelling Permit – and, in particular, whether the former had been “superseded” the latter.
34On 5 October 2023, the Council responded by a letter, confirming that the Tree Permit was “expired … [and had] no ongoing effect in relation to this land”, as “the [Tree Permit] expired prior to the required replanting being undertaken.” The letter further noted that compliance with the “endorsed plans under [the Four Dwelling Permit] will be required should this permit be acted on.”
Issues
35The issues for the Court to determine are as follows:
(a) Did the Notas breach ss 32C or 32D of the SLA?;
(b) If the Notas did breach ss 32C or 32D of the SLA, did s 32K(4) of the SLA bar the purchaser’s rescission of the Contract of Sale?;
(c) Did s 12 of the SLA or Special Condition 21.2(b) (“SC”) of the Contract of Sale require disclosure of the Tree Matters?;
(d) Did the Notas engage in misleading and deceptive conduct or, alternatively, innocent misrepresentation, in keeping silent about the Tree Matters?;
(e) Did the purchaser enter the contract in reliance on the Notas’ failure to disclose the Tree Matters?;
(f) Is the purchaser entitled to the deposit pursuant to s 49(2) of the PLA?; and
(g) What compensation is payable by the purchaser and guarantor to the Notas, or the Notas to the purchaser, in the circumstances of the findings as to the above issues?
Submissions
The plaintiffs’ submissions
36The Notas submit that they have a simple case. They are the vendors of the Eaglemont property pursuant to the Contract of Sale, and a day before settlement was due, the purchaser sent a letter that purported to rescind the contract. The Notas contend that the purchaser did not have the power to rescind the contract and thereby repudiated the contract. The Notas’ legal representative wrote the following day on their behalf, advising that they had accepted the repudiation and informing the purchaser that the deposit was forfeited and that the Notas were suing for compensation – that is, claiming that they suffered loss beyond the deposit amount of $400,000.00.
37The Notas claim that the case then turns on the purchaser’s complaints about the formation of the Contract of Sale, and in particular, the “tree matters”. The “tree matters”, which are the subject of the Tree Permit, comprise of two parts, according to the vendors: first, permission granted to the Notas to remove six Cypress trees in the north-eastern corner of the Eaglemont property, and second, the obligation to plant two new canopy trees within six months of such removal. It is common ground between the parties that the six Cypress trees were removed and that no replanting occurred prior to the formation of the contract.
38The Notas assert that it is not in dispute that if the purchaser’s claims of misleading and deceptive conduct, innocent misrepresentation, and breach of the SLA fail, then the vendors’ claim must succeed – namely, that the purchaser repudiated the Contract of Sale. Further, it is not in dispute between the parties that if the purchaser is liable to the Notas, then the guarantor is personally liable under the standard guarantee that is included for directors in clause 3 of the contract.
39The Notas' central response to the purchaser’s complaints is that the Tree Permit had expired. The Notas submit that the fact that the replanting had not occurred did not change the fact that the Tree Permit had expired. Therefore, on the Notas’ case, there was no breach of the SLA and, therefore, there was no duty of disclosure that could have given rise to misrepresentation by silence.
40In relation to s 32D of the SLA, it was submitted that not only did the Tree Matters need to affect the land, but that the Notas needed to have reasonable knowledge of it. This is an agreed fact between the parties. The Notas submit that, given they engaged solicitors to prepare the Vendor Statement and subsequently answered requests made of them, they acted reasonably, as people who are honest do not know when they are doing the wrong thing.
41In relation to the defence in s 32K(4) of the SLA, the kind of honesty under consideration is not akin to generalised honesty or about the trees on the Eaglemont property, generally. Instead, it is honesty about the contravention that has been proven in the case – namely, regarding any breach of ss 32C and/or 32D of the SLA. The question, then, is whether the contravention was the result of conduct that was both honest and reasonable on the part of the vendors.
42The Notas say that the defendants’ submissions conflate their general conduct with their specific conduct in relation to the Vendor Statement when addressing the question of honesty and reasonableness.
43On the question of the financial position of the purchaser, the Notas submit that the defendants’ submissions are simply wrong. Instead, the Notas argue that while financial disparity may indicate the purchaser is not substantially in as good a position, the phrase carries a broader meaning. The Notas rely on the case of Fifty-Eighth Highwire v Cohen & Anor, which confirms that an assessment of whether the purchaser is in substantially as good a position is not limited to financial considerations alone, but may be demonstrated by other methods.[1]
[1] [1996] 2 VR 64 at 77 (“Fifty-Eighth Highwire”).
44The plaintiffs submit that s 12 of the SLA does not create legal obligations on the vendor that can be relied upon by the purchaser. It merely imposes a penalty for certain conduct. This is in contrast with other provisions of the SLA, which typically create clear positive obligations on the vendor. The Notas referred to s 9AB of the SLA, which creates an obligation on the vendor to disclose in an off-the-plan contract, details of any works affecting the natural surface level of the land in the lot to which the contract relates. The Notas relied upon several sections in the SLA, including s 9AB, to inform their position – that s 12 does not, as a matter of statutory interpretation, create a positive obligation on parties.
45The Notas further submit that s 12 clearly creates an offence for knowing concealment. However, they also stated that it is possible to not disclose something whilst unknowingly concealing it. The Notas submit that there is a gap here.
46On the reliability of Mr O’Shea, the Notas refer to the recent decision of Croft J in Ma v Xu.[2] His Honour observes that “significant weight” should be placed on “contemporaneous documents” and what was done at the time, rather than after the event, when determining the probability that an event may or may not have occurred. The Notas state that Mr O’Shea’s evidence is consistent with the criteria set out in Xu,[3] and, therefore, should be considered in light of Croft J’s judgment as well as Webb v GetSwift Limited (No 5).[4] The Notas direct the Court’s focus to looking at what was done at the time, rather than what might have been said after the fact.
[2] [2025] VSC 361 at [169] (“Xu”).
[3] Xu at [172].
[4] [2019] FCA 1533 (“GetSwift”).
47The Notas further state that Mr O’Shea cannot be considered a reliable witness. They refer to the Further and Better Particulars of the Defendants dated 20 May 2024, setting out that the purchaser became “aware of the existence” of the Tree Permit on 19 August 2023 as a result of an onsite meeting for the purposes of soil testing. This sentiment was repeated by Mr O’Shea during examination-in-chief, who stated that he first learned about the Tree Permit in as early September 2023. However, it is submitted that Mr O’Shea received a copy of the Delegate Report on 29 August 2021 and he forwarded it on. He also admitted to being aware of the existence of the Tree Permit prior to signing the Contract of Sale. This goes beyond an error in the particulars.
48Such awareness of the existence of Tree Permit, the plaintiffs submit, is not trifling, as it goes to the heart of the dispute. False particulars and evidence-in-chief on such a critical matter counts substantially against Mr O’Shea’s evidence.
49Further, the plaintiffs submit that Mr O’Shea failed to make proper discovery of a number of relevant and potentially critical documents. This includes documents of Mr O’Shea’s initial assessments of the Eaglemont property including sketches and photos, financial feasibility studies, and other relevant supporting documents. It was not an adequate answer to say that the undertaking of a feasibility study is an agreed fact.
50There was also substantial argument about the categories of documents in relation to the financial position of the purchaser. The Notas say it ought to be rejected that Mr O’Shea did not hear the plaintiffs’ counsel’s repeated request for documents about the sale of 7 Redan Street, St Kilda (“the St Kilda property”) – the second defendant’s residential property. Such a failure to discover such documents, over the course of the proceeding, is of substantial concern to the plaintiffs. Further, the plaintiffs cite three separate instances where the need for discovery of financial documents were raised.
51It is submitted that Mr O’Shea’s willingness to lie to VCAT to avoid small filing fees indicates that there may be a similar willingness to lie to defeat a claim worth hundreds and thousands of dollars. Mr O’Shea was characterised by the plaintiffs as a person willing to make false statements and conceal critical documents for the purposes of obtaining a small monetary benefit.
52The plaintiffs addressed the following criticisms of the purchaser, as follows:
(a) When targeting the Notas’ failure to discover their attempts to raise finances for the Ivanhoe property, the defendants misconceived who bears the burden of proof in relation to this type of litigation. It is the plaintiffs who must prove breach of contract and, if that is successfully proven, the plaintiffs must prove causation. It is contended that, as a result of the Notas’ inability to receive the balance of the purchase price from the defendants, they were unable to settle the Ivanhoe property. Such detail arose from the conduct of the trial –however, paragraph 12 of the Statement of Claim did set out the loss of deposit, given the Notas could not put the proceeds from the Eaglemont property to use. It was, as argued by the plaintiffs, open to the defendants to plead a failure to mitigate and to call for discovery regarding the Notas’ alternate sources of money. The plaintiffs simply needed to prove that the inability to settle the Ivanhoe property flowed as a matter of causation.
(b) The 24 August 2020 email evidence was not confusing. Mr Nota stated that he believed what he was writing at the time was correct, and that the tree was not just “sick”, but that it was dead. Mr Nota provided an explanation as to the incorrect end date provided, as he did not turn his mind to the different points in time. Mr Nota’s evidence reflected what he understood at that point in time.
(c) The Notas deny that the plaintiffs went “expert shopping”. Mr Nota had a 2018 report produced by Stem Arboriculture (“the Stem Report”), which stated that the Cypress trees were in good health. By 2020, Mr Nota had a secondary report that stated they were in poor health. As a result, the allegation of “expert shopping” was not put to Mr Nota during cross-examination. In particular, Mr Nota was not asked what his instructions were in relation to the two reports.
53It is critical to the plaintiffs’ case that the expiry of the Tree Permit, as outlined in clause 3(b), must be given its ordinary meaning. It is clear within this meaning that the condition has expired. The Notas argue that the obligation to replant has also expired and that the purchaser does not refer to any authorities that contend that there remains an ongoing obligation to replant.
54It is, therefore, for the Court to determine how to interpret the Tree Permit – not to grapple with the purpose of the Tree Permit. It is submitted that the Court will not set a dangerous precedent if it is decided that there is no ongoing obligation. The consequences lie with the Council to draft better terms and conditions in the future.
55The Notas maintain that clause 2 of the Tree Permit does not create an ongoing obligation. Clause 2 instead creates a fixed obligation to replant, and then an ongoing obligation to maintain replanted trees. If replanting does not occur, while the Notas may be in breach of the Tree Permit, they are not bound by an ongoing obligation that runs with the land. The clause is conditional upon replanting occurring within that six-month period and does not state that this obligation arises until the replanting occurs.
56The plaintiffs assert that if an ongoing obligation existed, an expiry clause would be redundant. Instead, clause 3(b) is only inoperative when the removal and replanting occurs within the six-month period. If the permit holders complete both steps, the Tree Permit does not expire and there remains an ongoing obligation to maintain. If no replanting occurs, however, the Tree Permit expires.
57The plaintiffs note that there has been no judicial consideration as to whether the Tree Permit is a restriction to the land within the meaning of s 32C of the SLA. The plaintiffs submit that whilst Messrs Lloyd and Rimmer, as learned authors, are correct in observing that the Tree Permit is covered by s 32D of the SLA, once the Tree Permit has expired, it no longer affects the land.[5]
[5] David P Lloyd and William F Rimmer, Sale of Land Act Victoria (Thomson Reuters, 2nd ed, 2023) at [S.32D.140] (“Lloyd and Rimmer”).
58In relation to the defence under s 32K(4) of the SLA and the respective question of honesty, the Notas submit that they provided believable answers. From February 2020 to September 2021 (the time of Mr Nota signing the Vendor Statement), Mr Nota formed the view that the Tree Permit was something that was no longer required to be disclosed. Mr Nota was aware of the obligation to replant when he got the Tree Permit, but the pertinent question is his state of mind in September 2021. The plaintiffs assert that, without real challenge, Mr Nota explained his change in state of mind until September 2021. He did not read the Delegate Report in detail, when he received it in July 2021. However, he gave evidence that, by September 2021, when he signed the Vendor Statement, he took such matters in account.
59The Notas submit that they were not irreverent in relation to the Tree Matters. They further submit that general examples – including their failure to provide the Tree Permit to their solicitor, their failure to send the email requesting an extension of time from the Council to multiple email addresses, their failure to follow up with the Council regarding the extension, removal of the Flame tree and the Giant Honey Myrtle without a permit – do not go to the question of honesty in their preparation of the Vendor Statement. The Notas say that, in any event, there are answers to each of these criticisms.
60Such answers include that:
(a) The notices and handouts from the Council do not determine whether the Tree Permit has been complied with, but merely set out the Council’s position;
(b) Such material does not state that a failure to replant creates an ongoing obligation to do so;
(c) Ms Plank stated, during examination-in-chief, that any email sent to the generalised email address would have been assigned to Mr Sam Munro as the relevant Council officer;
(d) The Notas were entitled to rely on the silence of the Council in relation to their extension request;
(e) Mr Nota was of the view that he could remove the Giant Honey Myrtle, considering it to be an environmental weed given the height of the tree;
(f) The Notas did not give instructions regarding the removal of the Flame tree and did not see it being removed, and were, as such, disappointed; and
(g) The Notas included the material from the Council regarding the Tree Permit in the updated contract of sale as they were concerned about further litigation of this sort.
61The Notas claim that they ought to be reasonably excused because Mr O’Shea was opportunistic and made a bet on the Eaglemont property, like has previously occurred when he purchased 35 Mount Street, Eaglemont (“the Mount Street property”). When the application for the fourteen-dwelling subdivision failed, Mr O’Shea sought to get out of the Eaglemont property because he realised he made the wrong bet – rather than because of the Tree Matters.
62On the question of whether Mr O’Shea, and by extension Karlovy Group Pty Ltd, were in substantially good as position as they would have been had the Vendor Statement disclosed the Tree Permit, the plaintiffs contrast the Four Dwelling Application with what VCAT granted. Such a comparison demonstrates that there was no ongoing obligation to abide by the Council’s requirements under the Tree Permit, including to undertake the necessary replanting. There is no foundation for Mr O’Shea to argue that, in consideration of the radical changes in landscaping, he was required to replant.
63It is contended that any development would supersede the Tree Permit. Further, even if Mr O’Shea did not develop the Eaglemont property, the plaintiffs suggest it was already a treed property and, therefore, two extra trees did not matter.
64The plaintiffs accept that, when Mr O’Shea purchased the Eaglemont property, he intended to pursue a fourteen or fifteen-dwelling development. What is disputed is whether that was the only type of development under consideration by Mr O’Shea. The Notas argue that Mr O’Shea held other considerations, which may have been properly ventilated had proper discovery occurred.
65It was accepted by the Notas that reliance is not relevant to whether there is a breach of ss 32C or 32D, but relevant to s 32K(4). Critically, it is submitted that Mr O’Shea was aware of the Tree Permit conceptually and its corresponding replanting obligation, admitting that Tree Permits can be a good or a bad thing. Such awareness arose when Mr O’Shea received an email from Nelson Alexander, prior to signing the Contract of Sale, on 29 August 2021. Mr O’Shea failed to make enquiries of the Tree Permit – despite stating that if something matters a lot to him, he would make enquiries. As no enquiries were made, it follows that the Tree Permits did not matter to him.
66The Notas rely on the authority of Harris v K7@Surry Hills Pty Ltd and accept that reliance is a question of fact.[6] In particular, the fact that the Contract of Sale indicates there is no reliance is relevant to the assessment of reliance because a person does not typically sign something that otherwise states that the purchaser was not relying on any pre-contractual representations made by the vendor or their agents. Mr O’Shea recalled reading SC 3 and agreed that he was not relying on representations made by the vendor or their agents. Under cross-examination, he admitted that he did not rely on any representations when he signed the Contract of Sale.
[6] [2019] VSC 551 at 98(a) (“K7@Surry Hills”).
67On the issue of relief against forfeiture and the purchaser’s ability to settle the loan, the Notas rely on Mr Matthew Bush’s email dated 25 May 2023, referring to “Construction funding” offered to the purchaser by Millbrook Funds Pty Ltd (“Millbrook”), noting what was sought was a construction loan for the development of the Eaglemont property with progressive draw downs. However, if the development was not going ahead, then the construction-based loan would not proceed. The loan was conditional on the Eaglemont property being worth $4.5m, when in fact it was actually only worth $3.25m (as suggested by the Notas), and was also conditional on the St Kilda property being worth $7.5m, when in fact it failed to receive a tender when advertised for $6.9m to $7.5m – ultimately selling for only $6.5m. There was also no evidence that any other loan, even a loan for a lesser amount based on lesser security, was a loan that would be offered.
68In relation to quantification, the Notas submit that the Valuer-General valuation dated 1 January 2024 is near enough as can be to the relevant date. Whilst the Notas agree that generally all valuations are guesses, this cannot be a criticism. Instead, the Court must be satisfied about the value of the Eaglemont property, taking into account all the evidence before it.
69The Notas contend that the decision of Upside Property Group Ltd v Tekin is not a definite statement of law that unaccepted offers are inadmissible for the purposes of determining the value of a property.[7] Instead, Upside generally discussed approaches to unaccepted offers and stated such considerations occur on a case-by-case basis. Further, Spiegelman J’s decision in MMAL Rentals Pty Ltd v Bruning placed significant weight on unaccepted offers, treating them as highly probative – an approach inconsistent with Upside.[8]
[7] [2016] NSWSC 1260 (“Upside”).
[8] (2004) 63 NSWLR 167 at [97] (“MMAL Rentals”).
70The Notas argue that the case of Secretary to the Department of Economic Development, Jobs, Transport & Resources v CaradiPty Ltd distinguished between unaccepted offers made on the subject land of which the value is sought, and those made on other properties.[9] Justice Quigley rejected the relevance of unaccepted offers made on properties that were not the subject land.
[9] [2018] VSC 696 at [113] per Quigley J.
71Critically, it is submitted by the Notas that Upside involved a purchaser suing for compensation on the basis that a vendor defaulted and the land was worth more than the contract price. Upside stands for the difficulty in relying on unaccepted offers in “creating the floor” for market value. By contrast, in the present case, the Notas rely on Upside to establish a “ceiling”. The offer in the present case, made orally by “Jagvir G”, is closer to an invitation to treat and not an offer capable of acceptance. It was more likely than not that the sale of the Eaglemont property would not go through and, therefore, the Eaglemont property could not be said to have been worth as much as Jagvir G’s offer.
72In Cambridgev Anastasopoulos,[10] the Court accepted that if an item is offered for sale at a particular price and is not sold at that price, then it cannot be said to be worth that price. That principle, the Court held, reflects the definition of “market value”. The Notas submit that, by analogy, given their evidence that they advertised the Eaglemont property for sale at $3.4m and above, and no offer was received at that level, then the property cannot be said to be worth more than $3.4m. It does not mean that the property has no value, however.
[10] [2012] NSWCA 405.
73Finally, it was submitted that the evidence of Mr Stewart Oldmeadow regarding the undervalue of $3.25m was a notation of the agent, and not reflective of the state of mind of any prospective purchaser.
The defendants’ submissions
74The defendants suggest that the failure to disclose the Tree Matters was a breach of ss 32C and 32D of the SLA and permitted the purchaser to rescind the Contract of Sale pursuant to s 32K(2) of the SLA. The defendants further suggest that this failure constituted innocent misrepresentation by silence, permitting rescission, and/or misleading and deceptive conduct in breach of s 18 of the Australian Consumer Law (“the ACL”) and a breach of SC 21.2(b) of the Contract of Sale, allowing for compensation.
75The Eaglemont property is subject to a vegetation overlay and is restrictive to the owners of the land to preserve vegetation. Relevantly, the Stem Report dated 1 October 2018, prepared by consultant arborist Mr Lewis, included tree number “6” which is the Giant Honey Myrtle. Planning permission is required to lop, remove, or destroy trees numbered “6” and in Group 9. The Stem Report recorded the retention value of the Cypress trees (referred to within the category of Group 9) as “high”. The Flame tree (referred to as tree number “10”) was identified as having low retention value but noted in the first Stem Report as requiring a permit for removal. The defendants submit that this state of affairs, as recognised in the Stem Report, posed a problem for the Notas as it did not allow them to complete the development.
76Subsequently, the Notas obtained another tree survey report from Mr Hughes, the GHTrees Report, seeking to remove the Cypress trees. In the GHTrees Report, the Cypress trees were marked as having a low retention value. The defendants submit that such a change remained unexplained by the Notas.
77The defendants submit that, after receipt of the GHTrees Report, the Notas promptly removed the Cypress trees and the Flame tree. It is contended that it is not an accident the Flame tree was removed. Given the position of the Flame tree on the Eaglemont property, it had a direct impact on the proposed development. The defendants rely upon the evidence given by Mrs Nota regarding the removal of the Flame tree.
78The defendants submit that there was a decision made by the Notas to remove the Flame tree at the same time of the Cypress trees, even though they did not have the Council’s permission to remove the Flame tree contemporaneously. The defendants state that the term “environmental weed” (from which, it is argued, was first mentioned in Stem Report) was raised subsequently and was referred to in Mr Nota’s email to the Council dated 24 August 2020, seeking an extension of time to comply with the Tree Permit.
79The defendants contend that it is to be inferred that Mr Nota had received the Stem Report prior to writing the email, given the similarity in language used. Further, Mr Nota admitted that he did not inform the Council of the removal of the Flame tree. If the Court is to accept that Mr Nota referred to the Stem Report during the drafting of his email requesting an extension, it follows that the Court should accept that Mr Nota was aware that he could not remove the Giant Honey Myrtle as it needed a permit.
80The Tree Permit gave the Notas the right to remove the Cypress trees. The defendants contends that if the Notas’ interpretation of the Tree Permit is right, then it means that clause 2 (specifically the wording of “thereafter maintain”) has no work to do. The defendants assert that it is an affront to common sense and policy reasons if one takes the benefit of the Tree Permit by removing the trees yet does not follow the corresponding conditions of compliance because the Tree Permit has expired. The defendants urge the Court to reject such a proposition, as it would be a dangerous precedent to allow the expiry of the Tree Permit to excuse non-compliance.
81The defendants rely on the evidence of Council employee, Ms Hayley Plank, that it is a standard clause for tree permits to include that the replanted trees must be “maintained thereafter”. If trees are removed, then they must be replaced. The defendants rely on the file note drafted by the Notas’ solicitor that states that the Tree Permit is going to “remain on title forever because of an ongoing obligation to maintain the trees planted”.
82It was further argued that the letter attached to the Tree Permit provided that removal was granted “on the condition that the two large canopy trees be replanted in the front setback”. The related “STOP, READ & UNDERSTAND the conditions on the permit” brochure noted the existence of an audit and inspection program implemented by the Council and states that, twice a year, officers inspect properties where permits have been issued over the previous 12 months for compliance. This was identified as the “risk” that Mr Nota expressly identified – that is, an ongoing risk of an audit enforcing the obligation to replant, even after the Contract of Sale and Vendor Statement had been signed.
83The defendants state that the Delegate Report, provided as part of the Council’s refusal of the Four Dwelling Application, notes that a previous planning application, P714/2017, had “lapsed” on 29 September 2017, but did not record that the Tree Permit had expired.
84On 18 February 2020, the Council informed Mr Nota that there was no active Tree Permit to remove the Liquidambar. The defendants say this is relevant, as it goes to whether discretion should be exercised pursuant to s 32K(4) of the SLA. The defendants urge the Court to take into account a sequence of events when assessing the question of honesty and reasonableness. In particular, Mr Nota’s evidence is labelled as confusing and unclear around the timing of the removal of the Cypress trees. The defendants assert that Mr Nota’s request for an extension of time (as per the email dated 24 August 2020) is inconsistent with the removal date being months prior, on 21 February 2020.
85Further, Mr Nota indicates that he removed the Giant Honey Myrtle pending an arborist report, and he does not mention a permit for its removal.
86Such an unclear recollection, as submitted by the defendants, should be demonstrative of the fact that the Court cannot be satisfied of Mr Nota’s recollection of this period of time. Whilst the defendants may not infer that Mr Nota’s recall is dishonest, it does raise doubt in relation to Mr Nota’s memory of events that occurred five years ago. In the same correspondence dated 24 August 2020, Mr Nota indicates removal of the Giant Honey Myrtle (pending an arborist report) and does not mention needing a permit for its removal.
87The defendants also rely on the emails of 10 September 2021 from the defendants’ solicitor to the Notas’ conveyancer, inferring that the Notas knew Mr O’Shea could end up with the land “as is” without permits. The defendants assert that the Notas made a forensic decision at that stage not to disclose the Tree Permit or the particulars of its breach. The defendants further contend that Mr Nota’s oral evidence supports this proposition, where he stated he elected not to tell anyone that that replanting had not occurred. At the time of signing the Vendor Statement, Mr Nota acknowledged that there was a risk that he could be reprimanded or audited in relation to the Tree Permit.
88The defendants rely on the fact that the Tree Permit was included in the contract for the subsequent sale of the Eaglemont property. The defendants submit that the Notas should have included the Tree Permit in the Vendor Statement, referencing the Notas’ solicitor file note stating “the obligation to maintain was on title forever”.
89The defendants claim that the alleged loss of the shortfall of $750,000.00 (being the shortfall between the contract price of $4m and $3.25m) has not been made out by the Notas because they did not file an expert property valuation report. The defendants allege that instead of providing such reports, the Court is being asked to guess what the value of the land is.
90The defendants argue that the Court cannot rely on oral offers made afterwards to substantiate a property valuation. To support this proposition, the defendants rely on the case of Upside.[11] In his judgment, Darke J considers the High Court’s position in McDonald v Deputy Federal Commissioner of Land Tax (NSW)[12] as analysed by Wilcox J in Goold & Rootsey v Commonwealth of Australia, who stated:
“Of course, before placing reliance upon a mere offer, a court must consider carefully the question of its genuineness. The offer might be a sham, designed to prop up an inflated compensation claim or to reduce rates and taxes; in either case without any cost to the offerer. It might be an attempt to manipulate the market for some other ulterior purpose, perhaps a purpose extraneous to the litigation. If the offer was genuine when made, it might not have led to a concluded contract, even if resumption had not intervened. The offer might have been withdrawn. The purchaser might have failed to complete the transaction. Because of matters such as these, even a genuine offer cannot be regarded as direct evidence of value. But it seems to me that, once the court is satisfied about genuineness, an offer by an arm's length party to purchase the land under valuation is something that the judicial valuer ought to take into account in considering the possibility of a sale at a price different from that indicated by conventional evidence, such as an analysis of comparable sales, or of a hypothetical development, or a calculation of the capitalised value of the rental return. How much weight should be given to such an offer is a question to be determined by reference to the facts of the particular case. In some cases, the appropriate weight may be minimal; in others considerable.”[13]
[11]Upside at [86]-[98] and [117].
[12] (1915) 20 CLR 231.
[13] (1993) 114 ALR 135 at [30].
91The purchaser refers to the notes of real estate agent, Mr Oldmeadow, that observed the oral offer of $3.25m from prospective buyer, Jagvir G was less than market value and labelled him as an “under-bidder”. The defendants state the exceptions set out in Upside do not apply in the present case. Even if the defendants are wrong on that submission, they say that Mr Oldmeadow indicated that he was uncertain about the offer, as Jagvir G would not put it in writing. Such a perspective is consistent with Mrs Nota’s evidence, stating that she would not accept the offer even if it was “firmed”. It is asserted that the Notas must prove the value of the Eaglemont property as at 15 September 2023, being the date of the alleged repudiation.
92The defendants also submit that the Council’s Annual Rates and Valuation Notice issued on 27 July 2024, as well as the Land Information Certificate issued on 10 October 2023, are not sufficient as evidence of value of the Eaglemont property. All documents around this period of time give differing and contrary valuations. Mr Oldmeadow’s estimate of the value of the Eaglemont property being between $3.6m and $3.8m is evidence of this.
93The defendants claim they only knew that Jagvir G was the alleged subsequent purchaser when Mr Oldmeadow gave his evidence, stating that they were ambushed at trial.
94The defendants continue to rely on Upside to say that offers are not admissible as direct evidence of value as follows:
“I have come to the conclusion that the use of the offers in that manner would offend the general rule recognised in Cordelia Holdings Pty Limited v Newkey Investments Pty Limited (supra) and Auxil Pty Limited v Terranova (supra) that offers are not admissible as direct evidence of value.”[14]
[14]Upside at [117].
95The defendants were critical of the Notas’ opening submissions, stating that Mr O’Shea’s primary objective, being the fourteen-dwelling development, was not in dispute. Generally, the defendants argue the Notas’ case has been inconsistent throughout – especially noting that the defendants did have the four-dwelling development as a fallback position. They claim that the purchaser was only interested in the fourteen-dwelling development. The purchaser says that whether it is a “floor” or “ceiling”, Upside principles nonetheless apply.
96The defendants submit that Mr O’Shea had a copy of the Tree Permit in August 2023 when he was dealing with Cassisi Architects (“Cassisi”). The defendants say that Mr Nota’s evidence was confused about the delegate’s decision. On one hand, Mr Nota relies on its contents for not disclosing the Tree Permit, but other the other hand, he claimed he did not read the Delegate Report. The purchaser says both statements cannot be true.
97The defendants submit that there was substantial evidence that the purchasers could settle on the Contract of Sale. The defendants make reference to Lloyd and Rimmer:
“Conditions in a planning permit regulating the ongoing use of land (as opposed to its subdivision or development) fall within the category of ‘similar restriction’, as they regulate the use of the land in a similar way to a restrictive covenant. In any case, a planning permit meets the description of ‘approved proposal’ for the purposes of s32D(a).”[15]
[15] Lloyd and Rimmer at [S.32C.110].
98Whilst the defendants accept that Messrs Lloyd and Rimmer’s opinion is not judicial consideration, they note that authorities cited refer to their text.
99The defendants argued that it is undisputed that the Tree Permit falls within s 32D of the SLA.
100In requesting that the Court exercise its discretion under s 49(2) of the SLA, the defendants cite Nicholas Arthur Stokes v Molly Harris Toyne favourably, stating the facts are practically identical, in material aspects, to the current matter.[16] Here, the Notas have the benefit of the Four Dwelling Permit that they sought to have extended. It would, therefore, be unjust and unfair for the Notas to retain both the value of the Four Dwelling Permit and the deposit. The defendants have suffered substantial losses, specifically incurred during the VCAT application and permit process. Ultimately, the defendants wish to be compensated for the losses they incurred, being the loss of the deposit and the value of the permits.
[16] [2019] NSWSC 274 at [23], [146] and [165].
101In considering all the circumstances established by the defendants, they maintain that the Notas breached ss 32C and 32D of the SLA, and that the defendants are entitled (under s 32K) to rescind the Contract of Sale.
102The defendants admit that the Notas have lost their deposit on the Ivanhoe property and incurred interest. However, the defendants deny the Notas are entitled to relief. In regard to the defendants’ failure to plead mitigation, it is argued that details relating the family money, loans, and sources of finance came out in evidence at trial. The defendants cannot be criticised that such details were not raised in their defence. Further, there is no discovery by the Notas of applications for finance for the balance of the Ivanhoe property purchase price.
103The defendants submits that Mr Nota was an honest witness, but his evidence was tainted by time. The defendants contend that Mr Nota’s reliability as a witness is questionable, given his confused evidence about the email dated 28 August 2020 and general chronology of events, as well as his memory regarding a subsequent conversation with Mr O’Shea.
104Regarding the claim of misleading and deceptive conduct, the fact that the Contract of Sale may itself include a clause stating that there have been no prior representations made by the Notas does not, in and of itself, defeat the claim. In relation to the allegation of innocent misrepresentation, the defendants contend there has been no claim there has been an ability to settle the contract as a defence. Such a defence is a relevant consideration, but not conclusive for forfeiture and s 32K(4) of the SLA.
105The defendants’ interpretation of s 126 of the PLA is that the breach of the Tree Permit runs with the land – and in such circumstances, it would need to be disclosed.
106The defendants submit that s 32C of the SLA requires particulars of any failure to comply with the terms of an easement, covenant, or restriction. As noted, Messrs Lloyd and Rimmer have opined that s 32C would include a planning permit. If such an opinion is correct, then according to the defendants, a failure to disclose the Tree Permit enlivens a right to rescind. Whilst to establish a breach of s 32C requires there to have been a failure to comply with the particulars required by the provision, s 32D additionally requires that the vendor could reasonably be expected to have knowledge of the Tree Permit.
107Finally, the defendants submit that until the amended defence allowed for the inclusion of relief against forfeiture claim, discovery of the purchaser’s financials was not required, and no criticism ought to be made.
The witnesses
Age Johannes Wilhelm (“John”) Nota
108Mr Nota has been living at the Eaglemont property for approximately 25 years, since purchasing it in 1999. Between approximately 1976 to 1999, he owned two properties in Eaglemont and Eltham North. He also bought a block of land in Ventnor on Phillip Island, where he and his wife, Mrs Nota, have built a house (“the Ventnor property”).
109Mr Nota generally presented as a careful, considered witness who was ready to make appropriate concessions. There certainly were gaps in his recollection and his evidence. However, his memory lapses were generally explicable by the extensive effluxion of time involved with this case.
110Mr Nota said he applied for the Tree Permit. He applied for safety reasons, as large limbs of the Cypress trees were falling onto the Eaglemont property and the right of way. He also thought removal of the trees would increase the space available for development.
111In December 2018, Mr Nota commissioned a three-dwelling design plan from his architect, Cassisi. Mr Nota subsequently approached the Council to seek approval for the removal of trees to accommodate a four-dwelling development.
112In November 2020, the Notas had plans to apply for a four-dwelling development. Following the completion of the Stem Report, Mr Nota had a discussion with his architect about it, among other things. The Stem Report contained conclusions that planning permission was required to lop, remove or destroy trees within “Group 9” and that the Cypress trees were of high retention value.
113Mr Nota did not rely on the Stem Report in applying for a planning permit. Instead, Mr Hughes provided the Notas with another arborist report dated 20 January 2020, the GHTrees Report, which classified the Cypress trees as having low retention value. Mr Nota said he probably gave instructions that he wanted to remove the six Cypress trees and adding value to the Eaglemont property was one of the reasons he sought the removal of those trees.
114Mr Nota said that he read the Tree Permit in full when he received it. He understood that the conditions of the permit required him to remove the six trees and replace them with two other trees within six months. Mr Nota said that the Council could reprimand him, require him to replant, and fine him if he did not comply. Within one month of 21 February 2020, Mr Nota removed the trees. He recalls this because it was his birthday, and he was talking to a friend at the time the trees came down.
115Mr Nota recognised that the Tree Permit required him to comply with the conditions of the permit. He could not modify the permit without consent, he could only remove the relevant trees if he replanted two new trees, and he understood that audits and enforcement action could be undertaken by the Council. Mr Nota acknowledged that the Council informed that the compliance process was up to five years, during which it could audit and ensure compliance with permits, issue fines, and ensure replacement replanting of the removed trees. On 7 February 2020, Mr Nota acknowledged that he knew about the compliance requirements of the Tree Permit.
116Mr Nota sought to remove the Liquidambar tree as part of the original application. He received the Tree Permit, and again, applied for the removal of the Liquidambar tree as part of the Four Dwelling Application.
117Mr Nota said that Mr O’Shea did not tell him that the four-dwelling proposal was not commercially viable for him. Subsequently, Mr Nota recalled a telephone conversation, approximately one week before settlement, during which Mr O’Shea indicated that could not complete the Contract of Sale. Mr Nota said he initially rejected an offer of $700,000.00 in addition to the $400,000.00 deposit, and Mr O’Shea said that he would get back to him.
118Mr O’Shea wanted an extension of the settlement date, but Mr Nota did not want to provide an extension. Mr Nota said that he was worried about not being able to settle on the Ivanhoe property. Mr Nota had an existing line of credit, but he was going to be $200,000.00 short. There was another phone call on the same day between Mr Nota and Mr O’Shea. Mr Nota did not recall telling Mr O’Shea that his solicitor told him that the vendor for the Ivanhoe property would not agree to an extension of time for settlement.
119By email correspondence dated 24 August 2020, Mr Nota wrote to the Council noting that as a condition of the Tree Permit, by the end of that week, he was required to plant two canopy trees within six months of removing the Cypress trees. Given this, he requested an extension of time to plant the two trees. Mr Nota said the Council did not respond to the request. Mr Nota thought it meant the Council was not interested in the replanting of the two trees.
120Mr Nota gave evidence that he thought that the Giant Honey Myrtle was dead at the time. The Stem Report labelled the Giant Honey Myrtle as an “environmental weed” and the GHTrees Report mentioned that it was in poor condition. Mr Nota said that on 21 February 2020 after the removal of the Cypress trees, the Giant Honey Myrtle was able to get water and was subsequently in a good condition by 25 November 2020. Mr Nota said that he had no input into the reports that went to Council for the permit applications.
121Mr Nota said that he must have assumed that he removed the Cypress trees at the end of February 2020 when he sought to contact the Council for the extension, in writing that the Tree Permit was due to expire by 31 August 2020 instead of 21 August 2020. He emailed Mr Munro at the time and did not use the Council’s generic and public email addresses.
122Mr Nota thought that environmental weeds did not need a permit to be removed. Mr Nota also thought that it could be an error that planning considerations for tree number “6” required vegetation protection overlay in the Stem Report.
123Mr Nota said that on 17 September 2023, he planted two trees roughly where the Cypress trees used to be. He said that if they had to comply with the Tree Permit, it was ridiculously simple to do so.
124Mr Nota had not conducted a development before. He applied for the Four Dwelling Permit because he thought it would be of value to a developer if there was an approved planning permit already. Mr Nota did all the planning applications himself. He thought that the Four Dwelling Permit would mean that the trees would be pulled up if they were planted, so there was no point in planting them.
125Mr Nota was just interested in the Delegate Report dated 31 July 2019. He did not see that the Delegate Report referred to the Tree Permit and noted the removal of a row of six Cypress trees approved on 7 February 2020. Leading up to the signing of the Vendor Statement, Mr Nota did not tell the town planner, architect, or the Council about the existence of the Tree Permit. He said that the Council already had the information about the Tree Permit.
126On 4 August 2021 at 12:26pm, Mr Nota’s planner, Multiply Planning, sent Mr Nota a copy of the Delegate Report. Mr Nota said that it was possible that he had read the relevant part of the report. His solicitor asked him for a copy, and he sent a copy to Mr Ross Failla.
127On 4 August 2021 at 4:31pm, Mr Nota’s planner sent him all the objections and support letters for the Four Dwelling Application. On 1 September 2021, Mr Nota forwarded the material to his conveyancer. Mr Nota did not think the documents were important, but his conveyancer asked for copies of the documents.
128In about April 2021, Mr Nota signed up with Nelson Alexander for an exclusive sales authority. Nelson Alexander had approached the Notas saying they had a purchaser interested in the Eaglemont property. The Notas wanted to sell the Eaglemont property at some stage, but they wanted to get the approval for the Four Dwelling Permit and see how the market reacted to that. A planning permit was more attractive to developers than to “mums and dads”.
129Mr Nota said that they had paid a lot for the plans, and that they were out of pocket. It was a sticking point that they thought that they should be compensated for it. The proposed purchaser kept adding more conditions to the point that Mrs Nota did not want to proceed with the negotiations. The Notas did not know the identity of the proposed purchaser. Mr Nota told the agent that he needed $4.1m to sell the Eaglemont property at that stage.
130After the Contract of Sale was signed, Mr Nota found out that Mr O’Shea was behind both offers. Mr Nota said that if he knew that Mr O’Shea intended to lodge a Fourteen Dwelling Application, he would have increased the purchase price.
131By email dated 9 September 2021, the conveyancer sent a draft Vendor Statement to the Notas. It did not include the Tree Permit. Mr Nota believed that it had expired. He had asked for an extension for the permit in August the previous year, as it came close to the six-month period. Mr Nota had not replanted the two trees because of the COVID-19 lockdown and, therefore, could not go to the nursery to purchase the trees. He also wanted to pull down a tree in that replanting area and was concerned about disturbing any new plantings.
132Mr Nota formed the view that the Council was not concerned with the replanting. Subsequently, he applied to Council for a Four Dwelling Permit. There was no mention of the trees in the Delegate Report and the trees would have been removed in the proposed four-dwelling development.
133When engaging with his solicitors in preparing the Vendor Statement, Mr Nota thought he was being asked to include planning permits for buildings, not tree permits. The Four Dwelling Permit had been included in the Vendor Statement.
134On 9 September 2021, Mr Nota thought the Vendor Statement was compliant.
135About one month prior to settlement, on 19 August 2023, Mr O’Shea met Mr Nota at the Eaglemont property and Mr Nota mentioned that only three houses could be built on the property due to the restrictions on the six large Cypress trees. Mr Nota said he had applied for the Tree Permit for the Four Dwelling Permit, so that the trees could be removed for any proposed development.
136Mr Nota did not know that the other person onsite was Mr O’Shea’s son. They were marking out the four-dwelling area and taking soil samples. He could not recall the details of the conversation until he read the documents in the Court Book which triggered his memory.
137The initial proposal from the architects, that would not be rejected by the Council, was for a three-dwelling development – Mr Nota thought this would not be economically viable. With the removal of the trees, the Notas could fit four dwellings on the block of land.
138A week prior to settlement, Mr Nota and Mr O’Shea had contact by telephone. Mr O’Shea said he had difficulty completing a deal and it was not going well and was unlikely to succeed, and, therefore, he would not have the funds to settle the purchase of the Eaglemont property as a result. Mrs Nota listened in on the telephone call, but it was not on loudspeaker. Mr Nota said Mr O’Shea was putting the Notas in an incredibly difficult position. He had two years to obtain the funds, and they were relying on such funds to settle the purchase of the Ivanhoe property and prepare for retirement.
139Mr Oldmeadow attempted to sell the Eaglemont property afterwards in October 2023. The Eaglemont property was advertised on websites such as Domain, a property developers’ website, and was featured in the Age in an article on Eaglemont as a suburb. People were able to inspect the property, and it was advertised as private sale. The Notas were always of the view that it would be sold to a developer, and that it would be best to sell it by private sale. It was advertised between $3.6m and $3.8m and then reduced to between $3.4m and $3.6m. The Eaglemont property was removed from sale in February 2024. There was a verbal offer to the real estate agent who called the Notas and told them it was for $3.25m. The Notas did not say no. Mr Oldmeadow said he would try to get a better offer in writing, which he was unable to do. Mr Nota did not know who the purchaser was. The new owner would be entitled to continue on with the Four Dwelling Permit.
140The new contract of sale included the Tree Permit and a letter from the Council, stating the Tree Permit had expired prior to the required replanting being undertaken. The two documents were included to remove any doubt about the position of the trees. The Notas had “gone through hell” because of the Tree Permit and did not want to be in that position again.
141If the Eaglemont property had settled, the Notas would have completed the purchase of the Ivanhoe property and they would have kept about $250,000.00 in cash for renovations, with the remainder to be put into a self-managed superannuation fund and invested into the Australian Share Index Fund via shares in Vanguard Investments (“the Vanguard index fund”).
142With regard to superannuation investment, Mr Nota said he would have purchased $600,000.00 worth of units (without incurring a tax penalty) valued at $2.0868 each. Mr Nota would have invested the net profit from the sale of the property (being $3.6m minus $2.4m) into the Vanguard index fund, with unit prices starting at $2.0868.
143Mr Nota called his four sisters to borrow money for a six-month period to settle on the Ivanhoe property – but, over the weekend, his sisters changed their mind. He asked the executor of their mother’s will, Ms Marion Pito, being one of his sisters, for an earlier distribution of his inheritance which was due in January the following year.
144The Notas were unable to complete the purchase of the Ivanhoe property. They tried to source finance from thirteen financial institutions. They were rejected by the major banks because they were retired, and their superannuation could not service the loan. They did not regard superannuation as income or the ability to service a loan. The only way to service a loan was through a pension. They could not buy anywhere else because they had been rejected thirteen times. Mr Nota agreed he did not discover any documents, because no loans were given. In particular, there was no discovery of an “Aussie Home Loans” document.
145The two trees that were replanted would be located in the middle of the driveway of the proposed Unit 4 – that was the reason why Mr Nota did not include the permit, as the proposal for the four-dwelling development meant that the trees would be removed regardless. The two replanted trees are about 12 inches in height and have not grown since they were planted. One has also died since the replanting. Mr Nota said he planted them for demonstration, rather than for compliance with the Tree Permit. The tag on the replanted tree was “Cinnamon Twist” with a height of 3.0 metres and width of 1.5 metres. In Mr Nota’s view, the Tree Permit did not exist.
146There were instructions on the Tree Permit and several options for the replanting. Mr Nota took the permit to the nursery and asked for help in attempting to replant the trees.
147Mr Nota did not turn his mind to the Tree Permit in answer to the 10 September 2021 email or at the time of the Contract of Sale.
Stewart Oldmeadow
148Mr Oldmeadow is a licensed real estate agent and director of Miles Real Estate in Ivanhoe.
149On 9 October 2023, Miles Real Estate was engaged by the Notas to sell the Eaglemont property. It was offered for private sale through an expression of interest campaign, with an initial estimated price of $3.6m to $3.8m, an advertised range to the public. The campaign included advertising, opens for inspections, and private appointments.
150Mr Oldmeadow took notes for the sales campaign on his internal database.
151Mr Oldmeadow received a verbal offer of $3.25m. The offeror was Jagvir G, who requested a contract on 9 December 2023, and it was subsequently provided to him. The property next door was also for sale, and Jagvir G was the highest bidder on that property. However, he did not engage more than the verbal offer of $3.25m. On 16 December 2023, the notes taken by Mr Oldmeadow indicate that he was not going to engage any further. Prior to this, Jagvir G was suggesting potentially a six-month settlement – but this was not confirmed.
152The sales campaign did not result in the sale of the property, and it was subsequently withdrawn from the market in early 2024.
Sonja Anne Nota
153Mrs Nota said that in her marriage, financial matters are handled mainly by her husband, because he has skills and experience in that area. She has lived at the property for almost 25 years. Mrs Nota was called to give corroborating evidence to Mr Nota, who was the main actor and had control of the financial interests of the couple.
154Mrs Nota generally presented as a careful, considered witness who was ready to make appropriate concessions. There certainly were gaps in her recollection and her evidence. However, her memory lapses were generally explicable by the extensive effluxion of time involved with this case. Mrs Nota did not have a precise recollection of matters, nor was she directly involved in the financial matters.
155The Tree Permit was sought because of safety, as so many trees on the Eaglemont property were reaching the end of their life, the neighbours had made complaints about them, and their removal would enhance the viability of selling the property – both aesthetically and economically.
156In January 2020, there was an arborist report obtained about tree removal on the property. Mrs Nota did not read it but was aware of its existence. She only recalled talking with her husband about eventually having the trees removed as the trees were dropping limbs.
157In relation to the Tree Permit, Mrs Nota was aware of the obligation to replant in February 2020. She could not recall when the Cypress trees were removed. She said that the Notas did not receive an extension on the Tree Permit and that the Council did not respond to their request. She did not really consider the lack of extension of the Tree Permit as she was consumed with other things. She said that the Notas were not in a financial position to do the four-dwelling development, and they did not have the experience. The Notas made the Four Dwelling Application because it would enhance the saleability of the Eaglemont property.
158Mrs Nota could not recall seeing the Tree Permit. She knew about the removal and the replanting conditions. She stated that if there were major changes to it, then one would need to apply to Council.
159Mrs Nota was not happy with the purchaser because there were constant changes with the negotiations. She only found out the identity of the purchaser months after 15 September 2021 (when the contract was signed).
160Mrs Nota was shocked that the VCAT application was for fourteen dwellings. If she had known that was the defendants’ intent, she said that she would be thinking more about the effect on the neighbours, whether it was over-developing, and considering if the Eaglemont property would have been worth more and whether they would have asked for a higher price.
161The Ventnor property is in Mrs Nota’s name, and it was purchased about 14 years ago.
162Mrs Nota does not know how to draft a contract of sale of land or a Vendor Statement. She relied on a solicitor to draft these documents. This area was Mr Nota’s expertise. She expected him to do whatever was required to protect them. At the time, Mrs Nota did not hold a view that the Tree Permit needed to be included in the Vendor Statement. She said the Tree Permit “kind of went” and she forgot about it. She was not aware of any request from the conveyancer to prompt disclosure of the Tree Permit. She thought the solicitor had done the due diligence, and that the Vendor Statement was a correct and accurate document.
(iii)attempts to resell the Eaglemont property ($1,407.57);
(d) the costs arising from the plaintiffs’ inability to settle on the Ivanhoe property they intended to purchase contemporaneously with the sale of their own property, including:
(i)the forfeited deposit paid for the Ivanhoe property ($151,000.00); and
(ii)penalty interest incurred in relation to the failed purchase of the Ivanhoe property ($14,876.87); and
(e) an estimated investment return of 14% on the net proceeds of sale ($1,991,000.00), had those funds been invested in the Vanguard index fund between 30 September 2023 and 31 March 2025, totalling $278,740.00.
less the deposit of $400,000.00 forfeited by the purchaser, pursuant to General Condition 35.4(e) (“GC”) of the Contract of Sale.
Primary loss
491The primary loss claimed by the plaintiffs is the difference between the original purchase price under the Contract of Sale ($4m) and the market value of the Eaglemont property ($3.25m), totalling $750,000.00.
492The defendants submit that the Court cannot be satisfied that the market value of the Eaglemont property was $3.25m. In particular, the defendants refer to the evidence of Mr Oldmeadow at trial, who stated that no offers of $3.25m were made that were “capable of acceptance”. The defendants argue that the $3.25m offer represented “something under market value”, implying that the true market value was higher.
493In contrast, the plaintiffs submit that the prospective purchaser who made the $3.25m offer was not willing to increase the offer or formalise it in writing. They argue, therefore, that any suggestion that the Eaglemont property was worth more than $3.25m is “fallacious”. The plaintiffs further rely on a valuation issued by the Valuer-General dated 29 January 2025, which also assessed the Eaglemont property’s value at $3.25m. The defendants, however, argue that this valuation is too remote in time from the date of repudiation, being 15 September 2023, to be given probative weight.
494I refer to the decision of Darke J in Upside, where his Honour observed:
“In my opinion, the ways in which Upside seek to use the offers do involve using offers as direct evidence of value. I do not accept the submission made by Upside that an offer would only be used as direct evidence of market value if the amount of the offer was itself equated to market value. It seems to me that using offers to establish the existence of willing buyers in a market prepared to pay certain prices for a property, and thereby establish a floor in the market value, is to use the offers as evidence that goes directly to the question of value. That is the case even if the evidence is not the only evidence adduced or relied upon on the question. It should be noted that Spigelman CJ’s statement (at [97]) concerning use of an offer to establish a floor were made in the context of a case where it was relevant to show that there was a specific purchaser willing to pay more than ordinary market price (cf the paraphrasing of his Honour’s statement by Young JA in Crawley v Short [2009] NSWCA 410; (2009) 262 ALR 654 at [218]). Spigelman CJ regarded that situation as falling within a recognised exception to the general rule that offers not be permitted to be used as direct evidence of value. His Honour evidently considered that the offer in that case was being used as direct evidence of value. The present case does not fall within that exception. Here, the offers are not sought to be used to establish the interest of a particular purchaser or purchasers willing to pay more than the ordinary market price. Rather, the offers are said to establish what willing buyers in the market more generally are prepared to pay, and thereby establish a floor in market value.
…
Even if the offers were able to be used in the manner suggested by Upside, it would be necessary to consider the question of the weight that should be given to the offers. As the decided cases demonstrate, that would involve an assessment of the genuineness of the offers.”[83] (emphasis added)
[83] Upside at [116] and [118].
495The plaintiffs ask the Court to treat the verbal offer of Jagvir G, to purchase the Eaglemont property for $3.25m, as indicative of the “ceiling” of its market value. However, consistent with Upside, this approach involves using the offer as direct evidence of value – rather than, for instance, to establish that a particular purchaser was or purchasers were willing to pay above-market price for the Eaglemont property. As the offer goes directly to the question of value, I do not accept that it may be used for this purpose.
496I note the plaintiffs’ submission that the application of Upside must be determined on a case-by-case basis. However, even if I were to accept the verbal offer made by Jagvir G as evidence of market value, I would afford it little weight. The plaintiffs themselves concede that the offer was never formalised and may more properly be characterised as an “invitation to treat”. The offeror’s unwillingness to pursue the offer further suggests it was merely a preliminary expression of interest, and not a reliable indicator of the Eaglemont property’s market value.
497I am also not prepared to accept the Valuer-General’s valuation. In Plymin v Bruce, I set out as follows:
“Section 157(3) of the Local Government Act1989 (Vic), which was in operation at the relevant time, states that:
‘For the purposes of calculating the site value, the net annual value or the capital approved value of rateable land, a council must use the current valuations made in respect of the land under the Valuation of Land Act 1960 by a valuation authority’.
For the avoidance of any doubt on the question, under s9 of the Valuation of Land Act 1960 (Vic), the Valuer‑General is the valuation authority.”[84]
[84] [2023] VCC 1249 at [177] and [178] (“Plymin”).
498I do not accept the defendants’ contention that the Valuer-General’s valuation is too remote in time from the date of repudiation. The prescribed date of valuation was 1 January 2024 – less than four months after the Contract of Sale was repudiated on 15 September 2023 – and accordingly, the valuation is not so temporally remote as to be disregarded on that basis.
499However, I nonetheless decline to adopt the Valuer-General’s valuation as determinative of market value in this case. As I observed in Plymin, a statutory valuation, typically depended upon to calculate council rates and land tax assessments, is not a substitute for a valuation prepared by a qualified valuer for the purposes of assessing market value of a given property. Further, in the present case, the Valuer-General had initially valued the Eaglemont property in the order of $3.95m after the sale failed. The Notas subsequently contested the valuation, and the rates note was then issued accepting a capital improved value of $3.25m. It is clear that the valuation sought to be relied upon by the Notas is not in the standard form and was the subject of their objection to the Council.
500I also accept the defendants’ submission that the purchaser had invited the plaintiffs to jointly appoint independent valuers to determine the market value of the Eaglemont property as at the date of repudiation, but that no such valuation was obtained.
501Accordingly, in the absence of a formal valuation of the Eaglemont property as at 15 September 2023 and given the limited weight I afford to both the informal verbal offer by Jagvir G and the corrected Valuer-General’s statutory valuation, I am not satisfied that the property’s market value was $3.25m. As such, I find that the plaintiffs have not established the primary loss they allege, and I am not prepared to award damages on this basis.
Resale costs
502The costs associated with the resale of the Eaglemont property, totalling $8,431.50, have not been challenged by the defendants. I accept that these costs arise directly from the purchaser’s repudiation of the Contract. Accordingly, I find that the plaintiffs are entitled to recover this amount in full.
Legal expenses
503The legal expenses associated with the defendants’ recission of the Contract, the failed purchase of the Ivanhoe property ($2,970.00), and attempts to resell the Eaglemont property ($1,407.57) – totalling $4,377.57, have not been challenged by the defendants. I accept that these costs arise directly from the purchaser’s repudiation of the Contract of Sale. Accordingly, I find that the plaintiffs are entitled to recover this amount in full.
Ivanhoe property
504The plaintiffs claim damages arising from their inability to settle on the Ivanhoe property, including the forfeited deposit ($151,000.00) and penalty interest ($14,876.87), totalling $165,876.87. They submit that, due to the purchaser’s repudiation on 15 September 2021, they were unable to complete settlement, as they had been “anticipating the funds from the settlement of their Eaglemont property to complete their purchase”.
505In response, the defendants contend that there has been insufficient discovery regarding the thirteen loan applications the plaintiffs claim to have made. In the absence of such documentary evidence, the defendants submit that the Court cannot be satisfied that the plaintiffs have taken reasonable steps to mitigate their loss.
506It is well-established that the plaintiffs “cannot recover damages for a loss which he or she ought to have avoided … [or] a loss which he or she did avoid”.[85] The onus lies on the defendants to demonstrate that the plaintiffs failed to mitigate their losses.[86]
[85] Clark v Macourt (2013) 253 CLR 1 at [17] (“Clark”).
[86] Metal Fabrications (Vic) Pty Ltd v Kelcey [1986] VR 507.
507In the absence of such evidence, I am not satisfied that the defendants have discharged their onus. Accordingly, I find that the plaintiffs are entitled to be awarded the sum of $165,876.87 for losses associated with the unsuccessful purchase of the Ivanhoe property.
Vanguard index fund
508The plaintiffs seek damages for the loss of investment income on the net proceeds of sale of their property. They submit that, but for the purchaser’s repudiation of the Contract of Sale, the net proceeds of sale totalling $1,991,000.00 would have been available for investment in the Vanguard index fund between 30 September 2023 and 31 March 2025, yielding an estimated return of 14%, equating to a lost profit of $278,740.00.
509The starting point for assessment of contractual damages is the compensatory principle expressed in Robinson v Harman:
“where a party sustains a loss by reason of a breach of contract, he is, so far as money can do it, to be placed in the same situation, with respect to damages, as if the contract had been performed.”[87]
[87] Robinson v Harman (1848) 1 Exch 850 at page 855.
510Therefore, the relevant date for assessment of damages is the date of the defendants’ repudiation of the Contract of Sale, which I have found to be 15 September 2023.[88]
[88] Clark at [109].
511In Sellars v Adelaide Petroleum NL, the High Court set out the approach to assessing damages for the loss of a commercial opportunity.[89] Two requirements must be met:[90]
(a) the existence of a lost commercial opportunity must be established on the balance of probabilities; and
(b) once established, the value of that lost opportunity is to be assessed according to the degree of probability that the opportunity would have materialised.
[89] (1994) 179 CLR 332 (“Sellars”).
[90] Professor Katy Barnett, Damages for Breach of Contract (Sweet & Maxwell, 2nd ed, 2022) [2–041].
512In addressing the first limb of the test, Brennan J in Sellars explains:
“Where a loss is alleged to be a lost opportunity to acquire a benefit, a plaintiff who bears the onus of proving that a loss was caused by the conduct of the defendant discharges that onus by establishing a chain of causation that continues up to the point when there is a substantial prospect of acquiring the benefit sought by the plaintiff. Up to that point, the plaintiff must establish both the historical facts and any necessary hypothesis on the balance of probabilities. A constant standard of proof applies to the finding that a loss has been suffered and to the finding that that loss was caused by the defendant’s conduct, whether those findings depend on evidence of historical facts or on evidence giving rise to competing hypotheses. In any event, the standard is proof on the balance of probabilities.”[91] (emphasis added)
[91] Sellars at [18].
513While the relevant loss could be framed more broadly as the plaintiffs’ lost opportunity to invest the net proceeds of sale, the critical question is not whether a general investment opportunity was lost. Rather, the issue is whether the plaintiffs – on the balance of probabilities – would have invested those funds specifically in the Vanguard index fund, as claimed.[92]
[92] Origin Energy LPG Ltd (formerly Boral Gas (NSW) Pty Ltd) v BestCare Foods Ltd [2013] NSWCA 90 at [106].
514I note the following evidence given by Mr Nota during re-examination:
COUNSEL: “You were asked the question about whether you had already given evidence about the number of units you would have purchased in the Vanguard Index Australian Shares Fund and you said no but you can. Can you tell this court how many units you would have purchased in the index fund?---
…
MR NOTA: The surplus that was left over from purchasing the house, putting $600,000 in the super that we were entitled to do without tax penalty because we were downsizing. The surplus cash that we had would have all been put in the Vanguard Index Australian Shares starting at 2.0868.”
515And further:
COUNSEL: “You mentioned investment and the like both for the super and for any money not in super. Was there a particular investment you had in mind?---
MR NOTA: The Australian Share Index Fund which I have been largely invested in for 15, 20 years.
COUNSEL: Is there a particular entity through which you invest in the Australian Index Fund?---
MR NOTA:Yes. Vanguard Investments.
COUNSEL: In this period in September 2023 did you have any funds invested with the Australian Index Fund through Vanguard at that time?---
MR NOTA:Yes.
COUNSEL: Since then have you continued to have funds invested with Vanguard in that way?---
MR NOTA:Yes.”
516Given Mr Nota’s longstanding history of investing in the Vanguard index fund, and the absence of any evidence to the contrary, I find that the plaintiffs have successfully established, on the balance of probabilities, that they would have invested the net proceeds of sale in the Vanguard index fund. The defendants failed to make submissions to the contrary. As such, the loss of opportunity is made out.
517In addressing the second limb of the test in Sellars, the loss must be assessed “by reference to the probabilities or possibilities of what would have happened”.[93] This requires an evaluation of the percentage chance that the Vanguard index fund would have delivered an average annual return of 14% between 30 September 2023 and 31 March 2025.[94]
[93] Sellars at [21].
[94] Sellars at [21].
518I distinguish the present case from the “all or nothing” scenario considered in The Commonwealth v Amann Aviation Pty Ltd, where the High Court adopted that approach in the context of whether a government contract would have been renewed.[95] In contrast, the return on an index fund is not binary but operates on a spectrum, with a range of possible outcomes depending on market performance.
[95] (1992) 174 CLR 64 at [7].
519The question before me is, therefore, what the degree of probability was that the plaintiffs would have received a 14% return on their investment in the Vanguard index fund.
520The plaintiffs tendered the actual portfolio valuation during the period between 5 October 2023 to 31 March 2025. The source materials evidence the percentage increase from the unit price in the Vanguard index fund from $2.38 to $2.7139, which formed part of the agreed facts. Although I acknowledge that there is inherent market volatility and uncertainty associated with such investments, in the present case, I accept the benefit of the capital growth that would have emerged between the date of investment and the value as at the measurement date, for the purpose of assessing the quantum of the plaintiffs’ loss of opportunity. The claim is not for a future assessment as to loss and damage requiring an element of forecasting. The plaintiffs’ loss of opportunity is, therefore, valued at 14%, as at 31 March 2025.
521The purchasers have given evidence of sufficient certainty that, if they had obtained the balance of the proceeds of sale, they would have invested the balance in the Vanguard index fund, which they were already investing in as at 30 September 2023. The plaintiffs have valued the unit prices of the Vanguard index fund as at the entry and valuation dates, and as such, I accept that the loss of investment opportunity was in the sum of $278,740.00.
H. Should the caveat on the Eaglemont property be removed?
Removal of caveat
522Section 90(3) of the Transfer of Land Act 1958 (Vic) (“TLA”) permits any person adversely affected by a caveat lodged under s 89 of the TLA to “bring proceedings in a court against the caveator for the removal of the caveat”. Section 90(3) of the TLA empowers a court dealing with such an application to “make such order as the court thinks fit”.
523The relevant principles with respect to an application under s 90(3) of the TLA were summarised by Warren CJ in Piroshenko v Grojsman & Ors as follows:
“Caveats under the Torrens system are treated by the courts as analogous to applications for interlocutory injunctive relief. In so far as their registration is an administrative act, it is when application is made for their removal that the onus falls on the caveator to satisfy the two-stage test used by the court when deciding whether to exercise its discretion to grant injunctive relief.
…
This two-stage approach requires the caveator to establish that there is a serious question to be tried that they have the estate or interest which they claim in the land in question, and having done so, to establish that the balance of convenience favours the maintenance of the caveat on the Register of Titles until trial.”[96]
[96] (2010) 27 VR 489 at [7] (“Piroshenko”).
524In order to establish the first limb, the caveator must establish “a prima facie case with sufficient likelihood of success to justify the maintenance of the caveat”.[97]
[97] Piroshenko at [22].
525As to balance of convenience, Warren CJ applied the approach described in Bradto Pty Ltd v State of Victoria[98] – that the Court should take the course which appears to carry the lowest risk of injustice.[99]
[98] (2006) 15 VR 65 at [35].
[99] Piroshenko at [38]-[39].
526In light of my findings above that the defendants repudiated the Contract of Sale, I order, pursuant to s 90(3) of the TLA, that caveat number AX480430V, lodged by the first defendant and purporting to claim a purchaser’s lien over the Eaglemont property described in Certificate of Title Volume 7032 Folio 333, be removed.
Declaratory relief
527Pursuant to s 49 of the County Court Act 1958 (Vic), the Court has the same power to grant any relief or remedy as the Supreme Court. Declaratory relief is discretionary and must be directed towards resolving legal controversies between parties with a real interest in the matter. In accordance with the decision in Lehrmann v Network Ten Pty Limited (Cross-Claims),[100] declaratory relief must be attached to specific facts and not merely hypothetical.
[100] [2024] FCA 102 at [45]-[46].
528The Court of Appeal has recently provided the basic principles surrounding the provision of declaratory relief in Cappelleri v Cappelleri:
“First, the power to grant declaratory relief is no longer exclusively equitable. When exercised by a court of law, it is a statutory power.
Secondly, the party applying for declaratory relief need not have a subsisting cause of action or a right to some other relief.
Thirdly, the power to grant declaratory relief is discretionary. While it is not possible or desirable to fetter the manner of its exercise by the application of rules, the power is nonetheless ‘confined by the considerations which mark out the boundaries of judicial power’. Accordingly, and relevantly to the present case, the relief must be directed to the determination of a legal controversy, the person seeking it must have a real interest in the relief, and the relief may be refused if it will not produce any foreseeable consequence for the parties.”[101]
[101] [2024] VSCA 173 at [62]-[64].
529Presently, the declaratory relief sought by the plaintiffs does not relate to a hypothetical matter, but to the specific claim in this proceeding and grounded in concrete facts.
530In accordance with r 23.05 of the County Court Civil Procedure Rules 2018 (Vic), I make the declarations that the first defendant does not have an interest in the Eaglemont property, and that the first defendant’s deposit is forfeited.
Conclusion
531Accordingly, for the foregoing reasons, I am satisfied that the plaintiffs’ claim has been made out and the counterclaim ought to be dismissed. The deposit is subtracted from the damages calculated pursuant to GC 35.4(e) of the Contract of Sale. For the reasons set out above, the compensation, so as to put the plaintiffs in the position they would have been had the contract settled, is the sum of $457,425.94 – less the forfeited deposit of $400,000.00, leading to a loss of $57,425.94.
532The plaintiffs seek interest on such award of damages that the Court makes pursuant to ss 33, 58, and 60(1) of the Supreme Court Act 1986 (Vic) (“SCA”). Given the Court has assessed the Notas’ damages, the time for interest to run is from the date of the commencement of the proceeding under s 60 of the SCA, being 8 December 2023 to the date of judgment on 11 August 2025, at the rate fixed by s 2 of the PIRA. The total penalty interest accrued amounts to the sum of $9,628.68.
533Accordingly, for the foregoing reasons, I make the following orders:
(a) there is judgment for the plaintiffs against the defendants;
(b) the counterclaim is dismissed;
(c) the defendants must pay the plaintiffs the sum of $67,054.62 comprising:
(i)damages in the amount of $57,425.94; and
(ii)penalty interest from 8 December 2023 to 11 August 2025, in the sum of $9,628.68;
(d) pursuant to s 90(3) of the Transfer of Land Act 1958 (Vic), the registrar of titles must remove caveat number AX480430V recorded on Certificate of Title Volume 7032 Folio 333 forthwith;
(e) the Court declares that:
(i)the first defendant does not have an interest in the Eaglemont property, and
(ii)the first defendant’s deposit is forfeited; and
(f) the defendants must pay the plaintiffs’ costs of and incidental to the proceeding, including any reserved costs, on the standard basis to be taxed in default of agreement.
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Certificate
I certify that these 132 pages are a true copy of the judgment of Her Honour Judge Burchell delivered on 11 August 2025.
Dated: 11 August 2025
Gavin Choong
Associate to Her Honour Judge Burchell
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