Souter v Condor Developments Pty Ltd

Case [2011] WADC 212

JURISDICTION     :   DISTRICT COURT OF WESTERN AUSTRALIA

IN CIVIL

LOCATION:   PERTH

CITATION:   SOUTER -v- CONDOR DEVELOPMENTS PTY LTD [2011] WADC 212

CORAM:   O'NEAL DCJ

HEARD:   16-18 & 26 MAY 2011

DELIVERED          :   30 NOVEMBER 2011

FILE NO/S:   CIV 891 of 2010

BETWEEN:   CALLAN GEORGE SOUTER

Plaintiff

AND

CONDOR DEVELOPMENTS PTY LTD
Defendant

Catchwords:

Contract for the sale of land - Breach - Damages - Turns on own facts

Legislation:

Trade Practices Act 1974 (Cth)
Strata Titles Act 1966
Strata Titles Act 1985

Result:

For the plaintiff in part with damages assessed

Representation:

Counsel:

Plaintiff:     Mr D H Solomon

Defendant:     Mr D K Barker

Solicitors:

Plaintiff:     Solomon Brothers

Defendant:     Chalmers Legal Studio

Case(s) referred to in judgment(s):

Bellgrove v Eldridge [1954] HCA 36; (1954) 90 CLR 613

Chicco v Corporation of the City of Woodville (1990) A Tort Rep 81‑028

Drexel London (a firm) v Gove (Blackman) [2009] WASCA 181

Joliffe v Baker (1883) 11 QBD 255

King v Poggioli (1923) 32 CLR 222

Lawrence v Cassel [1930] 2 KB 83

Palmer v Johnson (1884) 13 QBD 351

Radford v de Froberville [(1977] 1 WLR 1262

Re Wilsons & Stevens Contract [1894] 3 Ch 546

Robinson v Harman (1848) 1 Exch 850; (1848) 154 ER 363

Simply Irresistible Pty Ltd v Cauper [2010] VSC 601

Tabcorp Holdings Ltd v Bowen Investments Pty Ltd [2009] HCA 8; (2009) 236 CLR 272

Willshee v Westcourt Ltd [2009] WASCA 87

O'NEAL DCJ: 

Introduction

  1. On 7 October 2005, the plaintiff entered into an agreement with the defendant to purchase apartment number 151 in a building called 'Condor Tower'.  The plaintiff's purchase was effectively 'off the plans', the defendant then being engaged in a project to refurbish an existing building.  The terms of the agreement are contained in an offer and acceptance form with conditions drafted by the defendant's solicitors.  The plaintiff agreed to pay a purchase price of $1.75 million and a deposit of $100,000.

  2. Because of delays in the construction of Condor Tower, the defendant was not ready to proceed to settlement until 30 July 2009.

  3. The plaintiff's case is that apartment 151 as built and provided at settlement did not correspond in some respects with express and implied terms of the sale contract and with representations said to have been made to him.  The plaintiff sues for damages at common law and also seeks remedies pursuant to the provisions of the Trade Practices Act 1974 (Cth) (TPA).

Background

  1. In 2005, the plaintiff was considering the purchase of an apartment.  The plaintiff's then partner, Janine Thomas (in this case the term referring not to any business affiliation but rather a personal one falling short of a de facto marriage), was a registered real estate sales representative.  The plaintiff 'understood' from what Ms Thomas had told him that she was a partner (in this case referring to a business affiliation) of a man named Wayne Briggs.

  2. Condor Tower began life as a high rise office building.  In 2004, the defendant was…

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AGLC
Souter v Condor Developments Pty Ltd [2011] WADC 212
Case
[2011] WADC 212
Decision Date

CaseChat Overview and Summary

In the case of Souter v Condor Developments Pty Ltd, the plaintiff, Souter, initiated legal proceedings against the defendant, Condor Developments Pty Ltd, following a breach of a contract for the sale of land. The dispute centred around the appropriate measure of damages for the breach, and the case was heard by the court. The main legal issue that the court had to determine was whether the damages for the breach should be assessed at the time of the breach or at the time of the trial. The court was also required to consider whether prejudgment interest should be awarded to the plaintiff.

The court examined the principle that damages for breach of contract are typically assessed at the time of the breach. However, it acknowledged that this general rule could be set aside in specific cases to ensure that the innocent party receives the most fair and just compensation for the loss and damage caused by the breach. The court referred to relevant case law, including Rio Tinto Exploration Pty Ltd v Graphite Holdings Pty Ltd and Johnson v Perez, to support its decision. In this particular case, the breach occurred at the end of July 2009, and the trial took place in mid-May 2011. The damages awarded to the plaintiff were based on estimates and a valuation that were significantly closer to the date of the trial than the date of the breach. Additionally, the valuation of the lost parking area was calculated using a discount rate based on interest rates current in the last quarter of 2010.

After considering the evidence and arguments presented, the court decided that the damages assessment was effectively made at the time of the trial. As a result, the court declined to award prejudgment interest to the plaintiff. However, the plaintiff was entitled to interest on the judgment amount. This decision highlights the importance of carefully considering the timing of damages assessments in breach of contract cases, and the need to adapt the approach to ensure fair compensation for the innocent party.

Orders

Orders of the court

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Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

Ordinarily damages for breach of contract are assessed as at the date of breach. That general rule will yield in particular cases to solutions best adapted to give the innocent party that amount in damages which most fairly compensates for the loss and damage caused by the breach: Rio Tinto Exploration Pty Ltd v Graphite Holdings Pty Ltd [2007] WASCA 276 per Buss JA at [93] and see Johnson v Perez (1988) 166 CLR 351, 355 – 356 (Mason CJ), 367 (Wilson, Toohey and Gaudron JJ), 371 (Brennan J). The breach in this case occurred at the end of July 2009 at the time of settlement. The trial took place in mid‑May 2011. The damages the plaintiff was awarded were based on estimates (exhibit 39, expert report of Kevin Windross, 19 November 2010) and a valuation (exhibit 40, expert report of Scott Bellerby, 23 December 2010) that were far closer in time to the date of trial than the date of breach. The valuation of the lost parking area was arrived at using a discount rate based on interest rates current in the last quarter of 2010. No submission was made at trial with respect to the timing of the assessment of damages. The fact is however that the assessment that I made, based on the evidence referred to above, was an assessment at the time of trial. In the circumstances I decline to award prejudgment interest. The plaintiff is of course entitled to interest on the judgment.