Stokolosa v Weeks Peacock Quality Homes Pty Ltd

[2000] SASC 334

STOKOLOSA & ANOR v WEEKS PEACOCK
QUALITY HOMES PTY LTD
[2000] SASC 334

Full Court:  Doyle CJ, Williams and Wicks JJ (ex tempore)

1................ DOYLE CJ...... This is an application for leave to appeal against a judgment of a Judge of this Court given on 11 August 2000.

1. The Judge allowed an appeal against a decision by a magistrate dismissing a claim brought in the civil jurisdiction of the Magistrates Court. The magistrate had dismissed the claim. The Judge ordered that judgment be entered for the plaintiffs.

2. By para 3(a) of the proviso to s 50(1) of the Supreme Court Act a further appeal may not be brought unless leave to appeal is obtained from the judge or from the Full Court.

3. The applicant has elected to seek leave from the Full Court as R 94.01(1)(b)(ii) permits. A differently constituted Full Court directed that the application be heard in open court.

4. The court’s practice has been to grant leave to appeal only if a question of general principle arises, and usually the court considers also whether there is reason to doubt the correctness of the decision under consideration. However, in the end the court must act as the interests of justice may require.

5. The plaintiffs’ claim is that the defendant, by its representative with whom they dealt, agreed to build a house for them for a fixed price, but later refused to do so. The evidence established that the defendant’s representative, a sale consultant, acted fraudulently; he should not have told the plaintiffs that the defendant had agreed to build the house.

6. The Judge held that the sales consultant had apparent or ostensible authority to act as he did. He found that the terms of the contract were sufficiently certain to be enforceable, even though some aspects of the contract had not been spelt out, in particular, there was no building schedule. Also, matters such as the standard of construction and the style of the finishes had not been agreed.

7. The Judge held that a term should be implied to the effect that the house would be built to the same specifications and standard of construction as the display homes at the place where the plaintiffs and the sales representative met and negotiated. The judge awarded damages based on the difference between the agreed price of $115,000 and the defendant’s estimate at trial of the cost of building the house, which was $125,000. That is, he awarded the plaintiffs damages based on the loss of the gain they would have made were the contract performed; that is, getting the house for $10,000 less than its cost and, by implication, $10000 less than its value.

8. The applicant challenges the decision that a term could be implied requiring that finishes and standards could be implied in accordance with the display homes.

9. The applicant is, in effect, arguing that a written contract to build a house for a fixed price is unenforceable because these matters had not been agreed. Courts are always reluctant to hold contracts unenforceable on this basis. The Judge’s decision must be considered in that light. The display homes would have provided a basis for determining types of finishes and standards of work. It is also relevant that at trial the applicant was able to arrive at an estimate of the construction cost, despite the uncertainty of which the applicant complains.

10. The Judge’s decision on this point raises no issue of principle. There is no obvious error in his Honour’s reasoning. It is common knowledge that a good deal is often left to be sorted out in fixed price house contracts. The decision is not one that departs from what one would expect in this area.

11. In my opinion, a case for leave to appeal on this point is not made out.

12. The applicant also submits that the Judge erred by assessing damages by reference to the detriment likely to be suffered by the applicant, the party in breach. I disagree.

13. The judge’s approach was that the house would have cost in fact, and would have been worth, about $10000 more than the agreed price. He awarded the plaintiffs this amount, or thereabouts, because it was the gain they would have made had the contract been performed. The fact that the gain happens to accord with the loss that the applicant would have made does not mean that the judge erred. In my view there is no substance on this point and, again, no issue of general importance. For those reasons, I would refuse leave to appeal.

15.............. WILLIAMS J.. I agree that leave should be refused, for the reasons given by the Chief Justice.

16.............. WICKS J.......... ............. I agree.

17.............. DOYLE CJ...... Accordingly, the order of the court is that the application for leave to appeal be dismissed.  The order of the court is that there be no order for the costs of the application.