Tay v Koh - [2000] WASCA 356

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA

TITLE OF COURT : THE FULL COURT (WA)

CITATION: TAY & ANOR -v- KOH & ANOR [2000] WASCA 356

CORAM: PIDGEON J
IPP J
MURRAY J

HEARD: 20 OCTOBER 2000

DELIVERED : 21 NOVEMBER 2000

FILE NO/S: FUL 170 of 1999

BETWEEN: RICHARD AH BOEY TAY
First Appellant (First Defendant)
COTSWOLD HOLDINGS PTY LTD
Second Appellant (Second Defendant)
AND
ANDREW KEE SUAN KOH
First Respondent (First Plaintiff)
KT & T DEVELOPMENTS PTY LTD
Second Respondent (Second Plaintiff)

Catchwords:

Procedure - Pleading - Deceit - Pleading false representation as to value - Whether necessary the parties to the conversation - Turns on own facts

Damages - Valuation - Value of strata title lot on hypothesis it is an ordinary freehold lot - Extent of discounts by reason of the type of development - Turns on own facts

Costs - Failure on some issues - Full costs ordered - Whether discretion miscarried - Turns on own facts

Legislation:

Nil

Result:

Appeal dismissed

Representation:

Counsel:

First Appellant (First Defendant)             :        Mr P G Clifford
Second Appellant (Second Defendant)     :        Mr P G Clifford
First Respondent (First Plaintiff)             :        Mr N W McKerracher QC
& Mr P Redding

Second Respondent (Second Plaintiff) : Mr N W McKerracher QC
& Mr P Redding

Solicitors:

First Appellant (First Defendant)             :        Murfett & Co
Second Appellant (Second Defendant)     :        Murfett & Co
First Respondent (First Plaintiff)             :        Williams & Hughes
Second Respondent (Second Plaintiff)     :        Williams & Hughes

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

Kenny & Good Pty Ltd v MGICA (1992) Ltd (1999) 73 ALJR 901

Case(s) also cited:

Briginshaw v Briginshaw (1938) 60 CLR 336
Calderbank v Calderbank [1975] 3 All ER 333
Dobb v Hackett (1993) 10 WAR 532
Garden City Wallpaper & Curtin Centre Pty Ltd v Barenfar Pty Ltd, unreported; SCt of WA; Library No 980544; 18 September 1998
Hughes Bros Pty Ltd v Trustees of the Roman Catholic Church [1999] NSWSC 1051
Hussey v Eels [1990] 2 QB 227
Messiter v Hutchinson (1987) 10 NSWLR 525
Smith New Court Securities Ltd v Scrimgeour Vickers [1996] 4 All ER 769
Tay v Koh, unreported; SCt of WA; Library No 980290; 28 May 1998
Water Board v Moustakas (1988) 180 CLR 491

PIDGEON J: Dr Koh, a surgeon who had been practising in Malaysia, came to live in Perth in 1986. In about 1987 or possibly early 1988, he met the appellant, Mr Tay, who told Dr Koh that it was easy to make money in Australia through property investment. As a result they became interested in some property transactions. This appeal is related to one particular transaction in respect of land near Alfred Cove described as lot 50 and which was a vacant strata title lot in a development called Pelican Cove.
Dr Koh was introduced to Mr Tay by Mr Tanto Adi Pramoko, who has been referred to in the proceedings appealed from by his first name, and in order to avoid any confusion in identification, I shall also refer to him in that way. In November 1988 Mr Tay took Dr Koh and his wife to see lot 50. Mr Tay told them that he and Tanto had bought the land approximately two years earlier for $800,000. Mr Tay said that the proposal was to build on it eight three storey town houses at a cost of $100,000 each. Mr Tay told Dr Koh that he wanted a local partner to come into the project and he offered to sell to Dr Koh a half share in the land for $400,000. Dr Koh understood this was half the amount Mr Tay and Tanto had paid for the land. Originally, Dr Koh agreed to take a 20 per cent share but on 18 April 1989 he agreed to take a 50 per cent share for the price originally suggested, namely $400,000. It was further agreed that the method to be used for Dr Koh to obtain his half share was that a company was to be formed with Dr Koh, Mr Tay and Tanto as directors. Dr Koh was to hold half the shares in the company and Mr Tay and Tanto the other half. Dr Koh would pay the money to this company which would then purchase the land from the current owners. These were Cotswold Holdings Pty Ltd, a company of which Mr Tay was a director and which is the second appellant, Oxley Holdings Pty Ltd and Mr and Mrs D'Annunzio.
The proposed company was duly formed and is now called K T and T Developments Pty Ltd, the second respondent. Dr Koh, Mr Tay and Tanto became directors and the shareholding was as earlier agreed. Dr Koh paid his cheque for $400,000 to this company together with a further amount of $20,000 for stamp duty, fees and other expenses. Mr Tay arranged for Dr Koh, as a director, to sign offers to purchase lot 50 from the current holders of the land and he also signed company cheques in favour of each of them for the purpose of discharging the purchase price. The total cheques drawn amounted to $458,000 as Dr Koh believed Mr Tay was paying the extra. The cheques in favour of each of the vendors were different as they held the land in unequal shares. The offers and cheques were given to Mr Tay and Dr Koh thought the transaction would go ahead and that the land would be transferred to the company. His Honour found that on 17 August 1990, prior to the land being transferred to the company, Mr Tay told Dr Koh that he had told a lie when he said that the land had been bought for $800,000 two years earlier and that he had lied about he and Tanto owning the land.
Mr Tay subsequently resigned as a director of K T and T Developments Pty Ltd. Dr Koh and his wife decided to proceed with the development of lot 50. I assume that Tanto also resigned as a director. Dr Koh and his wife had control of the company. The company obtained title to the land and proceeded to develop it.
On 8 April 1994 Dr Koh, as first plaintiff, and the company as second plaintiff, issued a writ against Mr Tay as the first defendant and Cotswold Holdings Pty Ltd as the second defendant claiming damages for deceit. There were originally other defendants including Oxley Holdings Pty Ltd and Mr and Mrs D'Annunzio but they ceased to be defendants by the time of the trial. At some stage Tanto became a defendant but was not a party when his Honour gave judgment. The plaintiffs pleaded that, on a date in November 1988, the defendant company by its director, Mr Tay, acting within the scope of the company's authority, made the following oral representation to Dr Koh:
"7.1Lot 50 was purchased in or about 1986 for the sum of $800,000."
The statement of claim, in par 11, pleaded that the representation was false in that:
"Lot 50 had not been purchased in 1986 for $800,000: the total price of Lots 17, 20 and 50 was $636,000 under agreement made in or about January 1988;"
Para 13 also claimed that Mr Tay knew that Lot 50 was not purchased for $800,000 in 1986, but that Lots 17, 20 and 50 had been purchased for $636,000 by an agreement made in or about January 1988. It was pleaded in para 15 that Dr Koh, in reliance on this representation, paid $420,000 to a company to purchase Lot 50 for a total purchase consideration of $458,000. There were other representations and issues pleaded but these now are relevant only to the ground of appeal relating to costs.
The issues joined were tried by Scott J. He accepted the evidence of Dr Koh that Mr Tay told Dr Koh that Mr Tay and Tanto had bought Lot 50 two years earlier for $800,000. This established the allegation that the representation had been made. The evidence to show that the representation was false was that lot 50 came into existence on the registration of a strata plan dated 26 November 1987. Lot 50 could not be conveyed as a separate lot prior to that date. On the same day a certificate of title issued for lot 50 in the name of Gunpack Pty Ltd. By a transfer dated 17 November 1988 the mortgagee of that company, in exercise of its power of sale, for a consideration of $636,000, transferred three lots, namely lots 17, 20 and 50, to the persons who owned the land at the time Dr Koh agreed to advance the money to buy it. There was no further dealing on the title up to the time the representation was made. This, of itself, would show that the representation could not be true and that Mr Tay as a director of one of the co‑owners must have known it was not true. In addition, his Honour found that Mr Tay told Dr Koh that he had told a lie on this question. His Honour found that Dr Koh was induced to enter into the arrangement by the representation as the price he was prepared to pay was one half of what he was told was the price at the earlier sale.

Pleading the claim in deceit.

The first part of the first ground of appeal claims that his Honour erred in holding that Mr Tay told Dr Koh that Mr Tay and Tanto had bought Lot 50 in 1986 for $800,000 in that the plaintiffs at no time pleaded that Mr Tay had represented that the purchasers were he and Tanto. The ground was argued on the basis that the representation as found was in two parts, namely, that the purchasers of the land were Mr Tay and Tanto and the price they paid at the time alleged was $800,000.
The representation which Dr Koh was seeking to prove was the representation that a price of $800,000 was paid for the land in about 1986. It was that proposition which caused Dr Koh to advance $400,000. The price and the approximate date is the fact sought to be proved. The conversation to prove that fact wherein it was claimed that Mr Tay said that he and Mr Tanto were the purchasers is no more than evidence to prove the fact being sought to be proved and by reason of that it should not be pleaded. There is, accordingly, no merit in the first part of the first ground.
The second part of the first ground claims that his Honour ruled that evidence relating to the fact that Mr Tay and Tanto were the purchasers was inadmissible. The ground claims that this caused Mr Tay not to put in other evidence which it is claimed would negate the plaintiff's case. The circumstances in which his Honour made the ruling were that Dr Koh, when giving evidence as to the particular conversation with Mr Tay, told his Honour that Mr Tay said "Tanto and myself, we bought this land two years ago." Counsel for the defendant objected that this did not arise on the pleadings. Counsel submitted that the pleaded case was that the representation made was that Lot 50 was purchased in 1986. It was not pleaded that it was represented that it was purchased by Mr Tay or Tanto. In the discussion that followed the trial Judge was very conscious of the difference between pleading facts and evidence. He said that one of the rules of pleading is that one pleads facts and not evidence. The discussion concluded by counsel for Dr Koh saying to his Honour that the plaintiffs were not seeking to prove the fact that Mr Tay or Tanto were the purchaser. His Honour then said, "In that event it doesn't matter and I'd rule it inadmissible." His Honour indicated that what was ruled inadmissible was the reference to Mr Tay or Tanto being the purchaser.
For my part, I would see the evidence as admissible as being evidence to prove the facts that were pleaded. The question is whether the trial miscarried through the defendant being denied the chance of leading evidence that might have affected the trial. The reason why the appellant claims it did is set out in the third part of the first ground which reads:
"1.3Had the attempt to call evidence from the respondents(plaintiffs) about the alleged representation of the Tay $800,000 purchase of Lot 50 been admitted into evidence the first appellant (first defendant) would have put into evidence statements made on oath in April 1997 by the first respondent (first plaintiff) in terms:
'Tanto … said he bought the piece of land 2 years back for $800,000…'"
The ground concludes by saying that the appellant was denied natural justice.
His Honour conducted the trial on the basis that it did not matter who was the actual purchaser and that it was sufficient to prove that there was no transaction at all in 1986. The titles register showed that, up to the relevant time, there was no separate transaction whatever relating to lot 50 after it became a separate lot. There would therefore be no evidence which Mr Tay could lead to show the representation was true. The evidence referred to in the ground of appeal that Dr Koh may have earlier sworn that he had been told by Tanto that Tanto had purchased the land earlier for $800,000 would not go to the truth or falsity of the representation. It could conceivably go to the question whether the representation was made by Mr Tay or by Tanto. It had been clearly pleaded that the representation was made by Mr Tay and it would have been open on that pleading to lead evidence that the representation was made by Tanto if that were the defendant's case. I would, in any event, see no inconsistency between what it is alleged Mr Tay said, namely that he and Tanto bought it for $800,000 and the claimed earlier statement of Dr Koh that Tanto said he bought the land two years back for $800,000. This latter statement would not necessarily exclude Mr Tay being a party to the purchase. I would dismiss each part of ground 1.

Value

Scott J assessed damages on the traditional basis for deceit, namely the difference between the price paid and the true value of the property. His Honour expressed the formula by saying that in Kenny & Good Pty Ltd v MGICA (1992) Ltd (1999) 73 ALJR 901 at 913 McHugh J said that the aggrieved party's damages are confined to the difference between the price paid for the property and the price that would have been paid on the basis of a true valuation. This related to a case of a negligent valuation but the damages described corresponds to the damages for deceit.
The fact that the title had not been transferred and the purchase price was in the hands of a company of which Dr Koh was one of the directors might suggest a different method of assessment. His Honour, however, outlined the subsequent history of the matter that caused him to assess damages in the way he did and this is not brought into question by the grounds of appeal. It follows that the starting point for the calculation is $400,000. Each party instructed his valuer to value the land as at April 1989 which would clearly be the appropriate date on which to determine the true value of the land. This was the date Dr Koh agreed to advance the money to buy the half share. Counsel, in submissions on the appeal, made some reference to November 1988 being the appropriate date. As it transpires there is no difference in valuation between the two dates.
There were before his Honour two valuers to give their opinion as to what was the true valuation for the full share as at April 1989. They were Mr Hughes, who was called by the plaintiffs, and Mr Goodchild, called by the defendant. His Honour accepted the valuation of Mr Hughes and he gave the following reasons for reaching this view. (AB32)
"In reaching the view as to the appropriate award of damages, I have accepted the evidence of the plaintiffs' valuer, Ross Alan Hughes, in preference to the defendants' valuer, Peter Goodchild. In my view, the plaintiffs' valuation evidence was more comprehensive and more accurately reflected the true value of the land at the date in question. The defendants' valuer, Mr Goodchild, appears to have valued Lot 50 Pelican Cove, on an optimistic basis rather than true market value and has selected as the basis for his valuation figures at the top end of the range of comparative sales for a lot of this size. In particular, Mr Hughes' evidence as to the profit risk factor involved in a market sale at the date of this valuation was, in my view, more realistic than the comparable figures provided by Mr Goodchild.
The difference between the two valuers appear to revolve around the development constraints in relation to Lot 50, including the strata title complications, the provision of land for a swimming pool, and the provision of service roads to access the units. In addition, I accept Mr Hughes' evidence that Mr Goodchild took insufficient account of the complexities of being involved in a strata title subdivision with a potential of 57 different owners."
The ground of appeal relating to this reads:
"3.The learned trial judge erred in holding that he preferred the property value evidence of Mr Hughes (see reasons for decision pages 21 and 22, paragraphs 81 and 82) over Mr Goodchild in finding Mr Hughes' evidence was more comprehensive in that:
3.1Mr Hughes' evidence was presented with significant reliance on hindsight;
3.2Was based upon an unsupported assertion that he was forewarned 'of the property recession we had to have';
3.3Mr Goodchild's evidence was based only upon events in the property market that had occurred up to late 1988."
The area of the land is 2555 square meters. It is a strata lot in a separate certificate of title. The registered proprietor also had a share in the common property set out in the strata plan of the Pelican Cove residential development. This comprises 50 lots of which 24 are developed with two‑level residential units and 25 are developed with single story units.
The essence of the ground of appeal is that his Honour should have acted on the evidence of the valuer called by the appellants. I shall therefore set out the opinions and conclusions given in evidence by each valuer.
There was working in conjunction with Mr Hughes another valuer, Mr B D Cooper who inspected the land on behalf of the respondent on 20 June 1994. At that time the land was still a vacant lot but the respondent had in hand a development that involved erecting on the land seven three storey units. Mr Cooper, on behalf of the firm Ross Hughes and Company, completed a valuation on 27 June 1994. (Exhibit Q). The valuation set out Mr Cooper's valuation of lot 50 as at April 1989.
Mr Cooper and the appellant's valuer both agreed that there was no comparable in globo vacant strata lot with which he could make a comparison. There were, however, some other transactions which had taken place at the time which each examined and which each thought would be of some assistance. In the main each looked at the same transactions. These were smaller areas of land.
The method used by Mr Cooper to obtain a valuation of lot 50 was to give an opinion of the value of the land on the assumption that it did not form part of a strata plan and "ownership was by green title". That is, it was on the basis of its being an ordinary title of a fee simple ownership in the whole of the land without any restrictions or obligations of a strata title and on the assumption that the land adjoined a road. He expressed his view, on this hypothesis, that the value would be $585,000. In reaching this figure he weighed up the transactions to which I have referred. The conclusion was based on the proposition that a potential purchaser buying the land in April 1989 would be buying it with a view to erecting on it nine units of a similar type to the two storey units on the balance of the strata title. The seven units subsequently proposed were three storey.
Mr Cooper considered that it was necessary to make a number of deductions from the figure he had arrived at by reason of the land being a strata title. It is the extent of these deductions to which the ground of appeal is directed. There is no argument with the figure of $585,000 as a starting point. It was accepted in argument and there was evidence to show that the appellant's valuer had reached a similar figure. Mr Cooper's reasons, as set out in his report, for making the deductions was that as the land being valued formed part of a strata complex involving a total of 50 lots, there would be a possibility of having up to 49 other strata title owners from which approvals must be sought. This would result in extra administration costs in obtaining their approvals to aspects of the development. He said the next factor that would decrease the value of the land, in the mind of a potential purchaser, was that a portion of the land might be required to be available for a swimming pool for the common use of other owners of the strata plan. This arose from a motion passed at a general meeting of the owners of the strata plan that was held on 27 November 1988. The motion passed was:
"The Owners of Lot 50 advised that they have agreed in principle to examine the possibility of:
(i)installing a swimming pool on part of Strata Lot 50
(ii)sub-dividing the Strata Plan to establish the area allocated for the use of the swimming pool as part of the common property of Strata Plan 15461
(iii) that the cost of sub-division and installation of the pool, surrounds, safety fencing and all accessories or matters incidental thereto shall be at the cost of the Owners of Lot 50 SUBJECT THAT the Owners of Strata Plan 15461 shall bear all running costs (including maintenance and repair) at a fixed levy to each unit owner (irrespective of the unit entitlement). The levy (to be determined) covering such running costs shall be applied from the date the pool is installed and shall be added to the levies due by each unit owner from time to time."

The owners of lot 50 who consented were the owners from whom Dr Koh's company obtained title. There was also passed at that meeting the following motion providing for a restriction on development for strata lot 50. The motion was:
"It was UNANIMOUSLY RESOLVED (with the consent and approval of the Owners of Lot 50) that there shall not be more than eight units on any future development of Strata Lot 50."
Mr Cooper said that the amount later spent to achieve the approval for seven units was $80,000 and as at 27 June 1994 an amount of $6,000 was required to be paid for public open space. He said in his report that it would be difficult to ascertain whether such expenditure would have been foreseen by a prospective purchaser in April 1989. He said, however, "We consider that a prudent purchaser of the subject land as at this time would allow a considerable contingency to reflect the foreseeable obvious difficulties including professional fees, risk, delays and holding costs likely to be involved within the approval process." He assessed this contingency at $100,000.
He went on to say, "In our opinion, the approximate ratio in value as to the relevant dates of the hypothetical situation where the subject land is a green title lot and reality where the subject land is a strata within a complex of 50 lots is in the range of 1:0.70 to 1:0.75". These proportions, expressed as a percentage would mean a deduction of between 25 per cent and 30 per cent from the total value. Mr Hughes adopted a midway percentage figure, namely 27.5% and made the following calculation:
"As at April 1989
Value Green Title $585,000

Less 27.5%

(approximately) $161,000
Less Contingency $100,000
-----------
$261,000
-----------

$324,000
------------"

He rounded this to $325,000 which he adopted as the value of the land. This meant that the true value for the half share at the time of the false representation would be $164,000 which, when deducted from the figure represented of $400,000, would result in damages under this head of $238,000.
Mr Cooper was not available to give evidence at the trial and the person called by the respondents to establish value was Mr Ross Hughes, a principal of the firm, to which Mr Cooper was attached. Mr Hughes commenced his evidence by giving his opinion of the value of the lot as at November 1988 the date the owners, who sold the land to Dr Koh's company, purchased from the mortgagee the three lots, namely lots 50, 17 and 20 for $636,000. Mr Hughes said he considered that the value at that time for lot 50 was $325,000. He based his valuation on what he considered a hypothetical purchaser would pay for lot 50 at a sale at that time and which was not a forced sale. There were in existence around that time offers in respect of the other two lots and he made his valuation on the assumption that the hypothetical purchaser would be aware of them. These were an offer of $325,000 for lot 17 and an offer of $230,000 for lot 20. He worked on the assumption that a hypothetical purchaser, conscious of the risks and expenses associated with obtaining approval to a development on a strata lot, would expect a profit in the range of 22%. He then produced a table to show that if one assigned to the other two blocks a value equal to the offers made, then the value of lot 50 on the basis of a profit of 22% would be $325,000. The table showed a total value of the three lots at a greater figure than the figure received by the receiver. He said that he considered that a receiver, in these circumstances, would be conscious that he was passing a latent profit on to the purchasers.
The risk factors to which he referred were that it was known that the body corporate had passed the motions I have set out. This showed a possibility of a requirement to provide a swimming pool. He said the next risk factor was the need to obtain further consents from a large number of other strata title owners in order to get the development through. It is now known that the proposed contract for lot 17 did not proceed to settlement. Mr Hughes said that that did not affect the issue as the known factor in the purchaser's mind is that there was an offer at the time of the November 1988 sale. He said that at the time of the November 1988 sale there was a boom in the property market whereas six months later in April 1989 it was known that there was a deteriorating market. He then put in evidence a report as to the property market conditions from 1987 until 1990. This said amongst other things that the most severe property market downturn in decades commenced in the first quarter of 1989 (AB708). He considered that, because of this downturn, the value of the lot in April 1989 would have been less.
Mr Hughes was then shown Mr Cooper's valuation of 27 June 1994. Mr Hughes said that he had reviewed this report and he agreed with the method Mr Cooper used. He referred to some differences in approaches he would have made. He said he would have been a little more conservative, but said that in his view the figure of $325,000 contained in that report would be the absolute maximum value of the lot. He was shown the report of the appellant's valuer, Mr Goodchild. Mr Hughes' general comment on this report was that it did not accentuate the complications that were attached to the site.
Mr Goodchild gave evidence for the appellant and verified his report. He inspected the block on 20 March 1999, two days prior to the trial and almost five years after Mr Cooper's inspection. By that time the block had built on it the seven strata title residential dwelling units as well as the swimming pool. Mr Goodchild valued the lot 50 as at 1 April 1989 when it was a vacant lot. He said that his research failed to reveal the sale of a similar comparable strata title development lot. He therefore examined the sales of a number of smaller blocks some of which were the same sales examined by Mr Cooper. Mr Goodchild referred to two of these sales as indicating the extreme of the upper level and of the lower level at the time. He expressed the opinion that the most probable value of lot 50 would be between these two extremes. He said in his report, "We have undertaken a hypothetical development of the site based on its potential of seven units which suggests a land value of between $425,000 and $475,000." He said that this value equates to a value range per unit of potential development of approximately $61,000 and $68,000 and he said this appeared to be supported by the limited amount of sales evidence available for analysis. This caused him to reach the valuation of $450,000 which meant that the value of the half share would be $225,000.
The ground of appeal relating to value makes two claims in respect of Mr Hughes's evidence. It is claimed, firstly, that the evidence was presented with significant reliance on hindsight and, secondly, was based upon an unsupported assertion that he was forewarned "of the property recession we had to have".
The cross‑examination of Mr Hughes commenced by its being put to him that his starting value was not significantly different from that of Mr Goodchild and he agreed with this. He agreed that the difference between them was the discount to be applied as a result of what he considered were risk factors. It was then put to him that the principal factor was the deteriorating market. Mr Hughes replied by saying that the market did start to deteriorate in April 1989, but there were a lot of other risk factors. (AB 414). It was later put to him in cross‑examination (AB421) that "selling the end product into a deteriorating market, that necessarily, if one is in, say 1989, discounting for the factor of selling into a deteriorating market, is looking at it with hindsight is it not?" to which he replied, "no" and some further questions were asked in this area. Mr Hughes' opinion, as later expressed in cross‑examination, was that a potential buyer in 1989 would know that the market was starting to decline. The buyer would have had in mind building on the lot a number of units which the buyer would be required to sell as soon as they were constructed. The known fact that the market was deteriorating would indicate the possibility that the price to be obtained for the units, when constructed, would not be as great.
The expression contained in the ground of appeal, "of the property recession we had to have" referred to an expression used by Mr Hughes in his evidence‑in‑chief. He had given evidence that in his opinion the value of lot 50 in November 1988, at the time of the mortgagee sale, was $325,000 and this was a value when there was a buoyant market. He was asked (AB407) as to how that would compare with the value in April 1989 and it was then that he said, "Really after March, April the market crashed which then went on to the recession we had to have." His evidence then went on to say that he thought the value of lot 50 would be less in April 1989 than in November 1988, but concluded the matter by saying that the $325,000 value of Mr Cooper in April 1989 would be the absolute maximum. It was put to him that the deteriorating market lasted for three years and the following was then asked: (AB414)
"And it was a deterioration that occurred, I think you said, concurrently with the recession we had to have, as you put it?---No. It developed into the recession we had to have. It formed part of it. I think that was about 91 or 2 that statement was made."
If that part of the ground claiming that Mr Hughes' evidence was presented with significant reliance on hindsight (ground 3.1), was treated as a discrete ground, I do not consider it is made out. His valuation as at November 1988 of $325,000 was made independently of the subsequent deteriorating market. It was based on the offers for lots 17 and 20. He was using the deteriorating market to say that the value in April 1989 would not have been greater, but would have been less. The deteriorating market was a factor in the value as at 1989, when he confirmed Mr Cooper's valuation. In respect of this he went no further than saying that a purchaser in April 1989 would be aware of the known fact that the market had started to deteriorate and that would have an effect on his or her mind to the extent I have already indicated.
The next part of the ground claims that Mr Hughes evidence was based upon an unsupported assertion that he was forewarned "of the property recession we had to have". (Ground 3.2). Mr Hughes was saying no more than that the deteriorating market which had started developed into a recession. He supported the fact that the market declined by statistics contained in his report (ex R). This ground would also fail as a discrete ground.
However, what is contained in par 3.1 and par 3.2 are not put forward as discrete grounds, but are put forward as grounds as to why his Honour erred in preferring the evidence of Mr Hughes over the evidence of Mr Goodchild. There is a further particular of this ground, namely, that Mr Goodchild's evidence was based on events that had occurred up to 1988 and was not influenced by the later deteriorating market. The matters referred to in the grounds of appeal were put to Mr Hughes in cross‑examination. The complexities involved in the development were argued before his Honour and were also the subject of cross‑examination. It became a matter for the trial Judge to determine.
His Honour's reasons made reference to the swimming pool. The motion passed in November 1988 showed the possibility that lot 50 might be required to provide a swimming pool for all the owners of the whole strata plan. It transpired that this became a requirement. Mr Goodchild was cross‑examined on this and as to whether he took sufficient account of it as an adverse factor. He referred to the possibility that the swimming pool might have enhanced the value of the units that were on lot 50. His Honour also asked some questions in this area. The effect of the requirement of the swimming pool and the extent to which it affected the value of the property were matters of fact before his Honour. There is nothing to indicate his Honour misused his position as the trial Judge or erred in his conclusion.
There was a further factor that became the subject of cross‑examination and that was the extra administration involved in obtaining approval for the development of lot 50 by reason of having to obtain approvals from up to 49 other owners. A thrust of the appellant's submissions in cross‑examination was that the other co‑owners, by the motion passed in November 1988 limiting the development to eight units, had given approval to the development which in fact proceeded by erecting seven three storey units. Mr Hughes said it would still be a factor for a person purchasing the land in April 1989 that there would be administrative costs which would extend to obtaining approvals in other areas.
It was open to his Honour to reach the view, as he did in the reasons I have earlier set out, that Mr Goodchild gave insufficient weight to the complexities of the subdivision. I do not consider there is any basis to say that his Honour was wrong in acting on Mr Hughes' evidence.
A question was referred to in argument that the discount allowed was in any event too much and the submissions made would provide reasons for it to be reduced. It was a discount as high as $261,000 taken from the figure of $585,000. I have indicated that if the particulars of the grounds were considered as discrete grounds they would not have been made out. There is nothing contained in them that would show that his Honour was wrong in acting on the figure advanced by Mr Hughes. The matter goes further as Mr Hughes by another way reached a similar conclusion. It was his opinion based on offers for lots 17 and 20 that the value in November 1988 was $325,000 and his view that the effect of the declining market was that this would be the absolute maximum value in April 1989.

Costs

Ground 4 of the appeal reads:
"4.The learned trial judge erred in the exercise of his discretion to award the first respondent (first plaintiff) the whole of his costs of the action, failing to give sufficient weight to the facts that:
4.1The respondents (plaintiffs) brought four separate causes of action against the appellants (defendants) and the respondents (plaintiffs) failed in three of four of their causes of action.
4.2The claim by the second respondent (second plaintiff) was dismissed.
4.3The claim against the second appellant (second defendant) was dismissed."
The order for costs which his Honour made following a hearing on 17 November 1999 ([1999] WASCA 228) was that the first defendant pay the plaintiff's costs of the action to be taxed. That is, that Mr Tay was to pay Dr Koh's costs of the action. There was no order of costs made in favour of the second plaintiff, K T and T Developments Pty Ltd and no order of costs was made against the second defendant, Cotswold Holdings Pty Ltd. The order extracted (AB11) refers to "plaintiffs'", but that would appear to be an error.

The ground of appeal is that his Honour erred in awarding Dr Koh the whole of the costs of the action and refers to reasons why the costs should have been reduced.
His Honour delivered his reasons in the action on 15 October 1999 ([1999] WASC 197). He then adjourned the matter to enable the form of the order to be discussed and to deal with the question of costs. At this hearing counsel for Dr Koh applied for a special order of costs as a "Calderbank" offer had been made. This was the only matter discussed at that hearing and it was refused by his Honour. There was no suggestion made to his Honour that the costs should be reduced by reason of the matters raised in the grounds of appeal. Dr Koh succeeded on most issues and particularly on the important question of credibility. The defendant company against which the plaintiff failed was found to have been properly joined. The taxing Master has the power to disallow any costs which can be seen to relate solely to any issue that failed. I do not consider in all these circumstances that it can be said his Honour's discretion miscarried as to costs.
I would dismiss the appeal.
IPP J: I have had the advantage of reading in draft the reasons published by Pidgeon J. I am in agreement with those reasons and have nothing further to add.
MURRAY J: I agree with Pidgeon J that, for the reasons given by his Honour, the appeal should be dismissed.