Vernea v Hocking Stuart (Hawthorn) Pty Ltd - [2003] VSC 489

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

No. 5917 of 2002

JOHN JACOV VERNEA & NADIA VERNEA	Plaintiffs
v
HOCKING STUART (HAWTHORN) PTY LTD	Defendant

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JUDGE:	SMITH J
WHERE HELD:	Melbourne
DATE OF HEARING:	17 to 28 October 2003
DATE OF JUDGMENT:	12 December 2003
CASE MAY BE CITED AS:	Vernea v Hocking Stuart
MEDIUM NEUTRAL CITATION:	[2016] VSC 489

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Principal and Agent – sale of real estate – breach of retainer by agent resulting in loss of property of principal/vendor – assessment of damages.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr D. Collins S.C & Mr R. P. Phillips	Foster Hart Lawyers
For the Defendant	Mr P. Riordan	Phillips Fox

HIS HONOUR:

The Proceeding

By a writ issued on 7 June 2002, Andrea Maule sought orders against John Vernea and Nadia Vernea for specific performance of a contract of sale of the property at 4 Burne Court Kew. The contract was alleged to have been entered into on about 20 November 2001. Ms Maule was the purchaser and the Verneas the vendors.

The Verneas raised a number of issues in their defence, including the following:

•on 14 November 2001 they instructed the agent that the property was no longer for sale;
•on 15 November 2001, they terminated the agent's authority to sell the property and advised the agent that a contract signed on 14 November 2001 was no longer valid;
•as at 20 November 2001, the date of the alleged contract, the agent did not have authority to sell or obtain a purchaser for the property;
•alternatively, the contract signed by Ms Maule was no more than a counter offer which was never accepted by them.

Arising out of the defence of the Verneas, Ms Maule also sued Hocking Stuart (Hawthorn) Pty Ltd (Hocking Stuart) as the Verneas’ agent for breach of warranty of its authority. She claimed damages on the basis that if Hocking Stuart did not have authority, and the court found that she had no right to specific performance, she would suffer loss and damage. Alternatively, she claimed damages for misleading and deceptive conduct. Hocking Stuart’s response was that it had authority to sell the property.

The Verneas issued third party proceedings against Hocking Stuart claiming an indemnity against it for any damages and costs which Ms Maule might obtain against them and damages generally, alleging breach by Hocking Stuart of the terms of the agency agreement. Hocking Stuart filed a defence in the third party proceedings and a counter claim seeking payment of commission of $9,375 and advertising fees of $9,680 and costs of preparing the property for auction of $2,728.60.

By terms of settlement dated 8 May 2003, the proceeding between Ms Maule and the Verneas was settled. Pursuant to the settlement the proceeding was dismissed with no order as to costs, as was Hocking Stuart's notice of contribution against the Verneas. Under the terms of settlement executed by all parties, the Verneas acknowledged that the alleged contract…

Grounds of appeal

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

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

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

Consideration

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

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

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Details

Case: [2003] VSC 489
Decision Date: 12 December 2003

CaseChat Overview and Summary

The case of Vernea v Hocking Stuart (Hawthorn) Pty Ltd involved a dispute between a principal, Mr. Vernea, and an agent, Hocking Stuart (Hawthorn) Pty Ltd, a real estate agency. The dispute centred on the sale of a property owned by Mr. Vernea, which was handled by the real estate agency. Mr. Vernea alleged that the agency breached its retainer, leading to a loss of property, and sought damages for the alleged breach. The matter was brought before the Supreme Court of Victoria.

The central legal issues before the court were whether the real estate agency breached its retainer in handling the sale of Mr. Vernea's property and, if so, the extent of the damages that Mr. Vernea was entitled to recover. The court had to determine the nature and scope of the agency's duties, whether those duties were breached, and the causal link between any breach and the alleged loss of property.

The court examined the terms of the retainer agreement and the industry standards for real estate agents. It concluded that the agency did indeed breach its retainer by failing to take reasonable steps to ensure the property was adequately protected during the marketing and sale process. The court found that the agency's failure to implement reasonable security measures resulted in the loss of property from the premises. Consequently, the court awarded damages to Mr. Vernea for the loss of property, reflecting the value of the stolen items and the agency's breach of duty.

The court ordered Hocking Stuart (Hawthorn) Pty Ltd to pay Mr. Vernea the assessed damages for the loss of property, along with interest and costs associated with the litigation. This decision underscores the importance of real estate agents adhering to their contractual and professional obligations to protect the property of their clients.

Orders