JUDGE:	McDonald J
WHERE HELD:	Melbourne
DATE OF HEARING:	31 January 2019
DATE OF JUDGMENT:	27 February 2019
CASE MAY BE CITED AS:	Zeng v Leeda Projects Pty Ltd
MEDIUM NEUTRAL CITATION:	[2019] VSC 106

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APPEAL – Application for leave to appeal on question of law – Victorian Civil and Administrative Tribunal – Senior Member awarded nominal damages for respondent’s breach of implied term requiring building works to be completed within reasonable period of time – Appellant could not access property for 130 weeks due to respondent’s breach of contract – Loss of use damages for breach of contract – Measure of damages by reference to rental value of property during delay period – Application for leave to appeal granted and appeal upheld – Loss of use damages awarded – Whether damages should be reduced by reason of failure to mitigate loss – Whether proceeding should be remitted to the Victorian Civil and Administrative Tribunal – No remittal of proceeding – Civil Procedure Act 2010 s 7 – Domestic Building Contracts Act 1995 ss 42, 53, 57, 57A – Victorian Civil and Administrative Tribunal Act 1998 ss 109, 148.

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APPEARANCES:	Counsel	Solicitors
For the Appellant/Cross-Respondent	Mr R Andrew	Russell Kennedy
For the Respondent/Cross-Appellant	Mr C Tran	Mills Oakley

HIS HONOUR:

In March 2011, Yun Zeng and her husband, Mr Dong, purchased a whole floor apartment at Level 87, Eureka Tower, Melbourne (‘apartment’). The purchase price was $5,838,000. The apartment was a shell and required fit-out works before it could be occupied. On 24 September 2013, Ms Zeng and Leeda Projects Pty Ltd (‘Leeda’) entered into a building contract pursuant to which Leeda agreed to carry out internal fit-out works including a private art gallery and residence (‘fit-out contract’). The contract price was $1,168,558.24 (inclusive of GST).

The fit-out contract contained an implied term that ‘the works must be completed within a reasonable time.’[1] The contracted works should have been completed by 3 December 2014. In breach of the implied term, the works were not completed for a further 130 weeks. On 2 June 2017, Leeda returned the access cards to the apartment to Ms Zeng.
[1]Leeda Projects Pty Ltd v Zeng [2018] VCAT 679 [113].

Disputation between Ms Zeng and Leeda led to a proceeding in the Victorian Civil and Administrative Tribunal (‘Tribunal’), heard over ten days between late January and mid-March 2018. Leeda claimed damages equivalent to the sum owing under the fit-out contract upon practical completion of the work. In June 2017, Ms Zeng’s architect certified for payment to Leeda in the sum of $211,944.20. Leeda claimed this amount. Ms Zeng claimed damages in the Tribunal for the loss of use and enjoyment of the apartment for the delay period, such loss measured as:

·A sum equivalent to the…

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.

Continue reading Zeng v Leeda Projects Pty Ltd

Details

AGLC: Zeng v Leeda Projects Pty Ltd [2019] VSC 106
Case: [2019] VSC 106
Decision Date: 27 February 2019

CaseChat Overview and Summary

The appellant, Zeng, sought to appeal a decision of the Senior Member of the Victorian Civil and Administrative Tribunal (VCAT) against the respondent, Leeda Projects Pty Ltd, in relation to the respondent's breach of an implied term requiring the building works to be completed within a reasonable period of time. Zeng claimed that the respondent's breach of contract resulted in the appellant being unable to access the property for 130 weeks. Zeng sought damages for the loss of use of the property during the delay period. The Senior Member of VCAT awarded Zeng nominal damages but declined to award loss of use damages.

The court had to decide whether Zeng was entitled to loss of use damages for the period during which the respondent's breach prevented Zeng from accessing the property. Additionally, the court had to determine whether the damages awarded should be reduced due to Zeng's failure to mitigate the loss and whether the proceeding should be remitted to VCAT for reconsideration of the damages. The court also had to consider the applicability of the Civil Procedure Act 2010, the Domestic Building Contracts Act 1995, and the Victorian Civil and Administrative Tribunal Act 1998.

The court found that Zeng was entitled to loss of use damages for the period during which the respondent's breach prevented Zeng from accessing the property. The court held that the measure of damages was the rental value of the property during the delay period. The court rejected the argument that the damages should be reduced due to Zeng's failure to mitigate the loss. The court held that there was no basis to remit the proceeding to VCAT for reconsideration of the damages. The court granted the application for leave to appeal and upheld the appeal. The court awarded Zeng loss of use damages.

The court ordered that the appeal be upheld, that Zeng be awarded loss of use damages, and that the damages not be reduced by reason of failure to mitigate loss. The court also ordered that the proceeding not be remitted to VCAT.

Orders