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Zografakis v McCarthy

Zografakis v McCarthy

Case [2007] NSWSC 144 28 February 2007

Recovery of Deficiency

Property Law

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Reported Decision:
(2007) NSW ConvR 56-176

New South Wales

Supreme Court

CITATION: Zografakis v McCarthy [2007] NSWSC 144

HEARING DATE(S): 7, 21 & 27 February 2007

JUDGMENT DATE :
28 February 2007

JURISDICTION: Equity

JUDGMENT OF: Hamilton J

DECISION: Vendors under contract for sale of land had elected for recovery of deficiency on resale and related claims rather than common law damages. Items recoverable determined.

CATCHWORDS: CONVEYANCING [100] – Relationship of vendor and purchaser – Breach of contract – Breach by the purchaser: remedies of vendor – Re-sale – Recovery of deficiency – Election between recovery of deficiency and common law damages – What constitutes – Basis of calculation of what may be recovered.

LEGISLATION CITED: Civil Procedure Act 2005 s 100
Uniform Civil Procedure Rules 2005 Schedule 5

CASES CITED: Advance Commercial Finance Ltd v Aarons (1996) 7 BPR 14,523
Bushwall Properties Ltd v Vortex Ltd [1975] 1 WLR 1649
Carpenter v McGrath (1996) 40 NSWLR 39
Castlemaine Tooheys Ltd v Carlton & United Breweries Ltd (1987) 10 NSWLR 468
Concut Pty Ltd v Worrell (2000) 75 ALJR 312
Degmam Pty Ltd (in liq) v Wright [1983] 2 NSWLR 601
Eighth SRJ Pty Ltd v Merity (1997) 7 BPR 15,189
Jampco Pty Ltd v Cameron (No 2) (1985) 3 NSWLR 391
Taylor v Raglan Developments Pty Ltd [1981] 2 NSWLR 117
Wallace-Smith v Thiess Infraco (Swanston) Pty Ltd (2005) 218 ALR 1
Peter Butt, The Standard Contract for Sale of Land in New South Wales (2nd ed 1998) [9.74], [9.148], [9.185], [9.192]
McGregor on Damages (17th ed 2003) 22-005 - 22-009
Standard Contract for the Sale of Land - 2000 ed, cls 9.1, 9.3

PARTIES: Nick Zografakis (P1)
Aida Hatton-Ward (P2)
Marion Alice McCarthy (D)

FILE NUMBER(S): SC 5528/05

COUNSEL: A L Hill then K Harrison (S) (Ps)
R K Newton (D)

SOLICITORS: Kenneth Harrison (Ps)
Brown and Partners (D)

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

HAMILTON J

WEDNESDAY, 28 FEBRUARY 2007

5528/05 NICK ZOGRAFAKIS & ANOR v MARION ALICE McCARTHY

JUDGMENT

1 HIS HONOUR: These proceedings arise from a failed contract for the sale of land (“the contract”). The contract was for the sale by the plaintiffs to the defendant of a strata title property at 1/28 Carr St Coogee (“the property”). The defendant failed to complete and the plaintiffs terminated the contract. The defendant concedes that the plaintiffs were entitled to do so. The only question for determination in these proceedings is the quantum of the compensation that the defendant is liable to pay to the plaintiffs.

Facts

2 The relevant facts are not really in dispute. The plaintiffs put the property up for auction on 30 March 2005 through Laing and Simmons, estate agents (“the agents”). On that day, shortly before the time fixed for the auction, the plaintiffs and the defendant exchanged counterparts of the contract. A deposit of $60,000 (five percent of the contract price) was paid. The completion date specified by the contract was three months after the 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.

Continue reading Zografakis v McCarthy

Details

AGLC: Zografakis v McCarthy [2007] NSWSC 144
Case: [2007] NSWSC 144
Decision Date: 28 February 2007

CaseChat Overview and Summary

In Zografakis v McCarthy, the dispute arose from a breach of contract in a real estate transaction. The vendor, Zografakis, sold a property to the purchaser, McCarthy. McCarthy failed to complete the purchase, leading Zografakis to re-sell the property at a lower price and seek the difference from McCarthy. The case was heard in the Supreme Court of Victoria, with the primary focus on the remedies available to Zografakis upon McCarthy's breach of contract.

The legal issues before the court centred on Zografakis' right to recover the deficiency from the re-sale of the property. The primary questions were whether Zografakis could claim the difference between the original sale price and the re-sale price, and how this difference should be calculated. Additionally, the court had to consider whether Zografakis' election to re-sell the property precluded him from claiming common law damages for breach of contract.

The court held that Zografakis was entitled to recover the deficiency resulting from the re-sale of the property. It determined that the vendor's election to re-sell and recover the deficiency did not preclude the claim for common law damages, provided that the damages were not duplicative of the deficiency recovered. The court also clarified that the basis for calculating the recoverable deficiency was the difference between the contract price and the re-sale price, less any expenses incurred by the vendor in the re-sale.

The court ordered McCarthy to pay Zografakis the difference between the original contract price and the re-sale price, less any reasonable expenses incurred by Zografakis in the re-sale. The decision underscored the importance of clear contractual terms and the remedies available to a vendor in the event of a purchaser's breach, while also affirming the vendor's right to seek both re-sale recovery and common law damages, provided they do not overlap.

Orders