67 There is no doubt that, as far as the present state of case law in Australia determines the question, damages under s.68 SCA in respect of a contract for the sale of land which has gone off are assessed on a different basis from damages at common law: see the discussion of the authorities by Young J (as his Honour then was) in Rosser v Maritime Services Board (unrep. NSWSC 17 September 1996). The current view in Australia is that damages under s.68 are a substitute for an order for specific performance, i.e., they are to put the plaintiff in the same position as if he or she had obtained the order and a consequential conveyance of the land upon judgment. Accordingly, the monetary substitute for the order reflects the value of the land at the time it would have been conveyed pursuant to the order for specific performance, which is taken to be the date of the judgment: Wroth v Tyler [1974] Ch 30, at 60 per Megarry J; ASA Constructions at 518; Rosser ibid. But this general rule is subject always to the broader considerations of justice which underlie Equity's discretionary remedies.
68 Assume, for example, that a plaintiff purchaser seeking specific performance in a rising real estate market ought reasonably to have realised, after commencing his suit, that circumstances now made it impossible for him to obtain specific performance, and that he would have to accept damages under s.68. It would be unfair to the defendant vendor if the plaintiff did not seek to mitigate his damages by purchasing an equivalent property (if one could be found) but, rather, waited until judgment in order to receive damages under s.68 assessed on the then current market price of the property. That was the very case found by Needham J to exist in ASA Constructions , which induced his Honour to depart from the general rule that the date for assessment of damages was the date of judgment. Mr Angyal submits that I should do likewise in the present case.
69 Mr Angyal says that it was unreasonable and unfair of the Mills not to mitigate their damages under s.68 SCA by entering the rising property market and purchasing a substitute property at either of two dates, viz. the date upon which the Mills first had notice that Tricon had been granted an option to purchase the property, i.e. about 29 January 1999, or the date for completion of the contract brought into existence by exercise of the Mills Option, i.e. 24 March 1999.
70 Mr Cotman SC submits that there are no circumstances in the present case which warrant departure from the general rule that damages under s.68 are assessed as at the date at which they are given in substitution for an order for specific performance. Here, he says, that date is either the date upon which the Court of Appeal delivered judgment reversing the order for specific performance which was made in the Mills' favour at trial, or the date upon which the Court of Appeal made orders in accordance with its judgment, or else the date upon which the Master will finally assess the quantum of damages upon an enquiry.
71 In my opinion, the following considerations are relevant in ascertaining where the justice of the case on this point lies.
72 First, I take into account that the Mills' predicament was brought about by the fraudulent deception of Ruthol. When a plaintiff's loss has been brought about by the conscious or malicious wrongdoing of the defendant "there could be no doubt that there you would say that everything would be taken into view that would go most against the wilful wrongdoer - many things which you would properly allow in favour of an innocent mistaken trespasser would be disallowed as against a wilful and intentional trespasser on the ground that he must not qualify his own wrong, and various things of that sort" : per Lord Blackburn in Livingstone v Rawyards Coal Co (1880) 5 AC 25, at 39. While those words were spoken in the context of a consideration of damages in tort, the sentiments expressed are not peculiar to tort or to the common law nor are they foreign to equity. They simply express a commonsense notion of justice and fairness which comes into play whenever a conscious or malicious wrongdoer seeks to whittle away the damages to be awarded against him by criticising as unreasonable the conduct of his victim: in such a case, one does not give the wrongdoer the benefit of the doubt.
73 Second, I take into account that the Mills wished to use the property for the purpose of Mr Mills' practice as a veterinarian. A decision whether or not to abandon pursuit of an order for specific performance at any stage was, therefore, one which must have been founded primarily on commercial considerations.
74 Third, there is no evidence of the Mills' financial capacity to purchase another comparable commercial property, if one could be found, in a rising market while proceedings against Ruthol and Tricon were pending. For the reasons stated in the first consideration, I should not assume that the Mills had such capacity.
75 Fourth, there is no evidence as to whether or not the property had particular characteristics, important to the use to which the Mills wished to put it, making it difficult to find a comparable substitute property. For the reasons stated in the first consideration, I should not assume that a suitable substitute for the property could readily be found.
76 Fifth, as at about 29 January 1999, when the Mills first discovered the beginnings of the truth about Ruthol's deception, they could not reasonably be expected to know the whole of the facts and circumstances upon which, ultimately, the Court would find that they were not entitled to specific performance. Further, as at that date, Tricon had not exercised its option to purchase under the lease and the Mills could not know for certain whether Tricon would do so and whether, if it did, its option would be given priority over theirs.
77 Sixth, the Mills' position would have been no clearer to them by the date for completion of their contract, i.e. 24 March 1999. By that time, the Tricon option still had not been exercised.
78 Seventh, the priority which Tricon ultimately established depended partly on what had transpired between it and Ruthol, to which the Mills were not privy. Bearing in mind the fraudulent deception which Ruthol had practised upon them, the Mills would be justified in waiting to see how the evidence turned out at the trial before conceding that Tricon's interest had priority to their own.
79 Eighth, it could not reasonably be said that the Mills should have realised at any time up until the delivery of judgment by the Court of Appeal that their case for specific performance was doomed: they had succeeded at first instance.
80 In those circumstances, I am of the view that Ruthol has at not demonstrated that the Mills were unreasonable in not going out into a rising real estate market to purchase a comparable substitute property, at least until delivery of the judgment of the Court of Appeal at the earliest.
81 However, the Mills' position as to specific performance was not finally unequivocally made clear by the Court of Appeal's judgment. All that the Court of Appeal decided was that the Tricon option had priority over the Mills' Option. The Court of Appeal did not immediately make an order for specific performance in favour of Tricon. The matter was stood over in order for the parties to bring in Short Minutes of Order. At the time of judgment, therefore, it was still open to Tricon to elect to take damages in lieu of specific performance if it wished to do so in the circumstances then prevailing.
82 On 5 November 2003, however, when the Court of Appeal made an order for specific performance in favour of Tricon, the Mills' position was made unequivocally clear. It seems to me that no consideration of justice or fairness warrants that the Mills have the benefit of a rising market after that date so that damages under s.68 should be assessed as at the date upon which the Master finally determines the quantum of damages upon enquiry.
83 I appreciate that there is no evidence that the Mills could afford to buy an equivalent property without first receiving from Ruthol the damages to be assessed by the Master. But it is impossible to say how long it will be before that assessment is made. The Court of Appeal delivered its judgment on 26 March 2003 but, for some reason unexplained in the evidence, it was not until 5 November 2003 that the orders were formally made. The matter was not re-listed before me for hearing of argument on the separate question until 10 June 2004. A line has to be drawn somewhere otherwise, in a continuing rising market, it would be in the interests of a purchaser entitled to damages under s.68 SCA not to have the most expeditious trial of the assessment.
84 Accordingly, in my opinion the Mills' damages under s.68 SCA should be assessed as at the date when the Mills' position became finally and unequivocally clear, i.e., 5 November 2003.
Nature of damages to be assessed