District Court of WA|2011-11-30

SOUTER -v- CONDOR DEVELOPMENTS PTY LTD [2011] WADC 212 (30 November 2011)

JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA

CITATION : SOUTER -v- CONDOR DEVELOPMENTS PTY LTD [2011] WADC 212

Contract for the sale of land - Breach - Damages - Turns on own facts

Bellgrove v Eldridge [1954] HCA 36; (1954) 90 CLR 613

Chicco v Corporation of the City of Woodville (1990) A Tort Rep 81-028

Drexel London (a firm) v Gove (Blackman) [2009] WASCA 181

Joliffe v Baker (1883) 11 QBD 255

Lawrence v Cassel [1930] 2 KB 83

Palmer v Johnson (1884) 13 QBD 351

Re Wilsons & Stevens Contract [1894] 3 Ch 546

Simply Irresistible Pty Ltd v Cauper [2010] VSC 601

Tabcorp Holdings Ltd v Bowen Investments Pty Ltd [2009] HCA 8; (2009) 236 CLR 272

Willshee v Westcourt Ltd [2009] WASCA 87

1 On 7 October 2005, the plaintiff entered into an agreement with the defendant to purchase apartment number 151 in a building called 'Condor Tower'. The plaintiff's purchase was effectively 'off the plans', the defendant then being engaged in a project to refurbish an existing building. The terms of the agreement are contained in an offer and acceptance form with conditions drafted by the defendant's solicitors. The plaintiff agreed to pay a purchase price of $1.75 million and a deposit of $100,000.

2 Because of delays in the construction of Condor Tower, the defendant was not ready to proceed to settlement until 30 July 2009.

3 The plaintiff's case is that apartment 151 as built and provided at settlement did not correspond in some respects with express and implied terms of the sale contract and with representations said to have been made to him. The plaintiff sues for damages at common law and also seeks remedies pursuant to the provisions of the Trade Practices Act 1974 (Cth) (TPA).

4 In 2005, the plaintiff was considering the purchase of an apartment. The plaintiff's then partner, Janine Thomas (in this case the term referring not to any business affiliation but rather a personal one falling short of a de facto marriage), was a registered real estate sales representative. The plaintiff 'understood' from what Ms Thomas had told him that she was a partner (in this case referring to a business affiliation) of a man named Wayne Briggs.

5 Condor Tower began life as a high rise office building. In 2004, the defendant was in the process of redeveloping and refurbishing the tower by converting it to a predominantly residential strata titled tower.

6 As par 10 of the further amended statement of claim sets out, Ms Thomas was employed by a licensed real estate agent named Wayne Briggs; in fact by his company, trading under the name 'Wayne Briggs Project Marketing'. In February 2004, the defendant had engaged WBPM as the exclusive selling agents for Condor Tower.

7 The plaintiff in his evidence described himself as an 'oil field consultant manager'. He said that in the course of his duties he dealt with contracts of various kinds. These as it turned out were mainly service contracts for the provision of personnel and equipment to the oil and gas industry 'under Australian law and international law'. The plaintiff said that he was involved in contract administration and dispute resolution. The contracts ranged in value from $3,000 up to $30,000,000.

8 The plaintiff's evidence was that when he first considered the purchase of an apartment Ms Thomas showed him some penthouses in a project called 'Manhattan Towers' which she was selling. Ms Thomas, he said, also told him that she was also a sales agent for Condor Tower. The plaintiff said that after looking at the Manhattan Towers project Ms Thomas showed him some material with respect to Condor Tower. This included brochures and plans that were tendered into evidence as exhibits 1, 14 and 16. He also had the opportunity to look at an architect's model of the proposed redevelopment of Condor Tower. The model was not in evidence.

9 The plaintiff said that when he expressed an interest in buying an apartment Ms Thomas recommended Condor Tower over Manhattan Towers.

she did inform me that it was probably a far better investment proposition because of its location, the fact that there is heritage land in front of the building, they - they wouldn't be losing the view of the river; Kings Park especially. Then she - informed me that the two sub-penthouses, as they are actually known, penthouses in the - project with the Sky Home being on top, that both the penthouses were actually for sale and I may consider purchasing one of those ... (ts 64).

11 In the course of his cross-examination the plaintiff said that 'Very early on in the discussions', Ms Thomas 'inquired about the joint purchase on a flip basis, to make some money, but she backed out before a decision was actually made to even purchase the property' [meaning apartment 151]. With respect to this idea that they jointly purchase apartment 151 he said 'probably within the first week of even discussing purchasing the property, it was dismissed. Ms Thomas said that she wasn't in a position to make any further investments ...' (ts 171).

12 I accept that there was a conversation along those lines. Ms Thomas recalled that she was working seven days a week on the display suite of Condor Tower. She agreed that given their relationship the plaintiff might well have popped in to visit her there.

13 Ms Thomas said that the plaintiff approached her after their relationship ended and told her he was interested in purchasing apartment 151. While she did not recall any serious interest on the plaintiff's part prior to him saying that he wanted to make an offer on apartment 151, Ms Thomas said that while their relationship was on foot,

We loosely talked about buying the condo penthouse because we knew it was just beautiful and it was a very unique product, it still is a unique product, but it was more of a loose jovial talk, 'maybe we should go halves in it', it wasn't serious ... We weren't together long enough to be investing in a property like that, so it was just a thought. I suppose he knew what I was selling and he knew how enthusiastic I was about the Condor Tower (ts 247).

14 The plaintiff was given a copy of the form of agreement that he would have to enter into if he wished to purchase one of the apartments at Condor Tower. I am satisfied that that probably occurred after the plaintiff advised Ms Thomas that he wanted to purchase apartment 151 for himself.

15 The agreement, in addition to a one page 'Contract for Sale of Strata Titled Property by Offer and Acceptance' that I will refer to later, consisted of a document of 35 pages entitled 'Conditions' plus annexures. The annexures were the 'Simplified Plans & General Specifications', 'Proposed Strata Plan', 'Management Statement', 'Strata Company Management Agreement', and 'Notice of Exemption'. I will refer to these documents collectively as the Contract.

16 The Conditions included the following terms relevant to the issues raised in this action:

1.1.1 These are the Conditions referred to in the Offer and Acceptance document.

1.1.2 These Conditions are part of the Agreement between us and you.

In this Agreement certain words and phrases have special meanings. Some of these words and phrases are set out in the clause entitled 'Definitions' and will have the meaning appearing next to them unless the contrary intention appears.

Other words and phrases are defined in other clauses of this Agreement in which case they will have those meanings for the purpose of the clause in which they appear and throughout this Agreement.

3.1.1 At the time you enter into this Agreement the Apartment may not have been constructed. We intend to procure that our builder constructs Condor Tower as soon as possible after we obtain all of the Approvals.

3.1.2 We will obtain all of the Approvals at our cost prior to commencing the development of Condor Tower.

'Completion' means the date when Condor Tower is finally completed; and

'Practical Completion' means the date when Condor Tower is so complete apart from minor defects as to allow occupation.

3.2.2 Subject to our prior approval of the Planning Application and the grant of the Building Licence we shall proceed with the construction of Condor Tower on the Land in accordance with the Planning Application as soon as practicable after the date of issue of the Building Licence. We will endeavour to cause Practical Completion of Condor Tower on the Land as soon as possible and in accordance with the approved Planning Application and the Building Licence and completed:

3.2.2.3 in compliance with all applicable legislation;

3.2.2.5 using materials which are in good condition, of high quality and suitable for the purpose for which they are intended.

3.2.3 We must cause full Completion of Condor Tower to be effected within 3 months from Practical Completion and in accordance with the approved Planning Application and the Building Licence.

3.4.1 For your ease of reference the Simplified Plans and General Specifications for Condor Tower are annexed hereto and marked 'A' and 'B' respectively;

3.4.2 A copy of the Detailed Plans are available for inspection by you at the office of our selling agent during normal business hours;

3.4.3 You acknowledge having been given the opportunity of inspecting the Detailed Plans before entering into this Agreement. You are deemed to be fully aware of the exact nature, extent and details of the Detailed Plans whether or not you have inspected them.

3.4.4 If there is any inconsistency between the Simplified Plans and General Specifications and the Detailed Plans then the Detailed Plans shall prevail.

3.5.1 It may be necessary for us to make some variation to the Detailed Plans and the General Specifications after you enter into this Agreement if:

3.5.1.1 a relevant authority imposes conditions on us which requires us to do so; or

3.5.1.2 it becomes necessary by reason of the requirements or the practical methods of construction either by (without limitation) the dictates of good building practice or the availability of materials; or

3.5.1.3 we consider it will enhance Condor Tower, or the Apartment; or

3.5.1.4 some matter arises which we could not have reasonably foreseen; or

3.5.1.5 the cost of materials or products described in the Detailed Plans or General Specifications has risen so that it is reasonable for us to substitute them with similar materials or products.

3.5.2 If we make such a variation then we will ensure that no variation will materially alter or affect the use and enjoyment of the Apartment by you or substantially diminish its value.

3.5.3 So long as we ensure that our builder constructs Condor Tower substantially in accordance with the Detailed Plans and the General Specifications with such variations permitted by this clause then we shall have fulfilled our obligations to you.

3.5.4 No variations to the Detailed Plans, the General Specifications or of Condor Tower will invalidate this agreement or give you any claim for a reduction of the purchase price or claim for compensation or the right to delay settlement.

3.5.5 You shall not be entitled to make any objection requisition or claim for reduction of the purchase price, by reason of any change to the Strata Plan ultimately registered by us pursuant to a variation permitted by this clause.

3.5.6 We shall not be obliged to enter into any supplementary agreement with you if we vary the Detailed Plans or the General Specifications in any way whatsoever.

3.5.7 In the event of any variation to the Detailed Plans, the General Specifications of Condor Tower being made in accordance with this Agreement, the Apartment as described in the Offer and Acceptance shall be subject to such variation.

3.7.1.1 you are entitled to inspect the Apartment; and

3.7.1.2 we must grant access to the Apartment to enable you to inspect the Apartment;

on one occasion within 5 business days before the Settlement Date.

3.7.5 After inspection you may notify us of any minor deficiencies in the construction of the Apartment (but not deficiencies in respect of any variation approved pursuant to the clause entitled 'Variations By You') or the common property comprised in the Strata Plan. Any deficiency in the construction of the Apartment is not materially affected and the local authority has issued a certificate permitting occupation.

3.7.6 We will rectify those deficiencies which we are obliged to rectify within a reasonable time before or after the Settlement Date. You will not delay settlement by reason only that we may not have by the Settlement Date rectified any or all of the minor deficiencies.

3.7.7 You will not delay settlement or make any claim for reduction of the purchase price or compensation or cancel this Agreement by reason of such minor deficiencies in the construction of the Apartment.

...

4.4 Balance of Purchase Price

You shall pay the balance of the purchase price to us on the Settlement Date.

Upon completion of the construction of Condor Tower we will prepare the Strata Plan so that it complies with the Strata Titles Act 1985 and is otherwise in accordance with this Agreement.

...

6.2 Settlement Date

Settlement will take place:

6.2.1 five (5) business days after the date that the Duplicate Certificate of Title for the apartment has been issued from the DOLI; or

6.2.2 the date of settlement referred to in the Offer and Acceptance,

whichever is the later.

...

6.9 Merger

6.9.1 On settlement the clause entitled 'Construction of Condor Tower' and 'Quality of Construction' shall merge and be extinguished;

6.9.2 No collateral agreement or warranty shall be deemed to apply in respect of the clauses entitled 'Construction of Condor Tower' and 'Quality of Construction' after settlement and all our obligations, if any, to you in respect of the repair of defects to your Apartment or Condor Tower shall be extinguished.

...

7.2 No Objection or Requisitions

7.2.1 No objection shall be taken requisition made or compensation claimed by reason that:

7.2.1.2 variations to the Detailed Plans and General Specifications permitted by the clause entitled 'Variations By Us';

7.2.1.3 variations to the unit entitlement allocated to the Apartment;

7.2.1.6 the alteration in the size of the Apartment from that shown on the proposed Strata Plan so long as it does not differ in area by 5% more or 5% less than the area shown on the Strata Plan.

...

11.5 Your Rights on Default

If we are in default in performing or observing our obligation to complete settlement or fail to comply with any of the other provisions of this Agreement which thereby prevents us from completing settlement under this Agreement and we fail to remedy the breach or default within the relevant period after service of a default notice or if we repudiate this Agreement, then you, without further notice to us shall be entitled to exercise one or other of the following remedies that you shall think fit:

11.5.1 affirm this Agreement and sue us for specific performance of this Agreement and damages for breach in addition to or in lieu of specific performance; or

11.5.2 terminate this Agreement, and recover the deposit and all interest (if any) thereon less any deduction under the clause entitled 'The Deposit';

12.1.1 This Agreement constitutes the entire agreement between us.

12.1.2 There are no prior or other agreements which shall have any effect on this Agreement nor shall any correspondence or documents which may have passed between us before execution have any effect whatsoever on this Agreement.

You acknowledge that in purchasing the Apartment and in entering into this Agreement you have:-

12.2.1 not relied upon any statement representation or warranty by us or our selling agent and our and their respective servants or agents (whether in writing or otherwise) other than as contained in this Agreement; and

12.2.2 relied solely upon your own skill and judgment;

12.2.3 thoroughly read and understood this Agreement;

12.2.4 had the opportunity to produce this Agreement to professional advisors for the purpose of receiving independent legal and/or financial advice;

12.2.5 been advised that we are not the builder of Condor Tower;

15.1 The following words have the following meanings:

'Approvals' means all the approvals required pursuant to the Strata Titles Act 1985 and all other approvals of any local or other authority which may be necessary to enable us to commence and carry out the development of Condor Tower;

'General Specifications' means the general specifications for the fitting out of Condor Tower and the Apartment annexed hereto and marked 'B'.

'Strata Plan' means the proposed strata plan annexed hereto marked 'C'.

(a) the Simplified Plans annexed hereto marked 'A';

(b) the General Specifications annexed hereto and marked 'B';

(d) the Management Statement annexed hereto and marked 'D';

(e) the Strata Management Agreement annexed hereto and marked 'E';

(f) the Notice of Exemption annexed hereto and marked 'F';

(i) the Buying and Selling a Strata Titled Apartment (Form 29).

'the Apartment' and 'the Property' means the property intended to be sold by us to you and described in the Schedule to the Offer and Acceptance.

'the Detailed Plans' means the detailed plans commissioned by us and in respect of which a building licence has been issued and pursuant to which the Apartment and Condor Tower will be built;

'the Simplified Plans' means the simplified plans comprising the initial design drawings prepared by our Architect and which are annexed hereto and marked 'A';

17 The drafting of this document has been the subject of judicial criticism by the Court of Appeal. Although that criticism did not directly relate to an issue before me I was taken to it (ts 5, 6, 31) by counsel for the plaintiff in his opening. One sentence in the plaintiff's submissions in reply suggested that these prior general criticisms about the standard of drafting of the Conditions make 'application of the contra proferentem rule ... appropriate.'

18 Nothing in the four lever arch volumes of authorities submitted on behalf of the plaintiff was cited in support of any such principle. Given that lay people such as the plaintiff were dealing with a lengthy standard form commercial agreement prepared specifically for the defendant this is in my view a case where a construction contra proferentem is appropriate. The general competence or otherwise of the drafting of an agreement does not however add anything in my view to the ordinary application of that rule of construction.

19 Annexure A shows the proposed floor plan layout for each of the 29 levels. As the Simplified Plans which comprise annexure 'A' show, level 24 consisted of two apartments or 'sub-penthouses'. One of these was the one for which the plaintiff contracted, number 151. The other is apartment number 150, still owned by the defendant. For apartment 151 four bedrooms are visible, three of which have ensuite bathrooms. The fourth appears to have a closet/storage area.

20 A one page brochure (exhibit 1) shows the layouts of apartments 151 and 150. The plaintiff saw this prior to signing the sales contract. Each is described as having an area of 235 sqm. The layout shows a large balcony on level 24 stretching the width of the front of the building across both apartments. There is, as might sensibly be anticipated, a dividing wall separating the apartments and a wall or partition dividing the balcony.

21 Similarly, the Simplified Plans include floor plans only, not elevations. The partition dividing the balcony on level 24 is present as an element. While it is not possible to determine what the height of the partition was to be, the width of the partition as an element appears wider than the common wall between the apartments.

22 The General Specifications contained in annexure B to the Contract set out the kinds of finishes that were to be used and details of fit outs. The specifications for 'residential lots', 'office lots', and for 'retail lots' are listed separately.

23 With respect to residential lots the 'Apartment Interiors' were to be provided with 'quality carpets to the bedrooms and bamboo floors to the living areas'. With respect to 'ensuites, bathrooms and laundries', polished floor tiles were to be provided, 'as per the interior designer's colour selection'. Wall tiles in these rooms were to be provided to a height of 1,000 mm except in showers where they were to extend to a height of 2,000 mm. As for the floor tiles, these tiles were to be provided 'as per the interior designer's colour selection'.

24 Under the heading 'Electrical' the specification says this:

Smoke Detectors: Included

Fire Alarms: Included

Light Fittings: Included

T.V. Point: Included

Pay T.V. Point: Included

Power Outlet: Included

Telephone Points: 2 points provided

Exhaust Fans: provided to bathrooms

Provision for: Air-conditioning

The following would be provided by the developer for each retail strata title lot - ...

26 With respect to 'office lots', the specification says:

The following would be provided by the developer for each office strata titled lot - ...

27 Annexure 'C' is the Proposed Strata Plan. This document contains 18 sheets setting out the plan proposed to be lodged for registration. The document was prepared by Peter Driscoll & Associates Pty Ltd Consulting Surveyors, but is marked 'provisional copy only subject to survey'. Two pages are of interest. The first is sheet 4 of 18 sheets. That shows two levels of parking being the ground floor and the first undercroft. On the ground floor, an area indicated as 55 sqm is marked as 'Pt 151'. This particular section of parking has been marked out by circling it, and the circled area has then been initialled by buyer and seller, suggesting that the area has been allocated to the purchaser of lot 151. The plaintiff said he initialled that page because 'I wanted it confirmed in my contract that that was the parking area I was going to be receiving' (ts 72).

28 At a number of points on the ground floor plan small squares are drawn that impinge upon the car bays. Their location and regularity suggests fairly plainly that they are structural columns. The parking area marked Pt 151 shows two such columns towards its eastern side. From this very small scale drawing it appears that something in the order of one fifth or slightly less of the total area marked as 'Pt 151' is to the east of the two columns. The placement of the columns in the parking area and relative to the plaintiff's garage is shown more clearly in Annexure A to which I will refer later.

29 Sheet 17 shows, among other things, the 24th floor plan. On this 'Pt 151' is shown as 235 sqm. Underneath that notation, in parentheses, is the further notation '353 m²'. The front balcony area is shown as '53 m²' and the rear balcony as '10 m²'. When the 55 sqm of parking on the ground floor is added to the areas shown for the areas of Pt 151 shown on the 24th floor the result is a total of 353 sqm.

30 'Pt 150' on the 24th floor plan is the mirror image of 'Pt 151' except that the total area shown in parentheses is 340 sqm. Otherwise, the figures for the areas of the apartment and the front and rear balconies are identical.

31 Annexure 'D' is the Management Statement which includes among other things the bylaws that will apply to the strata development. The bylaws include a specific article, number 20, that deals with 'individual air-conditioning systems'. The bylaw provides, among other things:

No proprietor shall affix any air-conditioning system without the prior written approval of the Council which approval can be withheld, if in the sole opinion of the Council, the proposed air-conditioning system is or is likely to be:

20.1.1 so noisy as to cause a disturbance to adjoining proprietors; or

20.1.2 of such a size and colour as not to be in harmony with the external appearance of the Scheme.

32 The Detailed Plans, defined in cl 15.1 as plans commissioned by the defendant 'and in respect of which a building licence has been issued and pursuant to which the Apartment in Condor Tower will be built', were never seen by the plaintiff, according to his evidence. There is some question as to what he might have been shown had he asked to see the plans on 5 October 2005, the date of his first offer_._ Exhibit 4 was a detailed plan of basement level 1 issued on 18 March 2005 'for building licence'. That document actually bears a City of Perth stamp dated 15 November 2005 that says 'Date of Licence approval'. This drawing more accurately shows the dimensions of the plaintiff's 'lock up garage'. The plaintiff's garage area is shown as encompassing all of the area within four of the structural columns and a small area extending to the east of the columns. That particular side and the back of the plaintiff's garage are secured by chain mesh fencing. The back of the garage adjoins several storage areas.

33 Exhibit 6 is another detailed plan of the same area, basement level 1. It bears the same drawing number, WD-P-02. However, while exhibit 4 is revision 'A', exhibit 6 is revision 'G'. The drawing registry shows that revision 'F' was made on 23 September 2005 with respect to a 'slab penetration added to lock up garage'. Revision 'G' was made on 6 October 2005 when it was 'reissued for building licence'. Like exhibit 4, exhibit 6 also bears a stamp 'City of Perth - 15 November 2005 - Date of Licence approval'. The word 'superseded' is handwritten on exhibit 4. Exhibit 6 has another stamp, 'City of Perth approved plan - building lic no 050109'. This stamp appears to bear the signature of the senior building officer.

34 Exhibit 6 shows that the plaintiff's lock up garage has now shrunk so that it is contained within the four structural pillars. The east side of the garage consists of a chain link fence down the centre line between the two pillars north and south. The north side of the garage, shown as chain link fence in exhibit 4, appears to have been changed to a fire rated wall enclosing one side of what is now a 'fire isolated passage'. It does not appear that the depth of the plaintiff's garage area has been reduced by this change. The storage areas to the north of the garage however have been reduced in size and number to accommodate the new passage.

35 Exhibit 3 is the Detailed Plan layout for the 24th floor that was prepared and issued to obtain a building licence. It was created on 18 March 2005. Inconsistently with the General Specification, this document shows the floors in the ensuite bathrooms for bedrooms 1 to 3 and in the living areas other than the bedrooms as 'stone'. It also shows quite a wide partition between the adjoining balconies of apartments 150 and 151. The partition has been drawn as half again as wide as the party wall between the apartments. Although a key is included with the drawing it is not possible for me, unassisted, to apply it to determine the nature of the wall or whether there were more detailed drawings submitted for the building licence. No evidence was lead by either party in this regard.

36 Exhibit 5 is a plan drawing of north and south elevations of the tower, also prepared on 18 March 2005 and issued for the purposes of obtaining a building licence. This drawing also bears a 'City of Perth approved plan' stamp and the building licence number. For that reason it is a Detailed Plan as defined in the Contract. The drawing of the southern elevation shows what appear to be floor to ceiling height partitions on the adjoining balconies between apartments up the centre of the building to the 23rd floor. The partition shown on the balcony between apartment 150 and 151 appears to be to a height just slightly below the lintels of doorways. The width of this element of the drawing in elevation appears to match the width of the partition shown in the floor plan exhibit 3.

37 The 'Contract for Sale of Strata Titled Property by Offer and Acceptance' is the document actually signed by the plaintiff and executed by the defendant. It is a standard form document with blank spaces intended to be completed by the parties. When I say that the document is a 'standard form' I mean that, like the Conditions, it was created by the defendant's legal advisors for the defendant's purposes in developing and selling Condor Tower.

38 When the plaintiff submitted his first offer, the terms of this form were completed by Ms Thomas on his behalf. At the top of the document in the space in the form provided for the identification of 'the buyer', the plaintiff's name and address and contact details have been added. The printed terms of the form provide that the buyer offers to purchase 'the proposed strata titled property described in the Schedule including all improvements with vacant possession unless otherwise provided in the Conditions at the price and on the other terms set out in the Schedule, the Conditions and the Supplementary Documents'. Following the identification of the buyer and the buyer's offer to purchase there follows the Schedule of five clauses.

39 In item 1 of the Schedule the number '151' has been written in to identify the apartment number of the Condor Tower '... more particularly described in the Conditions'. The original posted asking price for each of apartments 151 and 150 was $1.95 million_._ The purchase price first offered by the plaintiff is shown as $1,700,000. That figure was crossed out and initialled and a new figure counter-offered by the vendor: $1,850,000. That number was in turn struck out and the final purchase price of $1,750,000 added and initialled.

40 A similar negotiation is shown in the section for manner of payment, where the figure for the deposit to be paid is proposed and struck out until the final figure of $100,000 is arrived at.

41 In the subclause for 'Settlement Date' (cl 1(iv)) Ms Thomas wrote in 'as per condition 6.2.1'.

42 Item 3 of the Schedule says 'the Conditions apply at the sale insofar as they are not varied by the Special Conditions (if any) appearing in item 5 of this Schedule'. At item 5 these Special Conditions have been written in:

(i) the seller confirms that the garaging is fully enclosed with remote control entry for exclusive use;

(ii) the seller ensures balcony drains have correct flow at lowest point and is [sic] flood tested prior to settlement;

43 Those special conditions as proposed by the plaintiff as Buyer have been initialled by the defendant as Seller.

44 Prior to making his offer to purchase, the plaintiff said that he had 'quite a detailed look at the document', referring to the Contract. He said that he had significant and quite detailed discussions with Ms Thomas 'mainly because there was a lot of inconsistencies and ambiguities in the document that I wanted clarified'.

45 In the course of the plaintiff's discussions with Ms Thomas, the plaintiff said he raised concerns that he had with about 20 issues. These included the exact nature of the parking, whether it was lock-up parking, or simply car bays.

46 The plaintiff went on to say 'what I did try and clarify with her was with regards to the storage based on previous experience with residentials' (ts 69). He said that he particularly asked Ms Thomas about the allocation of a storage bay, having seen them in the drawings on the Contract; presumably Annexure A. He said that he questioned Ms Thomas several times about 'confirming that the storage was included' and he said that she confirmed that it was 'but she wasn't happy with me putting a special note'.

47 He said after Ms Thomas had told him that the storage was included 'I went through the contract a little bit more and then came back to the storage and questioned the confirmation that it would actually be included in my contract, and did I need to add it into the special notes?'. He said that Ms Thomas 'confirmed' that it was included and she said, 'you're buying a penthouse, of course you're getting it'. He said that she told him that he 'shouldn't make such a big deal, that it didn't need to be included as a special note. Putting too many special notes ... would go against me and that the developer may feel that it's too hard work and choose not to sell on the property'. He said that Ms Thomas told him to 'keep special clauses to a bare minimum and only where the inconsistencies in the document ensured that I stated my case': (ts 70). He said that 'Ms Thomas could not confirm which of the storage units I would be getting, which there were a number of them shown on the ground level parking behind the dividing wall of my parking bay ... but I was informed that my storage would be one of those'.

48 The plaintiff also said that having read the documents, 'I wanted to confirm, because of the wording in the document, that AC [air-conditioning] was included and I was given that assurance by Ms Thomas that it was'. The plaintiff said that the topic of air-conditioning first came up, 'as I'd gone through the detail over the contract, there is a section with regards to fit out and there was mention of air-conditioning. I questioned that, because it was quite vague. Ms Thomas informed me that it - it is included. I did ask her if I needed to put it in as a special clause. Again I was told that I was being too fussy and that it would not be in my interest to add too many special clauses into the contract. But again I was reassured by Ms Thomas that I was buying the penthouse, so of course I'm going to get air-conditioning. And ... with those assurances, my belief was that I would be receiving both storage and air-conditioning as part of the settlement for my building' (ts 70, 71).

49 On 7 October 2005 the defendant by its director Mr Albonico executed the Contract for Sale of Strata Title Property, accepting the final terms proposed by the plaintiff. The deposit was paid. A building licence was granted for the Condor Tower project on 15 November 2005: exhibit 9. Condition 63 of the building licence is 'parking facilities to AS 2890.1'.

50 According to the plaintiff, his relationship with Ms Thomas continued for about another three months after the execution of the agreement, ending either at the end of 2005 or early in 2006. They were together, he said, for about nine months in total. The precise duration of the relationship between the plaintiff and Ms Thomas, whether they were still in a relationship when the Contract was signed and whether the relationship continued for a time after that were matters that were explored in the plaintiff's evidence and in the cross-examination of Ms Thomas. The purpose of that for the plaintiff's case was seemingly to establish opportunities for the lengthy and repeated conversations about the Contract described by the plaintiff.

51 Cross-examination did establish that the plaintiff did not appear in Ms Thomas' Christmas photos that year. According to Ms Thomas she and the plaintiff had certainly broken up by New Year's Eve. That date was established by reference to absence of the plaintiff from family Xmas pictures and by the death of Ms Thomas' dog, Sammy, on New Year's Eve.

52 Whatever significance the relationship details might have had in respect of the plaintiff's case, they do in my view have significance for the assessment of credibility. It is undisputed that whatever the precise length of the relationship the parting was for reasons of 'non-compatibility' and amicable. The plaintiff and Ms Thomas were still on sufficiently friendly terms after their breakup that, on Ms Thomas' evidence, when her dog died nearly three months after the Contract was signed the plaintiff was received at Ms Thomas' house to console her.

53 The completion of Condor Tower was much delayed. By early July 2009 however the project was nearing completion and buyers were warned to prepare for settlement. The plaintiff was naturally interested to see how his apartment had turned out. There was some delay in the finishing to his apartment although Apartment number 150 was nearly complete. The plaintiff arranged with Wayne Briggs to view apartment 150 to get an idea of what the plaintiff's apartment would look like on completion.

54 Later in these reasons I will refer to the issues that arise on the pleadings, as well as an issue pleaded but abandoned at trial with respect to what were said to be misleading representations made by Mr Briggs at the meeting at apartment 150.

55 When the plaintiff went to look at apartment 150 he was able to look into apartment 151. He was able to step over the partition that was in place on the balcony. He simply walked along the balcony and looked through the windows of 151. He observed that in place of the bamboo floors stipulated in the general specifications, apartment 150 had marble floors, while he could see carpeted floors in apartment 151. Wayne Briggs he said told him that the developer had chosen to upgrade apartment 150. As to apartment 151, he said that Briggs told him that the developer had made a change, and that the plaintiff would have to speak with the developer. He said that Briggs told him that the air conditioning was a 'work in progress' but that it was going to be finished prior to settlement. At this stage as the plaintiff said neither apartment had fan units installed but he could see the wiring and plumbing in place, running up the outside wall and going into the building. In other words, provision had been made for air conditioning. Compressors and fan units were later installed for apartment 150. The plaintiff said that Mr Briggs also told him that he could not go and check the parking that had been provided because construction was still in progress on those levels.

56 About a week later the pre-settlement inspection provided for under the Contract was carried out. The plaintiff attended with his then [personal] partner and the defendant's representative. At that time a nine page list of defects was prepared to give to the defendant. The plaintiff however was still unable to inspect the car park levels.

57 On 29 July, the plaintiff met with the settlement agents and was shown a copy of the registered strata plan. When he looked at it, he said that he noticed that his car parking area had been reduced. Subsequently he raised that issue as well as his concerns that he had not been provided with a complete air conditioning system, storage locker, or bamboo flooring for the main living areas of the apartment. He also took issue with the lack of a screening partition down the middle of the southern balcony between apartment 150 and apartment 151.

58 When the plaintiff took possession of apartment 151, there were several surprises. First, although the area of the apartment itself had been reduced by 3 sqm, the area of the rear balcony had apparently been increased by 5 sqm and the front balcony by 12 sqm. Contrary to General Specification 9 but consistently with the Detailed Plan, exhibit 3, there was marble tiling in the entry area and the kitchen. Inconsistently with both the General Specification and exhibit 3 there was carpet in the living room. Consistently with exhibit 3 there was marble tiling laid in all bathrooms rather than the ceramic tiles provided for in the General Specification. Rather than ceramic tiles up the walls to the stipulated height, there was full height marble tiling to all bathrooms. And, the storage area in the fourth bedroom had become an ensuite toilet, finished to the same standard as the others.

59 While the plaintiff had been provided with an enclosed lock up garage as stipulated in the Contract, the area of the garage space had been reduced. The garage had been constructed in accordance with the Detailed Plan, exhibit 6, and not exhibit 4. The garage had been enclosed by a mesh fence between the pillars shown in the plans at the eastern side of the plaintiff's garage area. The effect of this was to reduce the total garage space from 55 sqm to 46 sqm, or 47.6 sqm, according to evidence that I will refer to later. The area that was lost was the area between the two structural pillars and immediately to the east of those pillars.

60 Finally, contrary to the plaintiff's claimed expectations, he had not been allocated a storage area.

61 The plaintiff's pleaded case is that the Contract contained express written terms that he would receive 'a car parking pay of 55 sqm' and that the apartment floor would be covered by carpets in the bedrooms and bamboo floors in the living areas. At par 5 of the statement of claim the plaintiff pleads that the Contract also included two terms that were partly in writing and partly oral. Those terms were:

5.1 The apartment would be air conditioned, provided for by annexure B of the Contract and orally confirmed by selling agent; and

5.2 the plaintiff would receive a store room, provided for by annexure A of the Contract and orally confirmed by the selling agent.

62 The particulars of the 'oral terms' refer to statements allegedly made by Ms Thomas to the plaintiff between 14 September 2005 and 5 October 2005. I have referred to the plaintiff's evidence with respect to those matters.

63 The plaintiff pleads that it was an implied term of the Contract that there would be permanent vertical screening between his apartment balcony and the adjoining apartment 'to restrict views'. Originally this was pleaded as a term to be implied as a matter of law, in compliance with the 'Residential Design Codes of Western Australia (R-Codes; 3.8.1 A1(ii) Privacy Requirements)'. At trial this was amended so as to allege section 4.10 of the City of Perth Development and Design Policy made pursuant to the City Planning Scheme 2004 (No.2) as an alternative basis for the implication. The plaintiff's submissions expanded this to an argument that the term was to be implied as a matter of fact or alternatively law, without objection by the defendant.

64 The plaintiff says that the defendant breached the Contract by:

supplying a car bay of only 46 sqm;
not providing a store room;
covering the floor with carpet;
not providing a balcony partition; and
not providing air conditioning.

65 The plaintiff also advances a claim pursuant to the provisions of the TPA. The same statements said to have been made by Ms Thomas as an employee of the defendant's selling agent and offered as particulars of the oral terms I have referred to, are also relied upon as misleading statements. If the terms with respect to air conditioning and storage areas are not found to be express or implied terms of the Contract, then as an alternative the plaintiff seeks orders pursuant to s 87 of the TPA, amending the Contract to include contractual terms in accordance with the alleged representations.

66 Statements said to have been made by Mr Briggs in the course of the 'pre-inspection' of apartment 150 and the balcony of apartments 150 and 151 were originally relied upon as statements said to have induced the plaintiff to forego his right to terminate the Contract prior to settlement.

67 The plaintiff seeks damages in the amount of $172,000 for breach of contract.

68 By its further amended defence the defendant admits that:

2.1 the Plaintiff and the Defendant entered into a contract for the sale and purchase of apartment 151 Condor Tower ... the terms and conditions of which the defendant will rely on at trial;

2.2 Wayne Briggs Property Group Pty Ltd was the defendant's selling agent; and

2.3 Janine Briggs was employed by the Wayne Briggs Property Group Pty Ltd.

69 The defendant denies that Ms Thomas made the statements attributed to her and denies in any event that the selling agent had actual or ostensible authority to make the kinds of representations alleged.

on the proper construction of cl 3.2.2 of the Contract the defendant was obliged to cause apartment 151 to be built in accordance with a Planning Application defined at cl 2.2.1 of the Contract that would be in accordance with the Simplified Plans and General Specification that were annexures to the Contract (Defence 2.5);
the General Specification that was annexure B to the Contract described the floors of apartment 151 as 'quality carpets to the bedrooms and bamboo floors to the living areas' (Defence 2.6);
the boundary between the balconies of apartments 150 and 151 was built in accordance with the building licence issued and the Simplified Plans being annexure A to the Contract (Defence 2.7);
the General Specification, annexure B to the Contract required the defendant to provide electrical outlets for air conditioning, but did not require the provision of air conditioning (Defence 2.8);
on the proper construction of the Contract no separate store room was included as any part of the entitlement of apartment\strata lot 151 (Defence 2.10, 2.11);
the proper construction of cl 3.4.4 of the Contract, in the event of any inconsistency between the Simplified Plans and the General Specification and the Detailed Plans then the Detailed Plans prevail (Defence 2.14);
by the terms of cl 3.5.1 of the Contract the defendant could vary the Detailed Plans and the General Specification for any one of four specific reasons, each of which is separately pleaded. One of the reasons pleaded is 'if required to do so by the City of Perth' (Defence 2.15);
the effect of cl 3.5.4 of the Contract is that no variation to Apartment 151 entitles the plaintiff to claim compensation (Defence 2.16);
the effect of cl 2.7.1.6 is that the Defendant [sic] cannot object, make a requisition or claim compensation if the as built size of apartment 151 does not differ by 5% less or 5% more than the area shown in the Strata Plan, annexure C to the Contract (Defence 2.17) and the proposed Strata Plan that was annexure C to the Contract showed apartment 151 as having a total area of 353 sqm including a front balcony of 53 sqm, a rear balcony of 10 sqm and a 55 sqm car park (Defence 2.18).

71 With respect to this last matter, the defence at paragraph 2.18 acknowledged that 'the Strata Plan as registered evidences that' apartment 151 had a total area of 358 sqm including a front balcony of 65 sqm, a rear balcony of 15 sqm and a 46 sqm car park.

72 The defendant's pleading is notable for the fact that while cl 3.5.1.1 to 3.5.1.4 of the Contract are expressly pleaded, cl 3.5.1.1 being invoked as 'if required to do so by the City of Perth', nowhere was it alleged that any variation by the defendant of either the Detailed Plans or the General Specification was in fact prompted by one or more of the four reasons set out at clauses 3.5.1.1 to 3.5.1.4. When counsel for the defendant sought to advance evidence justifying changes made by the defendant by reason of a particular requirement of the City of Perth, counsel for the plaintiff objected. Inevitably, when counsel for the defendant sought to amend the defence to plead, as a matter of fact, a reason within the terms of cl 3.5.1 for the variation to the detailed plans and general specification, counsel for the plaintiff opposed the amendment. For the reasons given in the course of my ruling during the trial I did not allow the amendment.

73 Despite the plea that refers to cl 3.4.4 of the Conditions, no reliance was placed by the defendant on any inconsistency between the Detailed Plans and the Simplified Plans.

74 The plaintiff's claims with respect to the 'pre-inspection' statements that statements made by Mr Briggs shortly before settlement was to take place misled the plaintiff so that he was induced not to exercise a right he arguably had to terminate the Contract. These claims were abandoned on the third day of the trial. Given the evidence before me that apartment 151 at about the time of settlement was worth something in the order of a million dollars more than the price the plaintiff was to pay, it is not surprising that that particular claim was abandoned.

75 The plaintiff's case with respect to the misrepresentations that he said were made to him by Ms Thomas depend for their success upon an acceptance of his evidence as credible on those points. I do not accept that evidence.

76 The plaintiff's demeanour in the witness box did not inspire confidence. In fact it was to the contrary. Quite apart however from matters of demeanour, which are subjective and difficult to articulate, the plaintiff's evidence itself was in a number of respects inherently improbable and contrary to evidence that I do accept.

77 I have referred to the plaintiff's evidence with respect to his occupation and his work experience. He is far from an average layperson so far as his ability to understand commercial contracts and appreciate the significance of their terms. He said that he had been through the Contract in detail. Having done that he had 'significant and quite detailed discussions with Ms Thomas over quite a few days, mainly because there was a lot of inconsistencies and ambiguities in the document that [he] wanted clarified'. While I do not accept that there were detailed discussions of the kind claimed by the plaintiff, having seen the plaintiff give evidence I have no doubt that he would have regarded himself as having a superior ability to Ms Thomas with respect to contractual matters. His evidence was that over a number of days in his discussions with Ms Thomas:

I raised a list of approximately 20 and ranging from the - the parking, there was many variations of the parking in the drawings in the contract, whether it be lock up or just car bays, so I needed that clarified. After approximately three or four days Ms Thomas got quite frustrated with me because she felt I was being too detailed and too pedantic and that the contract was what the contract was, and if I didn't like it, then I don't sign it. The developer was not going to change the contract with any of the - the variations that I'd put in.

78 It was not clear what the plaintiff intended in this last respect. There were no documents prepared by the plaintiff showing any variation or draft variation in evidence before me.

79 I do accept however, based on Ms Thomas' evidence, that if the plaintiff had sought changes in the Contract (apart from Special Conditions) Ms Thomas would in fact have advised the plaintiff in effect that if he didn't like the Contract then he shouldn't sign it.

80 The first offer that the plaintiff presented was in the amount of $1.7 million. The plaintiff knew that the vendor's listed asking price for this unit was $1.95 million: ts 69. From Ms Thomas' evidence, up to that stage of the sales programme, the developer had been reasonably insistent upon requiring the listed price.

81 The plans that were provided with the Contract showed, in the lower levels of the tower and in particular in the parking levels, a number of small spaces marked as storage. What was also apparent from the drawings was that the total number of residential and commercial units exceeded the number of storage spaces that appeared to be available.

82 At [47] - [48] above I referred to the plaintiff's evidence as to discussions with Ms Thomas about a storage bay and air conditioning and her alleged insistence that he should not include a special condition with respect to either despite the fact that he would receive both because 'you're buying a penthouse'. It was of course the plaintiff's evidence that Ms Thomas expressly advised him not to include special conditions.

83 Keeping in mind the plaintiff's experience in dealing with contractual matters, his suggestion that he believed the references to air conditioning in the Contract were 'quite vague' is implausible. His evidence is that he read the Contract in detail. With respect to 'residential' units the specification is for 'provision' for air conditioning in contrast to the other Electrical items that are stipulated as 'included'. The significance of 'provision for' as opposed to 'included' is stark. I do not doubt that the significance of the word 'provision' did not escape the plaintiff's attention and I do not doubt that it was understood by him.

84 The ordinary English meaning of the word 'provision' includes 'to make prior arrangement or preparation for'. The stipulation of 'provision for' would oblige the vendor to ensure that during the course of construction all preparatory work was done to allow the convenient later installation of an appropriate air conditioning unit. What it did not suggest was that the air conditioning unit itself would be provided. The work necessary to make provision may well have gone beyond simply the provision of an electrical outlet as pleaded by the defendant. As the photographs included in the expert report of Kevin Windross show, ducting and diffusers for an air conditioning system were installed during construction of apartment 151: exhibit 39.

85 What the term 'provision for' would not suggest however to any reasonably intelligent English speaker was that a complete functioning air conditioning system was included in the purchase price. If the plaintiff had any doubt as to what the term might have meant, a comparison between the specifications for residential and commercial units would have made it entirely clear that residential units did not receive complete air conditioning systems. Article 20 of the bylaws contained in Annexure D also rather strongly suggests that air conditioning was not provided as a matter of course.

86 I also find entirely implausible the idea that the plaintiff would not have insisted upon a term that he required once he had recognised that it was not provided for in the Contract or if he truly thought it was 'vague'. His evidence in this regard is to be contrasted with his own actions in including two special conditions in the offer that he made. In particular the special condition with respect to the testing of the balcony drainage is so idiosyncratic that it beggars belief that he would include that condition but omit a 'clarification' with respect to air conditioning and a storage space.

87 According to his evidence, he believed that it would be problematic if he tried to clarify that items said to be included as a matter of course, 'because he was getting a penthouse', were in fact included. I do not accept that he believed that the seller would reject his offer if it 'clarified' that something was included that, on his evidence, was to be included in any event.

88 Nor is it the case, as the plaintiff said, that he chose as a result of Ms Thomas' advice to only use a 'special clause' or special condition to resolve 'inconsistencies in the document'. His special condition with respect to testing of the drainage has nothing to do with any 'inconsistencies in the document' and everything to do with ensuring that the plaintiff obtained exactly what he wanted. The special condition with respect to parking provides a further insight into the plaintiff's thought process.

89 There is some inconsistency between Annexure C the Proposed Strata Plan, and Annexure B the Simplified Plan. Annexure C refers to both 'car bays' and 'garages' on sheet 4 of 18, but does not clearly label Pt 151 as a 'garage'. By contrast the ground floor layout in Annexure B plainly describes the area of parking that the plaintiff was to receive as 'lockup garage'.

90 The special condition ' ... confirms that the garaging is fully enclosed with remote control entry for exclusive use'.

91 As set out above, the plaintiff recognised that it was appropriate to mark out his parking garage area by encircling it on annexure 'C', the proposed strata plan and initialling that part of the plan so marked. That was despite the fact that that particular area was shown on the plan as being 'Pt 151', consistently with his apartment number and strata lot. Given his recognition of the necessity of so designating his parking area, his asserted belief that he would receive either title to or exclusive use of one of the storage areas without the same kind of designation is unlikely.

92 From the transcript of the plaintiff's evidence it will be seen that in the course of the discussions that he described it was rare for someone to merely 'tell' him something. Rather, Ms Thomas and later Mr Briggs 'confirmed' or 'reassured' or even 'went to great efforts to emphasise the benefits'. Much of what the plaintiff had to say had the ring of a submission as opposed to merely trying to recount past events.

93 Ms Thomas, by comparison, I found to be sensible, measured and credible. She denied saying the words that the plaintiff had put into her mouth. When she was challenged in cross-examination with the proposition 'you don't actually remember the discussion with Mr Souter three years earlier than that [sic], do you?' she answered 'well, no one remembers verbatim but they remember the gist of what they were saying'.

94 What Ms Thomas remembered was that she knew at the time as a fact that air conditioning was not included with residential units nor was a designated storage space. She knew that there were not sufficient storage spaces for all units to have one. She knew it was possible that, if it was necessary to conclude a negotiation on terms otherwise acceptable to the defendant, the defendant might agree to the provision of those items. She also knew however that if that was to occur it had to be included in the agreement as a special condition. Those things, she said, were not asked for by the plaintiff and she never told him that they would be provided without a special condition.

95 A motive or reason for what counsel for the plaintiff called '... a very, very nasty personal betrayal ...' of the plaintiff by Ms Thomas was hinted at in closing submissions. Counsel for the plaintiff said, 'All one can say is commercial interest. That's all one can infer' (ts 382, 391). The evidence does not suggest that such an inference is open, much less probable. I do not 'infer', as it was submitted that I should, that Ms Thomas intentionally deceived the plaintiff for her personal financial benefit.

96 In the course of closing submissions it was also submitted on behalf of the plaintiff that the evidence of the witnesses called by the defendant should not be accepted. The submission was that the evidence with respect to the circumstances in which the defendant might have agreed to include storage or other matters as an incentive by way of special conditions, 'all of that was presented in chief in a very choreographed way. All three gave exactly the same evidence about it' (ts 384). As counsel for the plaintiff acknowledged, he had not suggested to any defence witness in cross-examination that they were not telling the truth about a particular topic, or that they were giving 'choreographed' evidence (ts 384). Nor in my view could it be reasonably said that Ms Thomas' evidence was 'exactly the same' as other defence witnesses on the topic.

97 For the plaintiff's case to succeed on these issues I would have to conclude that Ms Thomas intentionally misled the plaintiff. It was never suggested to Ms Thomas in cross-examination that she had in fact done that, much less that there was any reason for her to do so. I raised that matter with counsel for the plaintiff in the course of his closing submissions.

98 The evidence with respect to the relationship between the plaintiff and Ms Thomas makes it inherently improbable that she would so mislead him. On the plaintiff's case I would have to accept that Ms Thomas knowingly deceived the plaintiff about matters that would inevitably be discovered, and that she did so while she was in a personal relationship with him. Nothing in the evidence begins to persuade me that she was capable of such a betrayal, even putting aside the fact that it was never suggested to her in cross examination that that was the case.

99 I accept Ms Thomas' evidence that she did not tell the plaintiff that air conditioning and a separate storage space were included as an incident of the purchase of a sub penthouse, or at all, and that she did not tell him that it was unnecessary for him to include particular terms that he wanted as special conditions. Moreover, wherever the evidence of the plaintiff conflicts with that of Ms Thomas, I prefer the evidence of Ms Thomas.

100 The defendant's outline of submissions summarises the contractual issues with brevity if not entire accuracy:

1.1 whether the defendant was by clause 3.5.1 of the Contract entitled to:

Bellgrove v Eldridge

At a glance

Court

Decision date

Catchwords

Source

Catchwords

Judgment (404 paragraphs)

SOUTER -v- CONDOR DEVELOPMENTS PTY LTD [2011] WADC 212 (30 November 2011)

Parties

Legislation Cited (3)

Cases Cited (6)