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[2011] WADC 212
District Court of WA
2011-11-30
Original judgment source is linked above.
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
Trade Practices Act 1974 (Cth)
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
King v Poggioli [1923] HCA 11; (1923) 32 CLR 222
Lawrence v Cassel [1930] 2 KB 83
Palmer v Johnson (1884) 13 QBD 351
Re Wilsons & Stevens Contract [1894] 3 Ch 546
Robinson v Harman [1848] EngR 135; (1848) 1 Exch 850; (1848) 154 ER 363
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';
(c) proposed Strata Plan annexed hereto marked 'C';
(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.
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:
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.
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:
1.1.2 install carpets and marble in the living areas of apartment 151 in lieu of bamboo flooring.
1.2 Whether the contract was for the sale of apartment 151 with:
1.2.3 a higher sight screen on the boundary of the front balconies of apartment 151 and 150.
102 The issues described in par 1.1 of the defendant's outline rightly assume that the resolution of the proper construction of cl 3.5.1 will resolve the issue of whether there was a breach.
103 The resolution of issues 1.2.1 and 1.2.1, whether or not the Contract included such terms, is finally resolved by the determination that I make with respect to the factual issue of what was said by Ms Thomas to the plaintiff. There are no written terms within the Contract that support the plaintiff's pleaded terms at par 5 of the statement of claim.
104 Issue 1.2.3 requires a determination by me as to whether such a term should be implied into the Contract.
105 An issue that arises on the defendant's case and not addressed by the defendant's summary is whether, even if there were breaches of the Contract as alleged by the plaintiff, the plaintiff's rights to recover those damages is otherwise barred by cl 3.5.4 or was extinguished on completion of the Contract; that is, on settlement by operation of cl 2.7.1.6 or cl 6.9. There were several variations of these arguments, some based on the pleaded case and some not.
106 Finally, it will be necessary for me to determine the proper measure of damages for any breach of the Contract that I find.
107 The Proposed Strata Plan, annexure C to the Contract, plainly promises the plaintiff a parking garage of 55 sqm. The General Specifications, annexure B, promised bamboo flooring in the main living areas. While it is the case that the Detailed Plans that then existed had already changed the floor specification in the main living area to 'stone' the plaintiff does not pursue damages for the replacement of carpet with stone. Given that the Detailed Plans take precedence over the General Specification, he would have been entitled to assert that the Contract provided for stone flooring. The real question here is whether the defendant is entitled to substitute carpet for either bamboo flooring or stone flooring, and to reduce the size of the plaintiff's parking garage as it did.
108 No justification has been offered for changing the specified bamboo or stone flooring to carpet.
109 So far as I was able to determine, the first time that the defendant unequivocally asserted a justification based on cl 3.5.1 of the Contract for varying the size of the plaintiff's garage was when the defendant filed its outline of submissions for trial on 10 May 2011. The trial commenced on 16 May.
110 The defendant's submissions asserted that, although the Proposed Strata Plan in the Contract was in accordance with the City of Perth's planning approval as was the defendant's application for a building licence, the City of Perth, it was said, '... would not issue a building licence unless the car park was modified to accommodate walkways, which modification resulted in 9 sqm of car bay being deleted from a car bay comprised within apartment 151'. Quite apart from the fact that exhibit 4 does not suggest that any part of the plaintiff's parking area needed to be sacrificed for a 'walkway', for reasons referred to above, the defendant was not given leave at trial to raise that issue.
111 The refusal of leave to amend the defence to accommodate a plea that that there was as a matter of fact a reason falling within the terms of cl 3.5.1, meant that the defendant was not able to advance evidence to justify the variation. That might have been expected to result in a narrowing of issues and the saving of time at trial. That did not occur as fully as might have been expected.
112 The defendant did not rely upon cl 3.4.4 and any inconsistency between the Simplified Plans, General Specifications and the Detailed Plans. Rather, in the first instance, the position of the defendant was that by the terms of cl 3.5.3 its only obligation was to provide an apartment (in the extended sense as defined) 'substantially in accordance with the Detailed Plans and the General Specifications'. Any difference between the apartment as built and the apartment as described in the Contract was not 'materially different' and the defendant was therefore said to have fulfilled its obligations to the plaintiff.
113 When regard is had to the context of cl 3, the construction of cl 3.5.4 contended for by the defendant seems particularly unlikely. The introductory words of cl 3.5.1 specifically raise circumstances that may require variation of the plans and specifications:
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 ...
114 Thereafter the five specific circumstances of when 'it may be necessary for us to make some variation' are set out.
115 Clause 3.5.2 specifically refers to the five circumstances in which a variation may be made and mitigates the consequences of any such variation:
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 ...
116 Clause 3.5.3 makes it plain that regard is to be had to the entirety of cl 3.5 to provide the context of the defendant's obligation to provide an apartment as described in the Contract:
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.
3.5.5 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. (my emphasis)
118 Although headings are expressly said not to affect construction or interpretation of the agreement (cl 15.4), cl 7.2 expressly refers to cl 3.5 as a whole by the heading name. No compensation is to be claimed in respect of '...variations to the Detailed Plans and General Specifications permitted by the clause entitled 'Variations by Us': cl 7.2.1.2.
119 If cl 3.5.4 were to be read on its own, without regard to the other provisions of cl 3 or the other provisions of the Contract it would suggest that the defendant had a significant discretion with respect to the specifications of the apartment as built without 'invalidating' the Contract or allowing the plaintiff the other remedies specifically referred to in that clause. It would be a discretion limited only by considerations of whether any departure from the Detailed Plans and General Specifications was 'substantial' and the absence of bad faith. To that extent the defendant might disregard the plain object of the Contract, the conveyance to the plaintiff of an apartment as described and specified in the Contract. In my view clear words would be necessary to achieve that result. Plainer words than are used by cl 3.5.4 would be necessary.
120 In my opinion the proper construction of cl 3.5.4 requires that it be read in the context of the entirety of cl 3.5. In particular the word 'variations' in cl 3.5.4 means, in my opinion, variations made necessary for a reason described in cl 3.5.1. No such reason having been established by the defendant, the alteration to the size of the car park area and the failure to provide the flooring stipulated either in the General Specifications or the Detailed Plan is a breach of the Contract, by the defendant.
121 A further argument put by the defendant is that on the proper construction of cl 3.5.4, 3.5.5, and 7.2.1.6 of the Contract, following settlement the plaintiff is barred from claiming 'compensation'. It was also submitted that equity would not permit the plaintiff a remedy of either damages or compensation because overall the plaintiff was better off than if the Contract had been performed strictly in accordance with its terms. The submissions tended to commingle the various arguments. I will however set out why in my opinion these many and varied arguments fail.
122 The defendant relies upon the authority of Joliffe v Baker (1883) 11 QBD 255. That case was said to be authority for the proposition that if a contract for the sale of land does not by its terms prevent compensation being claimed by a purchaser for errors, misdescriptions, or omissions, then such compensation must be claimed before completion of the contract.
123 First, the authority of Joliffe v Baker on this point was short lived to say the least: Palmer v Johnson (1884) 13 QBD 351, 354 - 356.
124 Second, the term 'compensation', used in several of the clauses referred to, is not normally synonymous with or inclusive of common law damages. 'Compensation' in the context of a conveyance normally refers to an allowance or reduction of a purchase price for the benefit of a purchaser for some diminution or deterioration in the value of the property contracted to be sold: In Re Wilsons & Stevens Contract [1894] 3 Ch 546, 550, and see Webster's Conditions of Sale, 3rd ed, pg 335, 336, cited in King v Poggioli [1923] HCA 11; (1923) 32 CLR 222, 245 - 246, and see Voumard, The Sale of Land, 6th ed (at update 38) [7300]. The term 'compensation' is one used in contra distinction to unliquidated damages for losses actually suffered: King v Poggioli.
125 Third, the application of the contra proferentem rule would in any event tend against the construction of the word 'compensation' contended for by the defendant. Had it been intended to limit claims for ordinary common law damages that could have been simply and clearly provided.
126 Finally, a claim for damages, for example, for breach of a vendor's obligation to construct a building is not defeated by the doctrine of merger on the completion of a contract: Lawrence v Cassel [1930] 2 KB 83 cited in Simply Irresistible Pty Ltd v Couper [2010] VSC 601 [247].
127 A further argument put by the defendant is that while the plaintiff's garage is 9 sqm (or 7.6 according to evidence that I will refer to later) smaller than that for which he contracted, and despite the fact that carpeting was provided to some of the living areas instead of either bamboo or stone as was variously stipulated, overall the plaintiff has received something better than he contracted for and has suffered no loss because of the changes. The defendant submits that if the terms of the Contract do not prevent the plaintiff from seeking 'compensation' then 'equity should intervene'. The reason for that as set out in the defendant's written submissions is that in a number of respects it is said the plaintiff received more than what he bargained for.
128 It could not be properly said, as the defendant's written submissions assert, that the remedy sought here by the plaintiff is equitable in nature. The claim is simply for common law damages for breach of contract. That fact creates an obvious hurdle to the identification by the defendant of any applicable principle of equity.
129 Because of the increased size of the balconies however, the plaintiff ultimately received an apartment (as defined in the Contract) having a total of 358 sqm as opposed to 353 sqm. In a number of respects the level of finish provided to the apartment was superior to what was described in the Simplified Plans and in the General Specifications. The discrepancy between what was contracted for and what was received is somewhat less if regard is had to the Detailed Plans.
130 It seems obvious enough that when the time came for settlement even with the matters complained about by the plaintiff, apartment 151 was worth substantially more than the agreed purchase price.
131 I accept the argument of the plaintiff that the defendant's submission in this respect is contrary to the 'ruling principle' for the assessment of damages at common law for breach of contract, described by Parke B in Robinson v Harman [1848] EngR 135; (1848) 1 Exch 850; (1848) 154 ER 363, 365 and reaffirmed in Tabcorp Holdings Ltd v Bowen Investments Pty Ltd [2009] HCA 8; (2009) 236 CLR 272:
The rule of the common law is, that where a party sustains a loss by reason of a breach of contract, he is, so far as money can do it, to be placed in the same situation, with respect to damages, as if the contract had been performed [13].
Oliver J was correct to say in Radford v De Froberville ([1977] 1 WLR 1262 at 1273; [1978] 1 All ER 33 at 44) that the words 'the same situation, with respect to damages, as if the contract had been performed' do not mean 'as good a financial position as if the contract had been performed' (emphasis added) [13].
133 It is in any event difficult to draw any conclusion about the effect on the value of the apartment that the variations might have. I do note that the detailed plans in fact stipulated marble floors throughout apartment 151 except in the bedrooms and the defendant was therefore obliged in the terms of the Contract to provide those. No evidence was led, nor argument advanced, as to what the detailed plans showed with respect to the size of the front and back balconies of the apartment.
134 The opinion of Scott Bellerby, a licensed valuer called on behalf of the plaintiff, was that the apartment 'as built' had a value of $2,760,000: exhibit 40. If the apartment had included air conditioning, full height screen on the balcony, a 5 sqm enclosed store room and an extra parking bay, he said that apartment 151 would have a market value of $3,055,000. Mr Bellerby also provided separate values for an additional parking bay and for storage space which I will refer to later in these reasons.
135 The defendant called Chad O'Reilly, a licensed valuer. Mr O'Reilly's opinion was that apartment 151 had a market value of $3,000,000 as of 6 July 2009: exhibit 38. He concluded that apartment 151 'as built' had a higher value than if it had been built 'in the original configuration specified in the original proposed strata plan'. In particular Mr O'Reilly believed that the addition of an ensuite bathroom for bedroom 4, marble tiling instead of ceramic tiling in all of the bathrooms as well as full height marble tiling to all bathrooms, and the additional balcony area, made apartment 151 more valuable notwithstanding the loss of 9 sqm of 'car bay area', the absence of a separate storage area, air conditioning and other matters referred to in his report.
136 The difficulty with both opinions is that the assumptions about what should or should not have been included in the apartment are not necessarily borne out either by the Contract or by the findings that I make.
137 As will be seen, I do not accept Mr Bellerby's conclusion that the plaintiff should have received 'an extra car bay'. Nor do I find that the plaintiff was entitled to air conditioning or a store room. With respect to Mr O'Reilly, I am not satisfied that the plaintiff was not in fact entitled by the terms of the Contract to the additional balcony areas and to marble tiling in all of the original bathrooms by virtue of the Detailed Plans.
138 Putting aside the fact that the valuation evidence does not allow me to reach any conclusion as to the relative values of an apartment in accordance with the terms of the Contract as opposed to the apartment as built, I do not accept the argument that the plaintiff would not be entitled to damages if the apartment as built was more valuable than it would have been if built in accordance with the Contract. Even if it had been established that there was no diminution in the market value of apartment 151 at the time of settlement despite the departure from what had been agreed, the High Court has rejected the proposition that a party is at liberty to break a contract, for example by making improvements to a leasehold property without the consent of the owner, and limit their liability to the difference in resulting market value: Tabcorp Holdings Ltd v Bowen Investments Pty Ltd. In the case of land and buildings, diminution in value is not the only measure of damages available: Willshee v Westcourt Ltd [2009] WASCA 87 [61] - [64].
139 The last argument raised by the defendant is one which arises from time to time in the course of disputes in construction cases, where the method of construction adopted by a builder departs from what has been provided for in the building contract. The High Court's decision in Bellgrove v Eldridge [1954] HCA 36; (1954) 90 CLR 613 has long stood as authority for the proposition that the ordinary measure of damages in such circumstances is the cost of the building work required to achieve conformity with the building contract (at (617) - (618)). One exception to that has been recognised. That is where the circumstances require demolition of the building work. The exception to the rule that the measure of damages is the cost of rectification may arise where the cost of building work necessary to achieve conformity with the building contract is such that it is unreasonable to insist on that work being done. The defendant says that the plaintiff's claims in respect of bamboo flooring, a storage space and the lost garage area are unreasonable and an exception to the normal rule for assessment of damages.
140 In Tabcorp, the High Court explained the qualification of 'unreasonableness' described in Bellgrove. The qualification applies in 'fairly exceptional circumstances ... only ... where the innocent party is "merely using a technical breach to secure an uncovenanted profit" ...': Tabcorp [17] (citing Radford v de Froberville).
141 In the circumstances here neither the substitution by the defendant of carpet for timber or stone, or the reduction in size of the plaintiff's parking garage area, could be described as 'technical'. The same would apply to a storage area if in fact the Contract had so provided. Nor in my view would it be reasonable to conclude that the plaintiff here was pursuing his claim to remedy the first two matters in order to secure profit to which he was not otherwise entitled. It was especially fortuitous for him that the bargain that he made for apartment 151 was so favourable to him when the time came for settlement. That appears to be the result of the delay in construction, and the rise in market, not generosity on the part of the defendant however. While it is not for the plaintiff to prove that he will carry out the work for which he may receive damages, I observe that with respect to the claim for flooring the plaintiff seeks only the cost of bamboo flooring when the Detailed Plans suggest that he might properly have claimed more expensive stone flooring.
142 The plaintiff contracted for a particular type of floor covering superior to that which was provided, and for a lock up garage area of 55 sqm total in the place designated in the proposed Strata Plans and the Simplified Plans. He did not receive them and in my view he is entitled to damages.
143 Much time was spent at trial arguing whether the Condor Tower development was required to be constructed in compliance with the Residential Design Codes of Western Australia. Lawrence Scanlan is an architect who gave evidence for the defendant. Mr Scanlan is an architect who has been involved in the development of some 500 apartments in the city centre area of Perth and is currently engaged in developing a further 500. It was his evidence that based on City Planning Scheme number 2 of 2004, Residential Design Codes - the 'R-Codes' - did not apply to Condor Tower.
144 The R-Codes became exhibit 17 at the trial. Part 3 of the R-Codes deals with 'design elements'. Section 3.8 of pt 3 deals with the element of privacy and in particular the protection of privacy. The text of design element 3.8 emphasises the necessity of taking into account the effect of a new development on proposed dwellings on adjoining properties. It says:
Design of new developments should avoid overlooking into adjacent habitable room windows especially of living rooms, and of balconies, terraces and other outdoor living spaces.
Where a dwelling has only limited outdoor living space, and especially where its location is fixed (for example, adjacent to indoor living areas), protection from overlooking has high priority.
145 Sensibly, design element 3.8 recognises that where setback distances cannot be used to achieve privacy separation, 'some form of screening will usually be effective'. The text goes on:
A reasonable test of this is whether the screening prevents recognition of persons or the precise nature of private activity.
146 It was not seriously contended that the metre high screen separating the balconies of apartments 150 and 151 provided any degree of privacy much less met the requirements of design element 3.8. The existing screen can be seen in photographs included in the report of Kevin Windross (exhibit 39) whose evidence I will refer to later. The photographs show a stone partition of something in the order of 50 mm wide and a metre high for the depth of the balcony, except for a portion that is perhaps two metres high and one metre wide adjacent to the exterior wall of the building.
147 City Planning Scheme number 2 - 2004 became exhibit 46 at the trial. Counsel for the plaintiff properly conceded that this document is a Town Planning Scheme admissible under the provisions of Part VI of the Interpretation Act 1984 as subsidiary legislation.
148 Section 23 of Scheme number 2 provides as follows:
(a) to residential development on land to which this Scheme or a precinct plan designates a density code; and
(b) to the extent expressly identified in the Scheme or in the relevant precinct plan as applying to a residential development, or to the relevant land.
149 Section 22 provides:
Unless otherwise consistent with the planning approval, development is to comply with the standards and requirements contained in the Scheme.
150 Volume 2 of this document is the 'Policy Manual'. Section 4.1 of the Policy Manual says that the purpose of 'this Policy is to provide guidance in the design of buildings and spaces to achieve an enhanced urban environment ...'. The policy described in volume 2 applies to development throughout the City of Perth scheme area with certain exceptions that do not apply to area in which Condor Tower was developed. Section 4.10 deals with 'Residential Design Policy'. Element 2 of this section covers 'privacy and security'. The introductory notes to this element say:
Residential development is designed to maximise actual and perceived level (sic) of safety for residents and visitors, while also achieving an adequate level of visual privacy to all dwellings given the intensive nature of development in the City.
151 Section 2.1 of element 2 provides:
While acknowledging that total protection from overlooking is unlikely in an inner-city context, developments should be designed to optimise visual privacy to all dwellings and private spaces by considering:
152 Whether the Residential Design Codes apply to Condor Tower turns on whether the land on which it was built is covered by a density code prescribed either in the City Planning Scheme number 2 or a 'precinct plan'. According to Mr Scanlan (and consistent with the scheme map provided in City Planning Scheme number 2) the area where Condor Tower was built is for the purposes of City Planning Scheme number 2 within the 'City Centre' scheme use area.
153 There is no evidence before me that would lead me to conclude that either City Planning Scheme number 2 or a precinct plan designated a density code that applied to the Condor Tower site, or at any rate none that counsel could point to. In the circumstances in my view the policy provided in volume 2 of City Planning Scheme number 2 applied to the development of Condor Tower. In my opinion however whether the R-Code or the policy under the City Planning Scheme applied, a purchaser of apartment 151, buying 'off the plan' would be entitled to assume that privacy would be a factor taken into account in the design and construction of the apartment, including the balcony.
154 The plaintiff was purchasing a private residence. While the residence was in a high rise development it would be reasonable to expect as a matter of fact that some effort would be made, to the extent that it was reasonable to do so, to protect the privacy of the occupants.
155 If the plaintiff was to have the benefit of his purchase of such a dwelling then he was entitled to a reasonable degree of privacy. That is not achieved by the current arrangement of a one metre high divider for most of the depth of the balcony.
156 As element 2.1 of the City Planning Scheme acknowledged, in some circumstances total protection from overlooking will not be achievable in an inner-city context. Nonetheless, a buyer off the plan would be entitled to expect that the development of Condor Tower would '... be designed to optimise visual privacy to all dwellings and private spaces ... with consideration given to screening'. Putting aside for one moment the argument advanced by the defendant, to which I will refer, there is no evidence that any regard was had to the issue of privacy in the context of the adjoining balconies of apartment 150 and 151.
157 Mr Lindsay Albonico, a director of the defendant who was involved in the development of Condor Tower gave evidence. The matter not being addressed, at the conclusion of his evidence I asked him why the balcony divider between two otherwise luxurious apartments such as number 150 and 151, would be constructed in such a way as to allow the occupants of one apartment to peer into the living area of the other. Mr Albonico said:
It's difficult to - to make a sensible answer of it ... I mean, we - there is two parts to the answer. One is that we weren't required to put anything there. We did put something there. What - what is there I understand, is objected to. So there is actually a party wall ... it's one metre high in part, its full height in another part. Its made of granite. It obscures the view of those [air conditioning condensing units of lot 150] to lot 151. But, yes I would agree that you would come out of lot 150 to look at the view and then realise you would be looking across the terrace of lot 151. ... If I'm allowed to make a comment about the future - I suspect that if are - if we do receive an offer for lot 150 that offer may well include a condition about that party wall which, which would then have to be considered.
158 Mr Albonico agreed that anyone who might be prepared to spend the asking price of $3,000,000 for apartment 150 would be disinclined to do so if the neighbours could peer at will into the front room. Quite apart from the loss of privacy inside the apartments, no use can currently be made of either apartment balconies without being exposed to the view of the neighbouring balcony.
159 The defendant's pleaded case was that cl 3.2.2 of the Contract obliged it to construct apartment 151,
... in accordance with a Planning Application, defined by cl 2.2.1 of the contract to mean, in effect, an application for approval to construct apartment 151 in accordance with the Simplified Plans and general specification( Defence at para 2.5);
...
The boundary between the balconies of apartments 150 and 151 has been built in accordance with the building licence issued by the City of Perth for the construction of Condor Tower and the Simplified Plans: Defence at para 2.7.
160 The plaintiff's written submission before trial was that:
The term that apartment 151 would be built in accordance with the residential R-Codes [sic] cannot be implied as such a term would be inconsistent with cl 3.2.2 which required construction of apartment 151 in accordance with the building licence issued by the City of Perth.
161 In closing submissions, counsel for the defendant pursued the argument that an implied term of the kind contended for by the plaintiff would contradict an express term of the Contract, cl 3.2.2.
162 I have previously referred to the detailed plans issued for the purposes of obtaining a building licence and stamped as 'City of Perth Approved Plans' for the purposes of the building licence. The defendant's case was that the City of Perth had granted a certificate pursuant to s 23 of the Strata Titles Act 1966, the effect of which was to certify that Condor Tower was constructed 'consistent with the building plans and specifications approved of by the City and that separate occupation of the proposed lots will not contravene the City's Planning Scheme'.
163 To test this argument I asked counsel how the provision of a balcony screen of sufficient height to provide privacy would contravene the Town Planning Scheme. Counsel did not contend that a screen that was sufficient to create privacy would have contravened the Town Planning Scheme. Rather, he said:
I am just simply saying that the contract required them to build in accordance with what was approved and that the proof that that was done, is the s 23 certificate issued by the City of Perth to allow this part of the plan to be registered. That it was consistent with what was approved, and consistent, meaning there is just simply no partition.
164 With respect, that submission reads quite a lot into the grant of the s 23 certificate. No plan approved for the purposes of the building licence and showing what the height of the balcony screen was to be was in evidence at trial. To the extent that there were plans in evidence that showed the balcony partition as an element, they didn't much resemble what appears in the photographs in Mr Windross' report: exhibit 39.
165 When Mr Albonico said that 'we weren't required to put anything there', it was not apparent whether a plan had been submitted that showed the absence of a privacy screen or whether no plan showing that design element had been required.
166 It would not, in my view, breach any express term of the Contract to imply a term that a balcony screen giving a reasonable degree of privacy would be built between the two apartments. The obligation of the defendant to build Condor Tower 'in accordance with a planning application and building licence' is not an express term that would contradict such an implied term.
167 First, the plans that I have been provided do not permit any assessment of what the City of Perth was asked to approve with respect to the height of the screen on the level 23 balcony, if indeed it was. Nor does the fact that the City granted a certification pursuant to s 23 of the Strata Titles Act 1985 prove either that Condor Tower was built exactly in accordance with the approved plans or that a screen of a proper height would not have gained approval.
168 The language of s 23(1)(a) in the Strata Titles Act 1985 was previously included in s 5(6) of the Strata Titles Act 1966. Prior to the registration of a strata plan allowing the subdivision of the subject land into plots, both required the certificate of the appropriate local authority that:
The building shown on the plan has been inspected and that it is consistent with the building plans and specifications in respect thereof that have been approved by the local authority.
169 The legislative history of this section is described in Drexel London (a firm) v Gove (Blackman) [2009] WASCA 181 [259]:
During the parliamentary debate on the Bill, an amendment was moved to insert the word 'substantially' in s 5(6)(c)(i) to require that a building be 'substantially consistent' with the plans and specifications. The Minister handling the passage of the Bill rejected the amendment saying:
'I am assured by the Crown Law Department that when we talk about a building being consistent, it only means that it must conform - not be identical - in the sensible sort of way. If one goes beyond the legal explanation that has been given to me, and takes the simple dictionary definition, it would be found that the word 'consistent' means something which is compatible; which, in itself does not mean that it has to be scrupulously in accordance with the utmost detail in the original plan.'
170 Nor in any event does it seem to me that I am bound by the City of Perth's certification under s 23(1)(a) of the 1985 Act or that the plaintiff is somehow estopped from showing that some aspect of the City Planning Scheme was effectively overlooked either at the stage of the approval of the plans or on the inspection for certification prior to registration of the strata plan.
171 In the course of closing submissions, a further issue arose. That was the question as to whether the plaintiff would be unable to have a screen of a sensible height constructed because of the requirement for the consent of other proprietors before the strata company could apply for a building licence to carry out the construction of a new screen. A subsidiary issue is whether the plaintiff is entitled to claim for damages in respect of failure to carry out the construction of what should have been common property.
172 First of all, so far as I can determine the construction of a screen on level 23 of the same height as every other balcony would not appear to affect any other owner except the defendant. If the other owners should be so churlish as to oppose the construction on common property, the plaintiff may, if he wishes, construct a screen immediately on his side of the dividing line. Secondly, I am satisfied by the submissions of the plaintiff that in any event if any other proprietor were to object to the construction of the screen, there could not be reasonable and proper grounds for objecting: s 7(3) of the Strata Titles Act 1985.
173 Finally, given the significant control that the defendant still has over the affairs of the strata company, the issues of building approval and common property are more illusory than real. As Mr Albonico said, if it were necessary to achieve a sale of apartment 150, then a proper height screen would be constructed.
174 The plaintiff engaged Kevin Windross, a chartered quantity surveyor to provide his opinion of the cost of installing an air-conditioning unit, fitting a screen on the balcony, and removing the carpet and replacing it with bamboo flooring in the main living areas of apartment 151. Mr Windross' report was tendered by consent and became exhibit 39. He was not required for cross-examination.
175 Mr Windross concluded that the cost of fitting air-conditioning was $18,000. The cost of a screen for the balcony was $8,000. The cost of taking up the carpet and replacing it with bamboo flooring was $19,000. For the reasons I have previously expressed, in my view the plaintiff is not entitled to the cost of installing air-conditioning. Should I be wrong in that however, the unchallenged evidence of Mr Windross in my view represents the damages that would have been suffered by the plaintiff. Similarly, I accept the evidence of Mr Windross as to the cost of providing the screen and replacing the flooring.
176 The plaintiff relied upon the evidence of Scott Bellerby, a licensed valuer, with respect to the value of a lost car bay and the value of a storeroom. Mr Bellerby's report became exhibit 40 at the trial.
177 Mr Bellerby offered his opinion with respect to the value of the loss of a storage unit of approximately 5 sqm. As a result of the inquiries he made which were set out in his report at page 34, he concluded that a 5 sqm storage area would lease for $1900 per annum, that is, $380 per square metre. He applied a discount rate of 6.5% to that for a period of 30 years to arrive at a capital value. Mr Bellerby's methodology was not challenged by the defendant.
178 Mr Bellerby concluded that the capital value of a lost storage space of 5 sqm was $25,000, that is, $5,000 per square metre net of GST.
179 While I do not accept that the plaintiff was in fact entitled to a separate storage space, Mr Bellerby's opinion in my view is a reasonable estimate of the capital cost of such a space and I accept it.
180 I have referred to the layout of the parking garage area that was provided for in the Contract and the layout of the garage that was actually provided. With respect to the lost parking area, Mr Bellerby said, at s 83 of his report:
We have entered into discussions with the City of Perth about the minimum car bay measurements that would be required for a development, in-line with the subject complex. These requirements are in accordance with the Australian Standard/New Zealand Standard 2890.1:2004 Guidelines, as advised.
The minimum car parking area therefore equates to 12.96 sqm as advised by Counsel.
The current strata plan for the subject property indicates that the garage area has a defined area of 46 sqm and we have therefore assumed it meets the counsel requirements to achieve three approved car bays.
The Contract for Sale - Annexure 'C' indicates that the subject property will have a total allocated ground floor area of 55 sqm, with the survey depicting area inside the columns (the existing garage) and an area outside of the columns.
During our inspection it was observed that there is an allocated car bay outside of the columns, which the strata plan indicates has been allocated to Lot 65.
Based on the minimum car bay areas as defined by the City of Perth and in accordance with the Australian Standards, the total square metre allocation, is based on Annexure 'C' of that Sales Contract, this area could accommodate potentially four car bays.
When analysing the market value based on the 'Off the Plan' specifications, we have interpreted the highlighted, shaded and initialled area as being defined as comprising the 'As Is' garage, which is depicted inside the columns on both plans and including an additional adjoining car bay, currently allocated to Lot 65.
181 Later, in s 85 of his report under the heading 'Zoning Influences', Mr Bellerby says:
182 It might reasonably be thought that the assessment of the particular area and dimensions necessary to provide a car parking space might be beyond the expertise of a licensed valuer. The admission of Mr Bellerby's report was not challenged on that basis however. It will be readily observed that Mr Bellerby does not extend himself in analysing how three car bays might be achieved in the available area. In fact it was unnecessary for Mr Bellerby to justify his provision of an opinion about the value of a car parking bay in the way I have just described. His instructions include the following in the letter of instructions provided by the plaintiff's solicitors:
Our client claims that the Off the Plan contract he entered into when purchasing the property stated that he would obtain a car parking space of 55 sqm (or a three car parking bays [sic]) where as the car parking space he received was only 46 sqm (being two car parking bays).
...
The valuation should include the following:
The cost of purchasing or procuring a car parking bay within Condor Tower or in the immediate vicinity.
183 At [131] above I referred to the principle that governs the assessment of damages, stated by Parke B in Robinson v Harman.
184 If the plaintiff has lost the use of an area where a car could be parked then the cost of providing an alternate parking bay is a reasonable assessment of damages. If the area lost could not be used as a parking bay then some other measure must be found.
185 Given that Mr Bellerby's enquiries lead him to the City of Perth requirements with respect to car parking areas, it might be thought that the Australian Standard 2890.1:2004 would be a logical starting point to determine whether a parking bay or its equivalent had been lost. Notwithstanding Mr Bellerby's evidence on the subject and the specific reference to AS 2890.1 in the building license (exhibit 9, item 63), the submission of counsel for the plaintiff was that the Australian Standard was irrelevant to the assessment of the plaintiff's loss.
186 Laurence Scanlon, the architect engaged by the defendant, measured the plaintiff's garage 'as built'. He also considered the dimensions of the additional area to the east of the plaintiff's garage that would have been available if the garage had been a full 55 sqm. He provided his opinion as to the number of parking spaces that would be available based on the application of Australian Standard 2890.1:2004.
187 Counsel for the plaintiff objected to the reception of Mr Scanlon's report. There were two bases for the objection. The first was that the report referred to the Australian Standard which it was argued first needed to be proved before the opinion could be received. The second objection was that Mr Scanlon's opinion that whether the area to the east of the pillars was included or not, the total parking space only provided for two parking bays within the terms of the Australian Standard, was 'simply completely irrelevant and of no probative use to any issue that your Honour has before you'.
188 The argument put by counsel for the plaintiff in justification of this position was:
... we have got a contract to buy an area of 55 metres. Our evidence is that would allow four standard car bays, according to the City of Perth. How we use it is up to us. What sort of cars we put in it is up to us. We're not building car bays and we don't apply an Australian Standard about building car bays in the area in a new building for building a car bay to work out what we do inside our lock at 55 metres and what - what we do with it and what we don't.
We contracted to get 55 metres as a lock-up garage. What we do with it is up to us. We park Goggomobils or whatever. That's up - that's up to us or our purchaser from us. We didn't get it so it's a question of what its worth. Well, we say we've lost 9 metres out of 55. We say, according to Mr Bellerby, that means we've essentially lost the value of a car bay and will need to get another car bay to put ourselves in the position where we would have been. That's it, Australian Standards are irrelevant [wrongly shown in the transcript as 'relevant'].
189 The suggestion that Mr Bellerby's evidence supported the proposition that the plaintiff had 'essentially lost the value of a car bay' somewhat overstates the effect of that evidence. Mr Bellerby was instructed to value the loss as the loss of a car bay. The suggestions in his report that a car bay had been lost, consistent though they were with the instructions he had been given and the argument of counsel for the plaintiff, were unsupported by any measurement that he had himself made. They were unsupported by any reference to the precise requirements of the Australian Standard mandated by the building licence (exhibit 9) that dealt with the very matter. In his cross-examination he repeatedly justified his valuation of the lost area as a car bay by reference to his instructions.
190 The argument advanced for the plaintiff at least has the virtue of simplicity: The Australian Standard (relevant to this extent it would seem) requires 12.96 sqm for a car bay. The Contract entitled the plaintiff to receive a parking area of 55 sqm. 55 divided by 12.96 equals 4.24. 46 divided by 12.96 equals 3.5. Therefore the plaintiff no longer has an area that arithmetically totals that required for 4 car bays. Therefore the plaintiff has lost the use of a car bay.
191 This issue occupied more time at trial than any other single issue. The case for the defendant was that, based on among other things Mr Scanlon's evidence and the relevant Australian Standard, while an area of approximately 9 m (or 7.4 sqm according to Mr Scanlon's measurements) had been lost, it was not an area that was of a sufficient size or the appropriate dimensions in which to park a car. The response by plaintiff's counsel was as follows:
Just assume our contract was for a 13 sqm area, which is one car bay according to the Australian Standard, and we were knocked off 9, so we got four.
And the defendant came and said:
You haven't lost a car bay, you can't fit a car into that nine metre, you haven't made your case out, you haven't actually lost the space for a car bay, because Mr Scanlon is proving the Australian Standard and you can't fit a car bay in that nine metre, so proverbially drop on your head, you haven't lost anything.
The answer to that is: that's rubbish. What we've lost is the effective use of an area in which we could park a car. The fact we didn't lose the entire 13 metres didn't mean we didn't lose the effective use of an area in which we could park the car.
192 Relevance aside, objection was taken to the tender of either a photocopy of AS2890.1 or what appeared to a published copy of the original document. As I was advised by counsel for the plaintiff:
Anyone who has defended prosecutions for breach of a building standard and has taken this objection before a magistrate knows that this objection is not a joke ... you can't prosecute someone for breach of an Australian Standard without proving it and proving it properly. Same point here. So I'm not just being, sort of, technical. People seem to think this document is like regulations, like my learned friend suggested, it's like a subordinate legislation. It's not, it's published by some private moneymaking enterprise. That's it.
So that's why I'm objecting to it. It just doesn't follow that it's admissible as a business record.
193 In fact, Australian Standard 2890.1:2004 is adopted by the City of Perth in City Planning Scheme Number 2 in s 5 of its planning policies with respect to parking facilities. Australian Standard 2890.1:2004 is also expressly adopted by the Western Australian Planning Commission in the R-Codes with respect to design element 6.5.
194 Satisfied as I am that it was the City Planning Scheme Number 2 that governed the development of Condor Tower, the Australian Standard 2890.1:2004 is in my view a document used in the ordinary course of the business of the City of Perth, recording matters relevant to the approval of parking areas within developments. Quite apart from the fact that I am satisfied that it is appropriate to regard the Australian Standard in that sense as a business record and therefore admissible in any event, in my view the content of this particular Australian Standard can be regarded as part of the corpus of knowledge that an expert such as Mr Scanlon would be expected to have. Whether or not it had the force of law it is exactly the kind of standard that I would anticipate an expert such as Mr Scanlon to have recourse to in order to provide the opinion that he has offered: Chicco v Corporation of the City of Woodville (1990) A Tort Rep 81-028, 67,895 (King CJ). In the ordinary course I would expect Mr Scanlon to have and apply a detailed knowledge of the standard and be able to bring that knowledge to bear in providing an opinion about the dimensions of the plaintiff's parking area. Certainly I would expect him to be able to identify a copy of the standard.
195 For the purposes of preparing the document that became exhibit 41, Mr Scanlon went to Condor Tower and physically measured the plaintiff's parking bay. The results of that exercise appear at page 3 of exhibit 41. As Mr Scanlon's report and his oral evidence set out, the actual area that the plaintiff received is 47.6 sqm. The area taken from the eastern side of the plaintiff's garage is 7.4 sqm. On p 3 of his report Mr Scanlon has superimposed the design envelope of the 12.96 sqm area required by the Australian Standard 2890.1:2004 and by the City of Perth to provide a car parking space.
196 The actual shape of the design envelope is not perfectly rectangular. The area required at the entrance of the parking space is the widest dimension. Quite obviously that is to allow ease of access when turning into the bay. The profile of a space then narrows before again expanding to the maximum width where car doors would be expected, before reducing again in steps to the narrowest width. Like most motor vehicles the template is longer overall than it is wide. While passenger motor vehicles will range in size the template of AS 2890.1:2004 appears to me to sensibly compromise the needs of large and small cars.
197 Two of the templates fit comfortably into the space that the plaintiff actually received. Three would not. Nor would three fit into the original garage area because of the pillars. By reference to both the design envelope and the text of AS 2890.1:2004 the garage area is not wide enough although it is much deeper than required by the standard.
198 Overall the plaintiff's parking garage area has a depth of 6.57 m. The width of the front of the garage between the columns is 6.55 m. The columns themselves are 0.53 m wide.
199 According to the measurements Mr Scanlon made, which I accept, the area that the plaintiff actually lost consisted of half of the area between the two eastern columns (265 mm wide by 5240 mm long equals 1.388 sqm) and an area immediately to the east of the pillar that is 6.24 sqm (950 x 6570). By my calculation the result is 7.6 sqm. The difference between my calculations and those of Mr Scanlon may well be the loss of the width of the chain link fence down the centreline between the two columns, which may have reduced the area he measured.
200 The graphic illustration of these dimensions at pages 3 and 4 of exhibit 41 however rather plainly demonstrates Mr Scanlon's conclusion. As Mr Scanlon said:
... I can assure you because of the location of the columns, even a Goggomobil will not fit into the space that has been lost. In fact even a motorbike would have trouble.
201 This drew a further objection from counsel for the plaintiff, apparently implying that matters of admissibility were being left to the witness:
I object again, of course, your Honour. The witness can tell you what the dimensions of a Goggomobil are if he thinks that's admissible.
202 The Goggomobil is a legendary, impossibly tiny car, built in Germany after World War II. Given the nature of the argument being advanced on behalf of the plaintiff, questions naturally arose as to what sort of vehicle might be parked in the lost space. The Goggomobil, the Heinkel and the Mini were referred to. Whatever Mr Scanlon's view as to the admissibility of the dimensions of the Goggomobil, I was interested to learn whether there was any car, even one as whimsical as a Goggomobil, that might enable the lost space east of the pillars to be used as a 'car bay'.
203 As it turned out, Mr Scanlon was able to give evidence that the Goggomobil is 'approximately about 1.4 m wide'. Mr Scanlon continued:
Now the dimension we've got between the known 55 sqm strata space which was part of the contract and a column that is not moved is approximately, not approximately - its exactly 950 mm and if you had a solid barrier at the extremity of the 55 sqm, whether it was a cyclone mesh or a brick wall or whatever, a Goggomobil will not fit into that space. It was never ever possible, and it still isn't.
204 In my view it would not be fair to characterise as 'rubbish' the argument that the loss of 7.6 sqm or 9 sqm here did not result in the loss of a car bay by the plaintiff. Whether a legal practitioner conducting themselves with rudimentary courtesy would so characterise an opponent's argument is another matter entirely. For present purposes it is only necessary for me to say that in my view, the opinion expressed by Mr Scanlon is an entirely sensible one.
205 As a matter of common sense, even without regard to AS 2890.1:2004, the 7.6 sqm or 9 sqm space lost by the plaintiff could never have been used as a parking bay. I accept the argument advanced by the defendant in that regard. Even if half the area between the pillars was not taken into account as part of the 9 sqm (in other words if was assumed that the entire 9 sqm was space on the east side of the pillars) the most the plaintiff would gain is a space 6.57 m long and 1.37 m wide, without allowing for a chain link fence on the boundary. Even if 9 sqm rather than the measured 7.6 is taken as the starting point, when the area necessary for the chain link fence and the area between the pillars are accounted for, the width of the lost space is reduced to about 1.1 sqm. AS 2890.1:2004 does not permit single parking spaces in enclosed garages to be less than 2.4 metres wide and requires a door of the same width: s 5.4.
206 That does not mean that the plaintiff has not suffered a loss for which he should be compensated. The 7.6 or 9sqm whilst useless for the purposes of parking were still potentially useful storage space. The availability of secure storage space of that kind for an apartment dweller would understandably be a thing of value.
207 Mr Bellerby's opinion as to the value of a car parking bay was set out in his report and received without objection: exhibit 40. Mr Bellerby said that in fact he was unable to find any prior sales of car bays or indeed of storerooms in the central business district. His enquiries showed however that car bays were regularly available for lease. Typically they leased for between $650 and $750 per calendar month along the Terrace, with the higher rates for bays located towards the western end, while the lower rates were achieved for bays in the area of Condor Tower.
208 Using a lease figure of $650 per month, or $7,800 per annum net of GST, Mr Bellerby applied a discount rate of 6.5% over a 30 year term. That resulted in a total figure of $101,857, which he rounded to $102,000, net of GST.
209 While counsel for the defendant criticised the nature of the inquiries made by Mr Bellerby about leasing rates, no objection was taken to their inclusion in the report and no challenge was made to the application of a discount rate or the amount of that discount rate.
210 The idea that a parking bay at the eastern end of the central business district would rent for $650 per month is not particularly startling. In the absence of any evidence contradicting the assumptions underlying Mr Bellerby's opinion and the method used to reach this conclusion, I accept that $102,000 represents the amount of damages that the plaintiff would be entitled to, if he had indeed suffered the loss of a parking bay.
211 As I have said, however, in my view he did not.
212 In my view the plaintiff's loss of area from his enclosed parking garage represents a loss of useful storage space and should be compensated on that basis. Despite Mr Scanlon's measurement, given the way that the defendant pleaded and conducted its case it is appropriate in my view to rely on the measure said to be 'evidenced' by 'the Strata Plan as registered': Defence at paragraph 2.18. Doing my best here, the plaintiff is entitled to damages in the amount of $45,000 for the lost garage area.
213 In my view the defendant breached the Contract by failing to provide a parking garage and floor coverings as specified, and a screen affording privacy on the balcony between apartment 150 and 151. The plaintiff is entitled to damages as follows:
214 I find in favour of the plaintiff on these issues and order damages of $72,000 in total. The plaintiff's claim is otherwise dismissed.
215 I will hear from the parties with respect to costs.
JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA
CITATION : SOUTER -v- CONDOR DEVELOPMENTS PTY LTD [2011] WADC 212 (S)
Costs - Plaintiff and defendant each successful on separate causes of action - Turns on facts
Timing of assessment of damages - Interest as damages - Turns on facts
Rules of the Supreme Court 1971 O 66 r 1(1), r 1(2), r 1(3)
ABB Service Pty Ltd v Hetherington [2001] WASCA 417
Johnson v Perez [1988] HCA 64; (1988) 166 CLR 351
Keet v Ward [2011] WASCA 139
Permanent Building Society v Wheeler (No. 2) (1993) 10 WAR 569
Rio Tinto Exploration Pty Ltd v Graphite Holdings Pty Ltd [2007] WASCA 276
Souter v Condor Developments Pty Ltd [2011] WADC 212.
1 O'NEAL DCJ: On 30 November last year I handed down my reasons for decision in this action: Souter v Condor Developments Pty Ltd [2011] WADC 212. I found for the plaintiff in part and assessed damages for that part of the plaintiff's claim that was successful. It has now become necessary for me to resolve issues of interest on the damages awarded and costs.
2 The plaintiff, declaring victory, seeks the costs of the action from the defendant. The defendant says that given the relative importance of discrete issues where it prevailed, including a separate cause of action, the plaintiff should pay 70% of the defendant's costs and the defendant 30% of the plaintiff's costs. Alternatively, the defendant says there should be no order as to costs.
3 Despite the court's broad discretion with respect to costs, normally a successful party will recover his costs: O 66 r 1(1) Rules of the Supreme Court 1971. Some good reason must be demonstrated by an unsuccessful party for it to avoid an order that it pay the successful party's costs.
4 Order 66 r 1(1) is tempered by r 1(2) and r 1(3). Rule 1(3) is in the following terms:
Where a party though generally successful in an action has, by the introduction of some issue or issues on which he has failed, increased the costs the Court may order such party to pay the costs of such issue or issues.
5 As was said however by the court in Keet v Ward [2011] WASCA 139 [18] - [19]:
... Notwithstanding O 66 r 1(3), courts are generally reluctant to apportion costs on the basis of success or failure on particular issues arising in the course of the trial. In Cretazzo v Lombardi (1975) 13 SASR 4, at 16, Jacobs J said:
'I would wish to sound a note of cautious disapproval of applications ... to apportion costs according only to the success or failure of one party or the other on the various issues of fact or law, which arise in the course of a trial ... trials occur daily in which the party, who in the end is wholly or substantially successful, nevertheless fails along the way on particular issues of fact or law. The ultimate ends of justice may not be served if a party is dissuaded by the risk of costs from canvassing all issues, however doubtful, which might be material to the decision of the case.'
'There are, of course, many factors affecting the exercise of the discretion as to costs in each case, including in particular, the severability of the issues, and no two cases are alike. I wish merely to lend no encouragement to any suggestion that a party against whom the judgment goes ought nevertheless to anticipate a favourable exercise of the judicial discretion as to costs in respect of issues upon which he may have succeeded, based merely on his success in those particular issues.'
6 Order 66 r 2(a) is also invoked by the defendant here. That rule provides that-
(a) where the statement of claim contains more than one cause of action and the plaintiff succeeds on one or more causes of action and the defendant succeeds on another or others, costs should be allowed to the plaintiff on the cause or causes of action on which he succeeds and to the defendant on that or those on which he succeeds, in the same manner as if separate actions had been brought ...
7 Order 66 r 2(a) has been considered by a number of cases. The manner in which O 66 r 2(a) will ordinarily be applied however is conveniently summarised in the decision of the Court of Appeal in Keet v Ward at [24]:
There are a number of cases which discuss O 66 r 2(a). From them the following propositions may be drawn:
(a) the expression 'cause of action' in O 66 r 2(a) is a reference to a factual situation, the existence of which entitles the plaintiff to obtain a remedy: Letang v Cooper [1964] EWCA Civ 5; [1965] 1 QB 232, 242 (Diplock LJ); Permanent Building Society v Wheeler (No 2) (1993) 10 WAR 569, 572 (Anderson J);
(b) the rule does not provide an inflexible rule which prescribes a mandatory approach to the awarding of costs in cases where there are multiple causes of action. The opening words 'in the absence of any special order' indicate that the court retains the discretion to make a special order departing from the rule in O 66 r 2(a): Kimpura Pty Ltd v JWH Group Pty Ltd [2004] WASCA 134 [12] - [15];
(c) however, where there are multiple causes of action and a party has succeeded on only one or some, the other party is prima facie entitled to costs on the others but the court will always attempt to do substantial justice in the circumstances: Permanent Building Society v Wheeler (No 2), 574 - 575 (Anderson J);
(d) it may not be appropriate to make a costs order in accordance with O 66 r 2(a) where there is in substance one contest, that is, where the causes of action arise from the one course of dealings, the one transaction or the same facts: Permanent Building Society v Wheeler (No 2) 574 - 575; R J Baker Nominees Pty Ltd v Parsons Management Group Pty Ltd [2009] WASC 206(S); Witcombe v Talbot & Olivier [No 2] [2009] WASC 173(S) (Beech J).
8 It is the case that all of the claims in respect of this litigation arose in respect of one transaction, the purchase of an apartment by the plaintiff from the defendant. In my view however it would be a gross generalisation obscuring the substantial matters at issue in this litigation to characterise everything that occurred between the plaintiff and the defendant or the defendant's agents and the claims advanced by the plaintiff as 'in substance one contest'.
9 In narrower conceptual terms there were three topics at trial around which the issues of fact revolved. The first was the plaintiff's cause or causes of action for breach of contract. The second was the plaintiff's causes of action for misleading and deceptive conduct. The third was the remedy sought by the plaintiff for each of its claimed causes of action.
10 The plaintiff's claims for breach of contract were divisible into claims for breach of express written terms and in one case an implied term on the one hand, and breach of terms said to be partly in writing and partly oral, on the other. These latter terms it was alleged stipulated that the plaintiff should have received a fully functioning air conditioning system for his apartment and a dedicated separate store room.
11 At trial, so far as the express terms which were said to have been breached, the only real issue was whether the terms of the contract allowed the defendant to depart from express stipulations as to the dimensions and features of the apartment. With respect to the term sought to be implied, the only real issue was whether that term was inconsistent with other terms in the contract, properly construed.
12 With respect to the claim for breach of terms said to be partly in writing and partly oral, as I found, the writing simply did not support the terms claimed. The 'oral terms' were alleged to have arisen from alleged pre-contractual oral misrepresentations by Ms Thomas, a registered real estate sales representative employed by the defendant's real estate agent.
13 With respect to the claims of breach of contract then the plaintiff was partly successful. In respect of the express written terms the plaintiff succeeded on a legal argument that required no evidence other than the terms of the agreement. With respect to the issue of the implied term, the privacy screen on the balcony, the evidence necessary to demonstrate that the need for a privacy screen was so obvious as to go without saying occupied relatively little time. The allegation that there was an express oral agreement was disposed of when I was unable to accept the evidence of the plaintiff.
14 In my view, properly understood, the allegation that there were specific express contractual terms derived from oral representations of Ms Thomas constituted a separate cause of action. By way of example, if after the expiry of a limitation period the plaintiff had sought to add a claim for the breach of the alleged oral contractual terms to an existing claim for breach of the express written terms of the agreement, in my opinion the additional claim would be statute barred: ABB Service Pty Ltd v Hetherington [2001] WASCA 417.
15 On these issues, on the causes of action of breach of contract, while considerable time was occupied by legal argument as to the proper construction of the written terms of the agreement, little was required by way of evidence. By contrast, the issue of what was alleged to have been said by Ms Thomas and what was known to the defendant's agent as to the subject matter of those alleged oral representations took less time in argument but occupied much of the evidence.
16 There was a factual overlap in the case alleging a breach of express oral contractual terms and the plaintiff's case on misleading and deceptive conduct and I will refer further to that below.
17 The plaintiff's case on misleading and deceptive conduct divided into two parts. Each could be said to be a separate cause of action in the sense described by the Court of Appeal in ABB Service Pty Ltd v Hetherington. The first part relied on what were said to be the pre-contractual oral misrepresentations of Ms Thomas. I observe that while the plaintiff's pleading alleged only misleading and deceptive conduct, the plaintiff by his counsel did not hesitate to argue in closing that in fact Ms Thomas had fraudulently deceived the plaintiff. As set out in my reasons for decision I rejected that argument and rejected the idea that Ms Thomas had misled the plaintiff in any way. The significance of allegations of this kind as against someone who earns their living as a registered real estate sales representative would be obvious. The defendant however does not rely on that as a basis for disentitling the plaintiff to costs and I do not therefore have regard to it.
18 The second part of the plaintiff's case in misleading and deceptive conduct was that, after executing the agreement for the purchase of his apartment but prior to settling on it, he had again been misled by the principal of the defendant's agent, Mr Wayne Briggs. That allegation was maintained until it was abandoned on the third day of trial: [74]. This particular cause of action did not overlap factually with any other cause of action. It relied upon the proof of the number of facts that were in dispute. It occupied only a modest amount of time at trial but it would have been a burden to the parties before the trial.
19 The evidence relied upon to try to prove express oral contractual terms, the alleged pre-contractual representations of Ms Thomas, was the same evidence relied upon to prove the misleading and deceptive conduct claim that the plaintiff pressed in his closing submissions. The evidence with respect to those matters and the argument of those matters occupied a considerable period of time at trial and no doubt in the parties' pre-trial preparation. The plaintiff failed entirely with respect to those issues.
20 The last of the three main topics at trial was the question of the remedies sought by the plaintiff in respect of his causes of action. The plaintiff sought damages for breach of contract and for misleading and deceptive conduct. He also sought remedies pursuant to the Trade Practices Act 1974 (Cth) that would have effectively rectified the written agreement to reflect what the plaintiff said were the assurances that had been made to him orally by Ms Thomas. While counsel for the plaintiff advanced arguments as to the plaintiff's entitlement to these latter remedies it was ultimately not necessary for me to deal with them in my reasons for decision.
21 So far as the claims for damages for breach of contract were concerned some of them, including for example claims for the costs of an air conditioning system and the cost of replacing flooring, were either relatively straightforward and unchallenged or but faintly challenged. The latter was the case for the issue of the cost of providing storage space. No evidence was called by the defendant and the cross examination of the plaintiff's expert was economical.
22 The damages issue that dominated the evidence and ultimately the central factual issue so far as damages were concerned was the plaintiff's claim in respect of the value to be attributed to the 8 or 9 sqm that was lost by the plaintiff from his garage area.
23 The plaintiff's case was that he had effectively lost a space in which a car could be parked and his loss should be valued in that way. The defendant's argument, (characterised by plaintiff's counsel as 'rubbish' although it was supported by the expert opinion of an architect regularly engaged in high rise development projects in the City of Perth), was that the lost 8 or 9 sqm could not be used as a parking bay. That was because, as set out in my reasons for decision at [180] - [205] the long and thin area that had been taken from the plaintiff did not meet the requirements of the City of Perth reflected by the Australian Standard 2890.1: 2004 for a parking space. Nor was it practically possible to put any kind of motor vehicle in the extra space that should have been left to the plaintiff even if it could have done consistently with the requirements of the City of Perth.
24 This issue occupied considerable time at trial. With respect, for the reasons set out in my decision after trial, the vigour with which the argument was advanced on behalf of the plaintiff and the time consumed by the issue was in inverse proportion to its merits.
25 Depending precisely on how it is to be characterised, the plaintiff succeeded either in part on his cause of action in contract or in one of his causes of action in contract.
26 The plaintiff failed however and the defendant succeeded on the issue of the 'oral agreement'. Given that this claim required proof that contractual terms had come into existence by virtue of what Ms Thomas had said as opposed to from the plain words of the party's written agreement, in my opinion it is better characterised as a separate cause of action.
27 The defendant successfully opposed the plaintiff's claim based on the cause of action in misleading and deceptive conduct and the plaintiff abandoned a further cause of action in misleading and deceptive conduct on the third day of trial.
28 There was conduct on the part of both parties here that unnecessarily prolonged the trial. The defendant's late attempt to amend its defence is one. That however has to be balanced against the plaintiff's efforts to exclude references to AS2890.1 as 'irrelevant' when that particular Australian standard was expressly nominated as the standard for the provision of parking spaces in the building licence tendered into evidence by the plaintiff, and was expressly relied upon by the plaintiff's expert witness in providing his opinion as to what the plaintiff had allegedly lost.
29 I have referred to the provisions of O 66 r 2(a). It is still necessary however, as his Honour Justice Anderson said in Permanent Building Society v Wheeler (No. 2) (1993) 10 WAR 569, 574 to have regard to the fact that orders of the kind set out in that rule are not to be made as a matter of course. As his Honour said 'the court will always look at the realities of the case and attempt to do substantial justice ...'.
30 In this case there was an overlap in the facts relied upon and the evidence tendered in the cause of action in breach of contract, at least with respect to oral terms, and one of the causes of action for misleading and deceptive conduct. The plaintiff failed in establishing the facts relied on for both. As I have said, the plaintiff simply abandoned the second cause of action for misleading and deceptive conduct that relied on the alleged conduct of Wayne Briggs.
31 The defendant was successful in defending discrete causes of action. The time and effort devoted to the litigation of those causes of action were at least equal to that occupied in proving the matters upon which the plaintiff was successful.
32 Assessing the relative success of the parties here, the limited success of the plaintiff is in my view offset by the effort involved in pursuing causes of action that were either abandoned, based on unproven oral representations and an issue that was simply so unreasonable that it was bound to fail.
33 Apportioning costs by attributing them to particular issues- or causes of action- brings its own particular problems. In my view it is unnecessary in any event in this case. In my view fairness here requires that there be no order as to costs.
34 The plaintiff seeks an award of pre-judgment interest as damages. Interest is sought in respect of the damages awarded to compensate the plaintiff for the reduced size of his garage area, and the cost of providing a privacy screen across the common balcony and to remove carpet and replace it with bamboo flooring in his apartment. The plaintiff had not at the time of trial incurred any cost himself in respect of those matters.
35 Ordinarily damages for breach of contract are assessed as at the date of breach. That general rule will yield in particular cases to solutions best adapted to give the innocent party that amount in damages which most fairly compensates for the loss and damage caused by the breach: Rio Tinto Exploration Pty Ltd v Graphite Holdings Pty Ltd [2007] WASCA 276 per Buss JA at [93] and see Johnson v Perez [1988] HCA 64; (1988) 166 CLR 351, 355 - 356 (Mason CJ), 367 (Wilson, Toohey and Gaudron JJ), 371 (Brennan J).
36 The breach in this case occurred at the end of July 2009 at the time of settlement. The trial took place in mid-May 2011. The damages the plaintiff was awarded were based on estimates (exhibit 39, expert report of Kevin Windross, 19 November 2010) and a valuation (exhibit 40, expert report of Scott Bellerby, 23 December 2010) that were far closer in time to the date of trial than the date of breach. The valuation of the lost parking area was arrived at using a discount rate based on interest rates current in the last quarter of 2010.
37 No submission was made at trial with respect to the timing of the assessment of damages. The fact is however that the assessment that I made, based on the evidence referred to above, was an assessment at the time of trial. In the circumstances I decline to award prejudgment interest. The plaintiff is of course entitled to interest on the judgment.
Bellgrove
Eldridge
(2009) 236 CLR 272
(1988) 166 CLR 351
(1975) 13 SASR 4
(1954) 90 CLR 613
(1923) 32 CLR 222
(1993) 10 WAR 569