Clancy v Carlson [2021] QDC 33

Uniform Civil Procedure Rules 1999 (Qld), r 166(1), r 390, r 476, r 986(2)

District Court of Queensland|2021-07-15

CONVEYANCING - BREACH OF CONTRACT FOR SALE AND REMEDIES - VENDOR'S REMEDIES - DAMAGES - where the parties entered into contract for the sale of a property - where the defendant failed to pay the balance of the purchase price on or before settlement date or at all and was therefore in breach of an essential term of the contract - where the court was satisfied that the defendant was aware of the trial date and it was appropriate for the plaintiff to seek to establish its claim pursuant to r 476 of the Uniform Civil Procedure Rules 1999 (Qld) - whether the market value of the property was $950,000.00 at the date of settlement and date of the breach - whether the plaintiff suffered damage between the contract price and the market value as at the date of settlement - whether the plaintiff incurred legal costs and has suffered loss and damage which he can recover from the defendant as a result of the difference in purchase price and market value - whether the plaintiff can claim the real estate agent commission fees of $25,000, retained by the agent, as loss and damage suffered - where the plaintiff claims pre-judgment interest pursuant to s 58 of the Civil Proceedings Act 2011 (Qld) - whether the appropriate rate for pre-judgment interest is the rate prescribed under the Supreme Court Practice Direction No 7 of 2013 - whether the plaintiff is entitled to unpaid license fees, rates, water and body corporate fees - whether the plaintiff can claim for indemnity from the defendant for expenses or damages incurred by the plaintiff as a result of the defendant's possession of the property - whether the plaintiff can claim interest on the license fees, bond cleaning, repairs, rates, water charges and body corporate fees pursuant to clause 9.9 of the contract - whether an order for the payment of the legal costs of the proceeding on an indemnity basis can be made against the defendant pursuant to clause 9.7 of the contract - whether the plaintiff can claim interest on the total amount of the judgment at the rate of 9.3% per annum pursuant to clause 9.9 of the contract.

Uniform Civil Procedure Rules 1999 (Qld), r 166(1), r 390, r 476, r 986(2)

Dovaenda Pty Ltd v Pagliaro and Anor [2007] QSC 216 HAP2 Pty Ltd v Bankier [2020] QCA 152

Keeley & Anor v Horton & Anor [2016] QCA 253

McDonald v Dennys Lascelles Ltd [1933] HCA 25; (1933) 48 CLR 457

Orchid Avenue Pty Ltd v Parniczky and Anor [2015] QSC 207

Willmott and Anor v McLeay and Anor [2013] QCA 84

[1] This litigation arises out of the sale by the plaintiff to the defendant of Unit 2, 2089 Gold Coast Highway, Miami in the State of Queensland (Property).

[2] The matter was listed by the court on 22 January 2021 for a hearing on 3 February 2021. As a consequence of email communications from the plaintiff's solicitors to the court concerning whether directions could be given for the plaintiff to give evidence by video link, it became apparent that the defendant may have been unaware of the trial listing.
[3] The court brought the matter on for mention on 1 February 2021. At that time, the solicitor on the record for the defendant filed an affidavit which addressed, amongst other matters, that he had ceased to act for the defendant in October 2020, that the plaintiff's solicitors were aware of this, that on 18 January 2021 he had given notice of his intention to withdraw as solicitor to the defendant by email and that on 31 January 2021 the defendant had, by email, advised the solicitor on the record for her that she would not be appearing at the trial listed for 3 February 2021. At the direction of the court, the solicitor on the record for the defendant filed and served an application for leave to withdraw.
[4] On 3 February 2021, the solicitor on record for the defendant was given leave to withdraw. After he had done so, the defendant was called[1] but there was no appearance.
[5] The plaintiff submitted that the trial should proceed pursuant to r 476 of the Uniform Civil Procedure Rules 1999 (UCPR). At the direction of the court, the bailiff left the courtroom and called the name of the absent defendant three times but there was no appearance.
[6] Rule 476 of the UCPR provides:

"(1) If a defendant does not appear when the trial starts, the plaintiff may call evidence to establish an entitlement to judgment against the defendant, in the way the court directs.

(2) If the plaintiff does not appear when the trial starts, the defendant is entitled to dismissal of the plaintiff's claim and the defendant may call evidence necessary to establish an entitlement to judgment under a counterclaim against the plaintiff, in the way the court directs.

(3) Despite subrule (2), the defendant may submit to judgment if the plaintiff does not appear when the trial starts.

(4) The court may set aside or vary any judgment or order obtained because of subrule (1) on terms the court considers appropriate."

[7] Rule 476 does not confer upon a plaintiff an automatic right to establish an entitlement to judgment: one concern was whether the defendant had notice of the trial.[2] In this case, there is an email from the defendant to her former solicitors dated 31 January 2021 in which she states relevantly:

"I do not intend to appear at trial on February 3rd 2021 as I am unavailable due to COVID restrictions. I have also made it very clear that I have been and continue to be unemployed and in financial hardship."[3]

[8] It is apparent from this communication that the defendant was aware of the trial date. The bland assertion that she was unavailable due to COVID restrictions without explanation, was made in circumstances where, as at 3 February 2021 she had not disclosed her location to the Court, there were no restrictions on internal travel within Australia into Queensland (other than, the announcement by the Queensland Government some 35 minutes before the email was sent, that certain areas of Western Australia were declared hot spots in Queensland and that anyone who arrived in Queensland from Metropolitan Perth, Peel or the South West regions of Western Australia from 7.55pm AEST 31 January 2021 must quarantine in government arranged accommodation at their own expense).[4] There is no assertion in her email that there is a relevant defence.
[9] The same email makes plain that the defendant had ceased providing instructions to her solicitors in October 2020. However, she took no step to comply with her obligation under r 986(2) of the UCPR at any point thereafter, even after having been sent by her solicitors a notice of intention to apply for leave to withdraw dated 18 January 2021 and having been provided at that time with a copy of the relevant rule.
[10] In these circumstances, the court was satisfied that the defendant was aware of the trial date and it was appropriate for the plaintiff to seek to establish its claim pursuant to r 476 of the UCPR.
[11] In that regard, the relevant considerations for the court are:[5]

(a) the pleadings set the limit of what may be proved against an absent defendant to establish an entitlement to judgment;

(b) the plaintiff can go no further in proof of the claim than call evidence to support the allegations already contained in the statement of claim;

(c) allegations which are admitted in the pleadings either expressly or by operation of the UCPR do not need to be proved;

(d) where there is part of the pleaded case which is in issue on the pleadings, evidence can be led in the usual way, or if the court considers it expedient a direction may be made pursuant to r 390 that evidence be received by affidavit.

[12] The court must also consider that the contents of any filed defence along with the statement of claim and any reply to determine the issues to be tried in the defendant's absence, which are then to be determined in accordance with the evidence called by the plaintiff.[6] Whilst that does not mean that the plaintiff will or must succeed on all issues, it will mean that an absent defendant will likely fail on any issue on which the defendant has a burden of proof.[7]

[13] The trial then proceeded. The plaintiff was granted leave to file an amended claim, which reduced the overall amount of damages claimed. Consistent with a direction given on 1 February 2021 that evidence could be given on affidavit, the plaintiff tendered a number of affidavits containing the evidence which he adduced to prove his case.
[14] The defendant's amended defence to certain paragraphs of the amended statement of claim was struck out by Judge Kent QC on 23 October 2020 and the court's further order was that no leave to re-plead was granted.[8] Consequently, a number of the paragraphs of the amended statement of claim were admitted by the defendant by operation of r 166(1) of the UCPR.
[15] The plaintiff provided the court with a pleadings matrix[9] which identified the issues arising on the pleadings. It is apparent from a review of that document that it was either expressly admitted by the defendant, or admitted consequent upon the defence being struck out that:

(a) the plaintiff was the registered owner of the Property;

(b) the contract for the sale of the Property was dated 25 October 2018 (Contract)[10] and it included the pleaded express terms which provided relevantly:

(i) that the purchase price for the Property was $1,105,000.00;

(ii) a total deposit of $75,000.00 (Deposit) was payable by the defendant to the trust account of Taylorsproperty.com.au Pty Ltd as the deposit holder;

(iv) for a default interest rate of 9.3 percent per annum being the contract rate applying as at 25 October 2018;

(v) by the effect of clause 1.1(2)(u)(i), "Essential Term" includes, in the case of breach by the defendant, clause 6.1;

(vi) by the effect of clause 9.1, without limiting any other right or remedy, if the defendant fails to comply with an Essential Term, that plaintiff may affirm or terminate the Contract;

(vii) pursuant to clause 9.4: "If the Seller terminates this Contract under clause 9.1, it may do any or all of the following:

(A) Resume possession of the Property;
(B) Forfeit the Deposit and any interest earned;
(C) Sue the Buyer for damages;
(D) Resell the Property;"

(viii) pursuant to clause 9.7 that the Seller may claim damages for any loss it suffers as a result of the Buyer's default including its legal costs on an indemnity basis and the cost of any Work and Expenditure under clause 7.6(3); and

(ix) for payment of interest at the default rate in accordance with clause 9.9 of the Contract on, relevantly:

(A) any amount payable under the Contract which was not paid when due and accruing from the date it was due until paid;
(B) any judgment for money payable under the Contract and accruing from the date of judgment until paid; and

(x) that by clause 8.6(4), the defendant indemnified the plaintiff against any expenses or damages incurred by the plaintiff as a result of the defendant's possession of the Property;

(d) in breach of the Contract, the defendant failed to pay the balance of the Purchase Price on or before the Settlement Date or at all;

(e) this breach was a breach of an Essential Term of the Contract and entitled the plaintiff to affirm or terminate the Contract;

(f) On or about 18 November 2019 the plaintiff terminated the Contract pursuant to Clause 9.1 of the Contract by notice in writing;

(g) the deposit has been forfeited to the plaintiff; and

(h) the defendant took possession of the Property on 9 November 2018.

[16] Whilst the amended statement of claim contained claims for relief under the headings Common Law Damages and Alternative Claim for Contractual Damages, the plaintiff abandoned its claim to the latter, electing to proceed with its claims under the heading Common Law Damages.[11]
[17] The matters which remain at issue on the pleadings are:

(a) what is the market value of the Property as at the Settlement Date? The plaintiff alleged[12] that the market value of the Property as at that date was $950,000.00 whilst the defendant denied this alleging the value at that date was more than $1,105,000.00;[13]

(b) what consequent loss and damage has the plaintiff suffered? The plaintiff claims for:

(i) the difference between the Purchase Price and the Market Value, which the defendant denies on the basis the value is not less than $1,105,000.00;[14]

(ii) $9,488.77 for legal fees payable by the plaintiff with respect to the conveyance of the Contract, which the defendant denies on the basis that the plaintiff is unlikely to have incurred legal fees in any amount in excess of $2,000.00 because legal fees in that amount would be usual and appropriate had the legal services been delivered in an efficient manner and without error or alternatively that the legal fees are grossly excessive;[15]

(iii) commission payable to the real estate agent with respect to the Contract.[16] The defendant pleads that the entitlement of the real estate agent to commission depends on the terms of the plaintiff's agreement with the real estate agent. Further and in any event that entitlement is met from the forfeited deposit and the plaintiff would have paid the commission to the agent had the sale settled, as a result of which the obligation to pay commission is not a loss or damage incurred by the plaintiff.[17]

[18] The defendant alleges that the plaintiff has failed to mitigate his loss in respect of those amounts. As the claim was undefended there was no evidence from the defendant to support this allegation, in respect of which she bears the onus.
[19] The claim also covers amounts alleged to be due arising from the special conditions. The plaintiff alleges that the date of settlement for the purposes of the special conditions was 15 November 2019[18] which the defendant denies on the basis that the date was the date upon which the Contract settled if it did and as the Contract did not settle there is no date of settlement for the purposes of the special conditions.[19]
[20] The plaintiff claims for unpaid licence fees arising out of special conditions one and three, being an amount of $900.00 per week from 29 March 2019 until settlement (quantified as a claim for 33 weeks being the period between 29 March 2019 and 15 November 2019).[20] The defendant denied this arguing expressly an implied term of the Contract that a licence fee was only payable for any period the defendant occupied the property after 29 March 2019 and the defendant's occupation of the Property ended on about 5 July 2019 so any obligation to pay, (which was denied) is limited to the period between 29 March to 5 July 2019.[21] The plaintiff only starts his claim for licence fees after 29 March 2019,[22] thereby negating the defendant's implied term argument and denies the defendant's occupation of the Property ended on or about 5 July 2019 on the basis that the defendant's keys to the Property were returned to the plaintiff on 13 December 2019.[23]
[21] The plaintiff claims for rates, water charges and body corporate fees arising out of special condition four of the Contract[24] which the defendant denied on the basis that on the proper construction of the special condition the obligation to pay such expenses was contingent upon settlement of the Contract.[25]
[22] In each case the quantification of the amounts sought is denied by the defendant on the basis there was no settlement for the purpose of the special conditions[26] and the amounts claimed are not admitted.[27]
[23] The plaintiff claims for interest on the licence fees, rates, water charges and body corporate fees pursuant to clause 9.9 of the Contract.[28] Those claims are denied on the same bases that the quantified amounts for each of these claims is denied.[29]
[24] The plaintiff also claims for indemnity from the defendant for expenses or damages incurred by him as a result of the defendant's possession of the property, by reason of clause 8.6(4) of the Contract[30] together with interest on those amounts.[31] As set out above, the defendant admits the terms of clause 8.6(4) of the Contract[32] but denies causing damage to the Property or that it required cleaning and denies quantum and that interest is payable.[33]
[25] Finally, the plaintiff claims its legal costs of the proceeding on an indemnity basis pursuant to clause 9.7 of the Contract. The defendant admits the terms of clause 9.7 of the Contract but says there is no entitlement because of the matters pleaded in the defence.[34]
[26] I address each of these claims in turn.

[27] The market value of the Property is disputed on the pleadings. The plaintiff alleges that the relevant market value of the Property at 28 June 2019, being the Settlement Date and date of the breach, was $950,000.00.[35]
[28] The plaintiff appointed the agent to sell the property on 28 August 2018 for a period of 3 months, with the list price as 'offers over $1,095.00'.[36] The list price does not, of course, equate to the market value. The contract price on the sale was $1,105,000.00 but the sale did not proceed. On the application for judgment, the plaintiff filed the expert valuation report of Tod Gillespie, registered valuer and director of Herron Todd White (Gold Coast & New South Wales North Coast) Pty Ltd. That is an expert report which has been prepared for the proceeding and it contains the declaration required by r 428 of the UCPR. In that expert report, Mr Gillespie expressed the opinion that the market value of the Property at 28 June 2019, to be $975,000.00.[37]
[29] Whilst the defendant's pleading denies the plaintiff's alleged market value and claims that the value of the property at 28 June 2019 was not less than $1,105,000.00 (which was the purchase price on the contract agreed to by the parties on 25 October 2018), the defendant did not test the plaintiff's evidence and filed no evidence in support of her allegation; further the Contract at that price self-evidently did not proceed.
[30] I accept the unchallenged evidence of the expert valuer Mr Gillespie. I find the market value of the Property at the Settlement Date to be $975,000.00.

The plaintiff's claims for the difference between the Purchase Price and the Market Value, legal costs of the conveyance and commission

[31] As I have found the market value of the Property as at the Settlement Date was $975,000.00, I find that the plaintiff has suffered damage in the sum of $ 130,000.00 (being the difference between the price on the Contract and the market value as at the date of settlement).
[32] The plaintiff makes further claims for loss and damage suffered.
[33] It is admitted on the pleadings that clause 9.7 of the Contract provides for Seller's Damages to include legal costs on an indemnity basis. As to the legal costs, the plaintiff claims $9,448.77 being legal fees payable by the plaintiff with respect to the conveyance of the Property.[38] The plaintiff has filed evidence in the form of three tax invoices issued by CJM Lawyers to the plaintiff for professional costs and disbursements regarding the sale of 2/2089 Gold Coast Highway, Miami in the total amount of $9,448.77[39] in support of that claim. The plaintiff has deposed that he paid those invoices.[40]
[34] There is no evidence before me to support the defendant's pleaded allegation, on which she has the onus, as to the amount or appropriateness of the legal fees.[41] Whilst the defendant alleged the plaintiff's legal fees were grossly excessive having regard to the circumstances,[42] the legitimacy of the invoices is not contested by evidence.
[35] I find that the plaintiff has incurred legal costs in the amount of $9448.77 and has suffered loss and damage in that amount which he is entitled to recover from the defendant.
[36] The plaintiff claims the real estate agent commission fees payable by him with respect to the Contract. The agent's commission was payable to Taylors Properties at a rate of 3.3% of the sale price which amounted to $36,465.00.[43] The appointment of agent document, dated 28 August 2018 is in evidence.[44] It records:

(a) that the commission is payable on settlement or forfeiture of the deposit, whichever is the earlier; and

[37] The deposit has been forfeited to the plaintiff. That triggers the agent's right to commission on the sale.
[38] Despite being contractually entitled pursuant to the appointment of agent document to charge more, the evidence is that on 9 October 2019, Taylors Properties retained $25,000.00 from the $75,000.00 deposit.[45]
[39] In my view, given the terms of the appointment of agent and that the deposit was forfeited to the plaintiff, the amount of $25,000.00 is payable to the plaintiff as loss and damage suffered.
[40] The deposit due under the Contract for the sale of the Property was $75,000.00.[46] The plaintiff having made those claims, properly acknowledges that the amount of $75,000.00 received as the deposit should be deducted from the total of these amounts. I agree. The deduction of the full amount of the deposit from the loss and damage claimed addresses the defendant's argument that such an amount was to be met from the deposit.
[41] I find that the loss and damage to the plaintiff is $89,448.77.

[42] The plaintiff claims pre-judgment interest pursuant to s 58 of the Civil Proceedings Act 2011 (Qld) on $89,448.77 from 28 June 2019, at the contractual default rate of 9.3 percent, alternatively at the rate applicable to a money ordered debt pursuant to Practice Direction No. 6 of 2013.[47] The plaintiff conceded in argument that it was arguable that the default rate provided for in clause 9.9 of the Contract did not apply to the pre judgment amount for loss and damage.[48]
[43] Section 58(3) of the Civil Proceedings Act 2011 provides relevantly:

(3) The court may order that there be included in the amount for which judgment is given interest at the rate the court considers appropriate for all or part of the amount and for all or part of the period between the date when the cause of action arose and the date of judgment."

[44] Section 58 confers a broad discretion to award interest but the purpose of the provision is to compensate a successful plaintiff from being kept out of the judgment sum, it is not to punish an unsuccessful defendant.[49] The purpose of s 58 is to compensate the plaintiff on just terms for the loss of use of money which has been enjoyed by the defendant. The usual practice is to apply the rate specified by the practice direction unless circumstances justify a different result.[50]
[45] Clause 9.9 of the Contract provides for default interest but not, in terms, on the loss and damage suffered. In those circumstances I am not persuaded that the contractual rate should be applied.
[46] There is no evidence before the court regarding the prevailing commercial rates of interest over the period in question. In the absence of such evidence, the rates prescribed for default judgments are the rates to be applied.[51]
[47] I therefore find the appropriate rate for pre-judgment interest on the amount of $89,448.77 is the rate prescribed from time to time under the Supreme Court Practice Direction No 7 of 2013.[52] I note that interest on the amount of loss and damage is to be awarded from the Settlement Date of 28 June 2019 to the date of judgment. I attach as part of Annexure A to these reasons a schedule of calculations to support an award of interest of $ 12,052.31 in respect of this loss.

The date of settlement for the special conditions and the claims for unpaid licence fees, rates, water charges and body corporate fees

[48] The plaintiff alleges that the date of settlement for the purposes of the special conditions was 15 November 2019.[53] I was informed in oral submissions that this was 3 days earlier than the date the plaintiff terminated the Contract, but it had been identified as the date because it made the rounding of calculations easier.
[49] The defendant denies this on the basis that the date of settlement for the purpose of the special conditions is the date upon which the contract settles, if it did and as the contract did not settle there is no date of settlement for the purposes of the special conditions.[54]
[50] The special conditions[55] do not contain a date for settlement. They provide:

"1 In accordance with standard condition 8.6 for the period of 9th November 2018 up to 29th March 2019 at nil weekly licence fee.

The Buyer will make all endeavours to settle the contract on or before 29 March 2019.
In the event that settlement does not occur on or before 29th March 2019, the Buyer will pay a weekly licence fee of $900.00 per week until settlement occurs.
The Buyer agrees to pay all council rates, water charges and Body Corporate fees from the date of possession until settlement of the property contained herein, all such expenses are to be paid in favour of the Seller at the time of settlement."

[51] Under the heading 'Settlement', the Contract provides "Settlement Date: 28th June 2019 refer to special conditions".[56]
[52] The plaintiff submits that the defendant's obligations to fulfil the special conditions had already accrued under the Contract prior to the termination, with those obligations accruing under special condition three each week starting from 29 March 2019 and that the non-payment of amounts due were further breaches of the Contract.[57] The plaintiff submits that obligations of this nature do not disappear and that proposition is clearly supported by authority relied on by the plaintiff.[58] It is not clear to me, however, that the word 'settlement' in the special conditions must correlate to the date of the plaintiff's termination of the Contract, as the plaintiff contends for. Taking that argument to its logical conclusion, the plaintiff could have kept the Contract on foot for years claiming weekly licence fees.
[53] A difficulty with the defendant's argument concerning the construction of the special conditions (ie that nothing is owing because there was no settlement) is that it would result in a windfall to her. It is a general rule of construction of contracts that they will be construed so far as possible in a manner as not to permit one party to it to take advantage of their own wrong.[59]
[54] Here, the defendant admits she took possession of the property on 9 November 2018[60] and pleads that she was only liable for licence fees after 29 March 2019 and until her occupation of the property ended on about 5 July 2019 (if at all).[61] It is apparent on the face of the defendant's own pleading that she was in occupation of the property for a period of time prior to 18 November 2019.[62] The defendant has filed no evidence to support her allegation that her occupation of the Property ended on 5 July 2019.
[55] The plaintiff's real estate agent has given sworn evidence that in or about August 2019 he inspected the Property after the defendant had vacated it and that on his inspection of the Property at that time, using a spare key, there was damage.[63] Thereafter the plaintiff, according to his sworn evidence, took steps to return the Property to order. The plaintiff's evidence is that painters charged $660.00 to repair damage to the Property and that he paid that invoice on or about 11 September 2019. Further, the bond clean after the defendant moved out was done and the plaintiff paid for that on or about 27 September 2019.[64] There is no evidence from the plaintiff to explain why he did not change the locks at or about this time - and indeed it is curious he did not do so if he believed the defendant was still in occupation, because he had repaired the damage done to the Property by the defendant. The plaintiff did not give evidence that he otherwise took steps to relet the unit (or, if he did, that those steps were unsuccessful).
[56] The plaintiff's solicitor's evidence is that the defendant only returned the keys and the remotes to the Property on or about 13 December 2019.[65] Attached to that affidavit is a letter from the defendant's solicitor to the plaintiff's solicitor dated 11 December 2019 which provides relevantly:[66]

"We refer to the above Contract which was terminated by you on behalf of your client on 28 August 2019.

We note that we have made repeated attempts to obtain instructions from you regarding collection of the keys and remotes to your client's property. In the absence of any response from you, we enclose the keys and remotes to the property. ..."

[57] Thus there is some evidence before the Court that the Contract was terminated in August 2019, which is consistent with other evidence before the Court of the plaintiff's agent conducting an inspection of the Property at that time and the repairs being effected to it shortly thereafter.
[58] Whilst the effect of the pleadings is that the plaintiff terminated the Contract on 18 November 2019, that has arisen as a consequence of the defendant's defence being struck out.[67] The plaintiff has not explained, given the other evidence he has placed before the Court that the defendant had vacated the Property as at August 2019 and cleaning and repairs were conducted and paid for shortly thereafter, how the statement in the defendant's solicitors' letter as to the date of termination should be understood consistent with the deemed admission as to the date of termination.
[59] In the circumstances, the plaintiff has satisfied me that he is entitled to occupation licence fees until 6 September 2019,[68] but I am not satisfied on all of the evidence that the plaintiff is entitled to receive occupation licence fees thereafter.
[60] It should be accepted that the defendant accrued liabilities under the special conditions in respect of the unpaid licence fees from 29 March 2019 until 6 September 2019.
[61] The plaintiff claims a total of $39,711.68 from the defendant for:[69]

(a) unpaid licence fees in the amount of $29,700.00 arising out of special conditions one and three. This is quantified as a claim for 33 weeks at $900.00 per week for the period of 29 March 2019 until 15 November 2019[70] which is just prior to the date of termination of the Contract by the plaintiff. The quantum of the weekly amount claimed is that provided for in the special conditions. For the reasons set out above, adopting an end date to this period of 6 September 2019, I find the plaintiff is entitled to unpaid licence fees in the amount of $20,700.00;

(b) Council rates for the period 9 November 2018 to 15 November 2019 in the total amount of $2,584.16. This claim arises out of special condition one and four. Clause 4 of the special conditions refers to the date of possession as the applicable date for rates, water and body corporate fees to start running. This date was admitted on the pleadings to be 9 November 2018. Applying the same end date of 6 September 2019 and looking at the notices which form part of the Clancy Affidavit I find the plaintiff is entitled to $2,081.77 comprising:[71]

(i) $334.63 being, with rounding, 7 of 26 weeks for the period 9 November 2018 to 31 December 2018;

(ii) The full amount for the period 1 January 2019 to 30 June 2019; and

(iii) $504.22 being, with appropriate rounding, 10 of 26 weeks for the period 1 July 2019 to 6 September 2019.

(c) water charges for the period 9 November 2018 to 15 November 2019 in the total amount of $502.05. This claim arises out of special condition one and four. I allow this claim in full as the billing period for the final water rates notice ends on 2 September 2019;[72] and

(d) body corporate fees for the period 9 November 2018 to 15 November 2019 in the total amount of $6,925.47. This claim arises out of special condition one and four. Adopting the same period and reasoning as for the rates notices I find the plaintiff is entitled to $5,586.92 comprising:

(i) $1,028.43 for the period 9 November 2018 to 31 January 2018;[73]

(ii) $4,005.50 for the period 1 February 2019 to 31 July 2019;

(iii) $552.99 for the period 1 August 2019 to 6 September 2019.[74]

[62] For the forgoing reasons I find in total in the amount of $28,870.74 for the plaintiff for unpaid licence fees, rates, water and body corporate fees.

A claim for indemnity of the plaintiff from the defendant for expenses or damages incurred by the plaintiff as a result of the defendant's possession of the property

[63] The plaintiff makes the claim for damages caused to the Property by the defendant pursuant to the terms of clause 8.6(4) of the Contract.[75] The defendant admits the terms of clause 8.6(4) as pleaded.[76] Her defence is that she did not damage the Property by failing to clean it or damaging the walls.[77]
[64] The plaintiff has provided affidavit evidence of the plaintiff's real estate agent, Mr Brett Klerck, that he inspected the property in or around August 2019 after the defendant had vacated it (using a spare key he had in his possession). At that time, he noticed damage being holes in the walls from hanging paintings, grease and dirt in the kitchen, dust and dirt on the floors and nail polish and pet urine smell on the carpets.[78]
[65] The plaintiff has provided evidence of expenditure on cleaning and repairs totalling $1,610.00.[79]
[66] I find for the plaintiff in the amount of $1,610.00.

Claims for interest on the licence fees, bond cleaning, repairs, rates, water charges and body corporate fees pursuant to clause 9.9 of the Contract

[67] The plaintiff claims pre-judgment interest pursuant to clause 9.9 of the Contract at the contractual default rate of 9.3 percent:

(a) in respect of the licence fees from the date each licensee was payable;

(b) in respect of Council rates, water charges and body corporate fees as I have allowed them totalling $8,170.74 from the Settlement Date being 28 June 2019;

(d) on the total amount of the judgment at the rate of 9.3 percent per annum.

[68] I allow claims for interest in respect of each of the heads on the amounts I have found owing to the plaintiff. As part of the schedule at Annexure A I have set out calculations to support a total award of interest in respect of these claims of $ 5,818.81.

The plaintiff's claims for legal costs of the proceeding on an indemnity basis pursuant to clause 9.7 of the Contract

[69] The plaintiff claims that the defendant is liable for their legal costs of this proceeding on an indemnity basis in reliance on clause 9.7 of the Contract.[80]
[70] The defendant admits the terms of clause 9.7 of the Contract but states that the plaintiff has no such entitlement because of the facts and matters pleaded in the amended defence.[81] As appears from the above reasons, the defendant has not made out any of the matters in the defence.
[71] In Willmott and Anor v McLean and Anor[82] the seller under a contract for the sale of a Gold Coast property terminated the contract after the buyer failed to pay the balance deposit and then sued for payment of the balance of the deposit. Unlike in this case, the claim in Willmott did not involve a claim for damages_._ The seller claimed indemnity costs pursuant to clause 9.7 of the Standard REIQ contract, which is in identical terms to the clause in this proceeding. Holmes JA (as her Honour the Chief Justice then was) referred to the principles that a court would usually exercise the discretion as to whether to give costs otherwise than on the standard basis so as to give effect to a contractual provision which 'plainly and unambiguously' provides for taxation on another basis but that costs are discretionary[83]. She observed that the case before her was not a case where the parties had contracted "plainly and unambiguously" for payment of costs on an indemnity basis.[84] This was because the claim before her did not include a claim for damages under the contact.[85]
[72] In this case, the plaintiff has succeeded in his claim for damages under the Contract. Consequently, consistent with the terms of clause 9.7 of the Contract, I am prepared to exercise the discretion to make an order for the payment of the legal costs of the proceeding on an indemnity basis.[86]

[73] In his written submissions, the plaintiff claims interest on the total amount of the judgment at the rate of 9.3% per annum pursuant to clause 9.9 of the Contract.
[74] The clause of the Contract giving rise to the entitlement is admitted on the pleadings. I find that this interest rate should be applied to the judgment sum from the date of judgment until it is paid.

[75] I order that there be judgment for the plaintiff against the defendant in the proceeding;
[76] The defendant is ordered to pay to the plaintiff the sum of $137,800.63 comprising:

(a) $89,448.77 as damages for breach of the Contract and interest on that amount of $12,052.31;

(b) $20,700.00 for occupation fees payable under the Contract and interest on that amount of $3,982.06;

(c) $8,170.74 for council rages, water charges and body corporate fees payable under the Contract and interest on that amount of $1,567.55;

(d) $1,610.00 for property damage payable under the Contract and interest on that amount of $ 269.20.

[77] Pursuant to clause 9.9 of the Contract, I order that there be interest calculated at the rate of 9.3% per annum on the judgment of $137,800.63.
[78] I order the defendant pay the plaintiff's legal costs of the proceeding on an indemnity basis pursuant to clause 9.7 of the Contract.

Interest Payable on Contractual Damages Pursuant to s58 Civil Proceedings Act 2007 (Qld)

Interest Payable on Council Rates, Water Charges and Body Corporate Fees

[2] Orchid Avenue Pty Ltd v Parniczky and Anor [2015] QSC 207 (Orchid Avenue) at [8] per Burns J

[3] PWM6 to the affidavit of Peter William Muller sworn 1 February 2021

[10] Exhibit JEC01-02 to the affidavit of John Edward Clancy affirmed 2 February 2021 (Clancy Affidavit). The Contract is an REQ contract for Residential Lots in a Community Titles Scheme. It is dated 25 October 2018. There are four special conditions which I shall return to in due course

[11] Paragraph 7 of the plaintiff's written submissions dated 3 February 2021: Exhibit 1

[14] Paragraph 11(a) ASOC and paragraph 29(b) amended defence

[17] Paragraphs 29(f), (g) and (h) amended defence

[21] Paragraphs 32(a), (b) and (c) ASOC

[22] Schedule of calculations for interest: Exhibit 7

[36] Exhibit JEC01-01 (page 8) Clancy Affidavit

[37] Exhibit TG01-01 affidavit of Tod Gillespie

[43] Paragraph 9 Clancy Affidavit. This is the amount claimed in paragraph 11(c) ASOC

[45] Paragraph 10 and JEC0104 Clancy Affidavit

[46] JEC0102 (Page 16) Clancy affidavit

[47] Paragraph 20 Plaintiff's submissions

[49] Keeley & Anor v Horton & Anor [2016] QCA 253 at [7] per Burns J, Holmes CJ and P Lyons J, concurring

[50] HAP2 Pty Ltd v Bankier [2020] QCA 152 at [177] per Sofronoff P, Morrison JA and Philippides JA concurring

[51] Keely y & Anor v Horton & Anor [2016] QCA 253 at [12] - [13]

[52] Currently 6.1% per annum. I have reworked the table provided by the plaintiff's legal representatives as the rates set by the practice direction were inconsistently applied across the different periods: for some periods only 6% was applied, whilst for others, the 6% rate added to the cash rate were applied

[54] Paragraph 33 amended defence to ASOC

[55] See JCE01-02 page 19 Clancy affidavit

[56] See JCE01-02 page 19 Clancy affidavit

[57] Paragraph 15 plaintiff's written submissions

[58] McDonald v Dennys Lascelles Ltd [1933] HCA 25; (1933) 48 CLR 457, 476-477 per Dixon J

[59] Lewison & Hughes, The Interpretation of Contract in Australia 2012, at [7.09]

[60] Amended defence at [25] admitting [15] ASOC

[61] Paragraphs 32(a) and (b) amended defence

[62] Paragraph 8 ASOC, to which there is no defence

[63] Paragraph 3 Affidavit of Brett Klerck affirmed 3 February 2021 (Klerck Affidavit)

[64] Paragraphs 20 - 24 Clancy Affidavit

[65] Affidavit of Jeffrey Patrick Lucas affirmed 2 February 2021 (Lucas Affidavit) paragraphs 3-8

[67] See Clancy v Carlson [2020] QDC 164 at [6] - [9] and [24]

[68] Adopting the first date of an even week after the end of August 2019 using the plaintiff's schedule of interest calculations which is Exhibit 7

[69] Paragraph 17 of the plaintiff's written submissions

[70] Paragraph 14(a) ASOC, paragraph 17(a) plaintiff's written submissions

[71] The rates notes are at JEC0107 Clancy Affidavit

[72] The water rates notices are at JEC0108 Clancy Affidavit

[73] This is the amount claimed in the plaintiff's written submissions in respect of this period

[79] JEC0109 and JEC0110 Clancy Affidavit

[86] See Dovaenda Pty Ltd v Pagliaro and Anor [2007] QSC 216 at [101] per Fryberg J for an analogous situation

Civil Proceedings Act 2007(Qld)

At a glance

Court

Decision date

Source

Judgment (137 paragraphs)

Parties

Legislation Cited (1)

Cases Cited (1)