LORI ANN NELSON v LYNETTE MARIE BELLAMY [2000] NSWSC 182 | Case summary

LORI ANN NELSON v LYNETTE MARIE BELLAMY [2000] NSWSC 182 | Case summary | Zoe

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P.Le Gay Brereton (Plaintif) COUNSEL : M.A.Twigg, Solicitor (Plaintiff) G.E.Underwood (Defendant SOLICITORS : Adrian Twigg & Co. (Plaintiff) Matthews (Defendant) CATCHWORDS : Vendor and purchaser - Sale of land - Vacant possession - Vendor able to give vacant possession notwthstanding certain items remaining on land at completion date - Contract - Condition or warranty - Breaches of contract alleged were breaches of warranty only - Purchaser not entitled to terminate - Contract - Wrongful termination by purchaser - Vendor entitled to terminate and to claim damages - Conveyancing Act 1919 - Section 55(2A) - Purchaser entitled to return of deposit - Fair Trading Act 1987 - Alleged representations either true or made with reasonable ground or not established - Defendant's cross-claim dismissed. LEGISLATION CITED : Fair Trading Act 1987 Conveyancing Act 1919 Argy v Blunts & Lane Cove Real Estate Pty. Limited (1990) 26 FCR 112 Cumberland Consolidated Holdings Limited v Ireland (1946) KB 264 C.Czarnikow Ltd. v Koufos (1969) 1 AC 350 Davies v Hastwel-Batten (1985) NSW ConvR 55-261 DTR Nominees Pty. Limited v Mona Homes Pty. Limited (1978) 138 CLR 423 Eighth SRJ Pty. Limited v Merity (Young J, 25 March 1997, unreported) Franich v Swannel (1993) 10 WAR 459 Hadley v Baxendale (1854) 9 ExCh 341; 156 ER 145 Hongkong Fir Shipping Co. Limited v Kaasaki Kisen Kiasha Limited (1962) 2 QB 26 CASES CITED : Jampco Pty. Limited v Cameron (No. 2)(1985) 3 NSWLR 391 Johnson v Agnew (1980) AC 367 Liverpool Holdings Limited v Gordon Lynton Car Sales Pty. Limited (1978) QdR 279 Lucas & Tait (Investments) Pty. Limited v Victoria Securities Limited (1973) 2 NSWLR 268 Mallick v Parish (1916) 16 SR(NSW) 305 Murdaca v Fisher (1981) 2 BPR 9287 Noble v Edwards (1877) 5 ChD 378 O'Brien v Smolonogov (1983) 53 ALR 107 Point Glebe Pty. Limited v Lidofind Pty. Limited (1988) NSW ConvR 55-412 Tramways Advertising Pty. Limited v Luna Park (NSW) Ltd. (1938) 38 SR(NSW) 632 DECISION : Plaintiff (Vendor) entitled to terminate contract and damages; cross-claim under Fair Trading Act 1987 dismissed.

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Statement of Claim 1 HIS HONOUR: By statement of claim filed 23 May 1997 Lori Ann Nelson, the plaintiff, alleged against Lynette Marie Bellamy, the defendant, that by contract for sale of land dated 19 September 1996, ("the contract"), the plaintiff agreed to sell and the defendant agreed to purchase the property situate at and known as Villa Tuscany B/134 Ocean View Drive, Wamberal in the State of New South Wales, being Lot B. in Plan 341313 ("the land") for a price of $285,000. The plaintiff further alleged that pursuant to the. said contract the defendant paid to the plaintiff's solicitors as deposit holder a deposit of $28,500.00 ("the deposit"). 2 The plaintiff further alleged that it was a term and condition of the contract that completion of the contract should take place by 31 October 1996 or within 21 days from notification to the defendant or her solicitor of registration of the plan (of subdivision), whichever should last occur ("the completion date") and that if the contract was not completed by the completion date either party would be at liberty to issue a notice to complete fixing a time for completion which time would be of the essence of the contract. It was further alleged that it was a term and condition of the contract that if the defendant did not comply with the contract or a notice under it or relating to it in an essential respect the plaintiff could terminate the contract by serving a notice and then keep or recover the deposit, except so much of it as exceeded 10% of the price, and sue the defendant to recover damages for breach of contract, or where the plaintiff had resold the property under a contract made within twelve months after termination, to recover the deficiency on resale (with credit for any of the deposit kept or recovered) and the reasonable costs and expenses arising out of the defendant's non-compliance with the contract and of the resale and any attempted resale. 3 The statement of claim further alleged that on 9 January 1997 the plaintiff notified the defendant that the plan had been registered pursuant to which the completion date in accordance with the contract was 30 January 1997. It was further alleged that the defendant did not complete the contract by the completion date whereupon on 4 February 1997 the plaintiff issued a notice to complete fixing 19 February 1997 for completion and making time of the essence. It was further alleged in the statement of claim that on 19 February 1997 the plaintiff was ready, willing and able to complete the contract but that the defendant failed on that day or at all to complete the contract. It was further alleged in the statement of claim that on 20 February 1997 the defendant purported to terminate the contract and thereby repudiated the contract, and that on 14 March 1997 the plaintiff accepted the repudiation and terminated the contract. The plaintiff further alleged that by reason of the defendant's failure to complete the contract the plaintiff had suffered loss and damage, being loss of the benefit of the bargain contained in the contract and the incurring of wasted costs and expenses of the sale and of the vendor's non-compliance with the contract. 4 The plaintiff claimed that, in these circumstances, the plaintiff was entitled to keep the deposit and interest accrued on it and to recover damages.

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Cross-Claim 6 By her cross-claim the defendant alleged that, prior to the entry into the contract, the plaintiff (cross-defendant) represented to the defendant (cross-claimant) as follows as set out in paragraph 4 of the cross-claim. (a) that the second dwelling in the course of construction on the land had been sold to a purchaser 'off the plan' for about $335, 000. 00 and that the difference in price arose because the second dwelling included a swimming pool; (b) that construction of the dwelling, the subject of the contract, on the land would be completed by about December 1996 and that the second dwelling would be completed by about January 1997, by which time the driveway to the land would be commenced and completed by about March 1997; (c) that the cross-defendant would supply and install wrought iron gates on the land, as depicted in a plan produced to the cross-claimant by the cross-defendant, such gates to incorporate a sail pattern to match the canopy at the front of the house and to have the words 'Villa Tuscany' incorporated into the metal work of the gates and that such gates would be delivered and installed by the end of September 1996; (d) that an iron gate would be installed by the cross-defendant in a gap in the brick boundary wall to the land and that such gate would match the gates referred to in paragraph 4(c) and that such gate would be delivered and installed by the end of September 1996; (e) that door handles for the internal doors and window latches for the windows had already been purchased by the cross-defendant and would be left in the house; (f) that a range hood would be supplied and installed by the cross-defendant in the kitchen of the dwelling and that it would be large and of solid stainless steel construction, that it would be delivered to the site within one week following the cross-claimant's inspection of the property and installed above the gas hotplate in the kitchen and that a cupboard in Lupus Blue' would be installed to the side of the range hood." 7 The defendant (cross-claimant) alleged that she was induced to enter into the contract in reliance upon the said representations and each of them, and further, that in respect of certain of those representations which were representations with respect to future matters, the plaintiff (cross-defendant) did not have reasonable grounds for making the representations or any of them. 8 The defendant further alleged in the cross-claim that, in making the representations, the plaintiff (cross-defendant) engaged in conduct that was misleading and deceptive and that such conduct did in fact mislead and deceive the defendant (cross-claimant). 9 Arising out of these matters the defendant (cross-claimant) claimed relief pursuant to the Fair Trading Act 1987, including a declaration that the contract was void from its beginning, damages, and an order that the deposit be paid to the defendant (cross-claimant). 10 The cross-claim also alleged that the termination of the contract by the defendant (cross-claimant) was valid. In respect of this claim the defendant (cross-claimant) sought a declaration that the contract had been validly terminated by her, an order that the amount of the deposit be paid to her and, in the alternative, an order pursuant to section 55(2A) of the Conveyancing Act 1919 for the return to her of the deposit paid pursuant to the contract.

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The Facts 12 In, and prior to, September 1996, the plaintiff was the owner of the property 134 Ocean View Drive, Wamberal, upon which was erected an old house. The plaintiff decided to demolish the old house, to subdivide the land into two lots, and to build a separate dwelling on each of the two lots. The plaintiff decided that she would sell one of the two dwellings, which was named Villa Tuscany, for a profit to enable her to repay certain debts, and to live in the other dwelling, the northernmost dwelling, called Villa Umbria, with her parents, who would purchase an interest in the dwelling, and her daughter. The plaintiff was assisted in this endeavour by her husband (through a company), from whom she was later divorced, and who had no financial interest in the project as a result of certain arrangements made in the Family Court of Australia. Building of both the dwellings had commenced, but the southern most dwelling, namely, Villa Tuscany, was more advanced to the extent that as at September 1996 the plaintiff was living therein with her daughter. 13 On 14 September 1996 the plaintiff advertised Villa Tuscany for sale in the Sydney Morning Herald describing it as a "Provincial Farmhouse". The advertisement also contained the following text:- "Rustic Tuscany style Torrens Title villa. 100m from Pacific Ocean. Romanesque courtyard, ha~f metre thick walls, handmade timber french doors and windows (all shuttered), huge pantry room, wild open fire, terra cotta roof, antique pine doors. Porters limewashed bagged walls, linen room. Private tree covered battle axe position. Neg. $285, 000. One already sold (off plan nearing completion) 'VILLA TUSCANY' READY FOR SALE FROM DEVELOPER. Open for inspection Saturday & Sunday 2-3pm 134 OCEAN VIEW DRIVE WAMBERAL." 14 The advertisement also included a telephone number for enquiries. On the day upon which the advertisement was published the defendant telephoned the plaintiff and arranged an inspection at about 12 noon on that day. The plaintiff and the defendant subsequently met at the property, and the defendant showed the plaintiff the two dwelling houses which were in the course of construction at the end of a right of way leading from the street frontage. The construction of the southern dwelling, Villa Tuscany, was in a much more advanced stage of construction than the northern dwelling, Villa Umbria, and, as stated above, the plaintiff and her daughter were living in Villa Tuscany. There was conversation between the plaintiff and the defendant on this occasion as more fully set out in the affidavits of the plaintiff and the defendant, which reveal differences of recollection between the plaintiff and the defendant as to what was said and what was not said as more fully referred to hereafter. 15 On 16 September 1996, following upon her inspection of the property, on 14 September 1996, the plaintiff instructed her solicitor to act for her in relation to her proposed purchase of the subject property. Further, an architect, Mr. Stephen Moore, was retained on behalf of the defendant to provide a home inspection report in relation to Villa Tuscany. Mr. Moore first inspected the subject property on 17 September 1996. On 19 September 1996 exchange of contracts for the sale and purchase of the subject property between the plaintiff and the defendant occurred, after certain negotiations as to the terms and conditions of the contract arising, inter alia, from Mr. Moore's inspection and report. In particular, there were two special conditions inserted in the contract, namely, special condition 23 and special condition 26, each of which detailed certain work which was agreed to be done by the vendor prior to completion, in respect of which disputes later arose as to whether or not the plaintiff had complied with her obligations in these respects and which disputes, inter alia, were the subject of the present proceedings. 16 Pursuant to the terms of the contract, the defendant's daughter and three of her friends occupied the subject property prior to completion, from 6 December until 8 December 1997, on which day they moved out, the defendant having inspected the property on 7 December 1997. To allow this occupation to occur the plaintiff and her daughter moved out of the property, and the plaintiff obtained a lease of a nearby property. 17 There followed considerable correspondence between the solicitors for the plaintiff and the solicitors for the defendant. The plan of subdivision was duly registered on 9 January 1997, and the solicitors for the plaintiff notified the solicitors for the defendant accordingly, by letter dated 9 January 1997, which concluded with the words:- "As per the contract this matter should now be completed within 21 days. " 18 Following further correspondence, the solicitors for the plaintiff wrote a letter to the solicitors for the defendant dated 4 February 1997 enclosing a notice to complete, nominating an appointment to settle at a specified time and place on 19 February 1997. 19 On 3 February 1997 the plaintiff, in company with Mr. Moore, the architect, inspected the subject property following which inspection the solicitors for the defendant wrote a letter to the solicitors for the plaintiff dated 3 February 1997 enclosing a list of work which it was alleged that the plaintiff was required to do pursuant to the contract but which had not been done or which had been done but not in a proper and workmanlike manner. A copy of this list is set out later in this judgment, and it was agreed between the parties that this list embodied the various matters of that kind which were the subject of dispute in the present proceedings. 20 On 19 February 1997 the solicitors for the plaintiff and the solicitors for the defendant and representatives of their respective mortgagees attended at the time and place specified for settlement in the notice to complete, but the settlement venue was changed to another location. The relevant parties then met at the new location. The solicitor for the defendant, Mr. Matthews, left the settlement room with the defendant and had a conversation with her and then returned to the settlement room. On his return Mr. Matthews said that he had been instructed not to settle the contract because the vendor was not in a position to complete the contract because of her failure to give vacant possession on that day as required under the contract, by reason of the fact that there was a significant amount of rubbish and builder's debris on the property. The proposed settlement was then aborted. 21 Subsequently, by letter dated 20 February 1997 from the solicitors for the defendant to the solicitors for the plaintiff the defendant purported to terminate the contract. This letter was in the following terms:- "20 February 1997 Adrian Twigg & Co. Your ref:PT. JA Suite 3, Level 10 - 162-166 Goulburn Street SYDNEY NSW 2000 Facsimile No: 9264 7508 1 page Dear Mr Twigg Bellamy purchase from Nelson Property: Villa Tuscany B/134 Ocean View Drive Wamberal I have been instructed to advise that the purchaser has elected to terminate the Contract for sale of the above described property dated 19 September 1996 because of the vendor's failure to complete the sale in accordance with the said contract for sale and the vendor's Notice to Complete dated 4 February 1997 being a breach of an essential term of the Contract: In particular, the vendor failed to offer vacant possession to the purchaser at the time and date fixed for completion in the Notice to Complete. Inspection at the time fixed for completion revealed large quantities of building materials, chattels, builder's rubble and other debris remained on the property. In addition the vendor failed to comply with Special condition 26 of the Contract by failing to install washout blocks in the south wall of the property, prior to completion. The vendor has failed to comply with Special condition 23 of the Contract by failing to install, prior to completion, open corner supports for garbage bin and an open shelf for microwave in the kitchen of the property. Further the vendor failed to comply with Special conditions 23 and 26 of the Contract by failing, prior to completion, to carry out works required by those conditions in a proper and workmanlike manner, (a schedule of such items was served on the vendor on 18 February 1997). I hereby direct and authorise you as stakeholder named in the contract to repay the deposit to the purchaser forthwith. In accordance with clause 3.2 of the contract all interest earned on the deposit is also due to be paid to the purchaser. You are directed to pay the interest to the purchaser forthwith. Yours faithfully (signed) Neil S Matthews 22 Subsequently again, by letter dated 14 March 1997 from the solicitors for the plaintiff to the solicitors for the defendant, it was stated by the solicitors for the plaintiff that the plaintiff regarded the defendant's purported rescission of the contract on 20 February 1997 as a repudiation of the contract by the defendant, and that the plaintiff thereby terminated the contract for the defendant's repudiation and failure to comply with the notice to complete. 23 The relevant paragraph in this letter was in the following terms:- "It does not appear to our client that your client (is) genuinely interested in trying to complete the contract. Therefore our client has demanded of us that we account to her for the deposit. Our client denies that your client is entitled to rescind and regards your purported rescission of the contract on the 20th February 1997 as a repudiation of the contract. Our client hereby terminates the contract for your repudiation and in particular in regards to the failure to comply with the notice to complete."

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Vacant Possession 24 In her defence the defendant alleged, as stated earlier, that as at the completion date, the plaintiff was not in a position to give vacant possession. In this connection the defendant alleged in her defence that this was by reason of the fact that "'building materials and rubbish remained on the land the subject of the sale, namely: 1 large wooden pallet, 3 wooden brick pallets, quantity of concrete blocks, quantity of pine board flooring off cuts, quantity of timber off cuts, 1 circular pole, broken concrete blocks, quantity of loose dried cement, quantity of other builder's rubble and used materials and two for sale' sign boards." 25 In addition, in the course of the hearing, mention was made of the shutters for the French doors which were apparently left stacked under the house. These, however, were included in the contract as items being purchased by the defendant as appears from their inclusion in the section of the contract entitled "Furnishings and chattels" as follows:- "10 shutters to match french doors (to befitted by purchaser) (all inspected by the purchaser). " 26 The contract provided that the property being sold was "The following land and the following furnishings and chattels". 27 It is obvious in those circumstances the purchaser is not entitled to rely upon the existence of shutters in the undercroft as constituting evidence that the plaintiff was not in a position to give vacant possession as at the date of completion. 28 In this connection counsel for the plaintiff relied, inter alia, upon special condition 1(a) which, so far as material, was in the following terms: - "1. The purchaser acknowledges that:- (a) … all fixtures, furnishing and chattels included in and forming part of this sale (the fixtures, furnishings and chattels ) are being purchased in their present condition and state of repair and with all faults and defects (apparent or latent) subject to any infestation and dilapidation and as a result of the Purchaser's own inspection investigation …". 29 In my opinion, however, the various items, other than the shutters for the french doors, particularised as having been present on the property at the relevant date, which are relied upon by the defendant as giving rise to the conclusion that as at the relevant date the plaintiff was not in a position to give vacant possession of the subject property, do not fall within the description of fixtures, furnishings and chattels included in and forming part of this sale. Accordingly, in my opinion, special condition l(a) did not operate in the circumstances of the present case to relevantly qualify the obligation of the plaintiff to provide vacant possession on completion pursuant to condition 17.1 of the contract which is in the following terms: "Normally, the vendor must give the purchaser vacant possession of the property on completion ." 30 The parties agreed that the relevant test to be applied was that stated in Cumberland Consolidated Holdings Limited v Ireland (1946) KB 264 at 271, namely, that in order to constitute a breach of a vendor's obligation to give vacant possession material left on the property must be "an impediment which substantially prevents or interferes with the enjoyment of the right of possession of a substantial part of the property." 31 In my opinion, the items referred to above which were present on the property at the relevant time were not, within the meaning of the relevant principle, "an impediment which substantially prevents or interferes with the enjoyment of the right of possession of a substantial part of the property." 32 I accept the submission made on behalf of the plaintiff to the effect that such items did not impinge at all on the living areas, including the courtyard, and did not substantially prevent use of the undercroft or the side alleys which did not, in any event, constitute, relevantly, "a substantial part of the property". I also accept the submission made on behalf of the plaintiff that Mr. Moore's close-up photographs give an exaggerated view of the impact of the builder's rubbish in the alleys (side passages) and that a far better perspective of its relative insignificance for present purposes is given by Mr. Greenish's photographs from a more natural distance. 33 In my opinion, as submitted on behalf of the plaintiff, the alleyways cannot be described as a "substantial part of the property" having regard to the design of the property and its user. I am further of the opinion, as submitted on behalf of plaintiff, that even if the alleyways could be described as a substantial part of the property such building waste as there was in those alleyways did not, as submitted on behalf of the plaintiff, in my opinion, substantially prevent or interfere with the enjoyment of the right of possession to those alley ways. 34 So far as concerns the undercroft, I am of the opinion that, again as submitted on behalf of the plaintiff, it did not constitute "a substantial part of the property", and further, that the only material which might have substantially prevented or interfered with the enjoyment of the right of possession of the undercroft were the stack of shutters for the french doors which were part of the subject matter of the sale. 35 In my opinion, these findings are not inconsistent with Mr. Moore's evidence that two men would be required for one day at a cost of $600 to remove the subject items. 36 The relevant date upon which it must be determined whether the plaintiff was or was not in a position to give vacant possession to the property is 20 February 1997, the date upon which the defendant purported to terminate the contract for breach by the plaintiff including the alleged breach by the plaintiff to be in a position as at that date to give vacant possession of the subject property to the defendant.

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The Evidence 37 By affidavit dated 3 July 1997 Stephen Moore, architect retained on behalf of the defendant gave evidence, inter alia, as to the state of the property on 19 February 1997, such evidence-in relation to the question of vacant possession including the following:- "15. As at 2.30pm on 19 February 1997, 1 observed the following (a) Builder's rubbish and building materials were lying around the southern dwelling and in the undercroft of the southern dwelling. There were numerous lengths of timber of assorted sizes on the southern side of the house, broken pieces of concrete blocks which I estimate to have been one cubic metre in volume on the eastern side of the southern dwelling; lengths of building timber and off cuts on the eastern side of the southern dwelling; a large circular pole lying on the eastern side of the southern dwelling; eleven wooden doors were stacked on top of 1 large heavy wooden pallet and there were several concrete 'Besser' blocks beneath the pallet as well as four 'Besser' blocks lying on the ground. A further three heavy wooden pallets used for the delivery of bricks were in the undercroft of the house; there was one further large timber pallet in the undercroft, lengths of pine board flooring and off cuts thereof were lying in the undercroft of the house; around the perimeter of the house there was a significant quantity (which I would estimate to be one cubic , metre) of dried cement, builder's rubbish and pieces of used building materials in the undercroft of the house and two 'For Sale' signs in the undercroft of the house. … 16. In my opinion the building material and rubbish described in paragraph 15(a) above which I observed on 19 February 1997 would have required the following work to be carried out to remove it from the site: (a) provide a truck to the site to carry the material; (b) provide two men to the site with the necessary tools including shovel, wheel barrow and mattock (c) pick up timber and pallets and load these materials onto the truck . (d) use shovel and wheel barrow to pick up and place in the truck all loose building materials and building rubbish; (e) pick up concrete blocks and load onto truck; (f) provide a chain saw to cut large timber pole into pieces capable of being lifted; (g) use truck to deliver the materials to the nearest public general tip, pay tipping fee and return unloaded truck (h) whipper snipper to cut weeds after clean up. 17. Two men would be required to complete the above work. I estimate that one full day for two men would be required to remove the material from the site . 18. My opinion on the cost of removing any building materials and debris which was inside the southern dwelling on 19 February My opinion on the cost of labour and equipment hire for the work referred to in paragraph 17 is $600.00. This opinion excludes the cost of removing eleven doors stacked in the undercroft of the house …" 38 Mr. Moore also gave oral evidence, principally by way of cross-examination, inter alia, as follows: "On the southern side of the house 'my estimate would be there were about four or five pieces of timber ... various sizes ....from my recollection in the order of two metres, the smallest probably about six inches ... probably two (of the order of six inches).'" 39 This was elicited in evidence in relation to a statement in Mr. Moore's affidavit as follows: "There were numerous lengths of timber of assorted sizes on the southern side of the house." 40 In other words, Mr. Moore had described the relevant "four or five pieces of timber" on the southern side of the house as "numerous", which, on one view, might seem to have been something of an exaggeration. 41 Mr. Moore also said, perhaps somewhat inconsistently, that there were two pieces of timber in the back alley, the southern alley and similar bits within the leaves and debris between the retaining wall and the house. 42 Mr. Moore gave evidence in respect of the eastern side of the subject dwelling as follows:- "Q. … you refer to lengths of building timber and off-cuts on the eastern side of the southern dwelling'. How many pieces did you observe? A. I would estimate on the eastern side there were about 22 to 30 pieces of timber. Q. The lengths of those pieces of timber?

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A. These pieces of timber were generally of small size, six inches, eight inches, that sort of order. 43 The two "For Sale" signs were in the undercroft on 19 February 1997 and had not been taken away by the agents before that date as Mr. Moore's photographic records indicate that on inspection on 19 February 1997 the signs were there. Mr. Moore said that the signs were stacked against a pillar in the undercroft. 44 Mr. Moore saw some pallets on the earth floor of the undercroft. Also "a pile of shutters, French doors" eleven doors stacked neatly on top of a wooden pallet beside one wall of the undercroft with the wooden pallet itself supported by some concrete blocks. 45 Mr. Moore gave evidence that he saw three pine board off-cuts, one probably about three metres long by about six millimetres, another one a metre wide by about two metres long, and another one about the same size. 46 Mr. Moore had no difficulty gaining access to the undercroft on 19 February 1997 through the undercroft access gate within the eastern wall of the house. 47 The photograph of the eastern alley was taken at a height of just above a metre and Mr. Moore was possibly "at least leaning over to take those photographs". 48 The defendant agreed that the plaintiff was to leave the shutters for the French doors on the property so that the defendant, not the plaintiff, could install them. In oral evidence (principally in cross-examination), the plaintiff gave evidence that there were a few lengths of timber left on the property and a telegraph pole; there were four to ten pieces of timber of the kind that could be used as firewood which were hardwood and in size they could have been between one and two metres. She said that on the eastern side of the house there were smaller pieces of timber ("little bits or cut-offs") approximately one foot in length, numbering four or five. The plaintiff said that there were pieces of concrete blocks on the southern side of the house, ("chips and some debris" in size five or six inches, in total a bucketful) and that on 19 February 1997 there was a barrow load of debris which could be collected from the property. The plaintiff stated that there were probably five or six timber pallets in the undercroft and there were lengths of "particle board and off-cuts in the undercroft. The plaintiff conceded that there were two "For Sale" signs in the undercroft on 19 February 1997. 49 The plaintiff also stated that there was no debris in the courtyard area or in the habitable part of the property. 50 In re-examination on this subject matter the plaintiff was asked:- "Wh ere in the house or where around the house was there anything which might be described as builder's rubbish?" 51 The plaintiff replied as follows:- "A Not in the courtyard, not inside the dwelling. If you had raked and got a wheelbarrow to a part of the side passage and maybe raked heavily, raked under the house, you could have constituted that as rubbish or probably two or three barrow loads if you had finally, finally raked it. Q. What did it comprise?

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Condition or Warranty 72 In my opinion, in accordance with the relevant principles, neither of these special conditions is a condition, breach of which would entitle the defendant (purchaser) to terminate the contract. 73 It was submitted on behalf of the defendant that special conditions 23 and 26(a) of the contract in respect of which it was alleged that the plaintiff was in breach were conditions (essential terms) of the contract, the breach of which entitled the defendant to terminate the contract. In this connection attention was drawn by counsel for the defendant to the fact that each of those clauses commenced with the words "Prior to Completion" and, in particular, to the fact that those words had been written in at the beginning of special condition 26(a), this latter consideration, presumably, being said to indicate that the parties regarded those words as of some importance. Reference was also made on behalf of the defendant to special condition 30 of the contract which provided, so far as material, that "If any dispute arises between the vendor and the purchaser as to whether ... (b) the vendor has complied with its obligations under clauses 23 and 26 the dispute will be referred to an architect" who "will act as an expert only". It was submitted that any such reference would have to take place "Prior to Completion" and that this also was some indication that the parties had regarded special conditions 23 and 26(a) as conditions (essential terms). I do not agree that references- pursuant to special condition 30 necessarily had to occur prior to completion but, even if that were the case, that consideration, in my opinion, lends only slight support to counsel for the defendant's submission that special conditions 23 and 26(a) were conditions (essential terms) of the contract, and, in my opinion, that slight support is convincingly outweighed by other considerations. The same is true in my opinion of the use of the words "Prior to Completion". 74 Rather, as counsel for the defendant submitted in his written submissions, in order that a term of a contract should be considered to be a condition it should be a term that "goes directly to the substance of the contract, or, in other words, is so essential to its very nature that its non-performance may fairly be considered by the other party as a substantial failure to perform the contract at all." 75 The generally accepted judicial statement of this general principle is that of Jordan CJ in Tramways Advertising Pty. Limited v Luna Park (NSW) Ltd. (1938) 38 SR(NSW) 632 at 641-2 which is in the following terms:- "The test of essentiality is whether it appears from the general nature of the contract considered as a whole, or from some particular term or terms, that the promise is of such importance to the promisee that he would not have entered into the contract unless he had been assured of a strict or a substantial performance of the promise, as the case may be, and that this ought to have been apparent to the promisor. " 76 This statement of principle was approved by the High Court in DTR Nominees Pty. Limited v Mona Homes Pty. Limited (1978) 138 CLR 423 at 430-1. 77 In my opinion, considering the general nature of the subject contract considered as a whole, neither special condition 23 nor special condition 26(a) can be regarded as being "of such importance to the promisee that (she) would not have entered into the contract unless (she) had been assured of a strict or a substantial performance of the promise." Accordingly, in my opinion, those special conditions are not conditions (essential terms) of the contract. 78 The conclusion to be drawn in this connection involves, of course, questions of fact and degree considered in the context of the whole of the circumstances of the case. In my opinion, however, when one has regard, inter alia, to the fact that the substance of the contract was the sale and purchase of a substantial building and land for the sum of $285,000 one has only to read each of the items referred to in special conditions 23 and 26(a) which are the subject of controversy in the present proceedings, and have regard to the general nature of those breaches and to what would be involved in remedying such breaches, to be compelled to the conclusion that none of those items either individually or cumulatively could be regarded by a reasonable person in the position of the defendant purchaser, as being of such importance that such a person would not have entered into the contract unless he or she had been assured of a strict or a substantial performance of the relevant promises. The same is true in my opinion in respect of the defendant who, for present purposes, must, in my opinion, be regarded as a reasonable person. 79 It is, moreover, in my opinion, also legitimate to have regard in this connection to the consideration that there is provision in the contract for a three months defect liability period (special condition 28) as well as special condition 30 previously referred to, both of which, in my opinion, indicate an intention to deal with any breaches of special conditions 23 and 26(a) in the manner provided for in special conditions 28 and 30 rather than by the more drastic remedy of entitling the purchaser to terminate the contract. 80 It is plain in my opinion that breaches by the defendant of either of special conditions 23 and 26 of the contract would not deprive the purchaser (the party not in default) of substantially the whole benefit which it was intended that she should obtain from the contract and, accordingly, in my opinion, those special conditions may be classified for present purposes as being warranties, rather than conditions, for breach of which (warranties) the plaintiff may be liable to the defendant in damages but in respect of which breaches the defendant would not be entitled to rescind the contract.

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Non-Essential Breaches 81 Counsel for the plaintiff, however, also submitted, in the alternative, in effect, that if, contrary to my view, it were inappropriate to classify those special conditions as either conditions or warranties, and if it were to be held that the plaintiff was in breach of those special conditions, nevertheless any such breach would not be an essential breach entitling the defendant to rescind. On this approach according to the relevant authorities, special conditions 23 and 26 of the contract might be described as "intermediate" or "innominate" terms, being terms, the breach of which entitles the purchaser to rescind the contract only if the breach is an essential breach, that is, a breach the effect of which is to deprive the purchaser of substantially the whole of the benefit which it was intended that he or she should obtain from the contract. 82 It is plain, in my opinion, that on this approach the breaches of special conditions 23 and 26 complained of by the defendant, even if fully made out, would not constitute essential breaches since they would not, in my opinion, have the effect of depriving the defendant of substantially the whole of the benefit which it was intended she should obtain from the contract. 83 The relevant statement of legal principle in this connection may be found in the judgment of Diplock L.J. in Hongkong Fir Shipping Co. Limited v Kawasaki Kisen Kiasha Limited (1962) 2 QB 26 at 69-70:- "No doubt there are many simple contractual undertakings, sometimes expressed but more often because of their very simplicity... to be implied, of which it can be predicated that every breach of such an undertaking must give rise to an event which will deprive the party not in default of substantially the whole benefit which it was intended that he should obtain from the contract. And such a stipulation, unless the parties have agreed that breach of it shall not entitle the non-defaulting party to treat the contract as repudiated, is a "condition ". So too there may be other simple contractual obligations of which it can be predicated that no breach can give rise to an event which will deprive the party not in default of substantially the whole benefit which it was intended that he should obtain from the contract; and such a stipulation, unless the parties have agreed that breach of it shall entitle the non-defaulting party to treat the contract as repudiated, is a 'warranty' . There are, however, many contractual undertakings of a more complex character which cannot be categorised as being 'conditions' or 'warranties' ... Of such undertakings all that can be predicated is that some breaches will and others will not give rise to an event which will deprive the party not in default of substantially the whole benefit which it was intended that he should obtain from the contract; and the legal consequences of a breach of such an undertaking, unless provided for expressly in the contract, depend upon the nature of the event to which the breach gives rise and do not follow automatically from a prior classification of the undertaking as a 'condition' or a 'warranty'."

[32]

Findings As To Alleged Breaches 85 The following paragraphs deal with my findings in relation to each of the relevant items alleged by the defendant either not to have been completed, or to have been completed but not in a proper and workmanlike manner. A. "23(a) Supply and installation of one cream aluminium window to the pantry room 600 x 1000 ." 86 The complaint made in relation to this item as set out in the schedule to the letter of 18 February 1997 from the solicitors for the defendant to the solicitors for the plaintiff is to the effect that the relevant window had been supplied and installed but had not been supplied and installed in a workmanlike manner because the "catch does not work". 87 Mr. Moore gave evidence that the "catch did not operate", whilst the plaintiff gave evidence that she last saw and used the catch on 20 December 1996 at which time it worked, although she stated that the catch was not "lockable". Mr. Moore's evidence was based upon his inspection of the property on 3 February 1997. 88 In relation to this matter I am of the opinion, based on Mr. Moore's evidence, that the probability is that the catch to the aluminium window to the pantry was not operative on 19 February 1997. In my further opinion, however, no breach of this special condition would entitle the purchaser to terminate the contract since special condition 23 of the contract is a warranty and not a condition. Further, in my opinion, it is beyond question that the breach thereby involved on the part of the plaintiff was not an essential breach so far as concerns the contract (on the assumption that, contrary to my view, it was not appropriate to characterise this condition as either a condition or a warranty). B. "23(b) Supply and installation of one stainless steel Extractor fan above gas hot plate with blue kitchen cupboard to match existing kitchen in Lupis blue. 89 Evidence was given by Mr. Moore in his affidavit to the effect that at his inspection on 3 February 1997 he observed that "a basic model recirculating rangehood (sic) fan and cupboard unit had been installed in the kitchen". His written report following this inspection stated that there was "a basic model retractable extractor fan installed in cupboard unit of modest size to enclose extractor unit. Extractor fan not connected to outside. Extractor fan may be one (of) two types. 1. Recirculating, usually equipped with a charcoal filter. 2 Exterior exhaust." 90 The plaintiff conceded in oral evidence that there was no charcoal filter supplied with the extractor fan, nor was the extractor fan connected to the exterior of the building. The plaintiff, however, gave evidence to the effect that there was nevertheless some kind of filter for the extractor fan. The plaintiff also gave evidence to the effect that the extractor fan was not connected to the exterior of the house "because it was a double cavity and under those circumstances it could be vented between the blocks to the cavity so it did not have to go straight out through the wall." 91 The defendant gave evidence that the plaintiff said that she was going to install a "large silver rangehood". The defendant also gave evidence to the effect that she saw in the contract that it provided for an extractor fan and not a rangehood but that she "didn't really pick up the difference" between an extractor fan and a rangehood which she understood to be referring to the same thing. 92 In my opinion the plaintiff was not in breach of her obligation to supply and install an extractor fan as required by special condition 23(3) of the contract. The evidence satisfies me that an extractor fan was installed in a cupboard unit of sufficient size to enclose the extractor fan unit in accordance with Mr. Moore's evidence, and in my opinion, on the true construction of the relevant provision in the contract there was no obligation upon the plaintiff to ensure that the extractor fan either contained a charcoal filter or to ensure that the extractor fan should be connected to the exterior of the house. I am further of the opinion that the plaintiff's obligation in this connection pursuant to the contract was not altered as a result of any conversation between the plaintiff and the defendant particularly having regard to the failure of the defendant to differentiate between an extractor fan and a rangehood and to the various other matters referred to later in this judgment in the course of dealing with the alleged representations by the plaintiff concerning this subject matter. C. "23(c) Supply and installation of kitchen cupboards to under ISLAND BENCH , to match existing kitchen as follows:- (i) under sink cupboards with doors … (iv) Partion (p) (sic) shelf for dishwasher side, dishwasher not supplied." 93 The plaintiff gave evidence to the effect that as part of the under-island bench there was an area with a bi-fold door behind which was a microwave and power point for it and that she had when living there placed a microwave there and had used it. The plaintiff said that the bi-fold door covered the microwave when closed. The plaintiff also gave evidence to the effect that there were in fact open corner supports for a garbage bin. These items do not appear to have been referred to by Mr. Moore in his evidence nor, in my opinion, was the evidence of the plaintiff in this connection relevantly challenged by any evidence from the defendant. 94 In all the circumstances I find that the plaintiff was not in breach of the contract in respect of either of these items. D. "23(d) Supply and install kikuyu turf to area on patio of approximately 4 x 3 metres ." 95 Although this item appears in the annexure to the letter dated 18 February 1997 from the solicitors for the defendant to the solicitors for the plaintiff, the annexure states in effect that the turf was supplied and installed and makes no complaint in relation to whether it was installed in a workmanlike manner. However, Mr. Moore's affidavit states the following in relation to this item. "15. As at 2.30pm on 19 February 1997, I observed the following: … (c) The patio on which Kikuyu grass has been laid was inspected and I found the grass to have substantially died back and was weed infested. In my opinion the Kikuyu grass had not been laid in a proper and workmanlike manner in that poisoning of weeds and cultivation of the ground had not been carried out prior to laying the soil and grass; also the grass would not have died had it been prepared properly with sufficient regular watering during its establishment period 96 Counsel for the defendant stated during the hearing that the complaint in respect of the grass "was a workman (like) quality complaint" notwithstanding that this complaint was not made in the annexure to the letter of 18 February 1997. 97 It will be noted that the substance of this complaint as set out in Mr. Moore's affidavit was that "poisoning of weeds and cultivation of the ground had not been carried out prior to laying the soil and grass". Mr. Moore stated in his affidavit that the relevant area was on 19 February 1997 "weed infested" but he did not give any details of the extent or nature of that weed infestation which, accordingly may have been extensive or may have been relatively minor. 98 The plaintiff gave evidence to the effect that prior to laying the Kikuyu turf in the first instance "There was top soil brought in to lay the base down. It was clean and weeded and raked ... Just with normal garden practice. "The plaintiff said that "There would have been, there was debris and bits of building rubble, etc., on it so that it was raked and tidied up and then topsoil was installed and it was aerated and it was, I used lawn food to put underneath it." The plaintiff also said that the topsoil was aerated "With a pitchfork, with a fork and when it was delivered by the turf company, the delivery person was an expert in turf and he assisted me and helped me lay it. The area is approximately 4 metres by 4 metres." The plaintiff also said that the relevant area "was tidied up. It was dug out, cleaned of any rubble, it had. topsoil laid on it, it had fertiliser put on it, it was aerated and then the turf was laid." The plaintiff also gave evidence to the effect that there were weeds in the area prior to the turf being laid "but they were removed" but that no "spray (was) put onto the area to kill any weeds or vegetation in that area prior to the placing of the topsoil" because she didn't use chemicals. 99 Mr. Moore's evidence was as set out above to the effect that the laying of Kikuyu grass in a proper and workmanlike manner involved, inter alia, "poisoning of weeds" so that on the assumption that Mr. Moore, an architect, has sufficient horticultural expertise to express an expert view in relation to such matters, it would appear that the plaintiff was in breach of her obligation to lay that Kikuyu grass in a workmanlike and proper manner in that what she did did not include any poisoning of weeds, although as she stated, all weeds were removed. 100 Even on that assumption, however, I am of the opinion that for the same reasons as given above in relation to item A, this breach by the plaintiff was neither breach of a condition entitling the defendant to rescind, because special condition 23 is a warranty and not a condition, nor an essential breach of a term entitling the defendant to rescind. E. "26. (a)Prior to Completion the vendor agrees to do the following works in a proper and workmanlike manner, complete the top capping to top of courtyard walls ..."

[59]

131 In oral evidence Mr. Moore disagreed that the painting of the cupboard in the main bedroom was in keeping with the character of the property. The plaintiff gave evidence that the original sanding and coating was completed in June 1996 and that an. additional coating was applied in the plaintiff s presence by the builder, Brian Tilley, on either 1, 2 or 3 December 1996. The plaintiff stated that no additional coating was applied after 3 February 1997 because she was unaware that it was necessary. 132 In all the circumstances I am of the opinion that it is probable that the plaintiff was in breach of this part of special condition 26(a) of the contract. I am further of the opinion, however, that this breach did not entitle the defendant to rescind the contract for the same reasons. K "26(a). Prior to Completion the vendor agrees to do the following works in a proper and workmanlike manner … to fill the gap between roof and wall on northern wall in main bedroom above rove to prevent egress of water and animals." 133 Mr. Moore stated in his affidavit in relation to this item the following:- "10. At my inspection on 3 February 1997 some work which had been carried out had not been completed in a proper and tradesmanlike manner as follows: … (n) a gap between the roof tiles and top of the brickwork on the northern wall had been infilled, however it required painting." 134 In his report, Exhibit G, in relation to this item Mr. Moore made a notation as follows:- "Completed. Painting required." 135 In his affidavit he also stated in relation to this item as follows:- "(g) The infilled gap on top of the north wall of the bedroom of the southern dwelling was not painted" as at 19 February 1997. 136 The plaintiff conceded that the gap when filled in was never painted. 137 The relevant part of special condition 26(a) of the contract certainly does not expressly require painting, and accordingly, I am of the opinion that the plaintiff was not in breach of this part of special condition 26(a). I am of the further opinion for the same reasons that if it be the case that this part of special condition 26(a) is to be construed as if it contained an implied term to the effect that the relevant area should be painted, any breach by the plaintiff of any such implied term was not such as to entitle the plaintiff to rescind the contract. The Defendant's Purported Termination of the Contract Was Wrongful

[65]

144 After quoting this passage Young J in Eighth SRJ Pty Limited v Merity (Young J, 25 March 1997, unreported) held as follows: "The Judges of this Division have constantly refused to set out any 'standard test' as to when a deposit might be refunded under s55(2A) though the general flavour of the decisions has been that, prima facie, a vendor who is at law entitled to forfeit the deposit should be able to do so because the commercial purpose of the deposit is to act as an earnest on the part of the purchaser that the contract will be performed. It is only if there is some significant special factor usually a factor sounding against the vendor's conscience that a court of equity will give relief under s55(2A) of the statute; see eg Pratt v Hawkins (1991) 32 NSWLR 319. I stand by what I said in Clurstock Pty . Limited v Timanu Pty. Limited (1988) NSW ConvR 55-419 at 57,831, that the flavour that emerges from most of the decisions on s55(2A) is that 'where the purchaser has been caught up in a situation through little fault of his own or perhaps because of the fault of his solicitor and has endeavoured to do the decent thing, the Court will very often exercise its discretion in his favour, notwithstanding. that this will have the effect of depriving the vendor of the right to forfeit the deposit and notwithstanding that the making of such an order will lessen the importance of a deposit as an earnest that the contract will be fulfilled. ' It is clear that the pivotal consideration is the justice of the situation, see the observations of Kirby P in Wight v Foran (1987) 11 NSWLR 470, 482 ... In SA Mearns v Parris Holdings Pty. Ltd (1994) 6 BPR 13,677 at 13,685, Santow J referred to the necessity of special or exceptional circumstances to warrant the making of an order. Although these words may have flowed through from one of my previous judgments, I must confess that having reread the authorities that may be putting the test a little high. The courts have refused to lay down the standard: it is a matter of looking at each particular case to see whether it is fair and conscionable to give relief or not ... Although the court does not lay down any 'standard test', it is clear that the discretion to be exercised is that of a collegiate court and not at the whim of an individual judge. It is thus useful to see how other judges have approached similar problems. The authorities digested in Professor Butt's book and in para. [310401 of Butterworth's Annotated Conveyancing and Real Property Act indicate that the following matters influence the court as to whether it will exercise its jurisdiction under the section in favour of a purchaser:- (a) Has the vendor received any windfall benefit? (such as the case where the vendor has in fact resold at a higher price?) (b) However, even if there is no windfall to the vendor, the court may still give relief. (c) Is non-completion a fault of the purchaser personally or a matter over which it had little control?

[84]

162 It was submitted on behalf of the plaintiff that the Citibank valuation so adjusted should be preferred to Mr. Bramall's valuation obtained on behalf of the defendant for the following reasons: (1) It was prepared independently of either party, for the purposes of an intending lender/mortgagee and so was not susceptible of bias intended or otherwise for a party/client. On the other hand, Mr. Bramall had been told, in the letter of instructions to him, what his client thought the property was worth. This was submitted to be all the more significant when Mr. Bramall's valuation came very late in the litigation. The relevant paragraphs in the letter of instructions from the solicitors for the defendant to Mr. Bramall dated 28 October 1998 were as follows: "I confirm the following matters: ... 6. She (the plaintiff) is measuring her damages on the basis of the enclosed Valuation Report dated 13 May 1997 by Citibank which was prepared for security purposes only. In that Report the property was valued at only $235,000. 7. Dr. Bellamy considers that in May 1997 the property was valued at about $340,000 to $350,000 and disputes the valuation based on her enquiries about the property market in the area and also based on the fact that in 1997 Ms. Nelson entered into a contract for the sale of the property for $397,750 with settlement of that sale taking place on 22 December 1997..." (2) Mr. Bramall failed to take into account several relevant comparable sales (which were put to him in cross-examination and had been referred to in the May 1997 St. George valuation of Lot 134A), the dates and locations of which made them of great significance and the prices of which tended strongly against his, and in favour of Citibank's valuation; (3) Mr. Bramall relied heavily on two unreliable transactions - the uncompleted sale to Bellamy of the subject land, 6 months earlier, and the sale to a special purchaser, 6 months later. Yet these were sales of types which he conceded were not to be relied upon; (4) Mr. Bramall's analysis of the remaining comparable sales to which he referred in cross-examination, did not reveal any assessment of them in terms which were superior and which were inferior to the subject land, so as to be of any use in facilitating a deduction as to the value of the subject land. (5) The St. George Bank valuation, which was also in evidence, of the adjoining and very similar lot of Villa Umbria (which was superior, in that it was larger than Villa Tuscany and included a swimming pool), in a completed state, was $280,000, of which $130,000 was attributed to the land. Villa Tuscany would be worth less than the superior Villa Umbria property.

[96]

173 In relation to the residential market generally Mr. Bramall said it was a "strengthening market" which was "consistent with falling/borrowing rates and so on, the market was strong and active and developers were out doing developments and finding that there were ready markets for the property." He explained how he arrived at the discount factor of 5.65% referred to earlier. In relation to certain comparables relied upon by him Mr. Bramall, when it was put to him that they were not comparable because they were double what he valued the subject property, he replied:- "A. What that indicates is that they had superior views, they had double garages, they had balconies taking advantage of ocean views and they showed those rates that I mentioned which are in round terms about double and when I look at the sale of the adjoining property 136A, which came out and had a large underlying area of 1690, my summation valuation reflects a rate at $1460 which I thought fitted comfortably into the market findings I employed." 174 When cross-examination concerning the content of the letter of instructions from the solicitors for the defendant referred to above Mr. Bramall stated that he did not speak to the defendant although he was aware of the defendant's views as to value at the relevant date as set out in that letter. When it was put to him that he produced a valuation which substantially accorded with the defendant's position at $330,000 Mr. Bramall replied that he "valued the property at $330,000 which is not the figures that were mentioned in the letter." Mr. Bramall rejected the suggestion put to him in cross-examination that he could be influenced even unintentionally from a statement by a client as to what they think the property is worth stating "No, my personal approach is to be independent and objective." 175 Mr. Bramall also expressed the view in relation to the Citibank valuation that "It seems as though it was a fairly cursory valuation carried out for mortgage purposes but in that valuation the valuation has a building area of 190 square metres where, in fact, the building has an area of 226 square metres." In relation to that valuation Mr Bramall also stated "And he has ascribed a land value of $110,000 and bearing in mind he was doing it on 13 May he ascribes a land value of $110,000. I do not believe that that is realistic, I think that is ultra conservative, even for a mortgage valuation in light of the sale which was taking place of a virtually identical property adjoining, a similar type of development." In respect of that adjoining property he said that his understanding was that there were footings poured and that in relation to the sale price of $160,000 he "viewed that as reflecting a land component of $150,000." He again denied that he was either directly or indirectly influenced in his valuation by his knowledge of the defendant's view as to the value of the subject property. He said:- "I read the letter of instructions of course but I do not act as an advocate, I act as an expert in the valuations that I carry out." Decision 176 In my opinion, Mr. Bramall was not, in his cross-examination, relevantly shaken in his essential views, including his views in respect of the comparable sales relied upon by him, and I can find no reason to reject his valuation having regard to its content and to that cross-examination as well as to his qualifications and experience. 177 In particular, having regard to these matters, and the whole of the relevant circumstances of the case, I prefer Mr. Bramall's valuation to the valuations of Citibank and of the St. George Bank, the authors of which gave no oral evidence and were accordingly not cross-examined. The result is that in respect of any comparable sales relied upon by the valuer in the Citibank valuation (if any), there are none identified, (the Citibank valuation includes the words "CERTIFICATE OF VALUATION (based on the comparable sales annexed)" but no such sales were annexed), whilst in respect of the comparable sales listed in the St. George Bank valuation, I have no evidence as to any analysis by the relevant valuer in relation to the differences and similarities between those comparable sales and the subject property nor as to the adjustments which might need to be taken into account in using those comparable sales for the purpose of arriving at a value for the subject property as at the relevant date.

[145]

233 In this connection the plaintiff was firm in cross-examination that she did not, in conversation with the defendant on this subject matter, use the word "range hood" but used only the words "extractor fan", and was equally firm that she told the defendant that there would be a cupboard above "the extractor fan" and did not say that there would be a cupboard "to the side" of a "range hood". 234 The cross-examination of the plaintiff included the following:- "Q. In your affidavit you say you used the word 'extractor fan'? A. Above it has two cupboards, and that they were going to be in the matching colour of the rest of the kitchen. If you have a range hood you cannot put cupboards above it. Q. Dr. Bellamy alleges in her affidavit, she says you told her there was going to be a large stainless steel range hood over the hot plates. You say you did not say that, and you used the phrase "extractor fan "? A. I said there was going to be a stainless steel extractor fan going above the hot plate with two cupboards above the actual extractor fan. That is what went into the contract and that is what Dr. Bellamy signed in the contract. There is a difference between having cupboards installed above - you cannot do it with a range hood. It was there in the contract to see ... Q. Do you deny that you mentioned the phrase "Stainless steel range hood" on that occasion in that discussion with Dr. Bellamy? A. What I will say - it was discussed by Dr. Bellamy as an option but I said I was putting an extractor fan, and I was putting in the cupboards above. I did not have to do it. There was no reason why I had to do it. Q. What did Dr. Bellamy say? A. She thought, she looked at the option of putting in something more elaborate . Q. Did she use the word "range hood"? A. Yes. I said - no, I had thought, toyed with that idea but, on my financial structure, it was not possible and, because of the look at the wall, the cupboards and the extractor fan were sufficient." (underlining supplied). 235 On the other hand, the defendant, in cross-examination, accepted that she saw in the contract that there was provision for an extractor fan, not a range hood but that she didn't "really pick up the difference". The cross-examination of the defendant included the following:- "Q. Well, you saw in the contract that this speaks of an extractor fan, not a range hood? A. Yes, I didn't really pick up the difference. Q. You say that you didn't pick up the difference between an extractor fan and a range hood? A. That's correct. Q. You understood it to refer to the same thing. A. I did."

[155]

246 In all the circumstances I regard the plaintiffs evidence on this issue as more reliable. In my opinion, the defendant's recollection is mistaken having regard to the relatively long period of time that has elapsed since the relevant conversation occurred. I do not for a moment suggest that the defendant gave deliberately false evidence, on this or any other issue, but I find on the balance of probabilities that the defendant's recollection of the relevant conversation was faulty, and not as reliable as the plaintiff's recollection, in all the circumstances. 247 So far as concerns the representations alleged to have been made by the plaintiff to the defendant as set out in paragraphs 4(c) and (d) of the cross-claim concerning the supply and installation of wrought iron gates with the words "Villa Tuscany" and other features to be incorporated into the metal work, to be installed by September 1966 and a gate to be installed in a gap in the brick boundary wall to the land also to be delivered and installed by the end of September 1996, I again prefer the version of the relevant conversation given by the plaintiff, as referred to below, as being more reliable and more in accordance with the probabilities having regard, inter alia, in particular, to the plaintiffs detailed knowledge of what was in the contract, to the stringent financial circumstances of the plaintiff, to the absence of any such provision in the contract coupled with the circumstances surrounding the drafting of the special conditions of the contract providing for outstanding work to be done, to the provisions of special condition 2 of the contract and to the certificate of Judith White, solicitor, annexed to the contract referred to above. 248 In relation to the iron gates the defendant said in her affidavit that the plaintiff said words to the following effect:- "Nelson: 'No, I'm not building the garage, but I have erected the sail in the courtyard instead of the garage. The people who made the sail are making a double set of iron gates for the car entrance and matching single gate in the wall. The gates will incorporate the sail design and the words 'Villa Tuscany' will be in the ironwork for the gates ."

[159]

252 The defendant was cross-examined in relation to the circumstances leading up to the exchange of contracts and the absence of any provision in the contract relating to gates as follows:- Q. Before you executed the contract, you understand that Ms. Nelson negotiated through your solicitors as to the special conditions of that contract, didn't you? A. We did. Q. Including in some detail, what work was to be specified in the contract and what wasn't? A. Correct. Q. In the course of those negotiations, you understood that Ms. Nelson was agreeing to include in the contract some of the matters which had requested to be done and not others? A. Correct. Q. And indeed, you or your solicitors prepared a list of things that you wanted included? A. Yes. Q. And to your knowledge Ms. Nelson accepted some of them and rejected others of them? A. That's correct Q. And then would you have a look at this further letter. Is this a reply from your solicitors to Adrian Twigg & Co. of 19 September? A. Yes Q. And Annexure A to that letter, is that a list prepared on your instructions of the things you wanted included in the contract? A. Yes, I believe so. Q. This was after you had had the benefit of seeing what was already in the draft special conditions forwarded the previous day? A. Yes, that's right. Q. Nowhere in there did you stipulate for anything about gates, did you? A. No, I didn't ." (underlining supplied). 253 As stated above, in my opinion, having regard to all the considerations referred to above, but, in particular to the stringent financial situation of the plaintiff at this point of time I find that it is more probable, in all the circumstances of the case, that the version of the relevant conversation given by the plaintiff is accurate, inter alia, because of the expense of supplying such gates, and also because of the fact that it is plain that they had not been previously ordered so as to be capable of being installed "some time in the next couple of weeks" as the defendant said the plaintiff said. On the other hand, in all the circumstances I find it more probable that the gates were mentioned in the context of the conversation as deposed to by the plaintiff as set out above.

LORI ANN NELSON v LYNETTE MARIE BELLAMY

At a glance

Court

Decision date

Before

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Source

Catchwords

Judgment (163 paragraphs)

Parties

Cases Cited (12)

Cited By (7)