Manion v Spark Farms Pty Ltd

Representation: Solicitors:
Shearwater Legal (First Plaintiff and Second Plaintiff)

File Number(s): 2025/00348159

Publication restriction: Nil.

JUDGMENT – EX TEMPORE

1. Before the Court for its consideration and determination is an assessment hearing in relation to this matter. On 10 February 2026 the Registrar made orders for an assessment hearing to be held on 12 March 2026.

2. The background to the matter is that the plaintiffs were the registered proprietors and vendors of a property at Salt Ash in New South Wales. Pursuant to a contract dated 21 July 2023, the plaintiffs agreed to sell the property to Spark Farms Pty Ltd as trustee for the Spark Farms Unit Trust. The sale price was $1,550,000 with a deposit of $155,000 to be paid in two tranches of $77,500. Under the contract, the second defendant, who also was one of the signatories on behalf of the purchaser company, guaranteed the obligations of the purchaser: see p 29 of the exhibit to the affidavit of Antony Keith Manion dated 4 March 2026. I am satisfied from the document appearing at p 32 of the exhibit to that affidavit that the plaintiffs were the registered proprietors at the relevant time of the property in question.

3. The events the subject of the claim are set out in the affidavit of Mr Manion dated 4 March 2026 read at the assessment hearing by the plaintiffs. In summary, the first defendant company did not complete the purchase of the property at the contracted settlement date. A notice to complete was issued. The notice to complete was not complied with and there was no completion. The plaintiffs issued a notice of termination of the contract in accordance with special condition 41 of the contract. Half of the deposit being $77,500 which had been released was then forfeited by the first defendant to the plaintiffs.

4. After the contract was entered into but before completion, and in anticipation of the expected completion of the sale of the property, the first plaintiff entered into a contract to purchase another property. A deposit of $26,000 was paid. Because of the failure to complete the first contract, the settlement did not occur on the relevant date in relation to the second property, and there was a default by the first plaintiff. Paragraph 20 of the first plaintiff’s affidavit indicates that the first plaintiff did not complete because he did not have the funds to settle because of the default of the first defendant on the first contract sale. A notice of termination was issued by that vendor and the first plaintiff forfeited the deposit of $26,000 to that vendor.

5. The plaintiffs then offered the first property at Salt Ash for sale on the open market and a contract was entered into at a lesser sale price. That sale was completed on 7 February 2025. I am satisfied from the affidavit of Gregory James Delahunty dated 25 February 2026 read at the assessment hearing that the second sale was conducted by Mr Delahunty as real estate agent and that the sales of the Salt Ash property on each occasion were at arm’s length through his real estate agency: see paragraph 10.

6. As is not surprising, the plaintiffs incurred a number of losses and expenses in relation to the resale. They claim those from the first defendant company who did not complete its purchase and from the second defendant who guaranteed the obligations of the first defendant company.

7. By Statement of Claim filed on 10 September 2025, the plaintiffs commenced proceedings for the recovery of damages for breach of contract including certain consequential losses which are set out in paragraphs 14 and 15 of the Statement of Claim.

8. The Statement of Claim was amended by an Amended Statement of Claim filed on 17 September 2025. In the Amended Statement of Claim, the same amount is sought as damages. I am satisfied from the affidavits of service of Justin Richards dated 13 October 2025 that the Amended Statement of Claim was served on the first and second defendants.

9. In relation to the first defendant, the plaintiffs read the affidavit of Colin Joseph Goldrick dated 25 February 2026 at the assessment hearing. Annexure A to that affidavit establishes to my satisfaction that the place where the Amended Statement of Claim was served was at the relevant time the registered office of the first corporate defendant. Accordingly, there was good service on both defendants. No Defence was filed by the defendants.

10. On 23 December 2025, judgment was given for the plaintiffs against the defendants for damages and costs with damages to be assessed as ordered by the then Judicial Registrar. As indicated above, Registrar Smith listed the matter for an assessment hearing today.

11. At the assessment hearing, Mr Roset appeared for the plaintiffs. The defendants were called outside and there was no appearance by or on their behalf. They have not been involved in any aspect of the proceedings and despite service on them have taken no step to file a Defence.

12. Nevertheless, the Court must be satisfied in relation to the amount claimed for breach of contract. I am satisfied from the Amended Statement of Claim, the affidavit of Mr Manion of 4 March 2026, and the documents in the exhibit to that affidavit, that a contract was entered into between the plaintiffs and the first defendant with the second defendant as guarantor and that the defendants breached the contract by not completing after the issue of a notice to complete and that the contract was terminated by the plaintiffs. The evidence establishes that the plaintiffs were ready, willing and able to complete.

13. At the hearing, Mr Roset handed to the Court a schedule of damages claimed. This included heads of damage as follows:

(a) reduced sale price on resale, $290,000; (b) council rates on the property for the longer period the plaintiffs held it, $2,690.45; (c) mortgage insurance costs for the longer period that the property was held, $20,403.61; (d) interest costs on the loan secured by the mortgages on the first property for the longer period it was held, $73,889.15; (e) conveyancing fees on the terminated sale, $2,007.39; (f) legal fees on drafting and issuing the notice to complete, $880; (g) lost deposit on the linked property purchase referred to above, $26,000; (h) total $415,870.60, from which was subtracted the deposit forfeited by the first defendant to the plaintiffs of $77,500, giving a balance of loss of $338,370.60.

Pre-judgment interest and post-judgment interest have been claimed as set out in calculations which are exhibits O and P to the affidavit of the first plaintiff. The total claimed is $369,393,16.

14. I reviewed the affidavits I have referred to and I also reviewed the exhibit tender bundle to the first plaintiff’s 4 March 2026 affidavit. I also requested Mr Roset who, as I indicated above, appears for the plaintiffs, to take me through the various amounts where they differed from the amount claimed in the Amended Statement of Claim. I am satisfied that the documents in the exhibit reflect the amounts now claimed.

15. The general principle to be applied is that damages for breach of contract are awarded to place the injured party in the position in which it would have been had the contract been performed so far as money can do. Claims can be made for wasted expenditure also: see Robinson v Harman (1848) 154 ER 363 per Parke B; Tabcorp Holdings Limited v Bowen Investments Pty Ltd (2009) 236 CLR 272 per the Full High Court at [13]; 123 259 932 Pty Ltd v Cessnock City Council [2023] NSWCA 21 per Brereton JA (with whom Macfarlan and Mitchelmore JJA agreed) at [50].

16. The Cessnock City Counci**l case went on appeal to the High Court of Australia: Cessnock City Council v 123 259 932 Pty Ltd [2024] HCA 17. In the judgment of the majority being Edelman, Steward, Gleeson and Beech-Jones JJ at paragraph 60, their Honours stated that “the long-established orthodoxy [was] that damages for consequential loss for a breach of contract are awarded only to place the plaintiff in the same situation as if the contract had been performed.” Their Honours referred at paragraph 61 to the legal onus being on the plaintiff to prove loss arising from a breach of contract and that is a “legal burden of proof”.

17. At paragraph 117 their Honours referred to consequential losses and stated at paragraph 118 that the plaintiff must show that the money claimed was wasted because of the breach of contract. Their Honours referred to the concept of wasted expenditure in their summary in paragraph 120. At paragraph 120(2) the plurality said:

“The calculation of a plaintiff’s consequential loss will permit the plaintiff to recover expenditure reasonably incurred in anticipation of, or reliance on, the performance of the contractual obligation that was breached but only to the extent that the expenditure would have been recovered but cannot now be recovered (‘wasted expenditure’).”

18. I have also taken into account the rules in Hadley v Baxendale (1854) 156 ER 145 in considering whether any of the damages claimed are too remote to be claimed. In European Bank Limited v Evans (2010) 240 CLR 432 at paragraph 12 in the joint judgment of the five judges of the High Court, their Honours stated that “the rule in Hadley v Baxendale does not detract from what was said in Robinson v Harman” and that “the rule is concerned with the question of remoteness and marks out the limits of the heads of damage for which the plaintiff is entitled to receive compensation,” or as McHugh J said in that case, “the rule marks the boundary of the liability for loss or damage caused by a breach of contract” (at paragraph 13). The High Court in Evans held that Hadley v Baxendale states that the entitlement of the plaintiff to recover such damages was limited to:

“such damages as arise naturally, that is, according to the usual course of things, from the breach of contract, or such damages as may reasonably be supposed to have been in the contemplation of both parties concerned at the time they made the contract as the probable result of the breach.”

19. I am satisfied that each of the heads of damage claimed is properly claimable. The reduced sale price on resale is an obvious head of damage and the affidavit of Mr Delahunty satisfies me that the sales of the property in question were both at arm’s length. The additional rates, mortgage insurance costs and interest are obviously additional costs incurred as a result of the delay in the sale. The conveyancing fees and the drafting of the notice to complete and termination notice are clearly fees that were only incurred because of the breach.

20. In relation to the moneys relating to the second property purchase, I am satisfied that that was entered into before the failure to complete occurred and it is in my view well within the reasonable contemplation of the parties that upon sale of a property a person will seek to buy a replacement property.

21. Accordingly, costs relating to that, such as the loss of the deposit, are claimable. Of course, the deposit forfeited must be subtracted as it has been. In relation to the interest claim, that is claimed under the Civil Procedure Act 2005 (NSW) and I am satisfied from the schedules that it appears to be justified.

22. An application was also made by the plaintiffs for lump sum costs and I was given a schedule but the schedule does not permit me to conclude that the amounts claimed are fairly incurred in terms of hours and the like and the tasks involved. There are also no disbursement documents which permit me to be satisfied. Accordingly, I decline to make a lump sum costs order. I note that the order made on 23 December 2025 was also for costs.

23. Accordingly, I now turn to the orders which should be made in the matter:

24. Judgment for the plaintiffs as against the defendants in the sum of $369,393.16.

25. The defendants are to pay the plaintiffs’ costs of the assessment hearing as agreed or assessed.

26. These orders are to be served on the defendants within 14 days. Service on the defendants may be effected by service at the email address “[redacted]@gmail.com”.

27. Any application to vacate orders 1 and 2 is to be made by the defendants within 28 days.

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