9.3.2 to recover damages for breach of contract.
15 Accordingly, it is not necessary to consider clause 9.3.1 (which makes provision for the circumstance where the vendor has resold the property under a contract made within 12 months after the termination, and is entitled to recover the deficiency on resale and the reasonable costs and expenses arising out of the purchaser's non-compliance with the contract or with the notice and of the resale).
16 The Plaintiff's claim for interest was stated to be grounded upon clause 36 of the contract (which makes specific provision for the payment by the purchaser to the vendor of interest on the purchase price at the rate of 10 per centum per annum calculated on a daily basis "for the period commencing on and including the date of completion…and continuing up to and including the date of completion").
17 The Defendant did not dispute the calculations of interest claimed by the Plaintiff.
18 I have had the benefit of receiving a written outline of submissions and a chronology from Counsel for the respective parties. Those documents will be retained in the Court file.
19 The first area of dispute between the parties related to the fact that the damages claimed by the Plaintiff were grounded upon the sale by the Plaintiff to the underbidder at the auction for an amount of $130,000 less than the price for which the Defendant had contracted to purchase the property. Accordingly, the Plaintiff claims the difference between the contract price and the price which the Plaintiff ultimately received. The Defendant, however, points to the fact that the sale to the underbidder was privately negotiated. The property was not put back on the market to be sold by, for example, public auction.
20 The law in this area is set forth in the decision of the Court of Appeal of New South Wales in Carpenter v McGrath (1996) 40 NSWLR 39, where all the relevant authorities are conveniently collected in the judgment of Sheller JA at 58f.
21 The general rule at Common Law is that where a party sustains a loss by reason of a breach of contract, the party is, so far as money can do it, to be placed in the same situation, with respect to damages, as if the contract had been performed: Robinson v Harman (1848) 1 Ex 850 at 855; 154 ER 363 at 365 per Parke B (cited with approval by Gibbs J (as he then was) in Wenham v Ella (1972) 127 CLR 454 at 471); Commonwealth v Amann Aviation Pty Limited (1991) 174 CLR 64 at 80, 98, 116, 134, 148, 161. (It will be appreciated, however, that that general principle is limited by the rule in Hadley v Baxendale (1854) 9 Ex 341 at 354; 156 ER 145 at 151.)
22 If the vendor sues for damages to compensate for the loss of the bargain, the purchase price is taken into account in determining whether the vendor has suffered loss, and, if so, the extent of it. Since damages in contract are usually assessed at the date of breach (Johnson v Perez (1988) 166 CLR 351 at 355), the normal measure is the contract price less the market price at the contractual time fixed for completion.
23 It was submitted on behalf of the Plaintiff that in December 2002 the property could not be sold on the open market, because of the existence of the caveat lodged by the Defendant on 2 December 2002.
24 The Defendant, however, points to the absence of any valuation as at 2 December 2002 (that being the date when the Defendant should have completed the contract), and submits that the joint valuation of $3,150,000 as at 2 February 2003 should apply to that date also. The Defendant also relies upon evidence disclosed in the two respective valuations provided on behalf of the parties that between December 2002 and February 2003 there was a rising property market in the relevant area. That is, it was the Defendant's submission that the market value at 2 December 2002 was higher than the price at which the property was sold to the underbidder, and, indeed, was higher than the price which the Defendant had contracted to pay ($1,130,000), with the consequence, so the Defendant submitted, that the Plaintiff had suffered no loss.
25 It was also submitted on behalf of the Defendant that there was no satisfactory evidence that the existence of the caveat constituted a block or impediment to the obtaining of a sale to some purchaser other than the underbidder. It was submitted on behalf of the Defendant that this matter of the effect of the caveat should have been the subject of expert evidence, but that there was no such evidence.
26 I am in agreement, however, with the submission on behalf of the Plaintiff that common sense and experience clearly indicate that where, as here, there was a caveat lodged against the title to the subject land, the likelihood of the Plaintiff being able to sell that land on the open market, by way of auction or private treaty, was remote in the extreme. Indeed, the Plaintiff was very fortunate in being able, as a result of negotiation, to sell the land to the underbidder - albeit at a reduced price - whilst the caveat still remained against the title to the property, and subject to certain conditions relating to the ability of the Plaintiff to complete. It should not be overlooked that ultimately completion took place on 4 April 2003, within three weeks after the removal of the caveat, on 14 March 2003.