STM123 No. 16 Pty Ltd v Wang

Hearing dates: 7 May 2025

Date of orders: 7 May 2025

Decision date: 07 May 2025

Jurisdiction: Equity - Real Property List

Before: Pike J

Decision: (1) Judgment be entered in favour of the plaintiff against the defendant in the amount of $2,425,534.54.
(2) The defendant pay the plaintiff's costs of the proceedings as agreed or assessed.

Catchwords: CONVEYANCING – breach by purchaser – remedies of vendor – resale – measure of damages – recovery of damages under cl 9 of the standard form contract – effect of resale in falling market – whether appropriate date for the assessment of damages for breach of contract is the date of the breach or a later date – damages assessed at a later date – no question of principle

Legislation Cited: Nil

Cases Cited: Jampco Pty Ltd v Cameron (No. 2) (1985) 3 NSWLR 391
Liggins v Park Trent Properties Group Pty Ltd (No. 2) [2022] NSWSC 176
Ng v Filmlock Pty Ltd (2014) 88 NSWLR 146
S T Investment Pty Ltd v Geng (2020) 19 BPR 40,071

Texts Cited: Nil

Category: Principal judgment

Parties: STM123 No. 16 Pty Ltd (Plaintiff)
Yejian Wang (Defendant)

Representation: Counsel:
Ms C Nguyen (Plaintiff)
Solicitors:
Bradbury Legal (Plaintiff)

File Number(s): 2023/00278901

Publication restriction: Nil

JUDGMENT (EX TEMPORE REVISED FROM TRANSCRIPT)

1. On 8 June 2023, the plaintiff as vendor entered into a contract for sale of land with the defendant as purchaser in relation to an off the plan purchase of a residential apartment in Point Piper (the Property). The purchase price was $16.5 million.

2. A ten percent deposit was payable in two instalments. The date of completion under the contract was 18 July 2023.

3. The first instalment of the deposit of $825,000 was paid, but the defendant failed to pay the second instalment of $825,000 by 18 July 2023. This second instalment was due to be paid on the earlier of the date of completion, being 18 July 2023, or the date on which the plaintiff demanded payment in the event of default.

4. On 19 July 2023, the plaintiff served the defendant with a notice requiring payment of the balance of the deposit by 26 July 2023. A notice to complete was served on the same day requiring completion by 7 August 2023. The defendant failed to comply with both notices, and, on 8 August 2023, the plaintiff terminated the contract.

5. Following termination, the plaintiff engaged a real estate agent to put the Property back on the market. A contract for sale was finally entered into on 11 November 2024 to sell the Property to a new purchaser for $12,820,000. I describe the marketing, or more accurately re-marketing, of the Property in a little more detail below.

6. These proceedings were commenced on 1 September 2023. The plaintiff alleges breaches of contract and sought both liquidated and unliquidated damages.

7. On 9 April 2024, the Court made orders for substituted service. At no stage has the defendant taken any active step in the proceedings.

8. On 22 November 2024, Peden J relevantly made the following orders, for the reasons given by her Honour:

9. Pursuant to rule 16.6(1) of the Uniform Civil Procedure Rules, judgment for the plaintiff against the defendant for $825,000 and interest in the sum of $91,938.67, and costs as agreed or assessed.

10. Pursuant to rules 16.7(1) and 30.1 of the UCPR, judgment for the plaintiff against the defendant for damages as referred to in the statement of claim filed 1 September 2023, interest and costs to be assessed at a trial to be allocated at a directions hearing on 7 February 2025.

11. Her Honour also made orders for personal service to be dispensed with and for the relevant documents to be served on the defendant at an address set out in the orders made.

12. Now before the Court is the plaintiff's hearing for an assessment of its unliquidated damages.

Evidence relied on

11. In support of the claim for unliquidated damages, the plaintiff relies upon the following material:

(a) an affidavit of Brendan David Hoffman of 13 November 2023; (b) an affidavit of attempted service of Paulene Amanda Hill of 23 November 2023; (c) an affidavit of attempted service of Christopher Zabroabec of 28 November 2023; (d) an affidavit of Brendan David Hoffman of 14 December 2023; (e) an affidavit of service of Paulene Amanda Hill of 12 April 2024; (f) an affidavit of Brendan David Hoffman of 15 November 2024; (g) an affidavit of Vaughan Rudd Blank of 15 November 2024; (h) an affidavit of Vaughan Rudd Blank of 18 February 2025; (i) an affidavit of service of Brendan David Hoffman affirmed 5 May 2025; (j) a bundle of documents being those exhibited to the affidavits set out above which I have marked as exhibit A; and (k) an email notifying the defendant of the most recent affidavit of Brendan David Hoffman which I have marked as exhibit B.

12. I am satisfied that the documents have relevantly been served on the defendant in accordance with the orders previously made, and that the defendant is aware of the hearing today but has chosen not to take any role in the proceedings. The matter was called outside the Court this morning and there was no appearance for the defendant.

Evidence of re-marketing

13. As set out above, the plaintiff terminated the contract on 8 August 2023. The Property was then re-marketed and ultimately sold to a new purchaser on 11 November 2024. For the reasons I will explain below, what occurred in the interim in terms of the re-marketing of the Property is relevant to the claim for unliquidated damages, in so far as it includes a deficiency on resale, so it is important that I set out what occurred by way of re-marketing.

14. What occurred by way of re-marketing is set out in detail in the affidavit of Vaughan Rudd Blank (Mr Blank) of 18 February 2025. Relevantly for present purposes, in October 2023, Mr Blank, who is the sole director and secretary of the plaintiff, engaged Michael Pallier (Mr Pallier) of Sydney Sotheby's International Realty (Sotheby's) to market and sell the Property. The evidence establishes that Mr Pallier is one of the leading, if not the leading, agents for the eastern suburbs and particularly Point Piper, with a particular expertise in relation to premium properties. The evidence establishes that Sotheby's thereafter carried out a comprehensive sales campaign, using every available strategy to market and sell the Property.

15. Between 24 October 2023 and 2 November 2024, Sotheby's conducted bi-weekly scheduled inspections and private inspections by appointment of the Property for potential purchasers. Mr Blank was kept regularly updated by Mr Pallier or those on his behalf as to what was occurring.

16. It would appear that approximately 93 parties inspected the Property throughout the entire sales campaign, either through scheduled inspections or private appointments.

17. Notwithstanding the extensive marketing campaign and the number of persons who inspected the Property, only two contracts for sale were issued during the relevant period. Mr Blank describes in detail what occurred during the relevant period and the need to constantly reassess and adjust the asking price.

18. I am comfortably satisfied on the material set out in Mr Blank's affidavit that every effort has been made since October 2023 to market and sell the Property so as to obtain the best available price. It was only on 11 November 2024 that the plaintiff finally entered into a contract for sale over the Property for $12,820,000. This was close to the then revised price guide for the Property of $13 million. That revised price guide was set as a result of what had occurred over the ensuing 12 or so months in marketing the Property.

19. It is clear from the material that the Property is a premium Property in the eastern suburbs where I will readily accept that there is only a select number of buyers who would be in a position to purchase the Property.

Evidence of value

20. The plaintiff also relies upon an expert valuation report prepared by Jason Field of Field & Kaye National Property Valuers. In his report dated 11 April 2025, Mr Field relevantly expresses an opinion on three matters:

21. The retrospective market value of the Property as at 8 August 2023 - which is assessed at $13,500,000.

22. The market value of the Property as at 14 February 2025 - which is assessed as $12,820,000.

23. Whether there was an immediately available market for the Property as at 8 August 2023, having regard to certain matters set out in Mr Field's instructions.

24. In relation to this last matter, Mr Field's report relevantly includes the following opinions:

(a) the property is in a "prestigious residential suburb" on a road regarded as "the most exclusive street in the country"; (b) the "prestige market" can be patchy, inconsistent, volatile and sensitive to fluctuations; (c) the "heat came out of the market" after August 2023 and "weakened in late 2024", but strengthened "since the early part of 2025"; (d) there is greater demand at the upper echelon in the eastern suburbs for houses rather than apartments; and (e) there is "less demand, less depth in the market".

22. In relation to properties such as the Property, Mr Field also expressed the opinion that:

Such properties do not necessarily have an immediately available market and may require a protracted campaign in order to identify a suitable buyer and achieve a sale.

23. Further, that:

Demand may be constrained for such apartments which may appeal to a limited initial spectrum of the market and require an extended campaign in order to secure a buyer.

Assessment of damages

24. Clause 9 of the contract for sale with the defendant provides:

9. If the purchaser does not comply with this contract (or a notice under or relating to it) in an essential respect the vendor can terminate by serving a notice. After the termination the vendor can:

9.1 keep or recover the deposit (to a maximum of 10% of the price);

…

9.3 sue the purchaser either:

9.3.1 where the vendor has resold the property under a contract made within 12 months after the termination, to recover:

• the deficiency on resale (with credit for any of the deposit kept or recovered and after allowance for any capital gains tax or goods and services tax on anything recovered under this clause); and

• The reasonable costs and expenses arising out of the purchaser’s non-compliance with this contract or the notice and of resale and any attempted resale; or

9.3.2 to recover damages for breach of contract

25. The contract for resale was entered into on 11 November 2024, more than 12 months after the termination on 8 August 2023. Accordingly, clause 9.3.1 is not available to the plaintiff in relation to assessing damages, and the claim for unliquidated damages is made pursuant to clause 9.3.2.

26. Such a provision in the standard contract for sale of land has received considerable judicial consideration over the years. It is clear that under clause 9.3.2 the general law of damages is applicable: see, for example, S T Investment Pty L**td v Geng (2020) 19 BPR 40,071 at [40]-[43] per Darke J.

27. It is clear that under the general law of damages, damages are normally assessed as at the date of breach. It is equally clear, however, that other dates may be justified, if a selection of a different date is necessary to fairly compensate the plaintiff for the wrong suffered.

28. The authorities in this regard were helpfully summarised by Slattery J in Liggins v Park Trent Properties Group Pty L**td (No. 2) [2022] NSWSC 176 at [14]-[36]. At [27], Slattery J refers to what was said by Gleeson JA (Tobias AJA agreeing) in N**g v Filmlock Pty L**td (2014) 88 NSWLR 146 at [55]-[59] (Filmlock), where Gleeson JA said:

[55] The date of breach rule assumes that there is a market in which the innocent party can resell the subject matter of the sale in question (or buy a replacement as the case may be). Where there is no such market, a later date may be appropriate to give the plaintiff an amount of damages which will compensate for the breach of contract: Johnson v Perez at 357; Wenham v Ella [1972] 127 CLR 454 at 467; and Tabcorp Holdings Ltd v Bowen Investments Pty Ltd [2009] HCA 8; 236 CLR 272 at [13].

[56] Accordingly, I would not exclude the possibility that, in an appropriate case, the interests of justice may require that “the date of breach” rule should not apply and damages may be assessed by reference to a later date, such as the contract price on resale.

[57] Two further matters should be mentioned. First, under the standard form of contract for sale of land in New South Wales, provided that the vendor has resold the property within 12 months after the termination, cl 9.3.1 entitles the vendor to recover the deficiency on resale and the reasonable costs and expenses arising out of the purchaser's non-compliance with the contract. In this circumstance, there is no need to resort to any argument concerning the date of breach rule.

[58] Secondly, whether a market value may be assessed in the case of land as at “the date of breach” is ultimately a question of fact. Of necessity, the sale of land will generally require a period to elapse for proper marketing. Unsuccessful attempts by a vendor to resell the property are not determinative as to whether there is no market for the land. Much will depend on the usual method of sale for the land in question having regard to its location, particular characteristics, the range of likely interested purchasers, and the time usually required for proper marketing of land of that type. Expert valuation evidence is likely to have a significant role.

[59] It needs to be emphasised that departure from the general rule is not a matter of discretion: Clark v Macourt at [109] (Keane J). A vendor claiming damages assessed at a date later than “the date of breach” must demonstrate that there are particular reasons on the facts which would make it unjust to apply the prima facie or “usual” measure of damages.

29. In the present case the plaintiff seeks to claim as part of its unliquidated damages, a deficiency in re-sale based upon on the sale in November 2024. This is on the basis that, having regard to the authorities that I have summarised above, such an approach fairly compensates the plaintiff in the present circumstances, where the Property is a premium property, which has no ready market for immediate sale, and which will, as events turned out, take time to properly market and sell. It is contended that, in the circumstances, adopting the date of breach of 8 August 2023 would not fairly compensate the plaintiff.

30. As noted by Gleeson JA in Filmlock, whether the date of breach or another is used, is ultimately a question of fact. Having regard to the evidence that I have summarised above, particularly as to the attempts that were made to re-market the Property between October 2023 and November 2024, and the opinions expressed by Mr Field as to the nature of the market in which the Property exists and is being sold, it is appropriate on the facts of this case to use the sale in November 2024 for the purposes of calculating the deficiency on resale. Using the valuation expressed by Mr Field of $13.5 million in August 2023 would not, in my view, fairly compensate the plaintiff in the circumstances, having regard to the lack of a ready market in August 2023 to immediately re-sell the subject Property.

31. Accordingly, for the purposes of assessing the unliquidated damages the deficiency on resale is calculated as $16.5 million minus the actual purchase price of $12,820,000 on resale, being a sum of $3.68 million. Credit must be given for the deposit of $1.65 million. I am satisfied that it is proper for the entire deposit of $1.65 million to be credited in circumstances where $825,000 was in fact paid, and Peden J made an order for the remaining $825,000 to be paid as liquidated damages back in November 2024. The remaining deficiency is thus $2,030,000 by my calculation.

32. In addition to a deficiency on resale, the plaintiff claims for a number of costs and expenses arising out of the defendant's non-compliance with the contract and re-sale.

33. Those costs and expenses are set out, together with supporting evidence, in the second affidavit of Mr Blank. They total $300,701.46.

34. Adding these amounts together, the total amount of the damages payable is $2,330,701.36.

35. To this amount must be added interest, calculated for the 178 days from the date of resale (11 November 2024) to the date of hearing: see in this regard Jampco Pty L**td v Cameron (No. 2) (1985) 3 NSWLR 391 at 395. The total for interest is $94,833.14.

36. Accordingly, I am satisfied that the unliquidated damages to which the plaintiff is entitled, including pre-judgment interest, is $2,425,534.54.

37. For the reasons set out above, I make the following orders:

38. Judgment be entered in favour of the plaintiff against the defendant in the amount of $2,425,534.54.

39. The defendant pay the plaintiff's costs of the proceedings as agreed or assessed.

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