Harris v Australand Apartments No. 6 Pty Ltd
[2011] QSC 204
To print this judgment please return to the case and click on the PDF icon
next to the
case name. For court use, a full PDF copy is required or preferred.
Exit Distraction Free Reading Mode
Please Note: You are about to print a copy of the onscreen
version of
this judgment. For court use, a full PDF copy of the judgment is required or preferred. Please
return to
the case for PDF printing options.
- Unreported Judgment
- Harris v Australand Apartments No. 6 Pty Ltd[2011] QSC 204
- Add to List
Harris v Australand Apartments No. 6 Pty Ltd[2011] QSC 204
Harris v Australand Apartments No. 6 Pty Ltd[2011] QSC 204
SUPREME COURT OF QUEENSLAND
PARTIES: | |
FILE NO/S: | |
Trial Division | |
PROCEEDING: | Application |
ORIGINATING COURT: | |
DELIVERED ON: | 26 July 2011 |
DELIVERED AT: | Brisbane |
HEARING DATE: | 15 July 2011 |
JUDGE: | McMurdo J |
ORDER: |
|
CATCHWORDS: | PROCEDURE – SUPREME COURT PROCEDURE – QUEENSLAND – PROCEDURE UNDER UNIFORM CIVIL PROCEDURE RULES AND PREDECESSORS – PLEADINGS – STATEMENT OF CLAIM – where there is an application to strike out parts of the statement of claim – whether the pleading is untenable – whether the pleading is properly particularised in accordance with r 155 Uniform Civil Procedure Rules 1999 (Qld) Trade Practices Act 1974 (Cth), s 52, s 87 Body Corporate and Community Management Act 1997 (Qld), s 212 Uniform Civil Procedure Rules 1999 (Qld), r 155 HTW Valuers (Central Qld) Pty Ltd v Astonland Pty Ltd (2004) 217 CLR 640, cited I & L Securities Pty Ltd v HTW Valuers (Brisbane) Pty Ltd (2002) 210 CLR 109, cited Marks & Ors v GIO Australia Holdings Ltd & Ors (1998) 196 CLR 494, cited Tenji & Anor v Henneberry & Associates Pty Ltd & Ors (2000) 98 FCR 324 at 333, applied |
COUNSEL: | D Pyle for the defendant M Evans for the second and third defendants by counterclaim |
SOLICITORS: | McCullough Robertson for the defendant Baxters Solicitors for the second and third defendants by counterclaim |
[1] In December 2006, the first plaintiffs contracted to buy from the defendant part of land which the defendant was to develop at Burleigh on the Gold Coast. The price was about $8.6 million. Settlement was to occur three weeks after notice of registration of a relevant plan of subdivision. In November 2008, the plaintiffs purported to terminate the contract upon grounds of a failure to comply with s 212(1) of the Body Corporate and Community Management Act 1997 (Qld) and a failure to construct the relevant premises as the contract required. The defendant (‘Australand’) said that the plaintiffs’ purported termination was a repudiation, upon which it then elected to terminate the contract. Australand says that the value of the land by that time was about $3.8 million.
[2] The plaintiffs’ claim against Australand was at first for declarations that they had validly terminated the contract and that they were entitled to the return or discharge of a bank guarantee which had been provided as the deposit. More recently, the plaintiffs have added claims under the Trade Practices Act 1974 (Cth). Their case is that Australand’s real estate agents engaged in conduct in contravention of s 52 of that Act, by which they were induced to enter into the contract. In particular, the agents are said to have made misrepresentations as to the likely income from the property. The plaintiffs claim damages pursuant to s 82 and an order to set aside the contract under s 87.
[3] Australand has joined the agents who are the second and third defendants added by counterclaim. Australand claims that if the plaintiffs are granted “the relief sought … under the TPA”, Australand will suffer loss and damage from the agents’ contravention of s 52, for which Australand ought to have relief under s 82 and s 87.
[4] It is Australand’s claim against the agents for damages which is the subject of this application. The agents apply to strike out that claim which is pleaded as follows:
“51.…
(a)the defendant will suffer loss and damage by the conduct of Mr Young, acting as the principal and sole director of Black & Young, which conduct contravened s.52 of the TPA.
Particulars
The amount of the loss will be calculated as follows:
(i)The difference between the amount of the price payable under the Contract and the true value of the Retail Lot as at either the date of the Contract, the date of termination (27 November 2008), the date of settlement or the present date on the basis that the first plaintiffs would have entered into the Contract had the Representations not been made;
Further Particulars
(A)In the event of the grant of relief sought by the plaintiffs under the TPA, the Court may find that the Representations were a cause of the decision by the first plaintiffs to enter into the Contract;
(B)The finding in (A) would not preclude a further finding, which the Court could make after hearing all the evidence, that the first plaintiffs would have entered into the Contract had the Representations not been made;
(C)The true value of the Retail Lot is a matter of expert opinion and an expert report will be provided;
(D)As at the date of the Contract, the true value of the Retail Lot was approximately $8.25 M;
(E)As at the date of termination and settlement, the true value of the Retail Lot was approximately $3.8 M;
(F)As at the present date, the true value of the Retail Lot is approximately $2.385 M.
(ii)alternatively to (i), the value of the lost opportunity to market and sell the Retail Lot at all material times between 21 December 2006 and 27 November 2008 less the true value of the Retail Lot as at 27 November 2008;
Further Particulars
(A)The true value of the Retail Lot is a matter of expert opinion and an expert report will be provided;
(B)As at 27 November 2008, the true value of the Retail Lot was approximately $3.8 M;
(C)The value of the lost opportunity is a matter of evidence including opinion evidence;
(D)The lost opportunity falls to be assessed against the background of the factual circumstances referred to in (E) to (H) below;
(E)As at the date of the Contract, the defendant had not yet placed the Retail Lot on the market;
(F)Despite the matter in (E), the opportunity to purchase the Retail Lot was generally known to property agents operating in the region;
(G)But for the Contract, the Retail Lot would have been formally placed on the market on or about July 2007 for a price equal to or exceeding the purchase price; and
(H)The Global Financial Crisis did not affect the retail property market on the Gold Coast until on or about September 2008.
(iii)the costs incurred by the defendant in relation to the Contract;
Further Particulars
(A)These costs are comprised of the legal costs incurred by the defendant in relation to the conveyance itself, including the legal costs incurred in the negotiation and preparation of the Contract.
(B)The defendant will provide further particulars of these costs in due course.”
[5] The claim in subparagraph 51(a)(i), as particularised, seems to be premised on the plaintiffs obtaining relief under s 87 to avoid the contract. In that event, Australand’s case is that it would be worse off by the difference between the contract price and the value of the property at alternative dates, being the date of the contract, the date of its termination, the date when settlement would have been due or the present date. That loss will be suffered “on the basis that the first plaintiffs would have entered into the Contract had the Representations not been made”.
[6] For the agents, it is submitted that this part of Australand’s case cannot succeed. It is argued that the contract would not be avoided by an order under s 87 absent a finding that the agents’ misconduct induced the plaintiffs to enter into the contract. Were that finding to be made, then the basis for this claim, which is that the plaintiffs would still have entered into the contract had the representations not been made, could not be established. In other words, Australand could not be awarded damages for the loss of its contract with the plaintiffs, because absent the contravention of s 52 by the agents, there would have been no such contract.
[7] Section 87 permits orders to be made for the purpose of compensating for the loss or damage caused by a contravention or for preventing or reducing that loss or damage. To obtain the relief which is sought under s 87, the plaintiffs must prove that if they are bound to perform the contract, they have suffered a loss by reason of the contravention of s 52. The plaintiffs’ case is that they are worse off because they made this contract. They do not plead, for example, that they are worse off because they would still have agreed to buy the land, but at a lower price.
[8] As French J (as he then was) said in Tenji & Anor v Henneberry & Associates Pty Ltd & Ors:
“Loss or potential loss causally linked to contravention conditions the exercise of the remedial powers under s 87 and their exercise must be directed to compensate for that loss.”[1]
Although avoidance under s 87 may serve several purposes, it must serve a compensatory purpose.[2] In the present case, that compensatory purpose would have to be in respect of the loss or damage which is the consequence of the alleged contravention, which upon the plaintiffs’ case, is their loss or damage from entering into the contract. To establish that they have suffered or will suffer loss or damage of that kind, the plaintiffs would have to establish the agents’ contravention of s 52 was at least a cause of the contract. The plaintiffs could not succeed absent a finding that but for the agents’ contravention, this contract would not have been made.
[9] Counsel for Australand emphasised that the agents’ contravention need not be the cause of the alleged loss or damage but may be a cause, in the sense of a material contribution to that loss.[3] He also cited authority to the effect that a “but for” test may be helpful but is not an exclusive test of causation.[4] Nevertheless, the plaintiffs’ case will require a comparison to be made between the position in which the plaintiffs find themselves (if otherwise bound to perform the contract) and the position in which they would have been but for the contravening conduct.[5] That comparison, according to the plaintiffs’ case, is between being bound by this contract and not being bound at all. It is upon the premise of that case succeeding that Australand makes this counterclaim against the agents. Upon that premise, this first part of Australand’s case against the agents cannot succeed. That premise is the contrary of what Australand pleads, which is that the plaintiffs would still have entered into the contract had the contravention not occurred. The submission for the agents must therefore be upheld. The case within paragraph 51(a)(i) should be struck out.
[10] The case in subparagraph 51(a)(ii) does not have the same flaw. In essence, the intended case here is that Australand was worse off by the agents’ contravention, because Australand made a contract which was susceptible to being avoided under s 87, whereas but for the contravention, it would have been able to make another contract (with another buyer) at a price higher than the value of the land by November 2008. Put another way, Australand lost the value of an enforceable contract at the higher prices prevailing in the market in 2006. Counsel for the agents concedes that such a case, if properly pleaded, would not be struck out. But he points to a number of deficiencies in the form of subparagraph (a)(ii). Firstly, it is said to be ambiguous by its use of the term “true value”. I do not accept that submission. The pleader has used the term “true value” in the sense described in HTW Valuers (Central Qld) Pty Ltd v Astonland Pty Ltd.[6] But the pleading is deficient because it does not quantify the loss or damage, as is required by r 155(1) of the Uniform Civil Procedure Rules 1999 (Qld). Australand’s case cannot be left simply upon the basis that “the true value … is a matter of expert opinion and an expert report will be provided”. Rather, the true value is a fact which should be pleaded. It is in the proof of that fact that expert opinion will be relevant.
[11] Subparagraph 51(a)(iii) is also an unquantified claim for damages. But on the eve of the hearing of this application, the solicitors for Australand particularised the claim, by saying that the costs amounted to $49,124.35. Nevertheless, Australand should further particularise its case. The agents are entitled to know how that sum has been calculated.
[12] The outcome is that the pleading in subparagraph (a)(i) is untenable, that in (a)(ii) is unparticularised and that in (a)(iii) requires further particulars. It will be ordered that paragraph 51(a) of the counterclaim, filed on 12 July 2011, be struck out. Australand will have liberty to replead in accordance with these reasons.