Galafassi v Kelly [2014] NSWCA 190

Court of Appeal Supreme Court New South Wales Medium Neutral Citation: Galafassi v Kelly [2014] NSWCA 190 Hearing dates: 10 - 11 March 2014 Decision date: 13 June 2014 Before: Bathurst CJ at [1]; Ward JA at [4]; Gleeson JA at [5] Decision: 1.Appeal allowed in part.

2.Set aside order 1 made by the primary judge on 31 May 2013.

3.In lieu thereof, judgment for the plaintiff against the defendants in the sum of $602,500.82.

4.Liberty to apply in respect of the calculation in [203] above.

5.In default of agreement as to costs or any further orders consistent with these reasons for judgment, direct:

(a)the appellants to file and serve within 14 days their proposed short minutes of order, together with brief written submissions in support;

(b)the respondent to file and serve within a further 14 days her proposed short minutes of order, together with brief written submissions in support.

[Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.] Catchwords: CONTRACTS - general contractual principles - repudiation and non-performance - renunciation - where purchasers evinced an intention no longer to be bound by the contract and where purchasers declared that they were unwilling and unable to perform their contractual obligations - continuing representation of financial incapacity - whether purchasers wholly and finally disabled from performing the essential terms of the contract altogether - continuing repudiation by the purchasers - vendor entitled to terminate CONTRACTS - general contractual principles - repudiation and non-performance - election - whether by commencing proceedings for specific performance and later filing a statement of claim the vendor elected to affirm the contract - whether vendor therefore precluded from terminating based on prior repudiation by the purchasers - vendor not precluded where after the commencement of proceedings the purchaser commits a breach of an essential term or otherwise evinces an intention to no longer be bound by the contract - purchasers' unretracted declarations of inability and unwillingness to perform remained as a fact in the history of the matter and gave an unmistakeable colour to their continued inactivity and entitled the vendor to terminate CONTRACTS - general contractual principles - remedies for breach - loss on resale - measure of damages - claim made under cl 9.3.1 of standard contract is one for liquidated damages - availability of special condition interest and land tax for late completion when completion does not occur - damages to be assessed based on the price of the first contract if it had been completed according to its terms - payments contingent upon completion unable to be included as part of the price of the first contract - whether land tax otherwise able to be included as a reasonable expense arising out of the purchaser's non-compliance with the contract CONVEYANCING - breach of contract for sale and remedies - vendor's remedies - whether notice to complete required before vendor can terminate if purchaser has indicated it is unwilling and unable to complete - notice to complete not required where the conduct of the purchaser amounts to repudiation CONVEYANCING - breach of contract for sale and remedies - vendor's remedies - resale - duty of vendor - mitigation - extent of vendor's obligation to act reasonably so as to mitigate loss on resale - whether trial judge erred in his approach to the question of mitigation EVIDENCE - facts excluded from proof - on grounds of public policy - settlement negotiations and offers - Evidence Act 1995 s 131 - whether communications in emails were made in connection with an attempt to negotiate the settlement of the dispute - whether communications were permissible within the exceptions in Evidence Act 1995 s131(2)(g) or 131(2)(i) Legislation Cited: Evidence Act 1995 (NSW) s 131 Supreme Court Act 1970 (NSW) s 68 Cases Cited: Advanced Commercial Finance Ltd v Aarons (1996) 7 BPR 14,523 Agricultural and Rural Finance Pty Ltd v Gardiner [2008] HCA 57; 238 CLR 570 Almond Investors Ltd v Kualitree Nursery Pty Ltd [2011] NSWCA 198 Angus v Kinraid [1988] ANZ ConvR 129 Apotex Pty Ltd v Les Laboratoires Servier (No 5) [2011] FCA 1282 Atlas Financial International Ltd v Nortbale Pty Ltd [2011] NSWSC 815 Barrett Property Group Pty Ltd v Dennis Family Homes Pty Ltd (No 2) [2011] FCA 276; 193 FCR 479 Baxter v Obacelo Pty Ltd [2001] HCA 66; 205 CLR 635 Brown v Commissioner of Taxation (2001) 187 ALR 714 Buchanan v Dunstan [2007] NSWSC 248; 13 BPR 24, 521 Bydand Holdings Pty Ltd v Pineland Property Holdings Pty Ltd [2009] NSWSC 1159 Carpenter v McGrath (1996) 40 NSWLR 39 Carr v J A Berriman Pty Ltd [1953] HCA 31; 89 CLR 327 Champtaloup v Thomas [1976] 2 NSWLR 264 Ciavarella v Balmer [1983] 2 NSWLR 439 Ciavarella v Balmer [1983] HCA 26; 153 CLR 438 Coshott v Burke [2013] FCA 513 Field v Commissioner for Railways (NSW) [1957] HCA 92; 99 CLR 285 Foran v Wight [1989] HCA 51; 168 CLR 385 Georgiou v Sindel [1982] 1 NSWLR 435 Glass v Demarco [1999] FCA 482 Gold Coast Oil Co Pty Ltd v Lee Properties Pty Ltd [1985] 1 Qd R 416 GPI Leisure Corporation Ltd (in Liq) v Yuill (1997) 42 NSWLR 225 Hansmar Investments Pty Ltd v Perpetual Trustee Co Ltd [2007] NSWSC 103; 61 ACSR 321 Hearse v Pallister [2008] NSWSC 504 Highmist Pty Ltd v Tricare Ltd [2005] QCA 357 Holland v Wiltshire [1954] HCA 42; 90 CLR 409 Hoskins v Rule [1952] NZLR 827 Immer (No 145) Pty Ltd v The Uniting Church in Australia Property Trust (NSW) [1993] HCA 27; 182 CLR 26 J Boag & Son Brewing Ltd v Bridon Investments Pty Ltd (2001) 10 TAS R 26 Jampco Pty Ltd v Cameron (No 2) (1985) 3 NSWLR 391 Johnson v Agnew [1980] AC 367 Johnson v Perez [1988] HCA 64; 166 CLR 351 K&K Real Estate Pty Ltd v Adellos Pty Ltd [2010] NSWCA 302 Karacominakis v Big Country Developments Pty Ltd & Ors [2000] NSWCA 313 Kelly v Galafassi [2013] NSWSC 680 Koompahtoo Local Aboriginal Land Council v Sanpine Pty Ltd [2007] HCA 61; 233 CLR 115 Korean Airlines Co Ltd v Australian Competition and Consumer Commission (No 3) [2008] FCA 701 Laurinda Pty Ltd v Capalaba Park Shopping Centre Pty Ltd [1989] HCA 23; 166 CLR 623 Liu v Fairfax Media Publications Pty Ltd [2012] NSWSC 1352 McDonald v Dennys Lascelles Ltd [1933] HCA 25; 48 CLR 457 McFadden v Snow (1952) 69 WN (NSW) 8 Michael Realty Pty Ltd v Carr [1977] 1 NSWLR 553 Mulkearns v Chandos Developments Pty Ltd (No 4) [2005] NSWSC 511 Nader v Sutherland Shire Council [2008] NSWCA 265 Ogle v Comboyuro Investments Pty Ltd [1976] HCA 21; 136 CLR 444 Palasty v Parlby [2007] NSWCA 345 Payne v Rowe [2012] NSWSC 685 Pihiga Pty Ltd v Roche [2011] FCA 240; 278 ALR 209 Proctor v Chahl [2008] NSWSC 1252 Rawson v Hobbs [1961] HCA 72; 107 CLR 466 Rian Financial Services Pty Ltd v Alfred Investment Projects Pty Ltd (1988) 90 FLR 215 Rossco Developments Pty Ltd v O'Halloran (1980) 29 ACTR 1 Rothenberger Australia Pty Ltd v Poulsen [2003] NSWSC 788; 58 NSWLR 288 Safehaven Investments Inc v Springbok Limited (1996) 71 P & CR 59 Sargent v ASL Developments Ltd [1974] HCA 40; 131 CLR 634 Seven Network Ltd v News Ltd [2006] FCA 343 Shevill v Builders Licensing Board [1982] HCA 47; 149 CLR 620 Silver Fox Co Pty Ltd v Lenard's Pty Ltd (No 3) (2004) 214 ALR 621 Sunbird Plaza Pty Ltd v Maloney [1988] HCA 11; 166 CLR 245 Taylor v Raglan Developments Pty Ltd [1981] 2 NSWLR 117 Tenstat Pty Ltd v Permanent Trustee Australia Ltd (1992) 28 NSWLR 625 Tiplady v Gold Coast Carlton Pty Ltd (1984) 54 ALR 337 Tropical Traders Ltd v Goonan (1964) 111 CLR 41 United Australia Ltd v Barclays Bank Ltd [1941] AC 1 Universal Cargo Carriers Corporation v Citati [1957] 2 QB 401 Zografakis v McCarthy [2007] NSWSC 144 Texts Cited: H McGregor, McGregor on Damages (18th ed, 2009, Sweet & Maxwell)