Singh v Lugondela [2020] VSC 544

Facts

The Plaintiff (Singh) was the purchaser under a contract of sale dated 18 March 2017 (Contract) under which the Defendant (Lugondela) agreed to sell to Singh the property at 71 Damask Drive, Tarneit, Victoria (Property).  The purchase price for the Property was $473,000 payable by a deposit of 5% ($23,650), which was paid, with the residue ($449,350 plus or minus adjustments) payable at settlement on 18 April 2017 (Settlement Date).

The registered proprietor of the Property, at all relevant times, was Mwamba Kande (Kande), the ex-husband of Lugondela.  Kande also had a mortgage over the Property to ANZ Bank.  Due to advice and representations made to her by third parties to the proceeding, namely the conveyancer acting on her behalf, Lugondela believed that she was able to sell the Property. 

On a date prior to the date of the Contract, Mwamba Kande signed a blank Transfer of Land.  Lugondela gave evidence that the real estate agent who assisted her to purchase the Property informed her that she was not on the title of the Property or a party to the mortgage.  Lugondela was told that she could arrange to transfer the Property into her name.  She was given several documents, including a Transfer of Land document, which her ex-husband had already signed. Lugondela signed the Transfer of Land as transferee believing that it would be lodged.  This did not occur. 

Proceeding

Lugondela failed to complete the Contract on the Settlement Date.  On 11 December 2017 Singh issued proceedings in the Supreme Court of Victoria seeking specific performance or damages for breach of contract—including legal costs, finance costs, lost value and lost amenity.  On 12 April 2019, judgment was entered for Singh against Lugondela for damages for breach of contract in a sum to be assessed pursuant to order 51 of the Supreme Court (General Civil Procedure) Rules 2015.  It was not until 4 August 2020 that the assessment of damages hearing occurred.  Given the delay between the commencement of the proceeding and the assessment of damages hearing, a significant question to be determined was at what date the assessment was to take place—the date of breach or another date.  It was Singh’s position that the date of election not to pursue specific performance effectively crystalised the breach and the Contract was, up until that date, still on foot.  It was Lugondela’s (and the third parties’) position that the date of breach, being the date of the failed settlement, was the date by which damages were to be assessed.  In support of their position, Lugondela (and the third parties) relied on Johnson v Perez[1]

In Johnson v Perez, Mason CJ, after referring to the guiding principle in the assessment of damages being compensatory, stated the general principle in this way:[2]

There is a general rule that damages for torts or breach of contract are assessed as at the date of breach or when the cause of action arises. But this rule is not universal; it must give way in particular cases to solutions best adapted to giving an injured plaintiff that amount in damages which will most fairly compensate him for the wrong he has suffered….

The general rule that damages are assessed as at the date of breach or when the cause of action arose has been applied more uniformly in contract than in tort and for good reason. But even in contract cases courts depart from the general rule whenever it is necessary to do so in the interests of justice. …

In considering the effect of Johnson v Perez, Derham AsJ determined that, properly advised, Singh should have proceeded for damages for breach much earlier than he did, being a reasonable time after being informed on 10 November 2017 that the ANZ Bank would not discharge the mortgage without authority from Kande.  His Honour determined it appropriate to allow a month after that time as a reasonable time to obtain advice, carry out any further investigations and enquiries and make a decision.  Indeed, it was a little over a month later that Singh commenced the proceeding.

His Honour determined that the date of breach of the Contract was 15 October 2017.   Notwithstanding this, his Honour considered it appropriate to calculate Singh’s loss of value at a later date—being the time when Singh should have elected to claim damages and proceeded to find another investment property so as to mitigate his loss and damage.  His Honour determined that this case was one that required a solution best adapted to giving  Singh damages that would most fairly compensate him for the wrong he suffered and where the interests of justice call for it.  His Honour therefore determined that the appropriate time should be a month after the letter of 10 November 2017, being 10 December 2017. 

Orders were made in favour of Singh by way of damages, comprising $24,870.88 for lost value, $1,500 for additional finance costs and $5,000 for legal costs thrown away, making a total of $31,370.88, plus interest pursuant to s 60 of the Supreme Court Act 1986 (Vic).

Derham AsJ has subsequently published the costs judgment in this proceeding—Singh v Lugondela (Costs) [2020] VSC 799.

[1] Johnson v Perez (1988) 166 CLR 351 (“Johnson v Perez”)

[2] Johnson v Perez at 355–6 (citations omitted).

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