Bradshaw v Henderson & Anor [2009] QDC 14

DISTRICT COURT OF QUEENSLAND CITATION: Bradshaw v Henderson & Anor [2009] QDC 14 PARTIES: GARY EDWARD BRADSHAW Plaintiff V CYNTHIA HENDERSON First Defendant And WALTER KIM WINSTANLEY Second Defendant FILE NO/S: 2005 of 2008 DIVISION: Civil PROCEEDING: Claim ORIGINATING COURT: District Court of Queensland, at Brisbane DELIVERED ON: 5 February 2009 DELIVERED AT: Brisbane HEARING DATE: 24, 25 September 2008; written submissions received up to and including 6 November 2008 JUDGE: Alan Wilson SC, DCJ ORDER: Judgment for the plaintiff against the second defendant for $14000 for claim and $6800 for interest CATCHWORDS: CONTRACT – BREACH OF CONTRACT – REPUDIATION – WRONGFUL RECISSION – whether specific performance should be granted – discretion – damages Property Law Act 1974, ss 10, 11 and 59 Cases considered: ASA Constructions Pty Ltd v Iwanov & Ors (1975) 1 NSWLR 512 Dinan v Harper [1922] VLR 49 Dowsett v Reid (1912) 15 CLR 695 Hawkins v Price [1947] Ch 645 Lamshed v Lamshed (1963) 109 CLR 440 Masters v Cameron (1954) 91 CLR 353 Moffatt Property Development Group Pty Ltd v Hebron Park -- 1 of 9 -- 2 Pty Ltd [2008] QSC 177 Patel v Ali (1984) 1 Ch 283 The Railway Commissioners for New South Wales v Orton & Knight (1922) 30 CLR 422 Wroth v Tyler (1974) Ch 30 COUNSEL: D Kelly for Plaintiff C K Copley for First Defendant Second Defendant appeared on own behalf SOLICITORS: Biggs Fitzgerald Pike Caboolture Legal Centre Second Defendant self-represented [1] Berths for boats at marinas are valuable commodities, and there is a market for them. This action concerns a failed attempt by Mr Bradshaw to purchase one owned by Mr Winstanley in 2003 at Scarborough Marina. Responding to an advertisement he saw at the marina, Mr Bradshaw contacted Ms Henderson (whose phone number appeared in the advertisement, and who believed herself to be authorised by Mr Winstanley to act as his agent) and after some negotiations with her they agreed on a purchase price of $30,000 and he payed her a deposit of $1000. [2] Mr Bradshaw never met or spoke to Mr Winstanley and his only subsequent dealings about the purchase were with Ms Henderson. Despite those dealings the matter never really progressed and in April 2003 Ms Henderson wrote Mr Bradshaw a letter returning the deposit, and saying the sale to him would not proceed. [3] Mr Bradshaw says that at the time he still had an enforceable contract with Mr Winstanley (or Ms Henderson) and seeks an order that Mr Winstanley transfer the berth to him, or that one of them pay him damages. [4] Ms Henderson and Mr Winstanley lived together for many years as de facto partners but separated in early 2003. She says that in the course of dividing their joint property and dealing with some pressing financial problems they had at the time, she was authorised by Mr Winstanley to advertise the berth for sale and act as his agent. Acting on that authority, she says, she put up the advertisement at the Marina, and dealt with Mr Bradshaw. [5] Mr Winstanley denies he ever authorised her to do any of that – while agreeing that during his relationship of 20 years with Ms Henderson she always looked after their financial affairs, and that they did have financial pressures at the time. [6] The evidence about their long-standing relationship is uncontroversial, as are the facts that by January 2003 Ms Henderson was unemployed and, while Mr Winstanley had work, his annual income of about $30,000 net was nowhere near sufficient to meet their outgoings of $8,000 per month. It was in those circumstances, Ms Henderson says, that she and Mr Winstanley agreed that they would, in fact, put three assets up for sale – the marina berth, her Maverick motor vehicle, and a Commodore station-wagon used by Mr Winstanley. [7] There were sound practical reasons for selling the berth, Ms Henderson says, because it was not being used by them, and the large boat owned by Mr Winstanley was actually moored near the residence in which she was living at Southern Cross -- 2 of 9 -- 3 Drive, Scarborough. She also says Mr Winstanley was keen to take the boat out of the water and move it to the house in which he was living, at Dakabin, and re-fit it. [8] Mr Winstanley’s denials that he authorised Ms Henderson to take steps to sell the marina berth, based in part on what he said was the absence of any practical need to do so, were unpersuasive and I prefer her evidence which, in the prevailing circumstances, is much more plausible. He agreed that the berth was a ‘common family asset’ 1 and that it was Ms Henderson who traditionally managed their financial affairs2 ; and he also admitted that the marina berth, the Maverick and the Commodore were mentioned in discussions as ‘candidates for liquidation’. Against that background, the actual sale of the Maverick vehicle is tangible corroboration of her version. The fact Mr Winstanley’s boat was not being stored in the marina berth and he had plans to refit it elsewhere is additional, circumstantial corroboration. [9] I also found Ms Henderson a more impressive, and apparently credible, witness. She gave a direct and forthright account of the financial problems which led up to the attempted sale of the berth, much more so than Mr Winstanley, whose admission that she managed the finances gave his protests about the absence of any need to sell assets an air of unreality. [10] I am, for these reasons, satisfied that when Ms Henderson put up an advertisement for the berth at the Marina and when she dealt with Mr Bradshaw she did so as Mr Winstanley’s agent, clothed with all necessary authority from him. [11] The next question touching the credit of the parties is whether Mr Bradshaw knew that Ms Henderson was only the agent for the actual owner of the berth. He said he presumed she was the actual owner, and did not know of Mr Winstanley’s ownership (or existence) until after the transaction fell over. Again, however, Ms Henderson’s evidence was more persuasive. These events happened, now, some years ago but Ms Henderson’s demeanour including, in particular, the clarity of her evidence suggested her recollection was more likely to be right. [12] Mr Bradshaw frankly admitted his memory for some relevant events had faded3 . His evidence on the question of ownership was unclear, and unpersuasive. The advertisement he saw at the marina which lead him to ring Ms Henderson bore two names and telephone numbers. He agreed that when he first spoke to Ms Henderson and put an offer to her she said she would have to call him back, but that he ‘… didn’t take anything from it’4 . That is surprising, and inherently implausible in light of the contents of the advertisement, and the fact that his offer was less than the advertised price (of $31,000), and Ms Henderson apparently could not give him an immediate response. [13] Other aspects of his evidence were similarly less than persuasive. Ms Henderson says she told him quite early in their dealings that Mr Winstanley owned the berth and that he and Mr Bradshaw would need to arrange to go to the marina and sign necessary paperwork, and gave him Mr Winstanley’s telephone number. Mr Bradshaw claimed that it was not until about 1 April 2003 (and for the first time) Ms Henderson gave him another telephone number and asked him to call it and that 1 T2–38.54. 2 T2–41.24, and 37; T2-39.33 – T2-40.48. 3 T1-59.1-12. 4 T1-49.40. -- 3 of 9 -- 4 he ‘… probably should have asked the question why I was ringing this other number’ 5 . If true, the oversight is puzzling: for what possible purpose would this have occurred, save that the person at ‘this other number’ had an interest in the matter? Mr Bradshaw is, the evidence showed, an experienced businessperson; his claimed lack of interest in this otherwise curious course of events is inexplicable and, for that reason, inherently implausible. [14] Mr Bradshaw also agreed that Ms Henderson told him that ‘… the marina (would) handle the paperwork’6, but then said that there was in fact no discussion about who would prepare it, and he presumed it would be the first defendant7 . Again, the inconsistency in this evidence undermines its credibility. [15] That said, Mr Bradshaw generally presented as a witness striving to be truthful but suffering a generally poor memory for these events. The compelling conclusion is that he simply failed to focus on these things at the time and, in particular, pay attention to what Ms Henderson told him. [16] The other area in which credit is a relevant issue concerns the delay between January 2003, when Mr Bradshaw paid the deposit, and April when Ms Henderson sent it back and purported to bring the transaction to an end. That delay, it is claimed, was Mr Bradshaw’s fault because he simply failed to nominate a date for settlement, or complete – with the legal consequence, it is said, that this failure amounted to a repudiation of the contract entitling Ms Henderson (whether acting for herself or as Mr Winstanley’s agent) to lawfully rescind. [17] Evidence from Mr Bradshaw which I do accept shows, however, that he was not an anxious buyer. As he said without contradiction, his boat was located in a rented berth in another marina in January and his right to moor there did not expire until May8 . After paying the deposit and learning that things would have to happen at the marina about the transfer of Mr Winstanley’s berth he was, as he said and I also accept, in ‘waiting mode’ to be told to go to the marina to complete the transaction.9 [18] Nor did he have, in those circumstances, any need or cause to nominate a date for settlement. It was not inimical to the terms of the contract that he should wait for the vendor to tell him arrangements had been put in place to finalise the transaction. The uncontroverted evidence that Mr Bradshaw purchased and settled upon another berth in another marina by August 2003 shows, too, that he was always capable of settling, as he claimed. [19] This analysis of the conflicts in the evidence indicates the following is a plausible summary of what actually occurred: that in January 2003 Ms Henderson, with Mr Winstanley’s authority, placed an advertisement (Exhibit 11) for the K12 berth at the marina for a sale price of $31,000. It invited potential purchasers to contact ‘Cindy or Kim’ and listed two phone numbers. In early January 2003 Mr Bradshaw telephoned Ms Henderson and made an offer of $30,000. She told him she would have to get back to him and, shortly afterwards, did so and accepted the offer. He then went to her home and gave her a cheque for $1,000 and received a receipt for 5 T1-55.46-47. 6 T1-55.18. 7 T1-56.17-19. 8 T1-36.59. 9 T1-56.37-8. -- 4 of 9 -- 5 ‘Deposit on marina berth K12, Scarborough Marina. Balance due - $29,000’ (Exhibit 13). [20] Thereafter, as Ms Henderson said, she made some enquiries at the marina and discovered the parties to the sale would have to attend there and execute documents, and told Mr Bradshaw that, and provided him with Mr Winstanley’s number for that purpose. [21] Later, Mr Bradshaw came to her home and said there was no answer on the mobile telephone number she had provided. In the period up to April there was no actual contact between Mr Bradshaw and Mr Winstanley despite, I am satisfied, attempts by the former to ring, which Mr Winstanley simply ignored. Finally in April Mr Winstanley, who for his own reasons was always a reluctant vendor of the berth, said to Ms Henderson: ‘This is ridiculous. Knock this on the head. You’re not trying to fucking sell this anymore. Let it go. Send him his money back.’ [22] She then typed out a letter to Mr Bradshaw dated 21 April 2003 (exhibit 14) which says: Please find attached a cheque for $1,000, being the return of deposit for a marina berth at the Scarborough Marina. The sale of the berth cannot be completed, as the owner is unavailable and I have been informed that I cannot act as agent. [23] The terms of this letter are untrue. Mr Winstanley was not ‘unavailable’ – rather, as Ms Henderson agreed, he was simply unavailable to Mr Bradshaw10 . Its contents also provide, however, further tacit corroboration for some of the factual conclusions reached earlier: that Mr Winstanley had passively delayed (and ultimately moved to thwart) the sale by simply ignoring Mr Bradshaw’s calls (i.e., by being ‘unavailable’); and, that Mr Winstanley had in truth authorised Ms Henderson to act as his agent in the sale. [24] If, in fact, Mr Winstanley (or Ms Henderson) had determined to end the contract because Mr Bradshaw had been unreasonably delaying settlement, there is simply no reason the letter could not have said that. [25] (Additional corroboration for this construction of the events appears in Mr Winstanley’s evidence. He agreed that Ms Henderson told him she had received a deposit of $1,000 and spoken to a Mr Mira at the yacht club about what was required to transfer the lease, and that he would have to attend there and sign the transfer.11 He also agreed that Ms Henderson told him in April 2003 that Mr Bradshaw had come to her house because he wished to finalise the transaction and said he told her, then, to ‘ … refund the money’ and that ‘I was not interested in selling my berth’12 .) [26] Mr Bradshaw was, then, at all times after January a willing but not anxious buyer whose interest in the purchase had been properly vouched by the payment of a deposit. His failure to press for settlement earlier than April cannot properly be characterised as a loss of interest – or a repudiation of the contract – on his part. 10 T2-21.57-58. 11 T2-36.44-57. 12 T2-37.7-11. -- 5 of 9 -- 6 [27] Ms Henderson’s primary defence to Mr Bradshaw’s action is that she was nothing more than Mr Winstanley’s agent. Interestingly, in submissions delivered after the trial, Mr Bradshaw’s legal representative accepts this13 . The admission carries at least a tacit acceptance that Mr Bradshaw’s evidence that he did not know Mr Winstanley was in fact the owner until after April 2003 was unconvincing. [28] In any event I am, for the reasons given earlier, persuaded that Ms Henderson’s evidence about her agency is correct. The effect of the finding is that she avoids any liability to Mr Bradshaw arising as a consequence of the contract14 . [29] Counsel for Ms Henderson raised, as a second line of defence for her, various other arguments. The first involves an assertion that because the marina berth was an ‘interest in land’ the contract had to be in writing, and evidenced by a sufficient note or memorandum: Property Law Act 1974, ss 10, 11 and 59. It is unnecessary to decide whether or not the sub-lease for the berth held by Mr Winstanley, and the subject of the proposed contract, was or was not an ‘interest in land’. Here, the contract was evidenced in a written form in Mr Bradshaw’s cheque, and the receipt provided by Ms Henderson – and, if further proof is necessary, her letter of 21 April 2003: Hawkins v Price [1947] Ch 645, and Dinan v Harper [1922] VLR 49. [30] Secondly, it is argued that the contract was incomplete (and therefore unenforceable) because additional documents – the assignment of the sub-lease – had to be prepared, and executed by the contracting parties. As the evidence of the parties (and Mr Mira, who runs the marina) showed, however, no other formal step was necessary to effect the sale but to request the marina to produce the documents necessary to effect the transfer. [31] The question whether parties intend to be bound by a particular document or form of agreement is a question of fact in each particular case15 . In Masters v Cameron (1954) 91 CLR 353 the High Court discussed (at 360-361) the three categories of circumstances typically arising where something further has to be done to finalise contractual arrangements. In the first, the parties have reached finality in arranging the terms of their bargain and intend to be bound by it, but also propose to have the terms restated in a form which will be fuller or more precise, but of no different effect. In the second the parties have agreed upon all necessary terms, but have made performance of one or more of them conditional upon the execution of a formal document. The third reflects an intention not to make a concluded bargain unless and until a formal contract is executed. [32] Here, the terms of the contract were certain as to the property to be sold, the price to be paid, and the contracting parties. No other terms were necessary and the parties clearly regarded themselves as bound, subject to the additional mechanical step of arranging for and executing the documents at the marina. This is a case which, then, falls within the second category: a contract binding the parties to join in bringing the formal documents into existence, and then carry their contract to 13 Written submissions of the plaintiff’s Counsel delivered 15 October 2008, paras 21 and 22. 14 The Railway Commissioners for New South Wales v Orton & Knight (1922) 30 CLR 422. 15 Moffatt Property Development Group Pty Ltd v Hebron Park Pty Ltd [2008] QSC 177 per Chesterman J at p 7. -- 6 of 9 -- 7 execution16 . In other words, the parties here plainly intended to be bound forthwith, even though there was some further formality to be fulfilled.17 [33] Earlier I reviewed the circumstances alleged, on Ms Henderson’s part, to constitute repudiation by Mr Bradshaw – namely, his failure to nominate a time for settlement and what was said to be his delay in pursuing completion. Once it is accepted that Mr Bradshaw was not personally anxious (but always ready, willing and able) to finalise the transaction and that nothing was done by Ms Henderson (or Mr Winstanley) to arrange for the preparation of the assignment of Mr Winstanley’s sub-lease and, also, that Mr Winstanley (and Ms Henderson) both refrained from pursuing the matter, and the former did not respond to Mr Bradshaw’s telephone calls, it cannot be said that his conduct caused the delay or that he evinced any intention not to be bound by the contract, or belief that he no longer regarded it as being on foot. [34] The next question is whether or not Mr Bradshaw is now, over five years later, entitled to have the contract completed by Mr Winstanley, and on the original terms. In the alternative he seeks damages about which he called uncontradicted evidence from a valuer who said the berth is now worth $110,500 – some $80,500 more than the price these parties negotiated in 2003. [35] Specific performance is a discretionary remedy18 and will not necessarily be granted if, in the prevailing circumstances, it would be inappropriate. Two factors touch the question whether it is the proper relief here – delay, and the prospect of hardship to Mr Winstanley if he is forced to perform a contract for an asset which, according to the valuer, has now more than trebled in value. [36] There was no explanation why so much time has passed between these events in early 2003, and the trial. Delay on the part of a plaintiff who seeks specific performance is a factor material to the discretion, although it will not usually tell against a plaintiff unless it is accompanied by some actual prejudice to the defendant, or a conclusion that the plaintiff should be regarded as having abandoned his rights: Lamshed v Lamshed (1963) 109 CLR 440, per Kitto J at 453. [37] As Kitto J also observed, there may be prejudice to a defendant even if proceedings for specific performance have been promptly commenced, but are not determined for a long time, because the defendant simply does not know, during that period of delay, whether or not he is free to sell his property. His Honour went on to say (at 454-455) that prejudice could arise merely by reason of the state of uncertainty induced in the defendant by that kind of delay. [38] Materially, at the conclusion of the trial Mr Bradshaw sought (and Mr Winstanley willingly provided) an undertaking that the berth would not be sold pending judgment, but the clear inference is that nothing of that kind had been pursued earlier – an absence also likely, it might be thought, to add to Mr Winstanley’s uncertainty about the nature of his interest in the berth for a period of over five years. 16 Moffatt Property Development Group Pty Ltd v Hebron Park Pty Ltd (supra) at pp 12-13. 17 Moffatt Properties (supra) at para [52]; Pagnan SPA v Feed Products Ltd (1997) 2 Ll LR 601, per Lloyd LJ at 619. 18 Dowsett v Reid (1912) 15 CLR 695 per Griffith CJ at 705-6. -- 7 of 9 -- 8 [39] Some cases involve examples of extreme hardship – for example, Patel v Ali (1984) 1 Ch 283 in which there had been unforeseen and very unhappy changes in the defendant’s circumstances within the period of four years and eight months after her failure to complete a contract for the sale of a house. They included a very serious illness involving the amputation of a leg, and dependence upon assistance from family and friends living in the neighbourhood of the house contracted to be sold. [40] While the prejudice here is plainly at a much lower level, Mr Winstanley has suffered the obvious disadvantages caused by delay which have already been discussed and, in practical terms, the potential loss of, comparatively, a large increase in the value of his asset. Mr Bradshaw was not initially anxious to complete and he was able, promptly, to remedy any inconvenience to himself by purchasing a berth in another marina. The actual damages to which Mr Bradshaw would normally be entitled absent any other remedy are not, for reasons which follow, anywhere near so large as $80,500 – but that would be the order of Mr Winstanley’s loss if he is forced to complete. All this points to measurable prejudice if specific performance is ordered. Against that, I am unpersuaded that there is any ‘balancing’ hardship for Mr Bradshaw if he does not get possession of this particular berth. [41] These elements dictate that the discretion to order specific performance should not be exercised here. The next question is whether Mr Bradshaw should, in lieu, receive damages and if so how much. [42] The right to damages is not, ordinarily, defeated by delay and as a general rule they will be measured at the date upon which specific performance was refused, so as to place the plaintiff in as good a position as he would have been if the contract had been carried out or if specific performance had been granted: Wroth v Tyler (1974) Ch 30. [43] As Needham J pointed out, however, in ASA Constructions Pty Ltd v Iwanov & Ors (1975) 1 NSWLR 512 circumstances can arise in which it would be unjust to apply that principle, or in which the party seeking relief has not shown the application of it would work justice, rather than injustice. Here, the combined factors of the long delay, Mr Bradshaw’s prompt purchase of another berth elsewhere, and the dramatic increase in value during the period of delay all tell against its application here, and that to do so would in truth work an injustice. The compelling conclusion is that, rather, justice is served if the proper date for assessing damages is taken as the date Ms Henderson, on Mr Winstanley’s behalf and at his instruction, repudiated the contract by purporting to rescind it (the letter of 21 April 2003). [44] Although Mr Bradshaw claimed that K12 had special qualities making it ideal for his boat, evidence from Mr Mira was persuasive that other berths in the ‘K finger’ of the marina were both suitable, and available for sale in the months after March 2003. Additionally, Mr Bradshaw said he could have paid $50,000 for a berth and that he did not look at purchasing another berth in the Scarborough Marina after April 2003 despite knowing how to enquire about those which might be for sale. He said his reason for that failure was because prices had gone up but that is not consistent with his apparent capacity to pay, and evidence of actual prices at the time. -- 8 of 9 -- 9 [45] I am satisfied the plaintiff could have satisfactorily mitigated his loss at the time by purchasing another berth in the K finger at Scarborough. Exhibit 8 shows that berths K25, K26, K28 and K31 were sold between June and September 2003 for an average price of about $44,000. [46] These elements compel the conclusion that the proper measure of damages is the difference between the average price, at the time, of another suitable berth on the K finger of $44,000, and the price of $30,000 for which he contracted to buy Mr Winstanley’s berth – i.e. $14,000. [47] As to interest, Mr Bradshaw agreed he had the use of his money between April and August 2003, when he purchased the berth at another marina. The applicable Supreme Court rate of interest is 9% and the application of that rate to the figure of $14,000 from August 2003 until the end of January 2009 attracts a figure, for interest, of $6,80019 . [48] There will be judgment, then, for the plaintiff against the second defendant for $14,000 for damages and $6,800 for interest. [49] I will hear submissions about costs. 19 9% of $14,000.00 for 5.4 years (rounded). -- 9 of 9 --