Damages for breach of contract for sale of development property

Portbury Development Co Pty Ltd v Mackali considered the requirements of a notice of rescission of a contract of sale of a development property and an assessment of the Vendor’s damages.

It is fundamental that damages for breach of contract are awarded in order to place the injured party, so far as money can do it, in the same situation as if the contract had not been breached but had been performed.  Thus, the basic measure of damages is constituted by the difference between the position, in which the plaintiff would have been, if the defendant had performed the contract of sale, and the position which has resulted as a consequence of the defendant failing to complete the contract of sale.


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Value of compulsory acquisition by VicRoads

The Supreme Court of Victoria case of McCann v Roads Corporation considered the valuation of land compulsory acquired by the Roads Corporation to build a bypass road near Geelong.

The question was whether the land should be valued as agricultural land or as a potential residential development.

The Court accepted expert evidence that the power line easement formed a “defensible boundary to prevent uncontrolled urban sprawl”.

The answer to the preliminary questions is as follows:

For the purposes of assessing market value of the land in the ‘before’ situation under the Land Acquisition and Compensation Act 1986 (Vic), what would have been the zoning of the land or any part of it at the acquisition date?

Answer: the whole of the land would have been zoned Rural without any public purposes overlay for the purpose of the Bypass.

If the answer to question (1) is that the land, or any part of it, would not have been zoned for residential use at the acquisition date:

What were the prospects of the land, or such part of it, being re-zoned for such use at any time after the acquisition date?

If there was any such prospect of the land being re-zoned for residential use, when would such re-zoning be anticipated to occur?

Answer: the land east of the power line easements was ripe for residential rezoning within two years subject to a residual risk of 20 per cent that this would not occur for a period of five years and subject to the provision of a riverside buffer zoned Public Reserve and Conservation Zone.


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Hobsons Bay Council evicts trespassers from boatsheds #AusLaw

Boat sheds around Melbourne’s Port Phillip Bay are prime real estate.  Here’s an extract from a recent Victorian Supreme Court case. 

On the northern bank of the Kororoit Creek in Altona is an area known as the Kororoit Creek Fishing Village. The Fishing Village was established during the nineteen-twenties when the land was privately owned by a Mr Knowles. Various rudimentary structures described as fishing huts or boatsheds formed part of the Village. Mr Knowles made them available for use for a modest annual fee.

The Hobsons Bay Council brought this proceeding against the current occupiers of the boat sheds, seeking declarations that the twelve were trespassers, and mandatory injunctions requiring them to vacate the sites and to remove their improvements and property from the sites.

The Defendants assert that they have an irrevocable licence over the land in question, on equitable principles. They rely in particular on the principles of proprietary estoppel.  They say that they are entitled to remain in occupation of their sites indefinitely, subject to payment of reasonable licence fees and Council rates, and to transfer their rights to others as they see fit.

The Council contends that the Defendants merely had revocable licences which had all come to an end before the commencement of this proceeding. Further, it contends that any estoppels that might otherwise have arisen have been prevented from arising by statutory provisions relating to local government in force in Victoria from time to time during the periods in question. On the other hand, during the hearing of this case, the Council made an open offer of settlement to the Defendants under which, subject to the defendants paying the Council’s costs of the proceeding, each claimant would be granted a fresh licence with a term of 5 years, which is now the standard term applicable to the other boatshed holders at the Village. The offer was not accepted. 

The Court referred to the principles stated by Fry J in Willmott v Barber, were well settled:

(1) The person infringing the rights of the owner must be mistaken about his rights;

(2) The owner must know his rights are being infringed;

(3) He must know that the infringer is mistaken;

(4) The owner must fail to warn the infringer or assert his rights;

(5) The owner’s silence must induce the infringer to continue in his mistaken belief;

(6) The infringer must have altered his position on the faith of his mistaken belief by spending money or doing work on the property.


A heritage study done on behalf of the Council in 2004 noted that “R. Baker’s hut 17 had beds, sink and a TV with a clothes line full of washing at the back”.

Mrs Gibbon is a retired widow. In 1993 she and her late husband paid $25,000 to the prior holder of site 3, Mrs Thompson, for a transfer. Mrs Thompson was herself a widow at that time. She and her husband had been living there for many years “with the Council’s permission or ignorance”. Mr Thompson had been a fisherman. The two husbands had known each other. The price of $25,000 accorded with the Council valuation of site 3 at the time. In 1993 the “boatshed” had had a couple of bedrooms, a lounge, kitchen area, shower, toilet, hand basin and sink, ie facilities that had enabled the Thompsons to live there. It had running water and electricity. Its condition was “pretty ordinary”. There was no boat in it. The Gibbons intended to use it mainly as a weekender and as a place to be with their children and grandchildren. They made no inquiries of the Council before they acquired it. The parties informed the Council shortly afterwards that there had been a “change of ownership” and requested that all rates, levies and taxes be thereafter charged to Mr and Mrs Gibbon. The charges were then duly paid until the outbreak of the recent dispute. As far as Mrs Gibbon knows, despite contact between the Gibbons and the Council from time to time over the years, nothing was said to either of them by the Council about the terms of their occupation until the recent dispute broke out. When the Gibbons acquired the place Mrs Gibbon did not think that there was any limit on how long they could stay there. However Mrs Gibbon could not give a reason why she thought that they could retain the place indefinitely. “I just – I presumed I suppose inadvertently apparently”.

Until about October 2006 Mr Waters had had no connection with the Village. At about that time a friend told him that a boatshed was for sale at the Village. It was Mr Ken Kilby’s boatshed on site 11. Mr Waters made contact with Mr Kilby. He was shown the boatshed. It had been divided into numerous rooms, with sleeping accommodation for up to 10 people. The back area was on a concrete slab. The shed was in very bad shape. It was messy, smelly and damp and the electrical wiring was dangerous. Mr Kilby told Mr Waters that there was a “permissive lease”. Mr Waters understood that to mean that there was a “[k]ind of verbal arrangement of a year to year thing”.

 The Court found in favour of the Council.


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Wanted business coach for lawyers #AusLaw

The Mornington Peninsula Lawyers’ Association meet every second month for dinner. 

We have had a cancellation for Thursday 26 May.  We are looking for a speaker to talk us about business development for lawyers. 

Know anyone who can help out?

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Social media ideas for lawyers #AusLaw

Being new to Twitter, I have started to follow people who appear interesting, and then follow the people who those people and so on exponentially.

The clever thing is that they start to follow you back.

Then if you start to use key words in your tweets such as “social media” or “Melbourne Property Lawyer”, you pick up more followers. 

I came across Dan Toombs of http://growyourfirm.com.au/  His website is clean and crisp, with a mix of text, videos and podcasts.  He has lots of ideas for lawyers dabbling in social media.  Hope you find it inspiring.

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Lleyton Hewitt sues his Agent for negligently managing his affairs #AusLaw #in

Tennis star Lleyton Hewitt is being sued by his agent Octagon in a Supreme Court of Victoria for unpaid commissions.  A related company Octagon Financial was involved in the management of Hewitt’s affairs including providing financial services to Hewitt “such as maintaining an interest bearing account, collecting his earnings, converting foreign currency, transferring money, paying his bills, managing his insurance needs, preparing United States federal income tax returns and such matters”.  Hewitt counterclaims for negligence, breach of fiduciary duty and breach of contract. 

The Judgment of His Honour Associate Justice Mukhtar deals with an appliction by Hewitt for further discovery of financial documents.  Lawyers will be interested in a discussion of the new Civil Procedure Act. 

His Honour allowed the application, stating: ” In any discovery application, the Court needs to ensure that discovery is not being used as a tactical weapon or as a means of harassing or weakening an opponent by putting them to labours and expenses which are not likely to result in the provision of information truly enabling a party to understand how to advance its case or impeach its opponent’s case. Closely related is the modern notion of proportionality which involves a judgment by the Court whether the extent of discovery being pursued is disproportionate to any possible gain that might be had from discovery. This is combative litigation, but I do not conclude that the tenacious request for discovery is overreaching or disproportionate. Hewitt is being sued for commission on his earnings. He is counterclaiming saying that his earnings were carelessly or improperly invested. The person making the claim and resisting this claim is his fiduciary. Hewitt is entitled to know by discovery how his money was dealt with in more precise terms than has been given so far. And he is entitled to know, from his agent, if there are more documents concerning the guarantee payments. ”

The case continues. 


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Getting Started

…but it takes longer to have something to say.

First about me.  I am a commercial property lawyer based in Melbourne.  My focus is on residential, commercial, industrial and recreational developments.  I also have an interest in clients building small and medium businesses.  Some of my work deals with deceased estates and resolving disputes through mediation and sometimes litigation.

Lawyers love disclaimers.  So just to state the obvious, my opinions are mine alone, and not the opinions of anyone or any association that I work with.  If you have a question, consult a lawyer for advice specific to your situation.

I was inspired to start this blog following the recent annual conference of the LIV Law Institute of Victoria.  Like most conferences you go away with a stack of notes, but rarely put anything into action.

So let’s start small, by adding an new entry, say once a week.  Something about the latest in property law; something about lawyers; and something about life.

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Welcome to my blog.  It doesn’t take long to get going.

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