But legal fees may bankrupt vendor

A NIGHTMARE neighbour on Bulwer Street is so badly behaved the Supreme Court’s declared his presence should’ve been disclosed to potential buyers of the adjoining unit. 

Sarah Thillagaratnam bought the ground floor unit at 6/34 Bulwer Street for $390,000 in 2015 but quickly found it unliveable due to the extreme aggressive behaviour of upstairs neighbour Laurence Pratt.

The sellers Henry Doan and Thi Van Anh Nguyen did not disclose Mr Pratt’s behaviour before the sale so the court’s found Ms Thillagaratnam is entitled to have the sales contract rescinded. 

Angry backlash

The court heard evidence from other tenants who’d previously lived in unit 6, summed up by Justice Jeremy Curthoys: “Mr Pratt made their lives misery because they could not make any noise above a whisper, including by turning on the hot water for fear of triggering an ‘angry backlash’ from him.

“If Mr Pratt could see you, he would scream out the window at you. If he could not see you, he would turn up his music to a ‘ridiculous level’ or start making noise by hammering the floor which would cause their entire unit to reverberate with noise.”

Like previous residents Ms Thillagaratnam got a restraining order on Mr Pratt, but it did not solve the problem. One former unit 6 tenant told the court they called the police on Mr Pratt an average of once a week for the eight months they lived there. 

Mr Pratt, who’s owned his unit since 1980, has a long history of breaching violence restraining orders and assaulting other tenants in the complex dating back to at least 2001. 

Unable to sleep, feeling sick and depressed, and losing her hair, Ms Thillagaratnam felt the apartment was uninhabitable and moved out in 2016, then took the sellers to court seeking rescission of the contract.

She argued the sellers breached the standard sale condition in the contract that contains the undertaking “the seller does 

not know of anything that will materially affect the buyer’s use or enjoyment of the strata lot or of the common property”.

Mr Doan and Ms Nguyen had limited English but told the court that apart from a few incidents they thought Mr Pratt was a “normal” neighbour. 

Justice Jeremy Curthoys’ finding stated: “A ‘normal’ person does not react so adversely to noise, they do not hammer on the floor, they do not abuse their neighbours by swearing and insulting them.”

Justice Curthoys added Mr Doan had called the police over the neighbour’s antisocial behaviour and “it is difficult to accept that the behaviour of a ‘normal person’ would cause Mr Doan to call the police”. 

The finding states that failing to disclose Mr Pratt’s behaviour was “reckless fraudulent misrepresentation” and Ms Thillagaratnam is entitled to have the contract rescinded and all costs associated with the purchase refunded. 

Including interest on the loan and all other fees, it comes to about $480,000 owed to Ms Thillagaratnam, but Justice Curthoys said “her victory is likely to be pyrrhic”.

The defendants have already had to sell their home to meet their legal fees trying to fight the case across the past five years, and may now end up bankrupt and unable to refund the costs. 

“This case illustrates the folly of litigation,” Justice Curthoys wrote. 

How much can a grouch set you back?

A SEVERE nuisance neighbour could make a house harder to sell than if someone had been killed there, and can knock anywhere from 25 to 50 per cent off the price according to expert evidence given in the Thillagaratnam v Doan case.

Unit 6/34 Bulwer Street sold for $390,000 in 2015 without the buyer knowing about the horribly behaved neighbour upstairs.

The plaintiff called on valuer David Moore who placed the correct value at $200,000. He found no directly comparable sales affected by a neighbour this bad, but did consider the price of other properties affected by “blight or stigma” including two houses “in which people had died and their corpses had remained in the premises for some period”, according to the court judgment.

His pricing included the consideration that the bad neighbour would probably live another 20 years past the 2015 sale according to life expectancy data.

Heavy traffic

The defendants called valuer Blake Lieschke who valued the property at somewhere between $350,000 to $290,000, depending on whose account of the neighbour’s behaviour was accurate. He looked at other properties in troublesome surrounds subject to heavy traffic noise, or that were near a prison or mental health facility.

But Justice Curthoys found the examples used to estimate the proper value were too different to apply to this unit, as noise from an aggravated neighbour banging a hammer on the floor or shouting abuse was “quite distinct” from loud traffic, and the previous presence of a corpse “does not provide a meaningful comparison to Mr Pratt’s conduct”. 

Justice Curthoys also found the valuation based on Mr Pratt’s life expectancy had too many variables: “Mr Pratt at 85 years of age will be a very different person from Mr Pratt at age 65 to 70. His ability to harass the occupant of Lot 6 is likely to diminish as he ages.”

Certain buyers might not be as deterred, Justice Curthoys said: “Although Ms Thillagaratnam believes that Lot 6 is uninhabitable it does not follow that a male in his 20s or 30s would have the same reaction as her to Mr Pratt. 

“They might well ‘hit back’ and direct noise at Mr Pratt when he starts hammering on the floor of his unit. They might bring 

an action in nuisance,” suing him which could lead to fines or imprisonment if he breaches an order made by the court.

“These are the only sanctions which seem likely to restrain Mr Pratt’s conduct,” Justice Curthoys said.

by DAVID BELL