New South Wales Supreme Court CITATION : Kestral Properties v Homes Corp of Aust [2000] NSWSC 30 CURRENT JURISDICTION: Equity Division FILE NUMBER(S) : SC 5258/99 HEARING DATE(S) : 2 February 2000 JUDGMENT DATE : 2 February 2000 Kestral Properties Pty Ltd (Plaintiff) PARTIES : v The Homes Corporation of Australia Pty Ltd (Defendant) JUDGMENT OF : Davies AJ COUNSEL : P: Mr T Thawley D: Mr B Coles SC SOLICITORS : P: The Law Firm of Solari's D: Church & Grace CATCHWORDS : Summary dismissal - sale of land - entitlement to terminate contract DECISION : See para 16 THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION DAVIES AJ WEDNESDAY 2 FEBRUARY 2000 5258/99 - KESTRAL PROPERTIES PTY LTD v THE HOMES CORPORATION OF AUSTRALIA PTY LTD JUDGMENT 1 HIS HONOUR: This matter commenced with the filing in late December of a Summons seeking a declaration that the plaintiff is entitled to have a contract of the purchase of certain land at Ocean Street, Wollongong, specifically performed and carried into execution. Before any affidavit had been filed in support of that Summons, a motion was filed by the defendant seeking, inter alia, that the proceedings be dismissed. That motion came on for hearing this morning and I have before me an affidavit by Bruce John Maples, who is the sole director and shareholder of the plaintiff company and by Mr John Lister Nichols, who is a director of the defendant and had responsibility on behalf of the defendant in the dealings with respect to the subject property. The property was one on which development was proposed. 2 Clause 16 made the contract conditional upon the Wollongong City Council's granting approval to a building application in respect of a development application and cl 17 provided that completion of the agreement was to take place within forty-two days after the date of the agreement or seven days after the vendor notified the purchaser that the Council had granted the building approval and with such notification provided to the purchaser a copy of the building approval together with the plans and other documents as approved by the Council. 3 The agreement was dated 10 September 1999 and a copy of the building approval was forwarded by the solicitors for the vendor on 18 October and on that day Mr Nichols, on behalf of the defendant, handed a bundle of documents to Mr Maples which apparently he said was a copy of the building approval and approved plans and documents. 4 I read the clause as requiring that a copy of the building approval and a copy of the plans and other documents be handed over at that stage before settlement. There is a paragraph in Mr Maples' affidavit which suggests that the original stamped documents would be required to be handed over at that stage, but I am satisfied that the contract had in mind that the stamped documents would be handed over on settlement but that the copy documents would be handed over in accordance with cl 17(b). 5 It is said by Mr Thawley, counsel for the plaintiff, that there is a dispute as to whether the documents that were handed over were a copy of the relevant plans and other documents approved by the Council and I accept there is an arguable case about that, although I think that the affidavit material on that aspect is very slim. 6 I note that any failure on behalf of the vendor in that respect seems to have played no relevant part in the events that subsequently occurred. Mr Maples indeed stated that, on receipt of the large bundle of documents handed to him, he took them away without looking at them, they were folded up and he put them in his office and did not look at the documents at that point of time. 7 I mention that because even if there was a breach of cl 17(b) - and I do not make any ruling upon that because the facts of the case are not before me - it does not seem to me that anything arose out of that event which gave rise to an equity to be enforced against the vendor. It does not seem to me that there was anything in what then happened that misled the purchaser or put the purchaser on the wrong footing. Nothing of that sort has yet been established. 8 If it is established that some relevant documents were not handed over, that may be a breach of the provision, but, as I say, that does not seem to me to raise an issue which would entitle a court of equity to interfere with other provisions which were agreed upon and to change the terms of the contract between the parties. 9 That leads me to the point that the settlement did not proceed within seven days of that date of 18 October because of problems which the purchaser had with obtaining finance. There had been a date set for settlement and it was not complied with. On 11 November the vendor's solicitors wrote to say that their client proposed that the contract be varied as follows: that the parties agreed that completion was to take place no later than 4pm on Friday 19 November 1999 and that in this respect time was to be of the essence of the contract and that on completion the purchaser was to pay interest on the unpaid balance at the rate of 8 percent per annum. 10 That proposal was agreed to by a return letter from the purchaser's solicitors on 11 November. A further letter followed on 16 November proposing an alteration of the time for completion to 26 November 1999, time again being of the essence, with interest accruing. On 18 November that was agreed to. Time for settlement was appointed for 12.30pm on Friday 19 November. 11 On 19 November the solicitors for the vendor wrote again to say that the purchaser had been unable to complete and was in breach of the essential term and they offered to further extend to 4pm on 3 December, time again being of the essence, with interest accruing. That was agreed to by the solicitors for the purchaser. 12 In due course, that date of 3 December 1999 again passed without the purchaser being prepared to settle and a notice of termination in consequence of the default was served. After that stage, the representatives for the purchaser sought some further extensions but those extensions were refused. 13 The last fact that I should mention is that as a result of a failure to settle on 25 October 1999, that is the seven days after the first date appointed, a notice to complete was served on the purchaser and that notice made time the essence of the contract. 14 It seems to me from those facts that what occurred was that the contract was varied and that the provision of cl 17(b) failed to have effect because the parties had specifically agreed to a date for settlement and had agreed that time was of the essence. In those circumstances, as that time and date was not met by the purchaser, I think the vendor was entitled to terminate the contract. 15 As I have said, it does not appear to me that there is anything in Mr Maples' affidavit which raises an issue upon which equity would interfere with the legal rights of the parties. 16 I am satisfied on the material before me that the vendor had a legal right to terminate. For those reasons I will order that the summons be dismissed insofar as it seeks that the contract be specifically performed and carried into execution. I will stand the matter over before the Registrar on Tuesday 8 February 2000. The plaintiff should pay the costs of the motion. ********** Last Modified: 09/25/2000 DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. 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