Neoform Developments & Interiors Pty Ltd v Town & Country Marketing Pty Ltd [2002] NSWSC 344

New South Wales Supreme Court

CITATION : Neoform Developments & Interiors Pty Ltd v Town & Country Marketing Pty Ltd [2002] NSWSC 344 CURRENT JURISDICTION: Equity Division FILE NUMBER(S) : SC 2247/02 HEARING DATE(S) : 17/04/02 JUDGMENT DATE : 17 April 2002

PARTIES : Neoform Developments & Interiors Pty Ltd (P) Town & Country Marketing Pty Ltd (D) JUDGMENT OF : Young CJ in Eq

COUNSEL : L J Aitken (P) M J Walsh (D) SOLICITORS : Hunter Lawyers (P) CATCHWORDS : CONVEYANCING [88]- Rescission- Condition giving liberty for either party to rescind if plan not registered by a certain date- Condition not fulfilled- Rescission possible after plan registered. CONVEYANCING [139]- Caveat- Second caveat- Some new facts arising after lapse of first caveat- Same interest claimed- Second caveat held to be of no effect. TAXES & DUTIES [340]- Stamp duty- Mortgage duty- Alleged charge arising out of agreement to lodge caveat on certain events- Unstamped instrument- Effect. LEGISLATION CITED : Duties Act 1997, ss 211, 304 Real Property Act 1900 s 74 O Gilbert v Healey Investment Pty Ltd [1975] 1 NSWLR 650 CASES CITED : McCulloch v Fern [2000] NSWSC 729 Treloar Nominees Pty Ltd v Buttrey (1977) 1 BPR 9672 Troncone v Aliperti (1994) 6 BPR 13,291 DECISION : Orders made.

IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION

YOUNG CJ in EQ

Wednesday 17 April 2002

2247/02 – NEOFORM DEVELOPMENTS & INTERIORS PTY LTD v TOWN & COUNTRY MARKETING PTY LTD JUDGMENT 1 YOUNG CJ in EQ: This is a fairly simple case involving a caveat which nonetheless raises a considerable number of issues. 2 The plaintiff is a developer and the defendant might be called an estate agent. A so-called marketing agreement was entered into by deed between the parties, which purported to appoint the defendant as the sole and exclusive party responsible for marketing the development until registration of the strata plan. 3 The defendant appears to have been responsible for selling, or at least causing contracts for sale to be exchanged, on seven of the fifteen lots in the development off the plan before the strata plan was registered. The contracts contained a clause 33 which was headed "Completion Subject to Registration of the Draft Plan" and which in the ordinary case read as follows, though there was some difference in the date in 33.2 in some of the contracts: "33.1 Completion is subject to and conditional on the registration of the draft plan. 33.2 If the draft plan is not registered on or before 31 December 2001 then either part may rescind by written notice to the other. 33.3 The vendor must use all reasonable endeavours to have the draft plan registered in accordance with 33.2." 4 The evidence suggests that the draft plan was approved by the local council on 21 November 2001. It was approved subject to a series of conditions. It would appear that the plaintiff did not apply itself to complying with these conditions until 16 January 2002, and two of the three conditions that are stated in the evidence were fulfilled very shortly thereafter, but the third took thirty-seven days to fulfil. 5 The plan was lodged with the Registrar General on 5 March and registered on 6 March 2002. The plaintiff rescinded each of the contracts on various dates between 7 December 2001 and 7 March 2002, purportedly in accordance with clause 33. 6 The seventh contract was one where the purchaser had said that his wife had died and asked if he could get out of the contract, and the developer agreed, rescinding on 25 February 2002. 7 There is material which, if accepted at the trial, the trial judge could infer that the predominant reason for rescinding was that the plaintiff had, through the intermediary of another estate agent, negotiated new contracts with other purchasers at a higher price. 8 The vital clause of the marketing agreement is 4.1.1 which reads: "The Vendor covenants to the Marketing Agent that the Marketing Agent shall have a caveatable interest in the land and shall be entitled, in the event of Vendor's default under the contract of sale, to lodge a caveat in accordance with this Clause in order to secure the payment of the Marketing Agents fee." 9 The marketing agent's fee is principally considered in cl 3.3 of the marketing agreement, which reads, so far as is relevant: "Subject to the Purchaser's Contract for Sale being unconditional ... the Vendor acknowledges that the Marketing Agent has completed its obligations under the Deed in respect of the unit and the Vendor covenants to the Marketing Agent that the Marketing Agent's Fee is then due to the Marketing Agent ... ". 10 3.4.1 provides that the Vendor agrees that the Marketing Agent's fee shall be paid on settlement. There are then provisions for the marketing agent to be notified as to settlement, and for the purchaser to be directed to pay the fee from the balance of purchase price due under the contract for sale. 11 The caveat which the plaintiff wishes to have removed from its title was lodged on 25 March 2002. It has been given number 8457400F and covers all seven lots. The interest claimed is said to be: "The Registered Proprietor has charged the land as security for payment of moneys due and/or to become due by the Registered Proprietor to the Caveator." 12 The caveat then refers to the marketing agreement, which it says is undated but entered into about May 1999, and then states the following alleged facts: "The Caveator has now become entitled to lodge this caveat pursuant to the provisions of clause 4.1.1 of the above agreement by virtue of the Registered Proprietor having become in default under the contracts for sale of the land entered into by the Registered Proprietor including breach of condition 33.3 thereof". 13 The defendant had previously lodged a caveat over five of the lots, again based on the same written agreement where the facts were stated: "On May 1999 the Registered Proprietor and the Caveator entered into an agreement where the Caveator performed the services for and on behalf of the Registered Proprietor and the Registered Proprietor gave to the Caveator a caveatable interest in the land." 14 The solicitors for the plaintiff initiated action to have the Registrar General issue a lapsing notice in respect of the prior caveat. 15 Mr Robinson, the managing director of the defendant, swore that he let that caveat lapse because of certain undertakings he thought he had been given by people on behalf of the plaintiff. He felt rather sore about these undertakings not being honoured, consulted new solicitors and counsel and, after taking advice, thought that because of the facts and events which had taken place after the previous caveat, which had been lodged on 8 October 2001, he could lodge a caveat without being in breach of section 74 O of the Real Property Act. 16 That section provides that if a caveat lapses any further caveat lodged: " … in respect of the same estate or interest and purporting to be based on the same facts as the first caveat"