Hanna v Saad [2003] NSWSC 399

New South Wales Supreme Court

CITATION : Hanna v Saad [2003] NSWSC 399 HEARING DATE(S) : 10/04/03 JUDGMENT DATE : 14 May 2003 JURISDICTION: Equity Division JUDGMENT OF : Barrett J DECISION : Summons dismissed with costs

CATCHWORDS : CONVEYANCING - alleged breach of contract - whether contract supplemented by oral term that vendor would deliver original letter from Council to purchaser before completion - whether oral agreement to defer date fixed for completion - no question of principle PARTIES : Brian Hanna and Francois Harb - Plaintiffs Sonia Saad and Raymond Saad - Defendants FILE NUMBER(S) : SC 5133/02 COUNSEL : Mr M J Cohen - Plaintiffs Mr K F Morrissey - Defendants SOLICITORS : Mannix Lawyers - Plaintiffs Sattout & Associates - Defendants

IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION

BARRETT J

WEDNESDAY, 14 MAY 2003

5133/02 – BRIAN HANNA & ANOR v SONIA SAAD & ANOR JUDGMENT 1 On 17 December 2001, the defendants as vendors and the plaintiffs as purchasers became parties to a contract for the sale of land, being a property at 5 Strickland Street, Bass Hill for a price of $550,000. The defendants had obtained from the Bankstown City Council some two months earlier a development consent permitting demolition of the existing dwelling and erection of four villa homes. The plaintiffs are builders. 2 Three days later, the defendants as vendors executed and delivered to the plaintiffs as purchasers a document as follows: "I, Sonia Saad and Raymond Saad the owners of 5 Strickland St Bass Hill agree to transfer the architectural plans, structural plans and DA approval for four town houses at Lot 123 Plan 8717 to be built on 5 Strickland St Bass Hill to Brian Hanna and Francois Harb at the time of settlement." 3 In circumstances which it is not necessary to relate, the vendors purported to terminate the contract and forfeit the deposit of $55,000 by notice dated 20 March 2002. The plaintiffs later instituted proceedings 2365 of 2002 against the defendants in this Division. Those proceedings were compromised and the following orders were made by consent on 7 May 2002: "1. Notice of termination of the contract dated the 20th March 2002 is set aside. 2. The contract referred to in the summons must be completed by the 22 May 2002 and if it is not completed by that date for any reason other than the default of the defendant the said contract is deemed properly terminated by the defendant [ie, present defendant/vendor] and the deposit paid pursuant to the said contract is forfeited to the defendant. 3. The Plaintiff [ie, present plaintiffs/purchasers] pay to the defendant the sum of $70,000.00 in addition to the purchase price set out in the contract at the same time as the plaintiff pays to the defendant the balance of the purchase price. 4. Each party to pay his own costs." 4 The contract was not completed in accordance with the revised regime created by these consent orders. By their summons filed on 24 October 2002 which initiated the present proceedings, the plaintiffs seek, as principal relief, a declaration that the defendants have repudiated the contract dated 17 December 2001 (as amended) and a declaration that the plaintiffs have accepted the repudiation. 5 The plaintiffs say that the contract, as supplemented by the document of 20 December 2001 and amended by the consent orders, was further amended by an oral agreement made on 22 May 2002, the date fixed for completion by the consent orders. The oral agreement is said by the plaintiffs to have been made by the first plaintiff, Mr Hanna, on behalf of the plaintiffs and the second defendant, Mr Saad, on behalf of the defendants by a conversation on that date. The repudiation is said to have consisted of a statement made by Mr Saad in a conversation on 29 May 2002. 6 The plaintiffs also say that the consent orders of 7 May 2002 constitute (or, perhaps more accurately, evidence) only part of the agreement of compromise reached by the parties on that day, being a compromise the terms of which Mr Hanna for the plaintiffs and Mr Saad for the defendants had announced orally to the defendants' solicitor on 30 April 2002 at the solicitor's office. Another element of the overall agreement, it is said by the plaintiffs, arose from an oral promise by the defendants. The outline of submissions furnished on behalf of the plaintiffs characterised that other oral promise as a promise that "the rights to development consent subsisting in the title" would be "assigned" by the defendants to the plaintiffs. As the hearing before me unfolded, however, it became clear that the alleged oral promise was a promise by the defendants that they would hand over to the plaintiffs the original of a letter dated 12 October 2001 from Bankstown City Council notifying approval of development application D485/2001, coupled with a stipulation (said to be implied) that this would be done in sufficient time before the contract's scheduled completion date (22 May 2002) to enable the purchasers to ensure the availability of their finance on that date. 7 The essence of the plaintiffs' claim is that, in breach of the unwritten term to which I have just referred, the defendants failed to deliver the original letter of 12 October 2001 in time to enable the purchasers to ensure the availability of their finance by 22 May 2002 and that having agreed orally on that date to extent the time for completion until 31 May 2002, the defendants wrongfully repudiated the contract by stating that they would not complete on 31 May 2002. 8 The defendants deny that the totality of the contractual stipulations in force between the parties contained the unwritten promises on their part on which the plaintiffs rely. Given that the alleged contractual terms are said to be oral, it is necessary to give close consideration to the evidence of meetings and conversations. 9 The first plaintiff, Mr Hanna, gave evidence of having visited the defendants' home at Greenacre on about 28 April 2002 with the second plaintiff, Mr Harb. The original contract was then in force without any alleged addendum, although the proceedings with respect to that contract were in train. They went there at the invitation of the second defendant, Mr Saad, and had a conversation with him. According to Mr Hanna, the conversation was as follows: "RS: 'I will settle for $630,000.00'. BH: 'I can offer you $590,000.00 but I will need to get the DA documents now so I can raise the extra money needed to settle. The valuer only valued the place as a vacant block of land and not as a development site because he did not have the DA documents. He said he will need the DA documents otherwise he cannot re-do the valuation for the higher amount. I need the valuation increased so I can borrow the extra money to pay you to settle'. RS: 'I will speak to Patrick Sattout [the plaintiff's solicitor] and get back to you'." 10 Mr Saad testified that such a meeting took place at his home on that day but dealt only with the question of a revised price and that nothing was said about "DA documents". Mr Harb's account of the conversation is in exactly the same words as Mr Hanna's, although without the concluding comment about Patrick Sattout related by Mr Hanna. It will be noted that nothing in this alleged conversation could be said to amount to a promise by Mr Saad with respect to the "DA documents". 11 Mr Hanna's affidavit next refers to a telephone call he received from Mr Saad on 30 April 2002 in which the following conversation occurred: "RS: 'I will accept $620,000.00 plus give you the DA documents now to give to the valuer'. BH: 'That's OK by me but I do need the DA documents straight away so I can re-arrange my finance. I want us to go to Patrick Sattout's office to tell him what we have agreed and sort it out once and for all'." 12 Mr Saad's evidence is that Mr Hanna telephoned him "another day" (i.e., after the day of the meeting at the Saads' home) and "we agreed 620 over the phone". In cross-examination, he placed the "other" day as that immediately after the meeting, namely, 29 April 2002. Mr Saad also says that the conversation did not deal with any aspect of the transaction other than the price. He maintained that position in cross-examination. 13 It is the testimony of both Mr Hanna and Mr Saad that they went together on 30 April 2002 to the office of Mr Sattout, the defendants' solicitor. Mr Hanna collected Mr Saad and took him to the office at Campsie. Mr Hanna's account of the meeting in his affidavit is as follows: "RS: 'We have come to an agreement. The new price is $620,000.00'. BH: 'I also need the DA documents now as agreed so I can give them to the valuer so he can increase the valuation of the property as a development site and that will allow me to raise the extra $70,000.00 for settlement'. RS: 'That's good I see no problems with that arrangement. Can you settle in 14 days?' BH: 'I can't say its up to Joe Mannix [the plaintiffs' solicitor]. He has to get everything ready to settle'. RS: 'I will give you the DA documents. My house is a mess at the moment because of renovations so I will need to find them. I will ring you when they are ready'. BH: 'Please Ray I can't settle without them. The sooner the better'." 14 Mr Saad said in his evidence in chief that the meeting took five or ten minutes and that the only matters discussed were price and settlement date. He denied that the conversation took the form related by Mr Hanna. I quote from Mr Saad's cross-examination: "Q. I put to you that you got there and the reason for the discussion was all about settling as it was vital and important to the plaintiff's for them to have access to what's referred to as the 'DA documents' that is the development consent? A. We [sic; scil 'they'] had access from the beginning.