Consolidated Credit Network (NSW) Pty Ltd v Zuck 1 Pty Ltd [2004] NSWSC 132

New South Wales Supreme Court

CITATION : Consolidated Credit Network (NSW) Pty Ltd v Zuck 1 Pty Ltd [2004] NSWSC 132 HEARING DATE(S) : 2, 3 March 2004 JUDGMENT DATE : 3 March 2004 JURISDICTION: Equity Division JUDGMENT OF : Young CJ in Eq DECISION : Orders made.

CATCHWORDS : CONVEYANCING [184]- Torrens system- Caveats- Whether person with right to onsell has interest in land- Necessity in cases where caveator is a trustee to secure undertaking as to damages. EQUITY [343]- Undertaking as to damages- Plaintiff a trustee company- Undertaking to be secured or supplemented. LEGISLATION CITED : Real Property Act 1900, ss 74K, 74MA, 74P Jensen v Giugni (1994) 6 BPR 13,667 Masters v Cameron (1954) 91 CLR 353 CASES CITED : McCosker v Lovett (1995) 7 BPR 14,507 Niesmann v Collingridge (1921) 29 CLR 177 Select Personnel Pty Ltd v Morgan & Banks Pty Ltd (1988) 12 IPR 167 Shepherd v Houston [1927] SASR 144 PARTIES : Consolidated Credit Network (NSW) Pty Limited (P) Zuck 1 Pty Limited (D) FILE NUMBER(S) : SC 1507/04 COUNSEL : D McGovern SC and M P Cleary (P) P Dodson (D) SOLICITORS : Pryor Tzannes & Wallis (P) Price & Company (D)

IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION

YOUNG CJ in EQ

Wednesday 3 March 2004

1507/04 - CONSOLIDATED CREDIT NETWORK (NSW) PTY LTD v ZUCK 1 PTY LTD JUDGMENT 1 HIS HONOUR: These are proceedings to extend a caveat lodged by the plaintiff over the title of the defendant to some land at Campsie. The proceedings were heard between 2pm and 5pm yesterday and at the end of the hearing I indicated my view and said that I would give reasons later. I think it is more satisfactory to the parties that I do it now, even though I have not had an opportunity to consolidate my thoughts. 2 The plaintiff operates a rather unique business, so far as I am aware. It trades as trustee of a trading trust. It acquires residential properties and residential development land then markets the completed units through a network of estate agents and alliances that it deals with. It earns income for the trust by making a commission. If the present transaction is anything to go by, that commission is the difference between the price which it pays the registered proprietor of the land in a contract for purchase (I use that term loosely) and the total of the moneys received from the on-sale of the units in due course. 3 It would seem that the defendant, a company which appears to be owned and operated by Mr and Mrs Vukmirica, was developing land in Campsie and there is some flavour that they were running into some problems. 4 One Annie Teo, a real estate agent, came into the picture and after several conversations there was an arrangement made between Mr Winkler senior, Mr Winkler junior, the Vukmiricas and Miss Teo that the defendant would pay the plaintiff almost seven million dollars for the land. It seems to have been contemplated that the defendant would continue with the development. In due course this would result in, I think, 24 units and one cottage, which would be on-sold. 5 It would not seem that either party was represented by any lawyer when documents, namely a letter of intent and a letter of offer, were signed by the various individuals about 24 July 2003. I use those words because it may be at the final hearing, if this case goes that far, there will be some issue of fact as to whether the various persons who appended their signature to the documents did so in their own personal capacity or as the authorised signatory for one of the corporations. 6 The letter of offer is not a familiar document to me, but it would appear that it is a standard document of the plaintiff. The document commences by saying that "The parties have agreed to the following terms and conditions"; the parties being the plaintiff and the defendant. 7 The first clause says that "The purchaser", namely the plaintiff: "hereby agrees to purchase from the vendor, namely the defendant, the property at Campsie." 8 The second clause says what the price is. 9 The letter then notes that the defendant is not yet the registered proprietor of the land, but should be by 31 October 2003. There are then terms dealing with when a display unit will be constructed and we then get a series of rather strange clauses, commencing with clause 11. Clauses 11 and 12 and 13 read as follows: "11. The purchaser hereby warrants that they will on sell the proposed eight (8) townhouses, sixteen (16) units and the cottage and they further warrant that all Contracts for Sale will be unconditionally exchanged by the 29th February 2004 or by the date of notification that the Strata Plan has been registered which ever is the latter. In the event there are delays in completion to the refurbishment or registration of the Strata Plan then the purchaser's compliance date will be adjusted accordingly. 12. The vendor and purchaser hereby agree that a Put and Call Option is to be entered into and a $25,000 deposit bond is to be paid, to be paid as a good faith deposit by CCN upon signing the Put and Call Option. Said $25,000 bond will be returned to CCN after 4 units are unconditionally exchanged with a 10% deposit. 13. Settlement of the Contract for Sale is to be within six (6) weeks from the date of exchange of the Contract for Sale or within twenty one (21) days from the date of notification of a Strata Plan being registered, whichever is the latter." 10 Clause 16 then provides: "The letter of intent from CCN dated 24 July 2003 is attached hereto and forms part of this Letter of Offer." 11 The Letter of Intent is addressed to Annie Teo and starts off "Dear Annie". The letter contains the following phrases: "I confirm Consolidated Credit Network (NSW) Pty Ltd (CCN) is prepared to purchase the above 8 townhouses, 16 units and the cottage under the following terms and conditions."