Mijalkov v Barbaro [2003] NSWSC 1024

New South Wales Supreme Court

CITATION : Mijalkov v Barbaro [2003] NSWSC 1024 HEARING DATE(S) : 3/11/03 JUDGMENT DATE : 7 November 2003

JUDGMENT OF : Burchett AJ at 1 DECISION : Specific performance order to be made; Plaintiffs directed to bring in short minutes on a date to be fixed.

CATCHWORDS : SPECIFIC PERFORMANCE - sale of land on condition relating to subdivision - inconsistent conditions - obligation of vendors not performed - right of rescission not available. CASES CITED : Re Strand Music Hall Company (Limited) (1865) 35 Beav. 153; 55 ER 853 Wardy v Hardy (2003) NSW Conv R 58,514 PARTIES : Dragan Mijalkov and Adriana Maria Mijalkov (Plaintiffs) Ross Barbaro and Frances Barbaro (Defendants) FILE NUMBER(S) : SC 5449/02 COUNSEL : G.M. McGrath (Plaintiff) C. Dwyer (Defendant) SOLICITORS : Isho & Associates (Plaintiff) Marando Solicitors (Defendant)

- 5 - IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION

BURCHETT AJ

7 NOVEMBER 2003

5449/02 - MIJALKOV v BARBARO JUDGMENT 1 BURCHETT AJ: The plaintiffs sue for specific performance of a conditional contract for the sale to them of land identified as a particular lot in an unregistered plan of subdivision, the defendants (the vendors) having purported to rescind the contract for failure of the condition. The sole question is whether the defendants had done what it was incumbent upon them to do before they could be entitled to rescind. 2 On 16 November 2001, the contract was entered into between the parties in accordance with the 2000 edition of the standard form, modified by special conditions. That standard form contains the same clause 28 which was construed by the Court of Appeal in Wardy v Hardy (2003) NSW Conv R 58,514, and is set out in the judgment of Mason P at 58,518-58,519. Clause 28 was left unchanged by the draftsman of the contract, but a Special Condition 22 was added, prefaced by the statement: "These Special Conditions [there were others as well] shall apply notwithstanding anything to the contrary contained in this Contract". Special Condition 22 reads: "22. The completion of this Contract is conditional upon the granting of consent to the Vendors [sic] proposed Plan of Subdivision of which the lot hereby sold forms part copy of which are [sic] annexed hereto and marked with the letter 'A' (thereinafter called 'the Plan of Subdivision') by the proper Authority or Authorities. The Vendor shall at its own expense take all reasonable steps to obtain such consent and to register the Plan of Subdivision at the Land Titles Office PROVIDED HOWEVER that if the Plan of Subdivision has not been registered within nine (9) months from the date hereof, or within such further time as the parties hereto may mutually agree, then either party shall thereafter be at liberty to rescind this Contract by notice in writing to the other or his Solicitors whereupon the provisions of Clause 19 hereof shall apply." 3 I pause to remark that clause 19, referred to in the closing words of the term, is a standard clause governing the incidents of a valid rescission, and that the reference to it underlines the draftsman's intention to make comprehensive provision by this special condition. It has been said many times, and is emphasised here by the prefatory statement, that, where a typed clause is added to a printed form of contract, so as to conflict with one of the printed clauses, the fact that the typed term has been specially added may lead the Court to reject inconsistent printed words, or even a whole provision: see the authorities cited in Lewison on the Interpretation of Contracts (1989) at 6.04. As Lord Romilly MR pointed out in Re Strand Music Hall Company (Limited) (1865) 35 Beav. 153; 55 ER 853 at 159; 856 (which Lewison cites at 6.03): "The proper mode of construing any written instrument is to give effect to every part of it, if this be possible, and not to strike out or nullify one clause in a deed, unless it be impossible to reconcile it with another and more express clause in the same deed." I find it impossible to reconcile the detailed terms of Special Condition 22 with any intention to retain clause 28 as a provision dealing with the same subject matter. 4 At about the time of the making of the contract, and in the same month of November 2001, the defendant, Ross Barbaro, instructed a surveyor, Robert Kerfoot, to prepare a submission to the relevant local government authority, Fairfield City Council, for the necessary subdivision of the land. The proposed plan and supporting documents were in fact submitted on 15 November 2001 by Mr Kerfoot, who received a Notice of Determination of Development Application for Subdivision from the Council on 12 January 2002, and in the ensuing months took various steps required to enable the subdivisional plan to be approved. 5 A crucial failure on the part of the defendants was their omission at any relevant time to inform Mr Kerfoot of the terms of Special Condition 22, or indeed of clause 28. He proceeded to carry out the instruction of November 2001, but without being aware of the existence of a contractual time limit within which he was required to work. 6 On or about 22 May 2002, Fairfield City Council gave approval to the engineering plans for necessary roadworks. Very little happened after that to achieve the fulfilment of the various conditions the Council had laid down which were required to be fulfilled before the plan of subdivision could ultimately issue. There seem to have been two basic causes of delay. One was the slowness of the Council to settle the details of a proposal to widen the road. The other was a desire of the plaintiffs and the defendants to synchronize the roadworks with the filling of a dam on the property, so as to use soil removed in the roadworks as filling. One of the conditions of the Council's consent to the subdivision was the stabilisation of the dam wall, which would have been obviated by the filling of the dam; however, that could only be done with a further consent, to be followed by a variation of the condition. 7 In the event, the balance of the nine months specified in Special Condition 22 ran out before the condition was satisfied, and the defendants then immediately purported to rescind. They had entered into the contract in order to facilitate a property settlement consequent upon their separation, but had since (about February) become reconciled, and no longer wished to sell. Also, property values in the area were rising steeply. 8 The evidence does not demonstrate with any certainty that the subdivision would have been approved in time if the surveyor had been told of the need for haste, and had put his best foot forward; but it does show that probably, in that situation, the special condition would have been fulfilled. Probably, the delays caused by the road widening and the proposal to fill the dam could and would have been overcome quite quickly. I accept the evidence of the plaintiffs' surveyor, Mr Timbs, to this effect. 9 Ultimately, the question is whether the defendants were in a position, under the contract, to exercise a right of rescission upon the expiry of the time. In Wardy v Hardy, decided upon the terms of a quite similar clause, Mason P quoted (at 58,525) the statement of the judge at first instance, Bryson J: " [I] t is the vendor's obligation to do everything reasonable to have the plan registered, and if that obligation is not complied with the vendor is not excused by showing that the non-compliance arises from some failure of an independent contractor." Much less can the defendants here excuse themselves by showing that Mr Kerfoot failed to speed up a process they never told him he had to complete within a fixed period. 10 As was said to be the case in Wardy v Hardy (at 58,522), while it is probable that various failures on the part of the defendants' agent did contribute to the delays that occurred, "it is the Defendant[s'] not doing everything reasonable, not the consequent delay, which constitutes failure to comply with [the special condition]". On my understanding of their case, the defendants themselves did not really controvert the plaintiffs' case on this issue. They did not, as the contract required, "take all reasonable steps to obtain [the] consent and to register the Plan of Subdivision". 11 Accordingly, the attempted rescission was ineffective, and the plaintiffs, who proved they were ready, willing and able to complete the contract, are entitled to a decree of specific performance. The order I make at this stage is that they bring in, on a date to be fixed, short minutes of orders appropriate to reflect the reasons of the Court.