New South Wales Supreme Court CITATION : Mantsis v Danoelle Pty Ltd [2005] NSWSC 595 HEARING DATE(S) : 17 June 2005 JUDGMENT DATE : 17 June 2005 JURISDICTION : Equity JUDGMENT OF : Hamilton J DECISION : Contract for sale of land declared to have been validly terminated. CATCHWORDS : CONVEYANCING [63] - Relationship of vendor and purchaser - Matters arising between contract and conveyance - Time - Time of the essence - Generally - By notice - Efficacy of notice - Notice expiring on Good Friday. LEGISLATION CITED : Interpretation Act 1987 s 36(2) CASES CITED : The Progressive Mailing House Proprietary Limited v Tambali (1985) 157 CLR 17 Con Mantsis (P1) Anetta Mantsis (P2) PARTIES : Danoelle Pty Limited (D1) David Miller (D2) FILE NUMBER(S) : SC 2951/05 J J Loofs (Ps) COUNSEL : No appearance (Ds) Nicholas Angelos & Co (Ps) SOLICITORS : No appearance (Ds) LOWER COURT JURISDICTION : IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION HAMILTON J FRIDAY, 17 JUNE 2005 2951/05 CON MANTSIS & ANOR v DANOELLE PTY LIMITED & ANOR JUDGMENT 1 HIS HONOUR: These are ex parte proceedings for final relief brought by the plaintiffs arising out of a contract for the sale of land which they say they properly terminated. The land is a house property at 18 Lambert Road, Bardwell Park ("the property"). 2 The contract was made on 9 December 2004. The price was $765,000. The plaintiffs were the vendors and the first defendant was the purchaser under the contract. The second defendant is one of two directors of the first defendant. The contract provided for a deposit of $38,250. It was to be paid in two equal instalments, of which the first was paid, but the second was not paid. 3 At the same time as the contract was entered into, the plaintiffs granted to the first defendant a licence to occupy the property immediately. By a clause of the licence agreement, in the event of the termination of the contract for sale for any reason whatsoever, the purchaser was obliged to deliver up possession of the property forthwith. 4 On 10 March 2005 a notice to complete was served on the first defendant and it required completion by 2:30 pm on 25 March 2005. By notice of variation dated 24 March 2005, the time for completion under the notice to complete was extended until 2:30 pm on 1 April 2005, which was Good Friday. Unbeknown to the plaintiffs, a caveat was lodged in respect of the property on 22 March 2005. The caveator was described as Ian Ferry, 16 Mann Street, Gosford and the interest claimed was one pursuant to an option to purchase the property. It was stated that this was pursuant to an option negotiated with the vendor's real estate agent executed on 3 December 2004. 5 The evidence demonstrates that there appears to be no such person as Ian Ferry. Importantly for present purposes, the real estate agent, Mr Tony Loupos, has in his affidavit of 12 May 2005 denied that he entered into any agreement with Mr Ferry or anybody else which could be construed to be an option to purchase the property. He asserts that he has never met an Ian Ferry and that, in any event, his instructions did not allow for any option to purchase to be negotiated on behalf of the vendors. In due course the caveat lapsed. 6 On 15 April 2005 the plaintiffs caused to be sent to the first and second defendants a notice of termination of the contract, dated the same day. The notice of termination was served in accordance with clause 20.6 of the contract on the first defendant's then solicitors and was delivered to the property. Those solicitors subsequently contacted the plaintiff's solicitors and indicated that they were no longer acting for the first defendant but had conveyed the notice to it. 7 Thereafter, there was an extraordinary series of events. The plaintiffs took possession of the property by changing the locks, but the defendants on three occasions rechanged them after the plaintiffs had responded by changing them back. 8 Other than the solicitor's communication referred to above, the only contact with the defendants has been telephone conversations which the second defendant had with persons at the plaintiff's solicitor's office. The second defendant in those conversations revealed a number of important matters. He claimed to have a right to be in possession of the property because the notice to complete, he said, was invalidated by having given Good Friday as the settlement date. This is wrong by reason of s 36(2) of the Interpretation Act 1987. What he said also indicated knowledge that these proceedings had been brought, but claimed that the plaintiffs could not gain orders because he had not been personally served. 9 These proceedings were commenced by summons on 13 May 2005. On 27 May 2005 Nicholas J granted an interlocutory injunction restraining the defendants from entering or remaining upon the property. The defendants were informed by letter sent to them in accordance with Nicholas J's directions of the hearing today, but, although called outside the Court, they did not appear and the matter has proceeded before me ex parte. 10 The plaintiffs claim that they have validly terminated the contract by their notice of termination given after the expiry of a valid notice to complete. They alternatively submit that the Court will infer that the caveat mentioned in paragraph [4] above was a false caveat, the lodging of which had been procured by the first defendant and/or the second defendant. They say that the Court should conclude that that was an action inconsistent with the desire to see the contract performed; that that repudiatory act also gave rise to an entitlement in the plaintiffs to elect to terminate the contract; and that by notice given on 15 April 2005 they exercised that right. They rely on the principle enunciated in The Progressive Mailing House Proprietary Limited v Tambali (1985) 157 CLR 17. 11 I do not propose to determine this last claim, but, in case there is ever any suggestion that the orders that I am about to make in the absence of the defendants should be set aside, the propounding of that ground also for termination of the contract is noted in this judgment. 12 I am satisfied that the contract was validly terminated by the plaintiffs by the notice given pursuant to non compliance with a valid notice to complete. There is no doubt that the first defendant, a company, was duly served with the summons by delivery at its registered office and it has never at any stage appeared. 13 Orders are also sought against the second defendant, so that the question of service on him arises. The second defendant has not been served. In the unusual circumstances of this case, I propose simply to dispense with service on him. I find, on the evidence before me, that he has knowledge of the existence of these proceedings and, clearly, had knowledge of one occasion on which the proceedings were before the Court. He was invited to attend at that time and failed to do so on that or any other occasion. In those circumstances, despite the lack of service on him, I propose to make the orders sought against him. 14 The orders sought are laid before me in a form of orders propounded by Mr Loofs, of counsel for the plaintiffs. I propose to make the declaratory orders asked for to the effect that the contract has been validly terminated, that the licence agreement was validly terminated and that neither the first defendant nor the second defendant has any right, title or interest in the property. 15 Furthermore, by reason of the extraordinary chain of events whereby the defendants re-entered the property on three occasions and the second defendant asserted a right to do so because of invalidity of a perfectly valid notice to complete and the need for personal service on him before orders could be made, despite the fact that he was perfectly well aware of the proceedings and when they were before the Court, it is appropriate to convert Nicholas J's interlocutory injunctive orders into permanent injunctions. A permanent injunction against entering or remaining upon the property will, therefore, be granted against each of the first defendant and the second defendant. 16 The plaintiffs seek costs, which they ought to have, and both the first defendant and the second defendant will be ordered to pay the plaintiffs' costs of the proceedings. ********** DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.