Tagget v HP Industrial Pty Ltd [2014] NSWSC 901

Supreme Court New South Wales

Medium Neutral Citation: Tagget v HP Industrial Pty Ltd [2014] NSWSC 901 Hearing dates: 3 July 2014 Decision date: 03 July 2014 Jurisdiction: Common Law Before: Davies J Decision: 1. Judgment for the Plaintiff against the First Defendant in the sum of $9,137,646. 2. The First Defendant pay the Plaintiff's costs of the proceedings. Catchwords: CONTRACT - breach of contract - contract for the sale of land - failure by purchaser to complete - assessment of damages - purchase price partly dependent on extent to which land can be developed Legislation Cited: Civil Procedure Act 2005 (NSW) Category: Interlocutory applications Parties: Ian Graeme Tagget (First Plaintiff) Rhonda Isabel Tagget (Second Plaintiff) HP Industrial Pty Ltd (First Defendant) HP 010 754 953 Pty Ltd (under external administration) (Second Defendant) Representation: Counsel: R A Parsons (Plaintiffs) No appearances (Defendants) Solicitors: CLS Legal (Plaintiffs) No appearances (Defendants) File Number(s): 2014/50210

Judgment 1The Plaintiff entered into a contract on 20 December 2007 to sell land at 795 Pottsville Road, Cudgera Creek to the First Defendant. The contract was varied on 24 December 2008. The deposit of $900,000 was paid by the First Defendant on 21 December 2007. 2The completion date was apparently extended to 4 January 2010 but it passed without the First Defendant having completed. That failure to complete led, ultimately, to receivers being appointed by the vendor's mortgagee (the Bank of Queensland) on 12 July 2012. The receivers served a Notice to Complete on the purchaser and stipulated the completion date as 18 September 2012. 3On 17 September the First Defendant by written notice purported to rescind the contract. The contract was not completed on 18 September or at all and on 19 September the receivers issued a notice terminating the contract. 4The Plaintiff now seeks damages for the breach of the contract against the First Defendant as purchaser and against the Second Defendant as guarantor of the First Defendant's obligations pursuant to clause 29 of the contract. The Second Defendant is now under administration. 5The First Defendant did not file a defence to the claim and on 8 May 2014 an order was made for judgment for the Plaintiff against the First Defendant for damages to be assessed. It is the assessment of damages with which this judgment is concerned. 6The land the subject of the contract was vacant land but was being sold for development purposes. So much is apparent from the terms of the contract. The purchase price consisted of three parts: First, the deposit of $900,000 which, as I have said, was paid; the second was for what was called a completion payment of $5.1m; the third was what was described as deferred payments which were calculated in accordance with Special Condition 20 of the contract. Both the completion payment and the deferred payments were to be paid upon completion of the contract. 7The calculation of the deferred payments is set out in clause 20.2 and subject to the definitions of "agreed land", "developable land" and "residue land" contained in clause 18.2. Clauses 18.2, 19 and 20 relevantly provide: 18.2 Definitions Agreed Land means that part of the Property with an area of no more than 6 ha which the parties agree is Developable Land as at the date of this Contract. Completion Payment: means the Completion Payment referred to in Special Condition 19.1(2) Deferred Payments means that part of the Purchase Price calculated in accordance with Special Condition 20. Developable land means land within the Property that upon completion of Earthworks is suitable for the erection of industrial improvements but does not include land within the Property required for Roads. Residue Land means an agreed part of the Property with an area of not less than 4 ha which is not Agreed Land but which the parties consider will be or is determined to be Developable Land after completion of the Earthworks.