Manly Property Holdings Holdings Pty Ltd v Lisker Pty Ltd & Anor [2017] NSWSC 1395

Supreme Court New South Wales

Medium Neutral Citation: Manly Property Holdings Holdings Pty Ltd v Lisker Pty Ltd & Anor [2017] NSWSC 1395 Hearing dates: 3, 4, 5 and 6 October 2017 Date of orders: 20 October 2017 Decision date: 20 October 2017 Jurisdiction: Equity - Duty List Before: Slattery J Decision: See paragraphs [236] to [237]. Catchwords: REAL PROPERTY – Contract for the sale of land -developer purchases development site under a contract with terms permitting the vendor to retain two of 13 units from the proposed development – contract permits the developer to take legal title to the site before the development is complete, to assist the developer in financing the development – a term in the contract requires the developer to develop the site expeditiously and in any event within three years of the contract – but in certain circumstances of the incapacity of the developer to retransfer the two units to the vendor, the contractual terms permit the developer to pay the vendor $1,500,000 in lieu of the re-transfer – the developer funds the development with pre-sales contracts, first mortgage bank finance and second mortgage mezzanine finance – vendor holds a mortgage over the site to secure the transfer back to the vendor of the two units upon completion of the development – developer encounters various delays in completing the development, which is not completed within the required three years – due to increases in building costs over the period of the delay, the completion of the development becomes uneconomic for the developer with the limited revenue that is available from the existing pre-sales contracts – developer seeks to sell the property to a group associated with the pre-sales purchasers – vendor seeks to acquire the bank's first mortgage and exercise the bank's power of sale to sell the property to a third party – whether the vendor may acquire the first mortgage and exercise the power of sale over the property, or whether the developer may sell the development property free of the vendor's third mortgage, upon payment of the $1,500,000 to the vendor. Legislation Cited: Conveyancing Act 1919, s 94 Corporations Act 2001 (Cth) Environmental Planning and Assessment Act 1979, s 96 Real Property Act 1900, s 57(2)(b) Cases Cited: Alghussein Establishment v Eton College [1988] 1 WLR 587 Birmingham v Renfrew (1937) 57 CLR 666 Childs Pty Ltd v Rumble (1990) NSW ConvR 55-510 Electricity Generation Corporation v Woodside Energy Ltd (2014) 251 CLR 640 Gray v Allen [1977] VR 413 Havenbah v Butterfield (1974) 133 CLR 449 Horwitz v Dainford Ltd (1984) 3 BPR 97,212 Joseph Street Pty Limited v Khay Tek Tan [2010] VSC 586 Plumor Pty Limited v Handley (1996) 41 NSWLR 30 Woodcock v Parlby Investments Pty Ltd (1989) NSW ConvR 55 – 454 Ottaway v Norman [1972] Ch 698 Masters v Belpate Pty Ltd [2001] NSWSC 169 New Zealand Shipping Company v Societe des Ateliers et Chantiers de France [1919] AC 1 Skinner v Scott [1947] NZLR 878 Sucrogen Australia Pty Ltd v Westpac Banking Corporation [2012] 2 Qd R 175 Suttor v Gundowda Pty Ltd (1950) 81 CLR 418 Category: Principal judgment Parties: Plaintiff/First Cross-Defendant: Manly Property Holdings Pty Ltd (ACN 161 624 826) First Defendant/Cross-Claimant: Lisker Pty Ltd (ACN 001 695 441) Second Cross-Defendant: Bank of Queensland Limited (ABN 32 009 656 740) Second Defendant: Steyne Developments Pty Ltd Third Cross-defendant: Grindon Pty Limited (ACN 114 995 881) as trustee for the Ekins Family Superannuation Fund Fourth Cross-defendant: David Stuart Gordon Ekins Fifth Cross-defendant: Paul Brendan Hannan Sixth Cross-defendant: Belinda Jane Hannan Seventh Cross-defendant: Merran Grace Cooper Eighth Cross-defendant: Kenny Jackman Ninth Cross-defendant: David Nicholas Foodey Tenth Cross-defendant: Robert John Collister Edwards Eleventh Cross-defendant: Craig Oswald Haskins Twelfth Cross-defendant: George Athol Murray Clapham and Lisa Jane Clapham as trustees for the Clapham Family Superannuation Fund Thirteenth Cross-defendant: George Athol Murray Clapham Fourteenth Cross-defendant: Lisa Jane Clapham Fifteenth Cross-defendant: Harold Murray Clapham Representation: Counsel: