Riddle v White Constructions Pty Ltd [2018] NSWSC 384

Supreme Court New South Wales

Medium Neutral Citation: Riddle v White Constructions Pty Ltd [2018] NSWSC 384 Hearing dates: 15 March 2018 Date of orders: 27 March 2018 Decision date: 27 March 2018 Jurisdiction: Equity Before: Darke J Decision: Plaintiffs entitled to refund of deposit. Catchwords: LAND LAW – conveyancing – the Contract for Sale – subject matter of the contract – purchase "off the plan" – vendor required to acquire additional land adjoining purchaser's proposed lot in order to achieve registration of subdivision – whether vendor entitled to require purchaser to acquire additional land as part of purchase

LAND LAW – conveyancing – the Contract for Sale – recovery of deposit – vendor incorrectly asserts that sale included additional lot – vendor serves Notice to Complete calling upon purchaser to acquire additional lot – vendor terminates contract following purchaser's failure to complete – termination a wrongful repudiation of contract – purchaser entitled to refund of deposit Category: Principal judgment Parties: Kevin Riddle (First Plaintiff) Naniwati Siridhata-Riddle (Second Plaintiff) White Constructions Pty Ltd (Defendant) Representation: Counsel: Mr P Afshar (Plaintiffs) Mr M Galvin (Defendant)

Solicitors: Blackman Legal (Plaintiffs) RMB Lawyers (Defendant) File Number(s): 2017/316164 Publication restriction: None

Judgment

Introduction 1. These proceedings were commenced by Summons filed on 19 October 2017. The plaintiffs are the purchasers under a contract for the sale of land entered into with the defendant as vendor. The plaintiffs claim that the defendant wrongfully terminated the contract and they are thus entitled to the return of the deposit they paid in the sum of $48,500, together with any interest earned thereon. The plaintiffs have not sought specific performance of the contract, and bring no claim for damages. 2. The defendant, which has filed a Cross Summons against the plaintiffs, maintains that it validly terminated the contract. The defendant contends that it was entitled to terminate the contract because the plaintiffs failed to complete in accordance with the requirements of a valid Notice to Complete. It therefore claims that it is entitled to the deposit. 3. The contract was entered into on 30 March 2015. The land the subject of the contract was Lot 14 in an unregistered plan of subdivision of certain land in Deposited Plans 758563 and 797732 in Kiama. The purchase price was $485,000, with a deposit of $48,500 payable on exchange. The contract employed the 2014 edition of the standard Law Society/Real Estate Institute form, together with various Additional Provisions that were expressed to prevail over printed clauses 1 to 29 of the standard form. 4. A "Preliminary Plan Showing Proposed Subdivision" was attached to the contract. Lot 14 was depicted on the plan as an area of 1,260m2 in a shape that approximates a trapezium. It was one of 101 lots shown on the plan. 5. By Additional Provision 39 "completion date" was defined to mean the later of the 35th day after the date of the contract or the 14th day after the date on which the Vendor serves notice on the Purchaser that the Subdivision Plan has been registered. 6. Additional Provision 32, which lies at the heart of the dispute, is in the following terms: 32 Subdivision 32.1 This contract cannot be completed unless a plan of subdivision (the Subdivision Plan) is registered as a deposited plan so as to give separate entity to the land. 32.2 The Vendor will do everything reasonably necessary to complete the subdivision by complying with the development consent from Kiama Municipal Council (the Council) and obtaining a subdivision certificate from the Council and obtaining and complying with other consents, approvals and certificates necessary from other relevant public authorities and service providers, including paying fees and contributions, so as to have the Subdivision Plan registered. 32.3 Either party may serve a notice rescinding the contract if the Subdivision Plan is not registered by 31 October 2016 (the Sunset Date). A party cannot rescind after the Subdivision Plan is registered. 32.4 In addition to clause 31.3 the Vendor may extend the Sunset Date by each day (but no later than 6 months after the Sunset Date) that the vendor or its builders or contractors have been delayed by reason of: 32.4.1 inclement weather or conditions resulting from inclement weather; 32.4.2 any civil commotion, combination of workmen strikes or lock-outs affecting the progress of the building works or affecting the manufacture or supply of materials for the construction of the property; 32.4.3 any delay in any approval required for development activities necessary or desirable for completion of the building works or completion of this contract; or 32.4.4 any matter or thing beyond the control of the Vendor. 32.5 The Vendor is the sole determinator of the Vendor's entitlement to extensions of time under clause 31.4. 32.6 A certificate by the Vendor in relation to extensions of time under clause 31.5 is final, conclusive and binding on the parties. 32.7 The vendor may make all alterations to the measurements and lot numbers shown on the Unregistered Plan as are needed to obtain the necessary certificate, consents and approvals and the registration of the Subdivision Plan. 32.8 The Purchaser cannot make a claim, objection or requisition, delay completion or rescind or terminate in respect of: 32.8.1 any alternation of lot number; 32.8.2 any minor reduction in the boundary dimensions or area of the land or minor variation in the position of the land as shown on the Unregistered Plan and as shown on the Subdivision Plan when registered; 32.8.3 any alterations to or omission of any of the other lots shown on the Unregistered Plan; or 32.8.4 the Vendor implementing its proposed subdivision of Lot 1, 2, 3 & 4 758563 in stages; or 32.8.5 any changes to the names of the roads shown on the Unregistered Plan. 32.9 If any reduction or variation is other than minor the purchaser within 14 days of being served by the Vendor with notice of the reduction or variation must elect either: 32.9.1 to complete without making a claim, objection or requisition and notwithstanding the reduction or variation and otherwise on the terms set out in the contract; or 32.9.2 to rescind, and if the Purchaser does not elect to rescind within the period of 14 days (being an essential period) he will be taken to have waived his right of rescission and to have accepted the Subdivision Plan with the reduction or variation. 32.10 A reduction in a boundary dimension or area is taken to be other than minor if it is a reduction of greater than five percent (5%). 32.11 Clauses 28 and 29 do not apply to the registration of the Subdivision Plan. 32.12 This clause is included in the contract because the Subdivision Plan when registered may differ in boundary dimensions, areas and location as a result of construction of works and final survey. Taking into account that this contract is an off-the-plan contract, the parties agree that this clause protects the legitimate interests of both parties, acting reasonably. 1. There is no dispute that the Vendor validly extended the Sunset Date from 31 October 2016 to 30 April 2017. The Subdivision Plan was in fact registered as Deposited Plan 1206414 on 7 April 2017. Notice of that fact was given by the Vendor's solicitor ("RMB") to the Purchaser's solicitor ("Blackman") on 7 April 2017. Accordingly, the completion date (or date for completion for the purposes of cl 15) thus became 21 April 2017. 2. The dispute centres upon those parts of Additional Provision 32 which concern changes to the Unregistered Plan, in particular Additional Provisions 32.7 to 32.10. 3. As will be seen, it appears that various changes were made to the subdivision plans, including as a result of a need to establish an Asset Protection Zone ("APZ") for bushfire protection purposes in an area adjacent to Lot 14 as depicted on the plan attached to the contract. 4. The defendant submitted that it was entitled under Additional Provision 32.7 to make such changes, and that if the plaintiffs had any right of rescission as a consequence of the changes, they waived the right as envisaged by Additional Provision 32.9. 5. The plaintiffs submitted that Additional Provision 32.9 was not engaged in the circumstances, and in any event the defendant failed to serve any notice in accordance with Additional Provision 32.9. The plaintiffs further submitted that the defendant has acted wrongfully by insisting (including by its Notice to Complete) that the plaintiffs were bound to accept not only a transfer of Lot 14 in the registered subdivision, but also the adjoining Lot 1 in Deposited Plan 1221171 which was intended to serve as an APZ.