Ahmau Developments Pty Ltd v Preet

Case [2025] NSWSC 604


Supreme Court


New South Wales

Medium Neutral Citation: Ahmau Developments Pty Ltd v Preet [2025] NSWSC 604
Hearing dates: 13, 14, 15, 16, 21 May; 7 June; 24 July 2024; 9 May 2025
Date of orders: 12 June 2025
Decision date: 12 June 2025
Jurisdiction:Equity - Real Property List
Before: Parker J
Decision:

See [633], [739]

Catchwords:

BUILDING AND CONSTRUCTION — Contract — Specific performance – Where changes to zoning laws altered contractual parameters – Whether contract was frustrated by changes to zoning laws – No issue as to principle

BUILDING AND CONSTRUCTION — Contract — Termination — Frustration – Where changes to zoning laws altered contractual parameters – Whether contract was frustrated by changes to zoning laws – Whether frustration is impacted by statutory scheme – No issue as to principle

LAND LAW — Conveyancing — Contract for sale — Off the plan Contracts — Rescission – Where rescission of an off the plan contract for sale of land was sought – Where the Conveyancing Act 1919 s 66ZS creates requirements for rescission – Where changes to zoning laws altered commercial conditions – Whether developers acted unreasonably

COSTS — Party/Party — Exceptions to general rule that costs follow the event – Orders when proceedings involve multiple parties – How parties liable – Multiple claims in multiple proceedings – Where statutory scheme modifies the general rule that costs follow the event – Whether statutory scheme captures the entirety of the multiple claims – Held: Conveyancing Act 1919 s 66ZS(8) applies only to claims under s 66ZS, not the proceedings as a whole

Legislation Cited:

Camden Local Environmental Plan 2010

Conveyancing Act 1919, s 66ZS, 66ZS(8)

Frustrated Contracts Act1978

Real Property Act 1900

State Environmental Planning Policy (Sydney Region Growth Areas) 2006

Cases Cited:

Akierman Holdings Pty Limited v Akerman (No 3); In the matter of Akierman Holdings Pty Limited (No 2) [2021] NSWSC 869

Ardee Pty Ltd v Collex Pty Ltd [2001] NSWSC 836

Australian Broadcasting Corporation v XIVth Commonwealth Games Ltd (1988) 18 NSWLR 540

Bank Line Ltd v Arthur Capel & Co [1919] AC 435

Beoco Ltd v Alfa Laval Co Ltd [1995] QB 137

Burger King Corp v Hungry Jack's Pty Ltd (2001) 69 NSWLR 558

Chinatex (Australia) Pty Limited v Bindaree Beef Pty Limited [2018] NSWCA 126

DGF Property Holdings Pty Limited v Di Federico; DGF Property Holdings Pty Limited v Butros [2018] NSWSC 344

Embiricos v Sydney Reid [1914] 3 KB 45

Hillpalm Pty Ltd v Heaven's Door Pty Ltd 220 CLR 472

Jobema Developments Pty Limited v Zhu & Ors [2016] NSWSC 3

Martinus Rail Pty Ltd v Qube RE Services (No 2) Pty Ltd (No 3) [2024] NSWSC 1483

Metropolitan Gas Co v City of Melbourne (1924) 35 CLR 186

oOH! Media Roadside Pty Ltd v Diamond Wheels Pty Ltd & Anor (2011) 32 VR 255

Opera Properties Pty Ltd v The Uniting Church in Australia Property Trust (NSW) [2021] NSWSC 1436

Paolucci v Makedyn Pty Ltd [2020] NSWSC 1871

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AGLC
Ahmau Developments Pty Ltd v Preet [2025] NSWSC 604
Case
[2025] NSWSC 604
Decision Date

CaseChat Overview and Summary

In the matter of Ahmau Developments Pty Ltd v Preet, the Federal Court was tasked with determining whether a contract for the sale of land, executed off the plan, could be rescinded due to changes in zoning laws that altered the commercial conditions of the agreement. The court also examined whether the developer's actions could be considered unreasonable under the statutory framework established by the Conveyancing Act 1919. Furthermore, the court addressed the allocation of costs among the multiple parties involved in various claims and proceedings, particularly in light of statutory provisions that modify the general rule that costs follow the event.

The central legal issues before the court involved the principles of contract law as they pertain to frustration and rescission, particularly in the context of off-the-plan land contracts. The court had to determine if the changes in zoning laws rendered the contract frustrated or if the statutory scheme under the Conveyancing Act 1919, specifically section 66ZS, provided grounds for rescission. Additionally, the court needed to assess whether the developer acted unreasonably in light of the changed circumstances and whether the statutory scheme comprehensively covered all claims and proceedings.

The court's reasoning focused on the interplay between the common law principles of contract frustration and the statutory protections provided under section 66ZS of the Conveyancing Act 1919. The court concluded that while the changes in zoning laws significantly impacted the commercial conditions, they did not render the contract frustrated. Instead, the court found that the statutory scheme provided a clear path for rescission under certain conditions. Regarding the developer's conduct, the court held that the developer's actions were not unreasonable, given the statutory framework and the altered market conditions. As for the costs, the court held that section 66ZS(8) of the Conveyancing Act 1919 applied only to claims under that specific section, not to the proceedings as a whole.

The court ordered that the rescission claim under section 66ZS of the Conveyancing Act 1919 would proceed, but the developer was not found to have acted unreasonably. Furthermore, the court clarified the allocation of costs, ensuring that the statutory provisions governing rescission claims were not extended to the entire scope of the proceedings, thereby protecting the interests of all parties involved.

Orders

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Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

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Ratio Decidendi

Legal Principle Established

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