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
[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.
[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.
[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.
Consideration
[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.
[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.
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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.