AIK Corporation Pty Ltd v Herrick
[2007] WASC 89
•17 JANUARY 2007
AIK CORPORATION PTY LTD -v- HERRICK & ANOR [2007] WASC 89
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [2007] WASC 89 | |
| Case No: | CIV:1020/2007 | 17 JANUARY 2007 | |
| Coram: | MARTIN CJ | 16/01/07 | |
| 8 | Judgment Part: | 1 of 1 | |
| Result: | Application dismissed | ||
| B | |||
| PDF Version |
| Parties: | AIK CORPORATION PTY LTD ROCIO HERRICK REGISTRAR OF TITLES |
Catchwords: | Real property Torrens land Caveats Ex parte application pursuant to s 138D(1)(e) of Transfer of Land Act 1893 (WA) for leave to lodge further caveat Where plaintiff sought extension of settlement date Default notice issued for failure to settle on specified settlement date and to produce a transfer of land document Caveatable interest alleged to arise from contract for the sale of land and because default notice was defective |
Legislation: | Transfer of Land Act 1893 (WA), s 138D(1)(e) |
Case References: | Nil |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
- IN CHAMBERS
- Plaintiff
AND
ROCIO HERRICK
First Defendant
REGISTRAR OF TITLES
Second Defendant
Catchwords:
Real property - Torrens land - Caveats - Ex parte application pursuant to s 138D(1)(e) of Transfer of Land Act 1893 (WA) for leave to lodge further caveat - Where plaintiff sought extension of settlement date - Default notice issued for failure to settle on specified settlement date and to produce a transfer of land document - Caveatable interest alleged to arise from contract for the sale of land and because default notice was defective
Legislation:
Transfer of Land Act 1893 (WA), s 138D(1)(e)
(Page 2)
Result:
Application dismissed
Category: B
Representation:
Counsel:
Plaintiff : Mr C P K Russell
First Defendant : No appearance
Second Defendant : No appearance
Solicitors:
Plaintiff : Birman & Ride
First Defendant : No appearance
Second Defendant : No appearance
Case(s) referred to in judgment(s):
Nil
(Page 3)
1 MARTIN CJ: This is an application by the plaintiff, AIK Corporation Pty Ltd, for an order that it have leave to lodge a further caveat over the land known as Lot 384 on Deposited Plan 48419, being the whole of the land comprised in Certificate of Title Volume 2626 Folio 958, pursuant to s 138D(1)(e) of the Transfer of Land Act 1893 (WA).
2 The application is brought ex parte. That is because service has not yet been effected upon the first defendant; being the owner of the land to which I have referred. Obviously, because service has not been effected, there is no appearance by or on behalf of the first defendant. I have not been told whether the second defendant, the Registrar of Titles, has been served, but no appearance has been entered.
3 It appears that attempts were made to serve the first defendant, both through solicitors, who it was thought might be acting on her behalf, and also by an attempt at personal service in New South Wales, where the first defendant resides, but each of those attempts were unsuccessful. Because of the view to which I have come in relation to the substantive merits of the application, I have proceeded to hear the matter ex parte because, for reasons that will become obvious, I did not think the first defendant would be prejudiced.
4 The application today follows an application made to Heenan J on 10 January 2007 in which orders were sought extending the time of operation of a caveat which had already been lodged and which would otherwise lapse if the time of its operation had not been extended. That caveat claimed the same interest which the plaintiff would seek to advance under the further caveat for which leave is now sought.
5 The application for extension of time of the previous caveat was refused by Heenan J on 10 January 2007. His Honour's reasons conveniently summarise the factual circumstances giving rise to these proceedings and to the current application. With gratitude and acknowledgment to his Honour, I borrow from that convenient summary of facts.
6 The caveatable interest is said to arise pursuant to a contract for the sale of the relevant land dated 20 July 2006. The contract - indeed, two versions of it, including one which has been stamped - appears in the affidavit of Ms Kuhnert, who is the director and shareholder of the plaintiff company. As Heenan J observed the contract "is a contract for the sale of land by offer and acceptance under the [Real Estate Institute of Western Australia] approved forms".
(Page 4)
7 The offer is made by the plaintiff and/or its nominee, to purchase the land which is described in full in the offer. The purchase price was specified by the contract to be an amount of $120,000 payable by a deposit of $2000 to be paid within seven days, with the balance payable on settlement, which was specified to occur on or before 5 September 2006.
8 There was no provision for the contract to have been made subject to finance or any other condition which required fulfilment prior to settlement. The contract is accompanied by a schedule, the effect of which, as Heenan J observed, appears to make the sale subject to certain existing encumbrances in the form of restrictive covenants affecting the subject land. However, neither before Heenan J nor me is there any suggestion that that gives rise to any arguable issue nor any impediment to the first defendant's title which would justify the plaintiff from refusing to accept the transfer of land subject to those conditions.
9 On the day before the unconditional contract for sale of the land was due to be completed, the plaintiff purchaser's solicitors communicated with a firm of settlement agents, Sun City Settlements, who were presumably acting for the vendor. In their letter sent by facsimile which is dated 4 September 2006, they sought extensions of the settlement date for two properties, one of which is the property the subject of these proceedings.
10 The extension sought was for a period of 21 days. The facsimile letter requested advice as to whether the vendors were agreeable to the requested extension and advised that, if so, the real estate agent would be asked to prepare an extension form for signing.
11 The settlement agents, apparently acting on behalf of the vendors of both lots and including presumably therefore the first defendant in the current proceedings, responded to that letter of 4 September 2006 by a facsimile dated 5 September 2006 in which they advised, inter alia:
"The vendor client is agreeable to the request on the basis that your client pays the required penalty interest due on the contract from the 5th September 2006 until such time as settlement is achieved. We advise that our vendor clients are ready, willing and able to settle as settlement is due 5th September 2006."
12 There does not appear to have been any immediate response to that letter, although it appears from subsequent communication that Ms Kuhnert may have endorsed a copy of that facsimile on or about
(Page 5)
- 5 September 2006 with the words "Yes, we accept this condition". At all events, it will be noticed that the time for which the extension was sought would have provided for settlement under the unconditional agreement for the sale of land not later than 26 September 2006.
13 It seems clear that there was neither a response to Sun City Settlement's facsimile of 5 September 2006 nor settlement on or before 26 September 2006. On the material currently before the Court, it seems the next step that was taken was the issue of a default notice by and on behalf of the first defendant purportedly pursuant to cl 23 of the Joint Form of General Conditions for the Sale of Land ("General Conditions") on 12 October 2006.
14 The default notice referred to the contract of sale and recited that the settlement date due under the contract was on or before 5 September 2006. It further recited that on 5 September 2006 Sun City Settlements had advised that the vendor was ready, willing and able to settle. It further recited that contrary to the terms of the contract, the purchaser had failed and/or neglected to settle on or before 5 September 2006 and failed to produce a transfer of land to the vendor.
15 The default notice went on to specify that the purchaser was in default under the contract in that it had failed to provide a transfer of land and failed to settle on or before 5 September 2006. The notice further advised that the vendor intended to enforce the vendor's rights and remedies under the contract and/or at common law unless the default was remedied and the legal costs of the vendor paid within 10 business days of the date of service of the notice.
16 By letter dated 25 October 2006, solicitors acting on behalf of the plaintiff wrote to solicitors, then acting on behalf of the first defendant, referring to the default notice and advising that it was their contention that the default notice was defective in that the seller had waived the requirement that settlement take place on 5 September 2006 and enclosing a facsimile from Sun City Settlements which was said to confirm that.
17 That is the facsimile which appears to be endorsed with the manuscript, which I am told was added by Ms Kuhnert, in which she purported to accept the condition relating to the payment of penalty interest from 5 September 2006. The letter dated 25 October from the plaintiff's solicitors goes on to state:
(Page 6)
- "It continues to be our clients [sic] intention to settle as soon as possible. It is expected that settlement will take place within 14 days."
18 It is then said:
"As a sign of good faith, in return for an extension of settlement date to 10 November, 2006, our client will increase the Deposit by a further $5,000.00. If the extension is agreed, this amount will be paid to Sun City Settlements by Friday 27 October and can be released to the Sellers if they require."
19 The next step in chronological sequence is that by a facsimile dated 27 October 2006 from George Giudice Law Chambers to the solicitors acting for the plaintiff, the solicitors acting on behalf of the first defendant contested the proposition that the default notice was defective and advised that the vendor did not agree to the request contained in the letter of 25 October 2006.
20 The letter further confirmed that their instructions were to issue a notice of termination under cl 24.2(d) of the General Conditions. That notice of termination was then issued and is dated 27 October 2006. It contains the same recitals as those in the default notice to which I have referred, and provided that by reason of the unremedied default the contract was terminated.
21 The plaintiff asserts that there are two arguments to support its contention that it has a caveatable interest in the land. The first proposition is that the facsimile from Sun City Settlements dated 5 September 2006 amounted to a counter-offer to the letter of 4 September 2006 requesting an extension of time. It is said to be a counter-offer because it imposed an additional term; namely, that the first defendant pay the required penalty interest.
22 The argument proceeds that being a counter-offer, its acceptance had to be communicated to the counter-offeror and that acceptance is said to have occurred when the letter of 25 October 2006 was sent by solicitors acting for the purchaser to the vendor, attaching the letter of 5 September 2006 to which the manuscript addition indicating acceptance had been added.
23 It is then said that because there was then an acceptance of the counter-offer, the default notice was defective and therefore ineffective because it erroneously specified a default by reference to settlement
(Page 7)
- occurring on 5 September 2006, when it should have specified the default in settlement occurring on 26 September 2006.
24 There are a number of insuperable obstacles in the path of this argument. The first is that, in my opinion, it is clear that the issue of the default notice amounted to a revocation of any counter-offer to extend time for settlement on the terms of the facsimile of 5 September 2006.
25 That is clear from its terms, in which it recites the requirement of a settlement date on 5 September 2006 and refers to a failure to settle on that date. If the proper construction of the events was that there had been a counter-offer from the vendor to extend the date for settlement, that counter-offer was, in my view, revoked by the issue of the default notice.
26 The second reason is that if the proper construction of those events was that there was a counter-offer, in my opinion, that counter-offer was impliedly revoked by the effluxion of time, or put another way, only open for acceptance for a reasonable time, which time had expired well before there was any purported communication of acceptance.
27 The counter-offer was, on the plaintiff's argument, an offer to extend the date for settlement until 26 September 2006 on terms and conditions including the obligation to pay penalty interest. On the plaintiff's argument, there was no response to that counter-offer by 26 September 2006. It seems clear to me that if that is the proper characterisation of the events, it was an implied term of the counter-offer that it be accepted not later than 26 September 2006. On the plaintiff's case, it was not.
28 The next problem though with the argument is that the letter of 25 October 2006 does not purport to be an acceptance of the counter-offer. It does not say so in its terms. On the contrary, what it does say in its terms is to advance yet another offer; that is, to settle within fourteen days of 25 October 2006. That proposition is entirely inconsistent with the acceptance of an obligation to settle by 26 September 2006. So I do not think it is possible to construe the letter of 25 October 2006 as amounting to an acceptance of a counter-offer to settle by 26 September 2006.
29 The final problem with the argument is that even if there was an agreement effected by the letter of 25 October 2006, the terms of that agreement would only have been to extend the date for settlement until 26 September 2006. Of course, the default notice issued on 12 October 2006 was issued after that time had elapsed without settlement occurring.
(Page 8)
30 Even if the proper characterisation of events was that settlement was due by 26 September 2006, the fact that the default notice referred to settlement occurring on 5 September 2006 would not, in my view, result in it being ineffective. The thrust of the default notice was to assert default by reason of the purchaser's failure to settle within the time specified by the contract. That proposition was correct on any version of events.
31 It provided a further opportunity to settle within a period of ten days from the issue of the default notice. That opportunity was not availed of. In my opinion, that appears to be sufficient compliance with the requirements of the General Conditions to have given rise to a right to terminate.
32 For those various reasons, the first line of argument relied upon by the plaintiff to support the proposition that it has a caveatable interest is without substance.
33 The second line of argument relied upon by the plaintiff for the proposition that it has a caveatable interest is that the default notice is defective because it does not, as required by cl 23 and cl 24 of the General Conditions, require the party in default to remedy the default.
34 In my view, this proposition relies upon an entirely pedantic and unrealistic construction of the default notice. As I have observed, the default notice specifies that unless the default or failure to settle is remedied within ten days, the various rights of the vendor upon the continuation of the default may be exercised. That seems to me to be a quite sufficient requirement to remedy the default, so as to comply with the provisions of the General Conditions.
35 For those reasons, I come to the conclusion that there is no arguable case in support of the proposition that the plaintiff has a caveatable interest in the land of the first defendant and I will dismiss the application.
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