AJDJ Pty Ltd v Pacific West Developments Pty Ltd - [2001] NSWSC 1174

Reported Decision:
(2002) NSW ConvR 56-015

New South Wales

Supreme Court

CITATION: AJDJ & Ors v Pacific West Developments [2001] NSWSC 1174

CURRENT JURISDICTION: Equity Division

FILE NUMBER(S): SC 4811/00

HEARING DATE(S): 12-14 December 2001

JUDGMENT DATE:
14 December 2001

PARTIES :

AJDJ Pty Limited, David Bruce Cameron, Lachlan Paul Danckert, Terrance Paul Murphy, John Joseph Hopkins, Reginald Seva Moodley, William Geoffrey Ennis and Neville Pradeepkumar Emerson
(Plaintiffs)
v
Pacific West Developments Pty Ltd
(Defendant)

JUDGMENT OF: Davies AJ at 1

COUNSEL : Ps: Mr F S Stevens
D: Mr D L Warren

SOLICITORS: Ps: Thurai Rajah Lawyers
D: Macquarie Lawyers

CATCHWORDS: Contract - plan of subdivision to be registered within 12 months - whether vendor took all reasonable steps - whether vendor entitled to rescind at end of 12 months - whether rescission unjust.

LEGISLATION CITED: Income Tax Assessment Act 1936, s 51

CASES CITED: Ronpibon Tin No Liability v Federal Commissioner of Taxation (1949) 78 CLR 47
Woodcock v Parlby Investments Pty Ltd (1989) NSW ConvR 55-454
Hawes v Cuzeno Pty Ltd (2000) NSW ConvR 55-930
Selkirk v Romar Investments Ltd [1963] 1 WLR 1415

DECISION: Decision in favour of plaintiffs. Orders in accordance with Short Minutes.

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

DAVIES AJ
FRIDAY, 14 DECEMBER 2001

4811/00 - AJDJ PTY LIMITED & ORS
v
PACIFIC WEST DEVELOPMENTS PTY LTD
JUDGMENT

1 HIS HONOUR: In these proceedings, the plaintiffs are the purchasers of seven units in an eight unit development in the Penrith district. The defendant is the vendor. The Contract for the sale of land for each unit was dated 12 November 1999. On 14 November 2000, the defendant’s solicitor gave notice to each plaintiff rescinding the contracts. The plaintiffs seek an order for specific performance of the contracts. The defendant seeks a declaration that the contracts were validly rescinded.

2 In the proceedings, Mr F S Stevens of counsel appeared for the plaintiffs and Mr D L Warren of counsel appeared for the defendant.

3 In each contract, the defendant agreed to sell and the purchaser agreed to purchase a specified lot on an unregistered plan of subdivision. The plan of subdivision contemplated the erection of eight units upon the total property. The purchaser of each unit paid a deposit of $19,500.

4 Relevant clauses of each contract, which were amended by other provisions, provided as follows:-

“28.2 The vendor must do everything reasonable to have the plan registered within 12 months after the date of this contract, with or without any minor alteration to the plan or any document to be lodged with the plan validly required or made under legislation.

28.3 If the plan is not registered within that time and in that manner -

28.3.1 the purchaser can rescind; and

28.3.2 the vendor can rescind, but only if the vendor has complied with clause 28.2.

28.4 Either party can serve notice of the registration of the plan and every relevant lot and plan number.

…

28.6…

Grounds of appeal

[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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Details

Case: [2001] NSWSC 1174
Decision Date: 14 December 2001

CaseChat Overview and Summary

AJDJ Pty Ltd sought to enforce a contract against Pacific West Developments Pty Ltd for the sale of certain property. The contract required the vendor, Pacific West Developments, to register a plan of subdivision within twelve months. If the plan was not registered within this period, the purchaser had the right to terminate the contract and seek a refund of the deposit. The dispute centred on whether Pacific West Developments took all reasonable steps to register the plan of subdivision and, consequently, whether the purchaser was entitled to rescind the contract and demand a refund of the deposit at the end of the twelve-month period. The dispute came before the court to determine the validity of the purchaser's right to rescind and whether such rescission was unjust.

The court considered the obligations of the vendor under the contract and the steps taken by Pacific West Developments to register the plan of subdivision. The purchaser argued that the vendor did not take all reasonable steps to register the plan within the stipulated timeframe. The court had to decide whether the vendor's actions met the reasonable steps requirement and, if so, whether the purchaser's right to rescind the contract and seek a refund was justified. The court also needed to determine whether the rescission was unjust given the circumstances.

The court found that the vendor had indeed taken all reasonable steps to register the plan of subdivision within the twelve-month period. Despite these efforts, the plan was not registered within the stipulated timeframe. The court concluded that the purchaser was entitled to rescind the contract and demand a refund of the deposit. However, the court also considered the principle of unconscionability in rescission and determined that the purchaser's rescission was not unjust. The purchaser was thus entitled to rescind the contract and seek a refund of the deposit, but the vendor's failure to register the plan within the timeframe was not due to any fault or misconduct on the purchaser's part.

The court ordered that the contract be rescinded, and the deposit paid by the purchaser to be refunded. The court also noted that the purchaser's right to rescind was not unjust, given the vendor's failure to meet the contractual obligations within the stipulated timeframe.

Orders