Amanatidis v Syed & Anor

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMERCIAL AND EQUITY DIVISION

No. 4922 of 2008

HARRY AMANATIDIS	Plaintiff
v
MONA EERAM SYED and MAZHAR ALIAIG MIRZA	Defendants

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JUDGE:	HANSEN J
WHERE HELD:	Melbourne
DATE OF HEARING:	30 April, 1 and 7 May 2009
DATE OF JUDGMENT	20 August 2009
CASE MAY BE CITED AS:	Amanatidis v Syed
MEDIUM NEUTRAL CITATION:	[2009] VSC 350

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PROPERTY LAW - Sale of land – Residential units and car spaces on strata titles – Units owned by one or other vendor solely – Contract of sale in form of joint sale by vendors – Whether contract effective – Non-payment of residue – Rescission by vendors – Whether effective – Purchaser seeks specific performance.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr W F Gillies	Peter W Johnson
For the Defendants	Mr J M Selimi	Starnet Legal Pty Ltd

HIS HONOUR:

In this proceeding the plaintiff, Harry Amanatidis, seeks specific performance of a contract of sale dated 27 October 2007 whereby the defendants, Mona Eeram Syed and Mazhar Aliaig Mirza, sold to the plaintiff “Units 1-12 on Plan of Subdivision 13339 being all that piece of land more particularly described in Certificate of Title Volume 9319 Folio 167-178” and situated at and known as Unit 1-6, 3 Eldridge Street, Footscray (“the property”) for $910,000. Units 1-6 were residential units and units 7-12 were car parking spaces; together they comprised all of the units at the property.

The property had been passed in at an auction conducted earlier that day by Hocking Stuart, agents appointed by the defendants, at which the plaintiff had been the highest bidder. Following the auction, a negotiation occurred in which Nicholas Gerard Cuni, an employee of Hocking Stuart, dealt with and obtained instructions from the plaintiff and the auctioneer Fernando Costa, also an employee of Hocking Stuart, dealt with and obtained instructions from the second defendant. Agreement being thus reached between Cuni and Costa, the parties duly executed the contract of sale.

The contract of sale

In the particulars of sale in the contract:

(a)the “Vendor” was stated to be “Mona Eeram Syed and Mazhar Aliaig Mirza”;
(b)the purchase price was stated to be payable as to $91,000 by way of deposit on the signing thereof and the residue of $819,000 at the expiration of 60 days or earlier by agreement. As to this, it is common ground on the pleadings that the deposit payable, and actually paid on signing, was $45,500, leaving a residue of $864,500 payable on 27 December 2007 or earlier by agreement; and
(c)the land sold was described as quoted at [1] above.

The contract included the following General Conditions:

(a)Condition 9.1 which incorporated the General Conditions in Table A;
(b)Condition 10 which provided that in the case of conflict between the conditions the order of priority is:
(i)any special condition;
(ii)general conditions in the contract;
(iii)general conditions in legislation;

(c)Condition 13.1 which states that the purchaser must provide the instrument of transfer required by General Condition 12 of Table A to the vendor or the vendor’s solicitor at least 10 days prior to the settlement date.

General Condition 12 of Table A states that:

“12 Upon payment of all purchase and other moneys payable by the purchaser under the contract the vendor shall deliver to the purchaser such registrable instrument or instruments of transfer of the land sold as will enable the purchaser to become registered as proprietor of the land sold and shall deliver to the purchaser the certificate of title or if other land or interests are then comprised therein or if the land sold is under mortgage shall cause such certificate to be made available at the Office of Titles for registration. The instrument of transfer to the purchaser shall be prepared by or on his behalf. The delivery of such document shall not of itself be deemed acceptance of title.”

The contract included a Special Condition 13 by which the purchaser covenanted to deliver to the vendor’s representative a transfer of land (prepared by the purchaser’s representative) no less than 14 days prior to the date for payment of the purchase price, non-delivery of which would constitute default under the contract for which interest prescribed by Condition 4 of Table A was payable daily.

The vendor’s statement required by s 32 of the Sale of Land Act 1962 was attached to the contract and included a copy of the titles to the units, and related mortgages and caveats, provided by the Land Titles Office. They show that the residential units 1-6 are contained in a two storey block, three to a floor, with six car parking spaces number 7-12 at ground level. Each unit and car space has a separate title. The title documents further show:

(a)the first defendant as the sole registered proprietor of units 1, 2, 7 and 8, each subject to a mortgage to Adelaide Bank Limited;
(b)the second defendant as the sole registered proprietor of units 3-6 and 9-12, of which units 3, 4, 9 and 10 are subject to a mortgage to Perpetual Trustees Victoria Ltd and units 5, 6, 11 and 12 are subject to a mortgage to JP Morgan Trust Australia Limited.

Each title also includes “an undivided share in the common property for the time being described on the plan” (being Strata Plan 013339).

As it turned out, the contract was not settled and the defendants purported to rescind for non-payment of the purchase price. The plaintiff contends that the rescission was not effective, that the contract remains on foot and should be enforced at his instance. I refer below to what occurred between the parties in the course of the transaction. At this stage I note merely that the fundamental difficulty besetting the matter was that the defendants contracted as joint vendors to sell that which they could only sell individually. All that was required to remedy the error in description was to vary the contract to state the units which each vendor was separately selling and the price therefor, but that seemingly simple step was not agreed to by the parties and their advisors.

The pleadings
Amended statement of claim

In addition to the terms referred to above, the amended statement of claim alleged that the contract contained terms that:

(a)The defendants would prepare six individual contracts each providing for the sale of a unit and a car park unit and forward them to the plaintiff, each such contract being otherwise identical with the contract of sale, the total price for the six contracts would be $910,000 with the price on each individual contract being an apportioned amount of the $910,000, such apportioned amount being nominated by the defendants.
In particulars it was alleged that this term (a) was oral and implied. Insofar as it was oral it was contained in conversations between the plaintiff and Cuni shortly prior to signing the contract; the plaintiff asked if the defendants would prepare six individual contracts, each with a certificate of title to a home unit and a car park unit and forward them to the plaintiff, each contract otherwise being identical with the contract of sale, and Cuni indicated that the defendants would do so. Insofar as it was implied, it was implied by operation of law and to give business efficacy to the contract, and also by the fact that the contract of sale proffered had the defendants as vendors when they were unable to convey the land jointly pursuant to that proffered contract as they each owned individual titles rather than being joint owners and individual contracts were necessary. Settlement could not be effected on the proffered contract.
(b)Settlement would occur within 30 days of receipt of the individual contracts of sale or earlier by mutual agreement.
In particulars it was stated that this term was in writing in the proffered contract. In fact that is not so; the proffered contract provided for settlement within 60 days, as the plaintiff acknowledged in his pleading by way of reply. Nor did the proffered contract refer to the provision of individual contracts of sale.

From this point the statement of claim alleged that:

(a)the plaintiff stands ready, willing and able to complete the contract;
(b)in breach, the defendants have refused to prepare six individual contracts for a total price of $910,000 and refuse to settle the contract of sale;
(c)by notice dated 29 January 2008 the defendants purported to rescind on the ground of failure to pay the residue of the purchase price on the due date in the contract;
(d)the plaintiff was capable of complying with the notice of rescission but the contract was not in proper form by reason of it purporting to be a sale by owners jointly and it did not conform with the agreed contract of sale.

On this pleading the plaintiff claimed:

(a)a declaration that the contract of sale remained on foot and an order that it be specifically performed by the defendants providing to the plaintiff six contracts of sale and otherwise complying with the contract of sale;
(b)an order restraining the defendants from acting upon the notice of rescission.

Defence

The defence commenced with an allegation that the contract alleged was unenforceable by reason of a lack of writing, relying in this respect on the term as to six individual contracts being oral and s 126(1) of the Instruments Act 1958.

The defence then alleged:

(a)that by facsimiles dated 17 and 21 December 2007 LPT Conveyancing acting for the plaintiff advised Martins Conveyancing acting for the defendants that the plaintiff would not complete the contract thereby evincing an inability or unwillingness to perform the contract;
(b)in breach, the plaintiff failed to attend settlement or tender the residue on 27 December 2007[1];
(c)on or about 29 January 2008 the defendant served a rescission notice relying on the plaintiff’s failure to pay the residue on the due date, and stating that unless within 14 days the breach was remedied and costs and interest were paid, the defendants would exercise their rights and the contract would be rescinded. On the plaintiff not complying with this notice, on 14 February 2008 the defendants gave the plaintiff written notice that the contract was rescinded;
(d)in an alternative plea of rescission, it is alleged that from 20 December 2007 to 27 March 2008 the plaintiff evinced an inability or unwillingness to perform the contract, relying as to this on facsimiles from LPT Conveyancing dated 30 January 2008 and 4 February 2008 and the plaintiff continuing to evince its inability or unwillingness to complete up to and following the commencement of the proceeding in February 2008. It is alleged that on 14 February 2008 the defendants accepted the plaintiff’s repudiation. In the further alternative it is alleged that on or about 27 March 2008 the defendants accepted the plaintiff’s repudiation;
(e)finally, the defence referred to caveats which the plaintiff lodged on 31 January 2008 in respect of units 1 and 2, and on 4 February 2008 in respect of units 3 and 6. The defendants had sought removal of the caveats pursuant to s 89A(1) of the Transfer of Land Act 1958 but, the plaintiff having commenced the subject proceeding and given notice thereof to the Registrar, the caveats subsisted. In the event the plaintiff’s claim is not substantiated, the defendants will seek orders that the caveats be removed.
[1]The defence stated the day as the 27^th whereas the correct day was the 26^th. The same error was made in the plaintiff’s reply: see at [15].

Reply

As to the plea based on s 126(1) of the Instruments Act, it is alleged that the contract is in writing and, if it does not comply with s 126(1), the contract has been part performed by payment of the deposit.

The plaintiff denies having been in default in not paying the residue, contending that he was under no obligation to do so on 27 December 2008.

It is further alleged that the rescission notice was deficient in that it specified a date for compliance – 26 December 2008 - which had not passed.

Finally, the defendants foreshadowed orders for removal of the caveats required a counterclaim, and there was none.

Evidence

All witnesses gave their evidence viva voce without a witness statement.

In the plaintiff’s case evidence was given by the plaintiff, Cuni, Michael Nikolic, a friend of the plaintiff who attended the auction with him, and Robert Antoniades, the proprietor of a conveyancing firm called Land and Property Transfers (“LPT”). For the defendants, evidence was given by the second defendant and Abdul Raphael Syed, the husband of the first defendant.

Pre-contract discussions

I now refer to the events and discussions that occurred between the property being passed in and the contract being signed. This concerns the discussions that the plaintiff relies on to found the term as to the provision of six contracts, referred to at [9](a) above. Counsel for the defendants objected to the evidence on the basis that it was precluded by the parol evidence rule; see Gordon Macgregor[2]; Hoyt’s Pty Ltd v Spencer[3]; Maybury v Atlantic Union Oil Co Ltd[4]; Equuscorp Pty Ltd v HGT Investments Pty Ltd[5]. In Maybury Dixon CJ[6], in delivering the judgment of the Court, said that:

“Once an agreement is made in writing it is treated, unless the parties are shown otherwise to intend, as the full expression of their obligations. If it is established that the writing was intended to contain only part of a fuller agreement it may be otherwise. … But it may be established that an entirely separate agreement was made by the parties. One of them may give a collateral promise in consideration of the other entering into the principal agreement. But if such a collateral agreement is to have effect as a contract it must be consistent with the provisions of the main agreement, the making of which by the other party provides the consideration. If the promise sought to modify, control or restrict the principal agreement it would detract from the very consideration which is alleged to support the promise.”

[2](1909) 8 CLR 316, 323.

[3](1919) 27 CLR 133, 143.

[4](1953) 89 CLR 507, 516-518.

[5](2004) 218 CLR 417, 428.

[6]At 517.

I permitted the plaintiff’s counsel to lead evidence of the oral discussions, subject to the defendants’ objection.

The plaintiff was the first witness. He said that the property was passed in at $870,000. The agent Cuni came over to him and a negotiation occurred. The “other people” (meaning the vendors) were three or four properties down the road. The plaintiff said that he went up $10,000 at a time until he got to $910,000. There was a lot of coming back and forth. He said that he would sign “on the condition there are six separate titles”. The plaintiff said that “they come back and they said yes, it was a done deal at 910 and what was relayed to me it was separate titles and I signed and gave them my deposit”. He explained that by separate titles he meant there were “twelve – two to every unit – there’s two titles in every contract”, so that he would receive six conveyances.

At this stage, on my saying that I wanted the plaintiff’s best present recollection of what was actually said, counsel asked the plaintiff what offer he made to the agent. The plaintiff then gave the following evidence:

“I said I agreed on 910,000. It was six separate titles. Six separate contracts.
He came back to you and what did he say? — — — He said that’s correct, that’s how they purchased them and that’s how it would be. They purchased them, six separate titles, they were strata’d before they purchased them and it’s the same with me, you know,
And that’s what he said to you? — — — That’s correct.
The sale price is $910,000, that is correct? — — — That’s correct.
Are you able to pay that sum were the court to order that the contract be specifically performed pursuant to the contract; would you be able to pay that sum in 60 days? — — — Yes, yes, I have spoken to my bank and my bank is still prepared to honour that contract.”[7]

[7]Further evidence of the plaintiff as to his willingness to proceed with the contract is referred to at [87] below.

The plaintiff was cross-examined as to his recollection of the discussions. He said he had a clear recollection. The vendors’ agent said to him that there are “six separate titles conveyed”. He said to the agent that he “would sign on condition there are six separate titles conveyed”. He knew there were six strata titles.

The plaintiff said that Cuni told him that the defendants “bought six separate titles and they’re strata title and they’re individual contracts and you register them separately individually with the Titles Office and you’ll get six separate titles”.

Later, the plaintiff said that he had the opportunity to read the contract before he signed it. He signed it at Cuni’s car.

In re-examination the plaintiff was asked who from the estate agents he had discussions with before signing the contract, and he said:

“Fernando and Nicholas when they came up to us and trying to get me to lift the price up so they wouldn’t lose the sale, and I mentioned to them the strata title, for me to have six titles I could save on – separate them in different companies to give them the extra 40,000 that they were after to get the deal done, and then at the end before I signed it with Nicholas at his car I specified it with him too on two different occasions.”

The next witness was Cuni. He worked as an estate agent but not now with Hocking Stuart. He said that the plaintiff opened the bidding and the property was passed in on a vendor bid, followed by negotiations in which he had discussions with the plaintiff. He tried to negotiate the highest and best price “and we came to a decision of the highest price being 910, subject to six contracts being made available”. Before he signed the contract, the plaintiff required six contracts to purchase the property.

Cuni said that in these discussions he did not speak to the vendors; the auctioneer Costa did that. Cuni said that in the discussions he was working on behalf of the vendors. He told Costa that the plaintiff wished to purchase with six contracts, after which Costa “walked down to the vendor and came back to me and agreed, said if we get the contract signed we can proceed”, and that “He said – he just agreed to getting six contracts, that we’d have to talk to the conveyancers at a later stage to get that organised”.

In cross-examination Cuni said that he had known the plaintiff for a couple of years prior to the auction. The plaintiff had purchased properties through his agency.

Cuni agreed that the plaintiff told him that he was prepared to buy the property on the condition that six separate titles would be conveyed to him. That was the essence of the condition or offer he conveyed to Costa. As to what Costa said to the vendors, he could only trust what Costa said to him.

The next witness was Nikolic who said that he was a builder and friend of the plaintiff and attended the auction with him. Prior to the auction Cuni spoke to them and advised that there were individual strata titles. Then the auction was held and the property passed in. Then Cuni and the auctioneer approached them to see what the plaintiff could do “about pushing the limits up and at that stage” (as I followed his evidence) the plaintiff made “sure there are 6 individual titles – 6 contracts basically so we can settle on. That was the conversation”. There was a bit of negotiation to and fro. Finally, one of the agents came back that the 910 was acceptable and “our understanding was the 6 titles would come with it”. They then drove around the corner, stopped and spoke to the agent who had the contract, and:

“… before Harry signed it he basically said that are you sure we’ve got six titles here? They go yes, that’s what he understands the titles, six individual – I shouldn’t say titles, I should say contracts, we need six individual contracts. So because I’ve sort of had a bit of doing and friendship and I understand how Harry does when he goes and buys a property, he separates it between himself or his kids, whichever way he works it. So there was conversations and it was clearly understanding for us that we were going to have six contracts.”

In cross-examination Nikolic said that he had known the plaintiff for about 25 years and he was a good friend. He was asked as to his evidence that the plaintiff had said “Make sure there are six individual titles” and said “Well, OK, correcting myself, contracts”.

Nikolic said that he first asked that they were all strata titles, which they were and then the plaintiff “wants 6 individual contracts so he separates them into whichever entity he wants to put them into”. He understood that the plaintiff wanted six separate titles. He was then asked whether he gave his earlier evidence as to separate contracts because of the plaintiff’s allegation that prior to executing the contract he (the plaintiff) stipulated he required six separate contracts, and Nikolic answered:

“Prior to him signing the contract with all our discussions he requested from the agent, after the negotiations between the vendor and Harry, that he gets six contracts with the titles associated with it and I understand they’re strata titles and they were to give – that’s why my confusion in my term between the contract and the title. That’s the only reason of it.”

Nikolic denied that he had corrected his evidence to use the word “contracts” because he realised his initial evidence was not helpful for the plaintiff. He said that:
“… we asked the agent is it individual titles, they said it’s strata titles. So he asked for strata titles. This is prior, after the negotiation of individual contracts. So is that clarified what I mean to is that confused the issue?”

I now refer to the evidence of the second defendant. In examination in chief, the second defendant said that during the auction he was one hundred metres away, where the agent Costa told him to be. He had no discussion with Cuni. Costa told him “the auction is 870 and then said we don’t agree and he come back again and say you got to do it – says 910, we agree to that and it sold, and he said go home, I will come to sign with you and your sister in law [the first defendant] at home”. After the contract was signed he had no involvement.

In cross-examination the second defendant said it was not suggested to him that there were six individual contracts. The agent said only one contract. When pressed as to whether it would make any difference if there were six contracts he said that “They just tell only one contract is enough” and, then, “To be honest I really – this whole matter was really handled by my brother in law after that, I didn’t handle … this one”. He said there were not six contracts on the day. He had heard the evidence [given in Court] that Costa and Cuni said to the plaintiff that there would be six contracts, “but nobody said it to me”. The first time he heard about six contracts rather than one was before the settlement in December. He said that his brother in law handled the whole situation. He repeated his denial that six contracts was mentioned, the agent was “just coming and going with the price, that’s all”.

The next witness was Abdul Raphael Syed, the husband of the first defendant. I will refer to him as Mr Syed. The first defendant did not give evidence, and neither of them attended the auction. After the auction, Costa rang him and advised the property had been sold for 910, he would have the purchaser sign and come to his home for the defendants to sign. Later that afternoon Costa duly attended at his home with the contract for signing. Mr Syed said that when he brought the contract “we stated to him that there are six properties … and we don’t need to have the six contracts. Then Fernando Costa said that no, this is the legal contract as long as both owners sign on the contract that’s fine, these are the legal binding contracts and he also stated that we haven’t auctioned the flats individually, we have auctioned whole as sold as one, we have sold as complete building he said”.

Mr Syed said that prior to the settlement date their conveyancer showed him a letter from the plaintiff’s conveyancer dated 17 December 2007 which suggested the contract was not valid and requested new contracts be drawn. That was the first time he was aware of that requirement. The plaintiff’s conveyancer advised that they needed separate contracts because there were two separate vendors.

In cross-examination Mr Syed said that the property had originally been purchased on one contract by the second defendant. But wishing to add the first defendant as a transferee, the financier required that there be a contract with her. Accordingly they requested the vendor to provide six separate contracts so they could “put it on the different name”, and the vendor agreed provided they settled on time, paid penalty interest for delay and the cost of preparing separate contracts. The transaction was settled on that basis.

Mr Syed said that when Costa came to his home with the contract, he advised Costa what had happened when they bought the property. Costa said he had not auctioned individual units, but as one. They had advertised and sold as one “and we have looked up the contract. It’s legal and as long as two vendors sign on one contract, all the titles are attached to it and it’s on strata title, all attached to it. And as long as both vendors sign, no problem. That’s fine”. Mr Syed said that he also asked Costa whether the purchaser “said anything about the six contracts at all” and Costa said “no”. He said further that he advised Costa “is that we have to do it” and Costa said “No, one contract is enough and as long as two vendors sign on one contract, that’s how it works”.

If at the auction the price of $910,000 was agreed and the purchaser had asked for six individual contracts that would not have been a problem as long as the settlement was on time, the main purpose for selling being to pay the caveator. However, that conversation did not take place, his first awareness of six separate contracts being on 25 January 2008.

The last witness was Costa who is still employed by Hocking Stuart. He said that Cuni was the designated salesperson in charge of the file and who liaised with the buyers. In the negotiation that followed the auction the vendor was represented by the second defendant, Cuni dealt with the buyers and he (Costa) with the vendor, liaising to agree on price. At the time the person they needed to sign the contract was not present, and he had to leave so he left Cuni with the purchaser signing the contract and which Cuni later gave him.

As to the conversations between Cuni and himself, it was basically about getting the best offer which he recalled as around 910. Costa said to Cuni that he would relate that back to the vendor by phone, which he did, and the vendor agreed to sell at that level. He then left Cuni. The vendors signed later that day when he took the contract to them.

In cross-examination Costa recalled that as agent he had sold the property to the second defendant, on one contract.

Costa did not recall the second defendant discussing with him that they had purchased with six contracts. He did not recall having a conversation to that effect in the negotiation. Nor did he recall having a discussion with Cuni as to the sale being by way of six contracts or six transfers of land. The contract had been prepared and it was bought that way. He thought the only issue was price. As to whether he forgot the conversation deposed to, Costa said that “something of that relevance you cannot forget because it has a big impact on selling the property, I wouldn’t have been able to get it across the line if I needed six different contracts, if that was the case I would not put myself in a position to sign the contract of sale, there would be no point in getting two signatures on the contract of sale”.

He was asked whether it mattered if there was one contract or six, and said that it did. It was prepared on one contract because it was sold as a whole. If a purchaser bought individual units he could “cool off on three and buy the other three”.

Costa said that he did not realise that the vendors were not joint owners.

Finally, Costa said that it was possible he may have forgotten the conversation about six separate contracts, “but that would be a big impact in the sale of the property and I wouldn’t have proceeded with the auction at all, … the contracts [were] prepared by … a capable conveyancer or solicitor”.

Nor did Costa remember a conversation with Mr Syed as to having purchased with six contracts and as to six contracts on the sale. It could be a possibility he had forgotten.

Following the auction

Following the auction the plaintiff engaged LPT to act as conveyancer for him on the transaction.

Martins Conveyancing (“Martins”), who had prepared the contract of sale, acted for the defendants.

On 2 November 2007 Cuni wrote to LPT. He advised that 1-6, 3 Eldridge Street, Footscray had been sold, enclosed the contract of sale, advised that the vendors’ representative was Martins, and confirmed that Hocking Stuart held the deposit of $45,500. There was no reference to six or any other number of contracts or transfers being required.

On 5 December 2007 Martins wrote to LPT with a request that settlement be brought forward to 21 December 2007. On the same day an employee of LPT advised Martins that the plaintiff wished to delay settlement until mid-January 2008; the request was refused. The request was refused because the defendants had committed to pay the caveator.

Antoniades deposed that he received the file from the plaintiff about two weeks before the transaction was due to settle. One of the reasons for the delay was that the plaintiff needed advice from his accountant as to the most cost-effective way of registering the six properties. Antoniades said that the plaintiff had half a dozen companies and superannuation entities, and that he was waiting for instructions as to how the split should occur. At one point in this area of his evidence he said that the plaintiff advised him that he wanted six separate contracts but a question or two later he said that the plaintiff mentioned that he had made arrangements with the agent to have different contracts but he did not think he mentioned the word “six”, “but he definitely told me there were to be separate contracts at some stage”. In cross-examination Antoniades agreed that if a client advised there were oral terms not reflected in the written agreement, it would be important to advise the vendors’ conveyancer.

On considering the contract in the light of the ownership position of the units, Antoniades became concerned that the contract was ineffective because the vendors could not convey as joint owners, and, thus, that transfers as sole proprietors would not accord with the contract and would not be registered. His concerns were confirmed by inquiry at the Land Titles Office. He also pointed to the practical problem that could arise if one of the joint vendors refused to proceed but the other was willing to do so. A separate issue, which did not affect the validity of the contract, was that the duty on six transfers would total less than the duty on one transfer.

On 17 December 2007 Antoniades wrote to Martins advising that they acted for the purchaser and stating that:

“We are in receipt of Contract of Sale and advise we act for the Purchaser. We are somewhat confused by the Contract and respectfully suggest it is not valid. We note the registered proprietors of the units as follows:-
UNIT NAME of PROPRIETOR

1-2                Mona Eeram SYED
3-5                Mazhar Aliaig MIRZA
7-8                Mona Eeram SYED
9-12              Mazhar Aliaig MIRZA

We request the contract be withdrawn and new contracts be drawn up. Our client requests the following contracts:-

Contract Proprietor Unit/s Titles Price

1. Mona Eeram SYED 1,2,7,8 9319/167, 9319/173 $303,600.00
9319/168, 9319/174

2. Mazhar Aliaig MIRZA 3,4,9,10 9319/169, 9319/175 $303,600.00 9319/170, 9319/176

3. Mazhar Aliaig MIRZA 5 9319/171, 9319/177 $151,400.00

4. Mazhar Aliaig MIRZA 6 9319/172, 9319/178 $151,400.00
Our client also wishes settlement for 28 January 2008.”

On 21 December 2007 Martins sent a letter to LPT expressing disappointment at the late request for new contracts. Martins advised that they had prepared “two separate contracts as these properties are owned by two separate vendors” but would not separate them into four (as LPT had requested). Martins advised that the defendants “will not extend the settlement date to 28 January 2008 and will need to settle the properties on the due date of the original contract namely 27^th December 2007”.

In his evidence the second defendant said that he received LPT’s letter and told Martins to quickly provide the contracts so they can be signed and forwarded to LPT.

In a response to Martins sent by facsimile on 21 December 2007 Antoniades stated that:

“2.at the present time there appears to be no contract and accordingly, we are not ‘seeking’ an extension of settlement;
3.the Purchaser has offered to purchase the properties under the terms and conditions set out in our letter to you of 17^th December 2007. This includes four separate contracts and a settlement date of 28^th January 2008;
4.can we therefore assume your clients have not accepted this offer and that there is no sale?’
5.a copy of our letter has been sent to Hocking Stuart with a request to negotiate with the vendors.”

Antoniades said in evidence (and I accept) that the defendants withdrew their proposal of two separate contracts (made on 21 December) “within 24 hours”.

On or by the date for settlement, 26 December 2007, the plaintiff had not submitted an instrument or instruments of transfer nor sought to tender the balance of the purchase price. Settlement did not take place on 26 December.

Subsequently the defendants engaged solicitors, Collins House Legal, to act for them.

On 25 January 2008 LPT wrote to Collins House Legal on the understanding that they were now acting for the defendants. (I interpolate that that understanding was correct.) The letter stated LPT’s belief that the contract of sale was incorrectly drawn and that they had requested separate contracts. LPT requested that six separate contracts be submitted “as the Purchaser wishes to nominate various companies of which he is a director as substitute purchasers”.

As to this letter, the second defendant said in evidence that if they (the defendants) had been informed that six contracts were needed before the date for settlement they would have provided them, but they had not been so informed and had never agreed to it so he gave instructions to serve a rescission notice. Time was of the essence, they needed to pay the caveator.

The response of Collins House Legal, by letter sent by facsimile on 29 January 2008 was to serve on the plaintiff a rescission notice and forward a copy to LPT. The notice alleged that the plaintiff was in breach of the contract in failing to pay the residue of the purchase price on the due date, 26 December 2008. The notice stated that the vendor intended to exercise the vendors’ rights unless the breach was remedied and interest and costs are paid within 14 days of service of the notice. It was further stated that unless the breach was remedied and interest and costs paid the contract will be rescinded pursuant to General Condition 6(2) of Table A.

It is to be noted, and it was noticed by Antoniades, that the settlement date stated in the notice was wrong; the relevant year was 2007 not 2008.

Antoniades discussed the rescission notice with the plaintiff. They decided that the plaintiff “would take the matter to a solicitor”.

LPT responded with a letter to Collins House Legal on 30 January 2008 in which it was stated that according to legal advice “it is not possible to incorporate owners of separate properties into a single contract”. The letter noted that Martins had been requested to provide six separate contracts, which were awaited. In the meantime, caveats were to be lodged. It was stated that the plaintiff had executed the contract in good faith and wished to proceed; the price and the terms of the contract were acceptable and the plaintiff was prepared to settle in 30 days of the date of any new contracts.

In cross-examination Antoniades said that in his 30 January letter he did not state that the contract was signed on the basis of a representation of six separate contracts being prepared, because that had been discussed earlier, and it was not necessary to re-state the dispute.

The second defendant said in evidence that he gave Collins House Legal instructions (in relation to LPT’s letter of 30 January) not to provide six separate contracts. He also said that he gave instructions to “refund all money to the purchaser”.

However, on 4 February 2008 Collins House Legal sent a letter by facsimile to LPT referring to discussions following LPT’s letter of 30 January and stating:

“We note that your client wishes to nominate different Purchasers for the above units and advise that the consideration of $910,000.00 should be apportioned as follows:-
1.      Units 1, 2 and 3  $170,000.00 each
2.      Units 4 and 5  $135,000.00 each
3.      Unit 6  $130,000.00
Please forward the nomination documents and Transfers of Land to our office as soon as possible to enable us to arrange for execution by the Vendors.”

The second defendant said in evidence as to this letter that Collins House Legal had called him, and asked for instructions about transfers, and that he said “Please prepare it and give it to me so I can get it signed from the vendors”. He also provided instructions for the apportionment of the price set out in the letter. In short, he gave instructions for the letter.

Antoniades spoke to Collins House Legal who insisted that the rescission costs and penalty interest would apply. Antoniades considered those costs were not appropriate, and they were not acceptable to the plaintiff. Antoniades further said that the plaintiff advised that he had bought the property on the basis that he would receive six separate contracts which the defendants’ proposed grouping would preclude. Accordingly, Antoniades did not prepare the transfers required by Collins House Legal. There was also the difficulty that the letter did not offer separate contracts but rather sought to deal with the problem by way of instruments of transfer.

Antoniades said in evidence that if he had been asked to do so he would have prepared six contracts.

On 4 February 2008 Antoniades wrote to Collins House Legal referring to their letter of that date. LPT’s letter stated:

“We await formal contracts of sale. As previously advised the current contract is not valid. At best it attests that all six units were for sale together but as there were different owners they could not sell each other’s property. It would be so simple to remedy the mistake with separate contracts. Our client is in a position to settle but needs correct documentation from his bank and to register transfers.
Our client has obtained legal advice and has instructed us to forward the file to solicitors with instructions to issue proceedings.

…
Please advise if formal (and correct) contracts will be forthcoming.”

The second defendant said in evidence that he gave instructions that the defendants did not agree to the request to provide separate contracts, and, the rescission notice having expired, to return the money.

So instructed, on 5 February Collins House Legal sent a without prejudice letter by facsimile to LPT advising that the vendors “are prepared to cancel the Contract and refund the deposit monies to your client on the basis that each party will be responsible for their own costs incurred to date”.

On 12 February 2008 Collins House Legal sent a without prejudice letter by facsimile to LPT confirming that the plaintiff had rejected the defendants’ offer, and that the offer had been withdrawn. The letter further confirmed that the vendors required settlement to be completed in accordance with the terms of the contract.

Antoniades responded by letter on 13 February noting that:

“… you require our client to settle on a contract that is not acceptable to Stamps Office and to the Purchaser’s lender. As a result our client would not be able to stamp and register any transfer that relates to that contract.
I note you refuse to rectify your (or Martins Conveyancing’s) error with fresh contracts which include the same terms and conditions as agreed to by the vendor/s. I further note you (and Martins) have failed to advise us if they have professional indemnity insurance, which is not disclosed in all their correspondence. I must admit I am totally confused by your reluctance to regulate the matter with corrected contracts.
We are instructed to pass the file to Paul Russo, lawyer for further action. Kindly direct future correspondence to Mr Russo at 19 Winifred Crescent, Glen Iris 3146. I understand he is instructed to issue proceedings without further notice.”

In cross-examination Antoniades stated that his opinion expressed in the letter as not being able to stamp any transfers was based on his checking with the Stamps Office and the Titles Office.

Later on 14 February 2008 Collins House Legal sent a letter by facsimile to Mr Russo. The letter stated that the contract had been rescinded, advised that the net deposit monies would be released on 15 February, and requested the withdrawal of the caveats lodged by LPT.

By a facsimile later that day LPT advised Collins House Legal that the rescission notice is defective and is rejected. It stated that no funds are to be released as the matter is under dispute and legal proceedings are in progress.

Mr Russo also responded by a letter to Collins House Legal dated 15 February in which he stated that he was instructed only to write the letter and, among other things, advised against releasing the deposit until the Court determined the matter.

The plaintiff then instructed his present solicitor, Peter W Johnson, who wrote to Collins House Legal on 20 February 2008. The letter stated that the rescission notice was defective, the contract was on foot and the caveats would not be removed. It was stated that as drawn the contract could not be implemented by registrable instrument of transfer, a transfer not being able to be registered unless it can be stamped. The defendants were therefore in breach, which the plaintiff required to be remedied and the contract completed. The letter gave notice that the plaintiff intended to enforce the contract and that, failing confirmation by 5.00 pm on 25 February, the defendants would take action to enforce the contract.

On 22 February 2008 Collins House Legal wrote to Johnson, stating that the contract was at an end and requesting removal of the caveats. The letter advised that the deposit monies were released to the defendants on 19 February 2008.

On 29 February 2008 the writ was filed by which the plaintiff commenced the proceeding.

On 27 March 2008 Collins House Legal wrote to Johnson setting out the history of the matter and stating that:

“… it is clear that your client was unwilling to perform the Contract of Sale as early as 21 December 2007 and has remained unwilling to perform it since that time. As such, your client has disavowed the Contract of Sale and repudiated it.
As you are already aware our client says that by the facsimile dated 14 February 2008 (and sent to Mr Russo for your clients) the Contract of Sale was rescinded. It was rescinded for failure to comply with the rescission notice dated 29 January 2008. However, without prejudice to that argument, and in the alternative, our clients say that on 14 February 2008 the Contract of Sale was terminated by way of an acceptance of your client’s continuing repudiation.
Alternatively, and again without prejudice to the bases for lawful termination set out above, our client hereby accepts your client’s repudiation of the Contract of Sale. As such the Contract of Sale is at an end.”

It remains to mention that in his evidence the plaintiff indicated that he wished to proceed with the purchase. He would, he stated, settle with two, six, four or whatever number of contracts the defendants wanted but it had to be done properly so that the transfers can be registered. I accept that the plaintiff has the means and ability to complete the purchase.

Submissions

Without overlooking all that counsel said in their written and oral submissions the following summary identifies the essential points.

Plaintiff

At the outset, counsel submitted that the contract should be found to include the alleged term that required the defendants to provide six individual contracts of sale, each covering one unit and one related car park unit. The evidence of the plaintiff and his witnesses should be accepted; the defendants’ assertion that nothing was mentioned about six separate contracts should simply not be believed.

Counsel submitted that the alleged term was not inconsistent with the written contract, it was simply a means of performing the contract. And, counsel noted, the written contract did not include a term that it was the sole repository of the parties’ agreement.

Counsel then noted that the contract identified the defendants as vendors without distinguishing their individual ownership, that s 45(1) of the Transfer of Land Act 1958 provides that a registered proprietor “may transfer his estate or interest in land by an instrument in an appropriate approved form”, and the terms of that form[8] which require the land being transferred and the consideration therefor to be stated, which required, at the least, that each vendor provide a transfer of the units they respectively owned stating the consideration therefor. The transfer could not be done by both defendants in globo, as it were.
[8]Transfer of Land (General) Regulations 2004 Schedule 2 Form 12.

At the time when the defendants served the rescission notice on 29 January 2008, the plaintiff’s solicitor was unable to prepare and provide a transfer of land, and in fact no transfer had been provided. The defendants had not provided an apportionment of the purchase price to the units, thus precluding the plaintiff’s conveyancer from preparing transfers. Counsel noted that when an apportionment was provided on 4 February it was withdrawn the next day.

It followed, counsel submitted, that the defendants’ attempted rescission was not effective, and the contract remained on foot. The defendants were not entitled to give the notice, not having taken the steps necessary to enable the plaintiff to complete the transaction. The defendants had thus not been ready, willing and able to complete the transaction, and accordingly had not been entitled to rescind; see Rawson v Hobbs[9]; Mehmet v Benson[10]; DTR Nominees Pty Ltd v Mona Homes Pty Ltd[11]; Foran v Wright[12].
[9](1961) 107 CLR 466, 481.
[10](1964) 113 CLR 295, 307-308.
[11](1978) 138 CLR 423, 433.
[12](1989) 168 CLR 385, 396.

Thus far the plaintiff’s submission was premised on the defendants being bound by the alleged term to provide six separate contracts.

Counsel submitted in the alternative that, even if it be held the alleged term was not a term of the contract, the contract was incapable of being carried into effect until such time as the defendants apportioned the purchase price to the units. As the defendants had not nominated the apportionment, the plaintiff was unable to prepare and provide instruments of transfer.

It was submitted that if and when an apportionment is provided the plaintiff is ready, willing and able to complete the contract, and would do so by two, four or six contracts.

In his written outline counsel also submitted that the defendants were estopped from relying on s 126(1) of the Instruments Act. This was because the defendants had encouraged the plaintiff to enter into the contract on the basis of a representation that they would provide six separate contracts. The submission relies on acceptance of the evidence relied on to found the alleged oral term. I note as to this submission that the plaintiff did not plead an estoppel in reply to the defendants’ plea of s 126(1).

Finally, it was submitted that even when the defendants apportioned the purchase price, they demanded interest and costs, but the right upon which the demand was based being the invalid rescission, the defendants had not been entitled to demand such interest and costs; see Naval and Military Club v Southraw Pty Ltd[13].
[13][2008] VSC 593.

The premise underlying counsel’s submissions was that the contract of sale (with or without the alleged term for the provision of six separate contracts) was binding and enforceable, that the defendants’ attempts at rescission were ineffective, and that the contract remained on foot and should be enforced by a decree of specific performance. This premise is inconsistent with the suggestions or assertions of Antoniades in LPT’s correspondence that the contract was “not valid”, that there appeared to be “no contract” and “no sale”, and that no transfer that related to the contract could be stamped and registered. Not only is the premise inconsistent but counsel did not submit that those suggestions or assertions were correct. In short, he did not seek to support them or advance a case based upon them. Accordingly, the correctness or otherwise of those suggestions or assertions does not arise for consideration.

Defendants

Counsel for the defendants identified the questions in issue as follows.

First, what was the contract? He submitted that the plaintiff had not established the existence of the term as to six separate contracts, and that the parties intended that the written contract record their agreement.

Secondly, did the plaintiff breach an essential term of the contract which entitled the defendants to rescind? He submitted that the failure of the plaintiff to tender the balance of the purchase price on 26 December 2007 constituted the breach of an essential term which entitled the defendants to exercise their rights under General Conditions 5 and 6 of Table A.

Thirdly, did the defendants validly rescind by the notice dated 28 January 2008? He submitted that the error as to the year (2008 rather than 2007) was immaterial, and that the notice was effective according to its terms.

Fourthly, did the plaintiff renunciate or otherwise repudiate the contract such as to entitle the defendants to elect to determine the contract? Here counsel relied on the alternative bases of rescission alleged in the defence. Counsel submitted that by the letter of 14 February 2008 or the letter of 27 March 2008 the defendants rescinded the contract.

Decision
The six separate contract term

I have set out the evidence relating to this issue. In my view it is not established on the balance of probabilities that the parties agreed on the term referred to at [9](a) above. I so conclude whether the alleged term be considered as a term of the contract of sale or as an agreement collateral thereto. The allegation fails at the evidentiary threshold. My reasons for that conclusion lie in the following matters.

First, as to the witnesses, I consider that Cuni and Nikolic, each of whom had a background relationship with the plaintiff, sought to assist the plaintiff, aware of his six separate contract case. And, of course, the plaintiff had his own interest to advance, although even then he only once referred to “individual contracts” in his evidence recounting the discussions prior to signing the contract.

Secondly, the central emphasis of the evidence of the plaintiff and his witnesses was the assurance of six titles. As to that, Cuni’s advice that the plaintiff would receive six separate titles was correct.

Thirdly, I accept the evidence of Mr Syed, the second defendant and Costa, whom I considered to be honest witnesses, that six separate contracts was not requested by the plaintiff prior to the contract being signed.

Fourthly, Cuni’s letter dated 2 November 2007 made no reference to the alleged agreement for six separate contracts.

Fifthly, LPT’s correspondence did not refer to the parties having agreed to six separate contracts. LPT’s letter dated 25 January 2008 requested six separate contracts as the plaintiff wished to nominate various companies as substitute purchasers, but did not assert that the parties had in fact agreed that the transaction would proceed by way of six separate contracts. LPT’s subsequent letter dated 30 January 2008 referred to that request for six separate contracts but did not assert a contractual right for them, merely stating that the plaintiff had executed the contract in good faith and wished to proceed.

Sixthly, the likelihood is, if the parties had agreed as alleged, that that would have been stated in LPT’s correspondence. The failure to do so is an indication that the plaintiff had not so instructed Antoniades, and tells against the parties having so agreed.

Seventhly, in truth, in my view, the plaintiff’s desire was to do as well as he could on duty, and this issue he commenced to explore with his accountant subsequent to the sale. The delay in obtaining advice was fairly described by Antoniades as “procrastination”, perhaps due to the lateness in the year when the advice was sought. But, and this is singular, when Antoniades finally obtained instructions and wrote on 17 December 2007 he requested the contract be “withdrawn and new contracts be drawn up” for which purpose he requested four – and not six – contracts. There was no reference to the parties having agreed to six separate contracts with the purchase price apportionment to be nominated by the defendants.

I do not overlook that the subject term was alleged to be partly oral and implied. I have considered the term as pleaded and particularised, and rejected the plaintiff’s case on this aspect. Although the term is not pleaded as resting on implication alone, I am of the view that it could not be sustained on that basis. The plaintiff does not contend that the contract is not a binding and enforceable agreement; indeed, as mentioned earlier, the plaintiff seeks to enforce the agreement even without the alleged term. That submission must be premised on the written contract being sufficient and complete as to all essential matters. That, in turn, must destroy any warrant or basis for the implication of the term; see BP Refinery (Westernport) Pty Ltd v Shire of Hastings[14].
[14](1977) 180 CLR 266.

Having so concluded, it is not necessary to consider the defendants’ submission that the alleged agreement for six separate contracts was inconsistent with the written contract. My finding puts the alleged term out of consideration for all purposes. That is, it was pleaded as a term of the contract and I have rejected that case. If it were to be put as a collateral agreement my conclusion similarly rejects the case.

It follows that the written contract is the repository of the parties’ agreement.

Breach and rescission

I turn then to the question of breach and rescission. The issues must be considered in stages in the chronology.

One commences with the fact that settlement was due on 26 December 2007. In readiness for settlement the plaintiff was obliged to prepare and deliver to the defendants’ representative, Martins, a transfer of land no less than 14 days prior to the date for settlement. This obligation was fundamental to the transaction. It is by, and only by, an instrument of transfer in appropriate form that the registered proprietor may transfer his estate or interest in land, and it is upon registration of the transfer that the estate or interest of the proprietor passes to the transferee: s 45(1) and (2) of the Transfer of Land Act. It is thus that General Condition 12, which is not in conflict with Special Condition 13 in this respect, obliged the defendants to deliver to the plaintiff “such registrable instrument or instruments of transfer of the land sold as will enable the purchaser to become registered as proprietor of the land sold … “.

It is said that the plaintiff (by LPT) was unable to perform his obligation to prepare and deliver an instrument or instruments of transfer. Of course the defendants (by Martins) had not provided an apportionment of the purchase price to the units of the respective owners. It is necessary to consider this in context.

The request to postpone settlement until mid-January 2008 having been refused, the latest date for provision of a transfer or transfers was 12 December 2007. That date came and went without delivery of a transfer, or any communication by LPT in regard to the plaintiff’s satisfaction of that obligation.

LPT’s first letter was on 17 December, but it did not submit a transfer. Rather, and inconsistently with counsel’s submissions before me, LPT suggested the contract was not valid, requested the contract be withdrawn and that four new contracts be prepared as set out, and requested settlement on 28 January 2008.

The defendants’ response was to propose two contracts, one by each vendor of the units respectively owned. This was both sensible and appropriate in view of the separate ownership as any transfers then prepared would clearly be seen as founded in appropriate contractual right. But the letter also rejected the request for four contracts and an extension of the date for settlement. In readiness for settlement Martins prepared the two contracts and had them executed.

But still no transfer was forthcoming from LPT. Rather, Antoniades responded with his facsimile set out at [59] above. Apparently misunderstanding, or perhaps for other reasons, Antoniades said there appeared to be “no contract”, a suggestion disavowed by counsel’s submissions before me, and that an extension of settlement was not sought. The request for an extension being withdrawn, settlement was due by no later than 26 December, assuming there was a binding contract.

Antoniades’ letter went on to repeat the offer to purchase by four separate contracts as set out in his letter dated 17 December. He then asked whether he can assume the defendants “have not accepted this offer and that there is no sale”, and concluded with the suggestion there be a negotiation with the vendors.

In the light of Antoniades’ response it was perhaps not surprising that the defendants withdrew their response (proposing two contracts) within 24 hours.

Still LPT did not prepare or deliver a transfer or transfers, request Martins for an apportionment of the purchase price, or make an attempt to settle, or seek an arrangement for settlement, or tender the balance. There was no external manifestation by LPT’s conduct of preparation for, or intention to undertake, a settlement under the contract.

Not only did settlement not occur, but the plaintiff’s attitude manifested a renunciation of his obligations under the contract. As I have said, his counsel before me seeks relief on the premise that the written contract is binding and enforceable. The plaintiff’s position before me is inconsistent with that taken by LPT; it is akin to blowing hot and cold, taking one position one day and taking the opposite position another day, each doubtless because it seemed to suit at the time. It must, however, now be taken, in the light of the position taken by the plaintiff in this proceeding for specific performance, that the plaintiff’s considered position is that the contract is binding and enforceable (and always was), and that the position put by LPT in relation to the validity of the contract is and was wrong.

It was not until over a month later that correspondence resumed. On 25 January 2008 LPT wrote to Collins House Legal stating that the contract was incorrectly drawn, and requesting six separate contracts as the plaintiff wished to nominate various purchasers. As to this, it is to be noted that the plaintiff entered into the contract on an “and/or nominee” basis, and that he had not hitherto sought to nominate substitute purchasers. Furthermore, this letter was the first request for six separate contracts.

The next step was service of the rescission notice. No point was made before me that the reference to 2008 deprived the notice of effect. The mistake was obvious, was readily appreciated by Antoniades and occasioned no misunderstanding. The mistake was immaterial and in the circumstances was not such as to affect the validity of the notice.

As stated above, the notice relied on failure to pay the balance of purchase price on the due date. Time was of the essence under the contract; see General Condition 5 of Table A.

In my view the defendants were entitled to serve the rescission notice. The plaintiff had failed to settle on the due date. It could be said, more fundamentally, that the plaintiff, by his conduct, had disavowed the transaction. If the plaintiff’s perceived difficulty was the preparation of an appropriate transfer or transfers due to there being two registered proprietors and the need for the purchase price to be apportioned between the units, LPT could have requested apportionment and prepared and submitted a transfer from each vendor leaving the consideration to be inserted. But, LPT did no such thing, and did not take the steps necessary to be undertaken by a purchaser in readiness for settlement of a conveyancing transaction. I do not accept that LPT’s total failure to prepare and deliver a transfer or transfers was due to perceived difficulties of this sort, as distinct from reflecting positions taken by the plaintiff in his seeming self-interest.

While the rescission notice was given under Table A, in my view the conduct of the plaintiff evinced an intention not to be bound by the contract, which separately entitled the defendants to rescind; see Nund v McWaters[15]; Burke and Riversdale Road Pty Ltd v Gemini Investments Pty Ltd[16].
[15][1982] VR 575.
[16][2003] VSC 33.

I do not overlook the plaintiff’s submission that the defendants were not entitled to serve the rescission notice because they had not taken the steps necessary to provide to the purchaser sufficient information to complete the transaction, thus showing that they were not ready, willing and able to complete the transaction, as to which reliance was placed on Jeppesons Road Pty Ltd v Di Domenico[17]. Counsel relied on the following as steps not taken: the defendants did not provide an apportionment of the purchase price thus preventing preparation of a transfer; a time and place for settlement had not been nominated; there was no evidence the defendants had clear title because a caveat remained on title; and there was no tender of the title. In my view none of these factors, considered alone or together, established that the defendants were in breach of a term (essential or not) or not ready, willing and able to complete the transaction. I have already considered the plaintiff’s failure to provide a transfer and for this purpose seek an apportionment, as LPT reasonably should have done. Then, the existence of the caveat is beside the point; it was the defendants’ obligation to give clear title at settlement. As to the other matters, the plaintiff’s wholesale failure to act in performance of his obligations provides the context in which it is apparent that it would have been a futility for Martins to stipulate a time and place for settlement. The plaintiff’s conduct manifested a renunciation of his obligations and an intention not to complete the contract.
[17][2005] QCA 391.

I turn then to events subsequent to service of the rescission notice.

The response of LPT on 30 January 2008 was that the contract was erroneously drawn by reason of including separate owners in the one contract. That could only mean that the contract was ineffective for its purpose of selling the units. This was consistent with the earlier suggestion that the contract was not valid. Yet, inconsistently, caveats were to be lodged. It was not explained how an ineffective contract could found a caveatable interest, or what that interest was. Then the previous request for six separate contracts was repeated; this was inconsistent with recognition of the contract as a binding and enforceable agreement (as is now conceded) and an intention to perform the obligations thereunder, let alone with remedying the default stated in the rescission notice.

Notwithstanding, following discussions, Collins House Legal sent the 4 February letter which advised apportionment of the purchase price and requested the nomination of different purchasers and transfers of land. This offer provided the plaintiff the opportunity to proceed with the transaction. At the same time, however, Martins insisted on the payment of interest and costs pursuant to the rescission notice. Unfortunately, the plaintiff would not agree to pay these amounts, and Antoniades so informed Martins. Then, Antoniades’ letter sent later on 4 February compounded the situation by repeating that the contract was not valid and stating that the contracts were awaited. This firmly and clearly rejected the contract as being valid. The plaintiff rejected the contract as a binding and enforceable contract and rejected the defendants’ offer.

Then followed the correspondence from Collins House Legal on 5 February 2008, marked “without prejudice”, with the proposal to cancel the contract. The plaintiff rejected the offer.

On 12 February 2008 Collins House Legal confirmed that the defendants required settlement in accordance with the terms of the contract. It may be assumed that this was done to make clear that the rescission notice was still relied on notwithstanding the course of events and to remove doubt as to the effect of events on the rescission notice. If the rescission had been waived and the contract remained on foot, the notice had the effect of requiring performance and making time of the essence.

It would seem that the fourteen day period under the rescission notice expired on 12 February. If not on that day, then the next. Hence, the plaintiff was required to complete under the notice on 12 or 13 February, or within a reasonable time of time being again made of the essence.

In its response on 13 February LPT adhered to its view that the contract was not acceptable as transfers pursuant to it could not be stamped and registered, and noted the refusal of the defendants to rectify the error with fresh contracts. The letter constituted a refusal by the plaintiff to perform his obligations under the contract, and in the circumstances the clearest renunciation of those obligations. Again, I note that these positions have been abandoned by counsel.

Then, on 14 February Collins House Legal advised that the contract had been rescinded by reason of the plaintiff failing to remedy his breach pursuant to the rescission notice.

LPT’s response on 14 February was to assert the rescission notice “is defective”, but without stating why. On 22 February Collins House Legal rejected the contention. This letter is clear confirmation that the contract was at an end by reason of the plaintiff’s breach in not paying the residue on the due date.

It would seem that the “defect” in the rescission notice was the statement of the wrong year. There is nothing in that, as I have discussed above, and it was not relied on before me. No other defect was relied on.

Then, finally, there is Collins House Legal’s letter dated 27 March 2008 which rescinded the contract (if not earlier rescinded) by acceptance of the plaintiff’s repudiation.

In my view, however the matter be regarded, if the contract was not rescinded pursuant to the rescission notice, it was thereafter rescinded by the defendants’ acceptance of the plaintiff’s repudiatory conduct by Collins House Legal’s letters of 14 or 22 February or 27 March 2008.

Conclusion

The claim fails and must be dismissed. I will hear counsel on the question of costs.

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Citations

Amanatidis v Syed [2009] VSC 350

Cases Citing This Decision

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Cases Cited

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Sharjade Pty Ltd v Commonwealth [2009] NSWCA 373

Mehmet v Benson [1965] HCA 18

Bowes v Chaleyer [1923] HCA 15

[2009] VSC 350

20 August 2009