Baeg v Wink Singh Pty Ltd

[2024] NSWSC 589

Supreme Court

New South Wales

Medium Neutral Citation:	Baeg v Wink Singh Pty Ltd [2024] NSWSC 589
Hearing dates:	9 May 2024
Date of orders:	9 May 2024
Decision date:	09 May 2024
Jurisdiction:	Equity - Real Property List
Before:	Parker J
Decision:	See [11]
Catchwords:	EQUITY — specific performance — contract for sale of land — corporate purchaser’s obligations guaranteed by sole shareholder and director — purchaser defaulted under contract — specific performance ordered against purchaser and guarantor
Legislation Cited:	Corporations Act 2001 (Cth)
Cases Cited:	Ryan v UPG 322 Pty Ltd [2023] NSWSC 1293
Texts Cited:	Nil
Category:	Principal judgment
Parties:	Seung Baeg Taeg (Plaintiff) Wink Singh Pty Limited (First Defendant) Harkanwar Singh Chhabra (Second Defendant)
Representation:	Counsel: C Robinson (Plaintiff) Solicitors: Yazbeck Law (Plaintiff)
File Number(s):	2024/61460
Publication restriction:	Nil

JUDGMENT – EX TEMPORE

Revised from transcript; issued on 16 May 2024

1. These are proceedings for specific performance of a contract for the sale of land. The plaintiff, Seung Taeg Baeg, is the vendor. The first defendant, Wink Singh Pty Limited ("WSPL"), is the purchaser. The second defendant, Harkanwar Singh Chhabra, is the guarantor of the purchaser's obligations under the contract.

2. The land in question is at Pennants Hills Road, West Pennant Hills, in Western Sydney. Mr Baeg is the registered proprietor.

3. The contract bears the date 4 September 2021. The purchase price is $3.5 million. The deposit payable was $87,500.

4. The contract uses the Law Society standard form (2019 edition). That consists of thirty‑two standard clauses. There are twenty‑three additional special conditions. Special condition 23, to which I refer below, is set out on its own on two separate pages and contains seven numbered clauses.

5. Originally, the contract provided for completion on 4 September 2022. This date was not met, and the contract was extended twice by formal addenda signed by the parties. The final date for completion was 15 September 2023. Completion did not occur on that date and a notice to complete was sent on behalf of Mr Baeg as the purchaser requiring completion on 29 September. WSPL failed to complete the contract on that date.

6. The summons in these proceedings were filed on 16 February 2024. Before the Court there is evidence of service on WSPL (under s 101X of the Corporations Act 2001 (Cth)) on 20 February. Mr Chhabra was served personally on 21 February.

7. As mentioned, WSPL is in breach of the contract through its failure to complete by the date nominated in the contract. There is no reason to refuse a decree for specific performance. I will make orders for specific performance accordingly.

8. Counsel for the plaintiff also sought an order for specific performance against the second defendant, Mr Chhabra, as guarantor. In Ryan v UPG 322 Pty Ltd [2023] NSWSC 1293 at [30]-[85] I considered the court's power to make an order against a guarantor in a conveyancing case such as the present. I concluded that where the guarantor has undertaken a direct liability to the creditor, coordinate with that of the principal debtor, specific performance may be granted requiring the guarantor to pay the purchase price on settlement. Such coordinate liability will generally have been assumed where the guarantor contracts "as principal" see at [77].

9. In the present case, Mr Chhabra has contracted as principal. Clauses 1.1 and 1.2 of special condition 23 provide:

1.1 In consideration of the vendor entering into this contract at the request of the guarantor, the guarantor:

(a) guarantees to the vendor:

(i) payment of all moneys payable by the purchaser; and

(ii) the performance by the purchaser of all other obligations

under this contract; and

(b) indemnifies the vendor against any liability, loss, damage, expense or claim incurred by the vendor arising directly or indirectly from any breach of this contract by the purchaser.

1.2 This guarantee and indemnity is a principal obligation of the guarantor and is not collateral to any other obligation.

10. Accordingly, I am satisfied that an order for specific performance should be made against Mr Chhabra, as well as against WSPL.

11. (The hearing was adjourned for counsel to formulate the terms of the orders.)

12. The orders of the Court are:

1. Declare that the Contract dated 4 September 2021 for sale of land at XXX Pennant Hills Road, Pennant Hills in the State of New South Wales, being the land comprised in Folio Identifier XX/XXXXX XX (the Property) between the Plaintiff as vendor, the First Defendant as purchaser and the Second Defendant as Guarantor (the Contract) is valid and enforceable.

2. Order that the Contract be specifically performed by the Defendants and carried into execution.

3. Direct the Plaintiff to create a PEXA workspace and invite the Defendants to join that workspace ("the PEXA Workspace") by 5pm on Friday 10 May 2024.

4. Direct the Defendants, by a solicitor or other member of PEXA, to accept the Plaintiff's invitation to the PEXA Workspace.

5. Direct the First Defendant to complete the purchase of the Property in the PEXA Workspace by not later than 3:30 PM on Thursday, 23 May 2024 (Settlement Date) in accordance with clause 30.11.2 of the Contract.

6. Direct the First Defendant through its solicitor prior to the Settlement Date to attend to verifying its Stamp Duty in the PEXA Workspace.

7. Direct the First Defendant to submit a Settlement Statement to the Plaintiff's Solicitor (which must account for interest required to be paid by the First Defendant pursuant to clause 3 in the Special/Additional Conditions in Annexure “A” to the Contract, and the cost of the Plaintiff issuing the Notices to Complete on the First Defendant pursuant to clause 13 in the Special/Additional Conditions in Annexure “A” to the Contract, two business days prior to the Settlement Date.

8. Direct the Plaintiff to confirm the Settlement Statement one business day prior to the Settlement Date.

9. Direct the First Defendant prior to the Settlement Date to do all things necessary in the PEXA Workspace to ensure completion can occur on the Settlement Date, including but not limited to:

1. Accepting the time and date for completion in the PEXA Workspace;

2. Completing and or create all documents in the PEXA Workspace necessary for completion to occur;

3. Input of all source funds into the PEXA Workspace to ensure completion can occur, and populating any necessary destination line items for the First Defendant;

4. Once source funds and payment directions are input, and the documents have successfully passed lodgement verification with the land registry, attending to signing off on the documents, completing the financial settlement schedule and signing the financial settlement statement.

10. Direct the Defendants to pay the balance of the monies due under the Contract at the Settlement Date, inclusive of the balance of the purchase price, interest, and any adjustment for Council rates, to the Plaintiff or as the Plaintiff directs, in return for the Plaintiff conveying title to the Property to the First Defendant through PEXA.

11. Order the First and Second Defendants to pay the Plaintiff’s costs of the proceedings up to, and including, the date of the making of these orders.

12. Direct the Plaintiff to serve a sealed copy of these Orders by 5pm on Friday 10 May 2024, by email to the First Defendant’s solicitor to the email address XXXX and to the Second Defendant to the email address XXXX.

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