Bakhos v Fenner - [2007] NSWSC 641

CITATION: BAKHOS v FENNER & ANOR [2007] NSWSC 641

HEARING DATE(S): 20/06/2007

JUDGMENT DATE :
20 June 2007

JURISDICTION: EQUITY

JUDGMENT OF: Bryson AJ at 1

DECISION: (1) Upon the statement of claim I give judgment for the defendants with costs; (2) On the amended first cross-claim I make the declaration in claim 1, the declarations in claims 2, 3 and 4. I make the order in claim 5 and the declaration in claim 6. On claim 7 I give judgment for the defendants for $9,550; (3) I order that the plaintiff/cross-defendant pay the defendants'/cross-claimants' costs of the cross-claim; (4) I reserve liberty to apply for further relief in respect of caveat AC136900.

CATCHWORDS: CONTRACT FOR SALE OF LAND - vendor and purchaser - fire damage - purchaser purportedly rescinded under s 66L of the Conveyancing Act 1919 after fire damage - vendors treated purported rescission as repudiation and accepted repudiation so terminating contract - on the facts, found that the damage was minor and the land was not substantially damaged as defined in s 66J of the Act, hence acceptance of repudiation was effective - deposit forfeited, caveat removed.

LEGISLATION CITED: Conveyancing Act 1919
Uniform Civil Procedure Rules 2005

PARTIES: Tony Bakhos - Pltf
Regula Fenner - 1st Dft
Rolf Maximillian Fenner - 2nd Dft

FILE NUMBER(S): SC 2703 of 2006

COUNSEL: N/A - Pltf
Mr A. Fernon - Dfts

SOLICITORS: Crane Butcher McKinnon

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

BRYSON AJ

WEDNESDAY 20 JUNE 2007

2703/06 - TONY BAKHOS v REGULA FENNER AND ROLF MAXIMILLIAN FENNER

JUDGMENT

1 HIS HONOUR: When these proceedings were called for hearing today Mr Fernon of counsel appeared for the defendants and there was no appearance for the plaintiff, Mr Tony Bakhos. The plaintiff’s name was called outside the Court three times at two minutes past ten however there was still no appearance for the plaintiff.

2 The proceedings were commenced by Summons on 11 May 2006. Mr Bakhos was then represented by Mr Sid Hawach, solicitor of Parramatta, who filed the Summons on his behalf. On the following day, 12 May 2006, the plaintiff obtained a number of orders for the further conduct of the proceedings including an order extending his caveat until further order. The Summons and the Application for Extension of Caveat were supported by the plaintiff's affidavit of 10 May 2006. The order for the extension of the caveat was taken out in the registry of this Court on 12 May 2006 and it still has effect.

3 I cannot see from the file that the plaintiff has taken any significant steps in the conduct of the proceedings since then. He has not been represented at any of the six interlocutory and directions hearings, although for some of them a note says that the proceedings were mentioned for the plaintiff by the defendants, suggesting some arrangement having been made between the plaintiff and the defendants at some time.

4 The plaintiff was not represented when…

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: [2007] NSWSC 641
Decision Date: 20 June 2007

CaseChat Overview and Summary

Bakhos v Fenner was a matter before the New South Wales Supreme Court where the dispute centred on the sale of land between the vendor, Bakhos, and the purchaser, Fenner. The contract for sale included a clause for rescission in the event of fire damage to the property. Following a fire, Fenner sought to rescind the contract under section 66L of the Conveyancing Act 1919. Bakhos treated the rescission as a repudiation of the contract and accepted this repudiation, subsequently terminating the contract and forfeiting Fenner's deposit. Fenner subsequently lodged a caveat to prevent the removal of the deposit.

The legal issues that required resolution included whether the fire damage was sufficient to invoke the rescission clause under section 66L of the Act, and if so, whether Bakhos' acceptance of the purported repudiation was valid. The court needed to determine the extent of the damage to ascertain whether the land was "substantially damaged" as defined in section 66J of the Act. If the damage was minor, Bakhos' acceptance of Fenner's purported rescission would be considered a valid acceptance of repudiation, effectively terminating the contract.

The court found that the damage to the property was minor and did not meet the threshold of "substantial damage" as defined in the Act. Consequently, Fenner's attempt to rescind the contract was not valid, and Bakhos' acceptance of this purported rescission constituted a valid acceptance of repudiation. As a result, the contract was terminated, and Bakhos was entitled to forfeit Fenner's deposit. The court ordered that the caveat be removed, allowing Bakhos to proceed with the forfeiture of the deposit.

The final orders of the court were that the deposit paid by Fenner be forfeited to Bakhos, and the caveat lodged by Fenner be removed. This outcome reflected the court's determination that the damage to the property did not warrant the termination of the contract under the Act, and Bakhos' actions in accepting the purported rescission were justified.

Orders