Barrington Tops Developments Pty Ltd v Low - [2008] NSWSC 832

CITATION: Barrington Tops Developments Pty Ltd v Low [2008] NSWSC 832

HEARING DATE(S): 29 & 30 April 2008, 16 May and 5 June 2008

JUDGMENT DATE :
14 August 2008

JURISDICTION: Equity

JUDGMENT OF: Hamilton J

DECISION: That plaintiff had committed a breach of contract. Damages assessed at $230,000.

CATCHWORDS: CONTRACTS [120] - General contractual principles - Construction and interpretation of contracts - Other matters – Whether a term for the carrying out of a subdivision or the sale of certain lots was an absolute promise – Whether a term should be implied that the obligation imposed was only to use reasonable endeavours.

LEGISLATION CITED: Community Land Development Act 1989
Environmental Planning and Assessment Act 1979 s 80(3)

CATEGORY: Principal judgment

CASES CITED: Butt v M’Donald (1896) 7 QLJ 68
Codelfa Construction Proprietary Limited v State Rail Authority of New South Wales (1982) 149 CLR 337
Day v United States 245 US 159 (1917)
Mackay v Dick (1881) 6 App Cas 251
Royal Botanic Gardens and Domain Trust v South Sydney Council (2002) 76 ALJR 436
Scanlan’s New Neon Limited v Tooheys Limited (1943) 67 CLR 169
Secured Income Real Estate (Australia) Limited v St Martins Investments Proprietary Limited (1979) 144 CLR 596
Taylor v Caldwell (1863) 3 B&S 826; 122 ER 309

TEXTS CITED: 30 Williston on Contracts (4th ed, 2004) [77:38]
Carter, Peden and Tolhurst, Contract Law in Australia (5th ed, 2007) [33-03]
Seddon and Ellinghaus, Cheshire and Fifoot’s Law of Contract (9th Aust ed, 2008) [10.40]

PARTIES: Barrington Tops Developments Pty Limited (P)
Stephen Thomas Low (D)

FILE NUMBER(S): SC 5999/06

COUNSEL: R J Colquhoun (P)
P T Russell (D)

SOLICITORS: Borthwick Wilson & Mitchell (P)
W J Enright & Prentice (D)

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

HAMILTON J

THURSDAY, 14 AUGUST 2008

5999/06 BARRINGTON TOPS DEVELOPMENTS PTY LTD v STEPHEN THOMAS LOW

JUDGMENT

1 HIS HONOUR: The subject matter of these proceedings is whether there has been a breach by the purchaser of a term of a contract for the sale of land (“the property”) at Clarence Town near Dungog. The central question is whether the substance of a term concerning the carrying out of a subdivision of the property and sale of certain lots was an absolute promise to carry out and register the subdivision and sell those lots within two years of the completion of the contract or whether its substance was only that the purchaser would act reasonably and use its reasonable endeavours to have the appropriate subdivision approved, registered and sold within that time.

FACTS

2 The vendor is the defendant, Stephen Thomas Low, who is a member of the Dungog Shire Council (“the Council”) and was until September 2006 the Mayor. The purchaser, the plaintiff, is Barrington Tops Developments Pty Ltd, of which company Michael Richard Downes is the sole director.

3 Until about 10 March 2004, the defendant was the registered proprietor of Lot 26 in DP 1007844 (“Lot 26”), Lot 65 in DP 753216…

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: [2008] NSWSC 832
Decision Date: 14 August 2008

CaseChat Overview and Summary

In the case of Barrington Tops Developments Pty Ltd v Low, the parties were engaged in a dispute regarding the interpretation of certain terms in a contract. The contract involved the sale of land and the development of a subdivision, with specific provisions regarding the sale of certain lots. The case was heard in the Supreme Court of New South Wales.

The primary legal issue before the court was whether a term in the contract for the carrying out of a subdivision or the sale of certain lots was an absolute promise. Alternatively, the court had to determine whether a term should be implied that the obligation imposed was only to use reasonable endeavours. This distinction was crucial as it would impact the extent of the developer's obligations and the remedies available to the purchaser in case of non-performance.

The court considered the language of the contract and the surrounding circumstances to ascertain the intention of the parties. It found that the term in question was an absolute promise rather than one that could be discharged by using reasonable endeavours. The court emphasised that the clear and unambiguous language of the contract indicated a firm commitment to the completion of the subdivision and the sale of specific lots. Therefore, the developer was required to fulfil these obligations without the ability to discharge them by merely using reasonable endeavours.

As a result of the court's decision, Barrington Tops Developments Pty Ltd was held to the absolute promise contained in the contract. The purchaser, Low, was entitled to seek specific performance or damages if the developer failed to carry out the subdivision or sell the specified lots. The court's ruling reinforced the importance of clear contractual language and the need for parties to carefully consider the implications of their agreements.

Orders