Birchill v Premier Holdings Pty Ltd - [2011] NSWSC 1020

Supreme Court

New South Wales

Medium Neutral Citation: Birchill & Ors v Premier Holdings Pty Ltd & Anor [2011] NSWSC 1020
Hearing dates: 18 August 2011
Decision date: 22 August 2011
Jurisdiction: Equity Division
Before: Brereton J
Decision:
Provisions in agreement obliging residents to give manager exclusive right to sell lots in retirement village at particular price unenforceable.
Provisions in agreement obliging residents to first give manager an exclusive sole agency to sell lots unenforceable
Where resident sets price of sale, appoints selling agent or otherwise conducts sale independently of manager such sales not "pursuant to deed" entitling manager to management profit.
First defendant to pay the plaintiffs' costs up to and including 12 March 2011.
Second defendant to pay the plaintiffs' costs on and from 13 March 2011

Catchwords: STATUTORY INTERPRETATION - (NSW) Retirement Villages Act 1999 - residents of retirement village enter into deeds empowering manager to sell strata lots - deeds do not allow residents to sell lot at price determined by them - s 168 and s 169 of Retirement Villages Act confer on residents right to control process of sale - s 168 and s 169 render such clauses unenforceable - deed requires resident to give manager an exclusive sole agency to carry out sale - Retirement Villages Act s 168(4) renders such clauses void - alternatively s 168(1)(a) and s 199 render such clauses void.
STATUTORY INTERPRETATION - Deeds of charge registered as (NSW) Conveyancing Act s 88B instruments to secure management profit and other service fees - whether any invalidity cured by registration - registration does not validate terms and conditions of instrument - provisions of deeds not 'estates or interests' - Conveyancing Act s 88(3) provides that registration of restrictions does not give restrictions greater effect than they otherwise have - Retirement Villages Act later in time than Conveyancing Act - Retirement Villages Act s 199 prevails over provisions of Conveyancing Act.
CONTRACTUAL INTERPRETATION - Provision of deed confers on manager entitlement to management profit if sales undertaken "pursuant to this deed" - construction of "pursuant to" - means "consequent to", "conformable with" or "in accordance with" - phrase connotes interconnection between an act and source of power for the act - phrase deals with sales that occur by reference to the deed - sales not occurring by reference to deed do not entitle manager to management profit.
Legislation Cited: (NSW) Civil Procedure Act 2005, s 98
(NSW) Conveyancing Act, 1919, s 88, s 88B
(NSW) Retirement Villages Act 1999, s 4, s 5, s 7, s 149, s 166, s 168, s 169, s 174, s 199
(NSW) Uniform Civil Procedure Rules 2005, r 20.26, r 42.13, r 42.15
Cases Cited: Brisbane City Council v Mainsel Investments Pty Ltd (1989) 2 Qd R 204
Goodwin v Phillips (1908) 7 CLR 1
Karacominakis v Big Country Developments Pty Ltd [2000] NSWCA 313
Mercantile Mutual Life Insurance Co Ltd v Australian Securities Commission (1992) 40 FCR 409
Nelson v Nelson (1995) 184 CLR…

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: [2011] NSWSC 1020
Decision Date: 22 August 2011

CaseChat Overview and Summary

The case of Birchill v Premier Holdings Pty Ltd concerns the interpretation of provisions in the Retirement Villages Act 1999 (NSW) and their interaction with contractual terms agreed to by residents of a retirement village. The dispute arose over the enforceability of clauses in deeds of charge executed by residents, which empowered the manager to sell their strata lots, but did not allow the residents to set the sale price. The Court of Appeal of the Supreme Court of New South South was tasked with interpreting these statutory provisions and their effect on the contractual terms.

The primary legal issues before the court were whether the statutory provisions in the Retirement Villages Act rendered certain clauses in the deeds of charge unenforceable, and whether the registration of these deeds as instruments under the Conveyancing Act 1916 (NSW) validated their terms. Specifically, the court had to determine the meaning of the phrase "pursuant to this deed" in the context of determining entitlement to management profit, and whether such profit was payable for sales not occurring in accordance with the deed.

The court held that the statutory provisions in the Retirement Villages Act rendered unenforceable certain clauses in the deeds of charge, such as those that prevented residents from selling their lots at a price of their choosing, or those that required residents to give the manager an exclusive agency to carry out the sale. The court found that these clauses were inconsistent with the rights conferred by the Retirement Villages Act, and therefore, were void under sections 168(4) and 199 of the Act. In terms of the contractual interpretation, the court held that the phrase "pursuant to" meant that the manager was only entitled to management profit for sales that occurred in accordance with the deed. As the sales in question did not occur by reference to the deed, the manager was not entitled to the profit.

The court ultimately found in favour of the plaintiffs, declaring certain clauses in the deeds of charge to be void and unenforceable, and finding that the manager was not entitled to management profit for the sales in question. The court did not make any specific orders, as the declaration of invalidity of the clauses was sufficient to resolve the dispute.

Orders