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Boyded Industries Pty Ltd v Gateway Parramatta Two Pty Ltd

Boyded Industries Pty Ltd v Gateway Parramatta Two Pty Ltd

Case [2020] NSWSC 1368 8 October 2020

Breach of Contract

Repudiation & Termination

Unjust Enrichment

Equitable Estoppel

Unconscionable Conduct

Contract Law

Equity

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Supreme Court

New South Wales

Medium Neutral Citation: Boyded Industries Pty Ltd v Gateway Parramatta Two Pty Ltd [2020] NSWSC 1368
Hearing dates: 23 September 2020
Date of orders: 8 October 2020
Decision date: 08 October 2020
Jurisdiction: Equity
Before: Darke J
Decision:
Amended Statement of Claim is dismissed with costs.

Catchwords:
EQUITY – equitable remedies – relief against penalties – parties enter into Deed of Call Option with defendants as grantor and plaintiff as grantee – plaintiff prohibited by clause 8(a) from causing any caveat to be registered on title of property – clause 8(b) records acknowledgement by parties that cl 8(a) is an essential term and that breach of cl 8(a) entitles defendants to immediately terminate Deed – plaintiff lodges caveat on title of property – defendants terminate deed – plaintiff claims cl 8(b) is unenforceable as a penalty – held that cl 8(b) is not collateral or accessory to cl 8(a) – held that even if cl 8(b) was a secondary stipulation it should not be characterised as a penalty having regard to defendants’ interests in the performance of obligation under cl 8(a)
EQUITY – equitable remedies – relief against forfeiture – contract terminated for plaintiff’s breach of an essential term – plaintiff claims relief against forfeiture where defendants have suffered no loss and plaintiff would lose valuable rights if termination allowed to stand – whether relief against forfeiture available – whether plaintiff had proprietary interest in land – conduct of defendants not shown to have contributed to breach – plaintiff’s breach held to be wilful – plaintiff’s claim for relief against forfeiture fails
CONTRACTS – waiver – election – whether defendants waived right to terminate for plaintiff’s breach – whether defendants elected to affirm contract – held no waiver by delay, no implied waiver and no waiver in accordance with requirements of contract – plaintiff fails to establish affirmation – defendants’ conduct not inconsistent with the exercise of the right to terminate for breach

Cases Cited:
Andrews v Australia and New Zealand Banking Group Ltd (2012) 247 CLR 205; [2012] HCA 30
Australia Capital Financial Management Pty Ltd v Linfield Developments Pty Ltd (2017) 18 BPR 36,683; [2017] NSWCA 99
Dunlop Pneumatic Tyre Co Ltd v New Garage & Motor Company Ltd [1915] AC 79
Forder v Cemcorp Pty Ltd (2001) 51 NSWLR 486; [2001] NSWSC 281
Integral Home Loans Pty Ltd v Interstar Wholesale Finance Pty Ltd (2008) 257 ALR 292
Kay v Playup Australia Pty Ltd (2020) 19 BPR 40,037; [2020] NSWCA 33
Koompahtoo Local Aboriginal Land Council v Sanpine Pty Ltd (2007) 233 CLR 115; [2017] HCA 61
Legione v Hateley (1983) 152 CLR 406
McDonald v Dennys Lascelles Ltd (1933) 48 CLR 457
Paciocco v Australia and New Zealand Banking Group Ltd (2015) 236 FCR 199; [2015] FCAFC 50
Paciocco v Australia and New Zealand Banking Group Ltd (2016) 258 CLR 525
Ringrow Pty Ltd v BP Australia Pty Ltd (2004) 209 ALR 32; [2004]…

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.

Continue reading Boyded Industries Pty Ltd v Gateway Parramatta Two Pty Ltd

Details

AGLC: Boyded Industries Pty Ltd v Gateway Parramatta Two Pty Ltd [2020] NSWSC 1368
Case: [2020] NSWSC 1368
Decision Date: 08 October 2020

CaseChat Overview and Summary

The parties involved in this dispute were Boyded Industries Pty Ltd and Gateway Parramatta Two Pty Ltd. Boyded Industries, the plaintiff, and Gateway Parramatta Two, the defendant, had entered into a Deed of Call Option concerning a property. The plaintiff was prohibited from registering a caveat on the property title under clause 8(a) of the deed. Clause 8(b) stated that the parties acknowledged clause 8(a) was essential and that a breach would allow the defendant to immediately terminate the deed. The plaintiff lodged a caveat, prompting the defendant to terminate the deed. The plaintiff argued that clause 8(b) was unenforceable as a penalty. The plaintiff also sought relief against forfeiture, claiming that the defendant had suffered no loss and that allowing the termination to stand would result in the plaintiff losing valuable rights.

The primary legal issues the court had to decide were whether clause 8(b) was a penalty and, if so, whether it was enforceable. Additionally, the court had to determine whether relief against forfeiture was available to the plaintiff. The court also needed to assess whether the defendant had waived their right to terminate and whether they had affirmed the contract.

The court found that clause 8(b) was not collateral or accessory to clause 8(a) and therefore not a penalty. Even if it were a secondary stipulation, it should not be characterised as a penalty given the defendants’ interest in the performance of the obligation under clause 8(a). Regarding relief against forfeiture, the court held that the plaintiff's breach was wilful, and the defendants had not contributed to the breach. Therefore, the plaintiff's claim for relief against forfeiture failed. The court also found that there was no waiver or election by the defendants to affirm the contract, as required by the terms of the deed.

The court ordered that the termination of the deed by the defendant stood, and the plaintiff’s claim for relief against forfeiture was dismissed. The court also ruled that the defendants were not required to reinstate the deed.

Orders