Brightman v Royal Pines Projects Pty Ltd

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SUPREME COURT OF QUEENSLAND

CITATION:

Brightman & Ors v Royal Pines Projects Pty Ltd [2024] QSC 149

PARTIES:

ADAM BRIGHTMAN

(first applicant)
AND

JODIE BRIGHTMAN

(second applicant)
AND

MARY MAGGIE MAE CRUZ

(third applicant)
AND

RAYMOND CAVITE CRUZ

(fourth applicant)
AND

CAMERON ROBERTS

(fifth applicant)
AND

REBECCA ANNING

(sixth applicant)
AND

ADRIANA EUGENIA HERNANDEZ SILVA

(seventh applicant)
AND

JARRAD GLENN BUNT

(eighth applicant)
AND

JESSICA LEE DEMCHENKO

(ninth applicant)
AND

DIANNE MARIA MASSEY

(tenth applicant)
AND

VISHENDRAN NAIDU

(eleventh applicant)
AND

B CORPORATION (QLD) PTY LTD
ACN 651 109 894

(twelfth applicant)
AND

GEORGE STANLEY NEWBOLD

(thirteenth applicant)
AND

BRENDA ZHOYA

(fourteenth applicant)
AND

MICHAELA ERIKA MORELAND

(fifteenth applicant)
AND

REMY ARRAN MORELAND

(sixteenth applicant)
AND

KRISTIE-LEE ANNING

(seventeenth applicant)
AND

DESMOND LAFFY

(eighteenth applicant)
AND

TRINA LAFFY

(nineteenth applicant)
AND

CORNELIA CHRISTINE DAY

(twentieth applicant)
AND

COLIN JAMES BURTON

(twenty-first applicant)
AND

PERRIE BURTON

(twenty-second applicant)
AND

SILVANA TRPESKA

(twenty-third applicant)

v
ROYAL PINES PROJECTS PTY LTD
ACN 118 164 999 ATF BRISBANE CREDITS TRUST

(respondent)

FILE NO/S:

BS 8832 of 2024

DIVISION:

Trial Division

PROCEEDING:

Application

ORIGINATING COURT:

Supreme Court of Queensland at Brisbane

DELIVERED ON:

12 July 2024

DELIVERED AT:

Brisbane

HEARING DATE:

11 July 2024

JUDGE:

Applegarth J

ORDER:

Declaratory and other orders in a form to be submitted by counsel.

CATCHWORDS:

CONTRACTS – GENERAL CONTRACTUAL PRINCIPLES – CONSTRUCTION AND INTERPRETATION OF CONTRACTS – IMPLIED TERMS – TERMS ESSENTIAL TO ENABLE PERFORMANCE – where there are contracts for the sale of apartments “off the plan” – where each contract contemplates the buyer having a financier and where the contract contemplated that finance would be required for the buyer to perform the contract – where the settlement date is set by the contract 14 days after a notice by the seller – where each buyer requests access to the relevant apartment to permit the buyer’s valuer to perform a valuation for finance purposes – where the seller gives notification of settlement – where the buyers’ requests for their valuers to inspect are not responded to for a week – where construction works prevent such an inspection occurring for the same period – where the contract does not include a “subject to finance” clause or an express term specifying an entitlement to access the property in the 14-day period – where there is an implied duty to co-operate – whether the seller, by failing to permit access to the buyer’s valuer, breached the implied duty to co-operate

Australis Media Holdings Pty Ltd v Telstra Corporation Ltd (1998) 43 NSWLR 104, cited
Butt v M’Donald (1896) 7 QLJ 68, cited
Commonwealth Bank of Australia v Barker (2014) 253 CLR 169, cited
Grieve v Enge [2006] QCA 213, applied
Jackson Nominees Pty Ltd v Hanson Building Products Pty Ltd [2006] QCA 126, cited
Mackay v Dick (1881) 6 App Cas 251, cited
Marshall v Colonial Bank of Australasia Ltd (1904) 1 CLR 632, cited
Mediratta v Clark [2019] VSC 685, cited
Secured Income…

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Details
Case
[2024] QSC 149
Decision Date

CaseChat Overview and Summary

In Brightman v Royal Pines Projects Pty Ltd, the applicants sought relief against the respondent, the seller of residential properties, for alleged breaches of contract. The dispute centred on the seller's refusal to allow the applicants' valuers to inspect the properties to obtain valuations necessary for financing the purchase. The applicants argued that the refusal amounted to a breach of an implied duty to cooperate, which they claimed was necessary for them to obtain finance and complete the purchase. The Queensland Supreme Court was tasked with determining whether the seller had indeed breached any such implied duty.

The central legal issue before the court was whether the seller, by failing to permit access to the applicants' valuers, breached an implied duty to cooperate under the contracts. The contracts did not contain a "subject to finance" clause or an express term specifying an entitlement to access the property within the 14-day period after notice of plan registration. The applicants contended that such an implied duty existed and was breached by the seller's refusal to allow inspections. The seller argued that it had no contractual or legal obligation to allow access to the property for valuation purposes.

The court found that the contracts implicitly promised the applicants a full 14-day period after the notice of plan registration to obtain finance, as this was essential for the applicants to perform their contractual obligations. This implied a duty to cooperate, including allowing access for valuation purposes. The court held that the seller's refusal to permit the applicants' valuers to inspect the properties during this period constituted a breach of the implied duty to cooperate. This breach prevented the applicants from obtaining valuations in a timely manner, thereby hindering their ability to secure finance and complete the purchase on the scheduled settlement date.

The court declared that the seller had breached the implied duty to cooperate and ordered further hearings to determine the appropriate relief for the applicants, including potential injunctive relief. The court also noted that the breach prevented the applicants from relying on the seller's failure to complete on the scheduled settlement date.

Orders

Orders of the court

Declaratory and other orders in a form to be submitted by counsel.

Background

Background to the litigation

They seek other declarations and injunctive relief.Facts The fifteen contracts are in materially identical terms. Each contract is for a lot in a new development called “Vantage View” at Benowa. The contracts were entered into between 21 January 2021 and 2 November 2023. The Body Corporate and Community Management Act 1997 (Qld) applies to the development. Clause 10 of the Contract relevantly provides:“10.1We must give you written notice at any time (as reasonably determined by us) after we become aware of plan registration that a separate indefeasible title for the lot has been created.10.2Settlement of the contract is conditional upon plan registration and us giving you notice under clause 10.1.” Clause 8.5 provides:“8.5Settlement must not take place earlier than 14 days after we give you notice of plan registration. You agree that notice of plan registration is an advice to you that the scheme has been established or changed.” Clause 2 relevantly provides:“lot means the lot or proposed lot in the development described in item 8.…plan registration means the registration (not lodgement) of a building format plan of subdivision that creates the lot under the Land Title Act 1994 (Qld).…settlement date means subject to clause 8.6, the date that is 14 clear days after (but not including) the date on which we give you written notice under clause 10.1.” (emphasis in original) On the morning of 1 July 2024, the applicants’ solicitors wrote to the respondent’s solicitors, requesting access to the relevant lot for the purposes of obtaining a valuation for finance purposes. That afternoon, the respondent gave notice in respect of each of the contracts requiring settlement on 16 July 2024. On 2 and 3 July 2024, the applicants’ solicitors contacted the respondent’s solicitors by email asking for a response to their earlier correspondence, threatening to commence this proceeding and giving greater detail of the relief that would be sought. On 4 July 2024, they again wrote to the respondent’s solicitors. They also contacted the Registry seeking an urgent listing. On 5 July 2024, having received no response from the respondent’s solicitors, the applicants’ solicitors wrote directly to the respondent and served that letter on the respondent’s registered office. The matter was mentioned before me on the afternoon of Friday, 5 July 2024, at which time I made directions for the hearing of the matter on Thursday, 11 July 2024, so as to enable the parties to file material and submissions going principally to the legal issue of whether the respondent was under the implied duty contended for by the applicants. On 8 July 2024, the respondent’s solicitors wrote to the applicants’ solicitors. The relevant part of the letter stated:“Despite the Seller having no obligation under the Contract or at law to allow access to the site or the Lot by third parties, the Seller has decided to consider the Buyer’s request for access by a valuer for inspection of the Lot, if the Buyer requires a valuer to inspect the Lot.We are also instructed to record that our client has not previously refused access (again despite having no obligation to grant access) and that given the necessary ongoing works on site, it is now practically acceptable to allow others to access the site.We note the Contract is not subject to finance and the Contract does not contain terms that allow the Buyer (or any third party) the right to access the building site or the Lot at any time. Any decision about access is at the Seller’s discretion. Any decision to allow access should not be interpreted as acceptance by the Seller that the Buyer (or any third party) has a right to access the site or that the Seller is contractually obliged to allow such access.”

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

I will hear the parties about the necessity for and the terms of a suitable injunction to protect the rights that I have declared.Summary and conclusion The respondent contends that it did not promise that the buyer would have an opportunity to obtain finance. This is said to distinguish this case from Grieve where the contract contained a “subject to finance” clause. I do not agree. The respondent promised a full 14-day period after the clause 10.1 notice for the buyer to obtain the finance necessary to complete the contract and to make other necessary arrangements to gain the benefit of title. The contract explicitly contemplated the involvement of the buyer’s financier to enable the buyer to perform its central obligation under the contract. This was something the parties must have intended. It is commonplace. By the terms of the contract and in its commercial context, the respondent implicitly promised the buyer the opportunity to obtain finance, and to have a full 14 days after the notice to finalise it. An exceptional buyer who carried the settlement sum around in a knapsack might not have availed himself or herself of the opportunity to obtain finance. Most individuals, including the buyers, would. The respondent having promised the buyer a full 14-day period after notice to pursue the opportunity to obtain finance in order to perform the buyer’s fundamental obligation, the respondent’s duty to co-operate so as to give the buyer the benefits of the contract applied to the obtaining of finance during all of those 14 days. The content of that duty included the matter determined in Grieve. This is to allow access to a valuer to facilitate obtaining finance to enable the buyer to perform the buyer’s fundamental obligation. The respondent breached its duty. That breach prevented valuations being obtained in a timely fashion to allow finance to be available for a settlement on 16 July. The respondent therefore is prevented from relying on a buyer’s failure to complete on that day. I will make declarations and orders in a form to be submitted by counsel.

Ratio Decidendi

Legal Principle Established

Clause 8.5 provides:“8.5Settlement must not take place earlier than 14 days after we give you notice of plan registration. You agree that notice of plan registration is an advice to you that the scheme has been established or changed.” Clause 2 relevantly provides:“lot means the lot or proposed lot in the development described in item 8.…plan registration means the registration (not lodgement) of a building format plan of subdivision that creates the lot under the Land Title Act 1994 (Qld).…settlement date means subject to clause 8.6, the date that is 14 clear days after (but not including) the date on which we give you written notice under clause 10.1.” (emphasis in original) On the morning of 1 July 2024, the applicants’ solicitors wrote to the respondent’s solicitors, requesting access to the relevant lot for the purposes of obtaining a valuation for finance purposes. That afternoon, the respondent gave notice in respect of each of the contracts requiring settlement on 16 July 2024. On 2 and 3 July 2024, the applicants’ solicitors contacted the respondent’s solicitors by email asking for a response to their earlier correspondence, threatening to commence this proceeding and giving greater detail of the relief that would be sought. On 4 July 2024, they again wrote to the respondent’s solicitors. They also contacted the Registry seeking an urgent listing. On 5 July 2024, having received no response from the respondent’s solicitors, the applicants’ solicitors wrote directly to the respondent and served that letter on the respondent’s registered office. The matter was mentioned before me on the afternoon of Friday, 5 July 2024, at which time I made directions for the hearing of the matter on Thursday, 11 July 2024, so as to enable the parties to file material and submissions going principally to the legal issue of whether the respondent was under the implied duty contended for by the applicants. On 8 July 2024, the respondent’s solicitors wrote to the applicants’ solicitors. The relevant part of the letter stated:“Despite the Seller having no obligation under the Contract or at law to allow access to the site or the Lot by third parties, the Seller has decided to consider the Buyer’s request for access by a valuer for inspection of the Lot, if the Buyer requires a valuer to inspect the Lot.We are also instructed to record that our client has not previously refused access (again despite having no obligation to grant access) and that given the necessary ongoing works on site, it is now practically acceptable to allow others to access the site.We note the Contract is not subject to finance and the Contract does not contain terms that allow the Buyer (or any third party) the right to access the building site or the Lot at any time. Any decision about access is at the Seller’s discretion. Any decision to allow access should not be interpreted as acceptance by the Seller that the Buyer (or any third party) has a right to access the site or that the Seller is contractually obliged to allow such access.”