Budiyanto v Kpi 6 Pty Ltd - [2018] NSWSC 1313

Supreme Court

New South Wales

Medium Neutral Citation: Budiyanto v KPI 6 Pty Ltd [2018] NSWSC 1313
Hearing dates: 20 August 2018
Date of orders: 28 August 2018
Decision date: 28 August 2018
Jurisdiction: Equity
Before: Darke J
Decision:
Vendor’s termination of contract held to be invalid.

Catchwords: LAND LAW – contract for sale of land – failure by purchaser to replace deposit bond within a certain time – whether a breach of an essential term giving vendor right to terminate contract – time stipulation not essential – no notice to perform issued so as to make performance by new time essential – vendor not entitled to terminate contract
Cases Cited: Shepherd v Felt & Textiles of Australia Ltd (1931) 45 CLR 359
Louinder v Leis (1982) 149 CLR 509
Neeta (Epping) Pty Ltd v Phillips (1974) 131 CLR 286
Gustin v Taajamba Pty Ltd (1988) 4 BPR 97,274
Category: Principal judgment
Parties: Adi Budiyanto (First Plaintiff)
Anggayasti Aulia Sutejo (Second Plaintiff)
KPI 6 Pty Ltd (Defendant)
Representation:
Counsel:
Ms B K Nolan (Plaintiffs)
Mr R Notley (Defendant)
Solicitors:
David Leamey Solicitor & Barrister (Plaintiffs)
Paramonte Legal (Defendant)

File Number(s): 2018/66735
Publication restriction: None

Judgment

These proceedings concern a contract for the sale of a lot in an unregistered strata plan to be created as part of a multi-level unit development in Merriville Road, Kellyville.
The contract was entered into on 2 April 2014 between the plaintiffs as joint purchasers and the defendant as vendor. The dispute centres upon the provisions of the contract that deal with the deposit. The contract provided for a deposit of $38,500, being 10% of the purchase price of $385,000. The contract contemplates that the vendor might accept a bond as the deposit. That occurred in this case. The contract further provides that in certain circumstances the purchaser must provide a replacement for a deposit bond.
The defendant claims to have validly terminated the contract on 25 October 2017 on the ground that the plaintiffs were in breach of essential terms of the contract in relation to the deposit bond and its replacement. The plaintiffs dispute the validity of the termination and claim that the contract remains on foot.
The contract employs the 2005 edition of the Law Society of New South Wales/Real Estate Institute of New South Wales standard form, together with Additional Clauses. Clause 2 of the standard form, that would otherwise deal with the deposit, was deleted (see Additional Clause 18.1(a)). The deposit is instead dealt with in the Additional Clauses, notably cll 12, 13 and 14. These clauses are in the following terms:

12.   DEPOSIT
12.1   Investment of deposit
(a)   If this contract says the deposit is to be invested, the deposit holder must invest the deposit (at the risk of the party who becomes entitled to it) with a bank, building society or credit union, in an interest-bearing account in NSW, with interest to be reinvested, and after deduction of all proper government taxes and financial institution charges and…

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 Budiyanto v Kpi 6 Pty Ltd

Details

AGLC: Budiyanto v KPI 6 Pty Ltd [2018] NSWSC 1313
Case: [2018] NSWSC 1313
Decision Date: 28 August 2018

CaseChat Overview and Summary

The case of Budiyanto v Kpi 6 Pty Ltd involved a dispute concerning a contract for the sale of land. Budiyanto, the vendor, and Kpi 6 Pty Ltd, the purchaser, entered into a contract for the sale of a property, which included a deposit paid by the purchaser. The contract stipulated that if the purchaser failed to replace the deposit bond within a certain time, the vendor could terminate the contract. The purchaser failed to replace the deposit bond within the specified time, leading to the vendor claiming the right to terminate the contract. The court had to determine whether this failure constituted a breach of an essential term, which would allow the vendor to terminate the contract.

The primary legal issue was whether the failure to replace the deposit bond within the specified time was a breach of an essential term of the contract, thus giving the vendor the right to terminate. Additionally, the court examined whether the time stipulation was essential and whether the vendor had issued a notice to perform, which could have made performance by a new time essential. The purchaser argued that the failure did not constitute a breach of an essential term and that the time stipulation was not essential.

The court found that the time stipulation was not essential, and no notice to perform was issued by the vendor, which would have required the purchaser to perform within a new time. Therefore, the failure to replace the deposit bond within the stipulated time did not breach an essential term of the contract. Consequently, the vendor was not entitled to terminate the contract. The court emphasised that for the vendor to terminate the contract on the basis of a breach of an essential term, the stipulation must be truly essential and not merely a matter of convenience.

The court's decision was that the vendor was not entitled to terminate the contract due to the purchaser's failure to replace the deposit bond within the stipulated time. No orders were made to terminate the contract, and the case was resolved in favour of the purchaser. This outcome highlights the importance of clear and essential stipulations in contracts for the sale of land and the necessity of following proper procedures, such as issuing a notice to perform, before a vendor can terminate such contracts.

Orders