Chen v Kpi Hezlett Pty Limited

[2024] NSWSC 315

Supreme Court

New South Wales

Medium Neutral Citation:

Chen v KPI Hezlett Pty Limited [2024] NSWSC 315

Hearing dates:

20 March 2024

Date of orders:

20 March 2024

Decision date:

20 March 2024

Jurisdiction:

Equity - Real Property List

Before:

Hammerschlag CJ in Equity

Decision:

(1) Judgment for the plaintiff against the defendant for $175,000 together with interest from 24 June 2022.

(2) The defendant is to pay the plaintiff's costs of the proceedings.

Catchwords:

CONTRACTS – Sale of Land – Where defendant Vendor repudiates contract by purporting to terminate it without valid grounds and plaintiff accepts repudiation – Plaintiff entitled to damages

Category:

Principal judgment

Parties:

Shuyu Chen (Plaintiff)
KPI Hezlett Pty Limited (Defendant)

Representation:

Counsel:
P Lin (Plaintiff)

File Number(s):

2022/00200046

Publication restriction:

Nil

Ex Tempore JUDGMENT

1. HIS HONOUR: By Statement of Claim filed on 8 July 2022, the plaintiff:

1. seeks a declaration that on or about 24 June 2022 it terminated a contract dated 12 February 2018, under which he purchased from the defendant land known as Unit A007 (Lot 8), The Hugh Block A, 182‑186 Hezlett Road, Kellyville, New South Wales, being the land described in Lot 8 in an unregistered strata plan being part of a proposed Lot 3 in an unregistered deposited plan which forms part of Lot 2 in Deposited Plan 1180345 Folio Identifier part 2/1180345 and

2. claims damages said to have been suffered by him as a result of the defendant's breach of the contract by unlawfully purporting to terminate it.

2. In the alternative, the Statement of Claim seeks an order that the defendant refund to him the deposit paid by him.  This claim was not pressed at the hearing. 

3. The defendant entered an appearance and later filed a Defence on 6 October 2022.  On 1 December 2023 the matter came before Peden J in the Real Property List.  The defendant was represented.  The matter was stood over to 9 February 2024.  However, on 12 December 2023 the solicitors previously appearing for the defendant had filed a notice of intention of ceasing to act.

4. The contract is in the form of the Law Society and Real Estate Institute of NSW 2005 Standard Edition supplemented by additional clauses.  The purchase price was $835,000 with a deposit of 10%.  Additional clause 12.2(b) provided:

"(b) In the event that the parties agree that the deposit is to be paid by way of instalments, the purchaser must pay the deposit to the deposit holder as follows:  (i) as to the sum of $10,000 on the date of this agreement; (ii) balance of the 10% deposit in the sum of ______ within seven days from the date that the purchaser or the purchasers' representative received written advice that the approval of the construction certificate has been given."

5. On 9 February 2024 there was no appearance for the defendant. Her Honour stood the matter over until 15 March 2024.  On 15 March 2024, the matter came before me and I fixed it for hearing today.  I directed the plaintiff to write to the defendant notifying it of my orders.  I am satisfied that the plaintiff complied with that direction.  When the matter was called today, the defendant did not appear.  I record that counsel for the plaintiff provided me with helpful written submissions which I have marked MFI1 and will retain with the papers.

6. Going back to the clause, its terms reflect the agreement between the parties that the deposit would be paid by way of instalments.  In the contract, Deposit Holder is defined to mean the vendor's solicitors, Paramonte Legal Trust Account. 

7. The plaintiff duly paid $10,000 on the date of exchange.  The contract does not define construction certificate.  It is, however, an example of a contract commonly described as a purchase “off the plan”, in that a residential unit was subsequently due to be constructed on the land.  There were to be four blocks of apartments built, by all accounts, designated A, B, C and D respectively.

8. The contract pertained to a proposed unit in proposed block A.  The defendant undertook to use all reasonable endeavours to have registered a strata plan by 31 October 2019 but under additional clause 3.5 had the right to extend the registration date by a day for each day construction of the building was delayed by factors identified in the contract.  On 23 May 2018 the defendant extended the registration date from 30 April 2020 to 30 December 2020.

9. On about 2 August 2018, the defendant, via its solicitor, informed the plaintiff by email that:

"The construction certificate has been issued although this does not pertain specifically to Block A. We are instructed that our client has agreed for the balance of the 10% deposit payable under the contract to be paid once CC for Block A has been issued. Accordingly, we will revert back to you in due course once payable becomes due."

10. The plaintiff says, and I accept, that he understood that the contract had been varied accordingly and conducted himself on that basis. In my view, the contract properly construed, required a construction certificate pertinent to the construction of the block in which the apartment was to be, namely, Block A. However, if it did not, the parties agreed to that effect and the contract was varied accordingly. Either way, it was not open to the defendant to act contrary to what it said. No certificate pertinent to Block A was ever provided so that payment of the balance of the deposit never fell due.

11. Nevertheless, some four years later, on 17 May 2022, the defendant purported to terminate the contract on the basis that the plaintiff had not paid the balance of the deposit.  That termination was plainly a repudiation of the contract, which the plaintiff was entitled to and did, on 23 June 2022, accept bringing the contract to an end.  I am satisfied that the plaintiff could and would have performed the contract had he not accepted the defendant's repudiation. 

12. Evidence from an expert valuer establishes that as at 24 June 2022, the day after the plaintiff terminated, the land the subject of the contract was worth $1 million.  That being so, the plaintiff has suffered loss of $10,000 being the amount paid towards the deposit, plus the difference between the purchase price under the contract and the value of the land when the contract was terminated, being $165,000.

13. I make the following orders: 

1. Judgment for the plaintiff against the defendant for $175,000 together with interest from 24 June 2022. 

2. The defendant is to pay the plaintiff's costs of the proceedings.

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Decision last updated: 26 March 2024