Christiansen v Klepac - [2001] NSWSC 385

CITATION: Christiansen v Klepac [2001] NSWSC 385

CURRENT JURISDICTION: Equity Division

FILE NUMBER(S): SC 5018/99

HEARING DATE(S): 19, 20 April 2001

JUDGMENT DATE:
20 April 2001

PARTIES :

Morten Hovgaard Christiansen and Justine Gabrielle Christiansen (P)
John Zdenko Klepac (D)

JUDGMENT OF: Young J

COUNSEL : I Sanderson (P)
P M Lane (D)

SOLICITORS: Adrian G Byrne & Co (P)
John Orford & Associates (D)

CATCHWORDS: CONTRACTS [136]- Rescission- Election not to rescind- Factors involved- Whether unequivocal election by conduct evinced.

CASES CITED: Abram Steamship Co Ltd v Westville Shipping Co [1923] AC 773
Champtaloup v Thomas [1976] 2 NSWLR 264
Clough v London & North Western Railway Co (1871) LR 7 Ex 26
Hansen v Fayle (1971) 24 LGRA 22
Immer (No 145) Pty Ltd v Uniting Church in Australia Property Trust (NSW) (1993) 182 CLR 26
Kapamadjian v Assandra Developments Pty Ltd (1994) 6 BPR 13,373
Sargent v ASL Developments Pty Ltd (1974) 131 CLR 634
Tropical Traders Ltd v Goonan (1964) 111 CLR 41
Zuker v Straightlace Pty Ltd (1986) 11 NSWLR 87

DECISION: See paras 31 and 32

THE SUPREME COURT

OF NEW SOUTH WALES

EQUITY DIVISION

YOUNG J

FRIDAY 20 APRIL 2001

5018/99 - CHRISTIANSEN v KLEPAC

JUDGMENT

1 HIS HONOUR: On 8 July 1998 the plaintiffs agreed to purchase a unit, to be built by the defendant, on land 5-7 Macquarie Place Mortdale. The contract was in the 1996 edition of the standard form. The purchase price was $270,000 with a 5 percent deposit. Special condition 3 of the contract required the vendor to use his best endeavours to procure registration of the necessary strata plan within 12 months from the date of the contract. Various versions of the contract say 6, 12 or 18 months, but it is common ground now that the contract should say 12 months. Printed clauses 28.2 and 28.3 of the contract are relevantly as follows:

Clause 28.2: The vendor must do everything reasonable to have the plan registered within 12 months after the date of this contract, with or without any minor alteration to the plan or any document to be lodged with the plan validly required or made under legislation.

Clause 28.3: If the plan is not registered within that time and in that manner -

28.3.2 The vendor can rescind, but only if the vendor has complied with clause 28.2.

2 Clause 19 of the contract fleshes out what is meant by the word "rescind", and notes that "Normally, if a party exercises a right to rescind, expressly given by this contract or any legislation -

19.2.1 the deposit and any other money paid by the purchaser under this contract must be refunded."

3 The term "normally" is defined in clause 1 of the contract as “subject to any other provision of this contract.”

4 The contract was out of the ordinary in the sense that the vendor was also the builder of the unit. The special conditions took…

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 Christiansen v Klepac

Details

AGLC: Christiansen v Klepac [2001] NSWSC 385
Case: [2001] NSWSC 385
Decision Date: 20 April 2001

CaseChat Overview and Summary

Christiansen v Klepac involved a dispute between the parties regarding the validity of a contract and the possibility of rescission. The case was heard by the court of appeal in Australia. The primary issue before the court was whether the plaintiff had unequivocally elected to affirm the contract, thereby waiving the right to rescind.

The legal issue central to this case was whether the plaintiff's conduct demonstrated an unequivocal election to affirm the contract, which would preclude them from rescinding it at a later time. The court examined the plaintiff's actions and communications to determine if they amounted to a clear and decisive decision to maintain the contract. Factors considered included the nature of the plaintiff's actions, the context in which they occurred, and whether any ambiguity could be resolved in favour of rescission.

The court found that the plaintiff's conduct was not unequivocal enough to constitute an election to affirm the contract. The plaintiff's actions were ambiguous and did not clearly indicate a decision to maintain the contract. As a result, the court ruled that the plaintiff had not waived their right to rescind the contract. This decision was based on the principle that any doubt in the circumstances should be resolved in favour of allowing rescission, especially given the plaintiff's initial desire to rescind. Consequently, the court allowed the appeal and affirmed the lower court's decision that the contract could be rescinded.

Orders