Cole v Raykir Holdings Pty Ltd - [2019] NSWSC 1017

Supreme Court

New South Wales

Medium Neutral Citation: Cole v Raykir Holdings Pty Ltd [2019] NSWSC 1017
Hearing dates: 29 July 2019
Date of orders: 13 August 2019
Decision date: 13 August 2019
Jurisdiction: Equity
Before: Darke J
Decision:
Plaintiffs held to have validly terminated contract for sale of land, and to be entitled to recover damages from defendants.

Catchwords:
LAND LAW – contract for the sale of land – termination for breach of an essential term or for repudiation – where vendors issued notice to complete giving the purchaser 14 days to complete – where parties agreed to extend the time for completion under the notice to complete – where purchaser intimated it could not complete by extended date for completion – where purchaser failed to complete by extended date for completion – vendors terminated contract – whether notice to complete effective to make time of the essence – whether extension effective to make the newly appointed time of the essence – time for completion under extended date held to be of the essence – purchaser held to have breached contract in an essential respect and to have repudiated the contract – contract validly terminated by vendors

LAND LAW – contract for the sale of land – deposit – penalty doctrine – deposit payable by two instalments each of 5% of the purchase price – where first instalment paid on contract date – where second instalment payable “on or prior to the completion” of the contract – whether second instalment is in the nature of a deposit – held that second instalment not in the nature of a deposit
GUARANTEE AND INDEMNITY – guarantee – construction – guarantee of the purchaser’s obligations under contract for the sale of land – guarantor agrees to be personally liable for performance of purchaser’s obligations “under this Contract” – where purchaser liable under liquidated damages clause upon termination of contract – whether obligation under liquidated damages clause is an obligation “under this Contract” – guarantor held to be liable for amount of liquidated damages
Legislation Cited: Civil Procedure Act 2005 (NSW), s 100
Conveyancing Act 1919 (NSW), s 55
Uniform Civil Procedure Rules 2005 (NSW), r 14.11
Cases Cited: Ankar Pty Ltd v National Westminster Finance (Australia) Ltd (1987) 162 CLR 549
Ashdown v Kirk [1999] 2 Qd R 1
Associated Beauty Aids Pty Ltd v Federal Commissioner of Taxation (1965) 113 CLR 662
Cooper v Ungar (1958) 100 CLR 510
Cratchley v Bloom (1984) 3 BPR 97,206
Foran v Wight (1989) 168 CLR 385
Forster v Jododex Australia Pty Ltd (1972) 127 CLR 421
Galafassi v Kelly (2014) 87 NSWLR 119; [2014] NSWCA 190
Iannello v Sharpe (2007) 69 NSWLR 452; [2007] NSWCA 61
Kazacos v Shuangling International Development Pty Ltd (2016) 18 BPR 36,353; [2016] NSWSC 1504
Koompahtoo Local Aboriginal Land Council v Sanpine Pty Ltd (2007) 233 CLR 115; [2007] HCA 61
Laurinda Pty Ltd v Capalaba Park Shopping Centre Pty Ltd (1989) 166 CLR 623
Luu…

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.

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Details

Case: [2019] NSWSC 1017
Decision Date: 13 August 2019

CaseChat Overview and Summary

The case of Cole v Raykir Holdings Pty Ltd involved a dispute over the sale of land between the plaintiffs, Mr and Mrs Cole, and the defendant, Raykir Holdings Pty Ltd. The dispute arose from the termination of a contract for the sale of land, with the plaintiffs alleging that the defendants had wrongfully terminated the contract and seeking damages. The matter was heard in the Supreme Court of Queensland. The primary legal issues the court had to address were whether the time for completion under the extended date was of the essence, whether the purchaser had breached the contract in an essential respect, and whether the guarantor was liable for the amount of liquidated damages.

The court held that the time for completion under the extended date was of the essence, as the parties had agreed to extend the time for completion under the notice to complete. The purchaser had breached the contract in an essential respect by failing to complete by the extended date for completion, and the defendants were entitled to terminate the contract. The court further held that the second instalment of the deposit was not in the nature of a deposit but rather a payment due at completion. Consequently, the guarantor was liable for the amount of liquidated damages, as the obligation under the liquidated damages clause was an obligation "under this Contract."

In light of the above findings, the court ruled in favour of the defendants. The plaintiffs' claim for damages was dismissed, and the guarantor was held liable for the amount of liquidated damages. The contract for the sale of land was validly terminated by the defendants.

Orders