Cong Xu v Austino Property Development Pty Ltd - [2013] NSWSC 1177

Supreme Court

New South Wales

Medium Neutral Citation: Cong Xu v Austino Property Development Pty Ltd [2013] NSWSC 1177
Hearing dates: 19 August 2013
Decision date: 27 August 2013
Jurisdiction: Equity Division
Before: Darke J
Decision:
(1) Declare that the plaintiff validly rescinded the Contract for Sale of Land made on 26 May 2011 between the plaintiff as purchaser and the defendant as vendor in respect of the land described as Lot 1/15 Borrodale Road, Kingsford, by Notice of Rescission dated 8 October 2012.
(2) Declare that the plaintiff is entitled, pursuant to the contract, to a refund of the deposit monies paid by the plaintiff in the sum of $126,000, together with all interest earned on those monies.
(3) Order that within seven days the defendant authorise the agent holding the deposit monies as stakeholder, known as Property Square Realty, to release the deposit monies and all interest earned thereon to the plaintiff.
(4) The parties have liberty to apply in respect of any issues arising out of the declaration and order (2) and (3) above.
(5) Order that the defendant's Statement of Cross Claim be dismissed.
(6) Order that the defendant pay the plaintiff's costs of the proceedings.

Catchwords:
CONVEYANCING - Non-compliance with condition - purchaser's remedies - rescission - pursuant to condition giving right to rescind - loss of right - election between inconsistent rights - whether entry into negotiations for early occupation of property was conduct inconsistent with the right to rescind
CONTRACTS - general contractual principles - election - loss of right to rescind - whether entry into negotiations for early occupation of property was conduct inconsistent with the right to rescind a contract for the sale of land
Cases Cited: Agricultural and Rural Finance Pty Ltd v Gardiner [2008] HCA 57; (2008) 238 CLR 570
Immer (No. 145) Pty Ltd v Uniting Church in Australia Property Trust (NSW) (1993) 182 CLR 26
Sargent v ASL Developments Ltd (1974) 131 CLR 634
Zucker v Straightlace Pty (1986) 11 NSWLR 87
Category: Principal judgment
Parties: Cong Xu (Plaintiff)
Austino Property Development Pty Ltd (Defendant)
Representation: Counsel: J Darams (Plaintiff)
E White (Defendant)
Solicitors: James Tuite & Associates Lawyers (Plaintiff)
Legal Point Lawyers (Defendant)

File Number(s): 2013/80287
Publication restriction: Nil

Judgment

Introduction

This case concerns a contract for the sale for land between the plaintiff as purchaser and the defendant as vendor, entered into on 26 May 2011. The central issue is whether the plaintiff validly rescinded the contract by notice of rescission given on 8 October 2012. In purporting to rescind the contract the plaintiff relied upon Special Condition 40.1 of the contract which is in the following terms:

40.1 Completion of this Contract is conditional on the registration of the Strata Plan of Subdivision by the Registrar General. If the Strata Plan of Subdivision is not registered by 31 August 2012 then either party may by notice in writing to the other rescind this Contract.

There is no dispute that the relevant Strata Plan…

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: [2013] NSWSC 1177
Decision Date: 27 August 2013

CaseChat Overview and Summary

In the matter of Cong Xu versus Austino Property Development Pty Ltd, the dispute arose from the purchaser's claim to rescind a contract for the sale of land due to non-compliance with a condition by the vendor. The case was adjudicated by the Supreme Court of New South Wales. The primary contention was whether the purchaser's actions, including entering into negotiations for early occupation of the property, constituted conduct inconsistent with their right to rescind, thereby forfeiting that right.

The court had to determine if the purchaser's engagement in discussions regarding early occupation and related actions could be seen as an election that was inconsistent with the right to rescind. The legal issue revolved around whether such conduct, if any, constituted a relinquishment of the right to rescind, aligning with the principle that a party cannot retain inconsistent contractual rights. The court examined the actions of the purchaser to discern if they had effectively elected to waive their right to rescind in favour of maintaining the contract's terms.

In resolving these issues, the court concluded that the purchaser's actions, including entering into negotiations for an early occupation of the property, did not unequivocally demonstrate an election to affirm the contract. The court found that these actions were not so inconsistent with the right to rescind as to amount to a relinquishment of that right. Therefore, the purchaser retained the option to rescind the contract for the sale of land due to the vendor's non-compliance with a condition. The court's decision allowed the purchaser to proceed with the rescission of the contract, subject to the terms and conditions specified in the judgment.

Orders