Conlan v Jones

[2002] WASC 217

JURISDICTION     :   SUPREME COURT OF WESTERN AUSTRALIA

IN CHAMBERS

CITATION:   CONLAN -v- JONES & ORS [2002] WASC 217

CORAM:   EM HEENAN J

HEARD:   27 JUNE 2002

DELIVERED          :   27 JUNE 2002

FILE NO/S:   CIV 1869 of 2002

BETWEEN:   SUE CONLAN

Plaintiff

AND

TREVOR JONES
CHRISTINE ANN JONES
First Defendants

REGISTRAR OF TITLES
Second Defendant

Catchwords:

Torrens system - Caveat - Application for extension - Claim by purchaser under uncompleted contract of sale - Allegation that contract had been terminated - Arguable case - Claimant to commence actions for specific performance - Caveat extended

Legislation:

Transfer of Land Act, s 138B

Result:

Caveat extended
Liberty to apply
Plaintiff to commence action for specific performance

Category:    B

Representation:

Counsel:

Plaintiff:     Ms P E Cahill

First Defendants           :     Mr S M Davies

Second Defendant         :     No appearance

Solicitors:

Plaintiff:     Jackson McDonald

First Defendants           :     Anderson Josland

Second Defendant         :     No appearance

Case(s) referred to in judgment(s):

Nil

Case(s) also cited:

Nil

1. EM HEENAN J:  The application before the Court is for an order pursuant to s 138B of the Transfer of Land Act for the continuation of a caveat lodged by the plaintiff over land registered in the names of the first defendants.

2. The claim which the caveat asserts is an entitlement to purchase the land in question under a contract of sale made between the plaintiff as purchaser and the defendants as vendors on 5 May 2002.  That contract is entitled, Contract for Sale of Land by Offer and Acceptance, and is annexure SC2 to the affidavit of Mabel Sue Conlan sworn on 25 June in support of the plaintiff's application.  This discloses that there was indeed a contract by the plaintiff for the purchase of the land in question and that it was subject to finance.

3. The clauses relating to finance include a condition 1.1, "It is a condition of this contract that before the latest time the lender gives approval of the granting to the purchaser of the loan."  The lender is identified as ANZ which I take to mean the ANZ Banking Corporation, the latest date for approval is 23 May 2002, and the amount of the loan desired is $400,000.

4. In the events which happened, the plaintiff purchaser applied to the bank for the requisite loan.  Acceptance of that application and approval of the finance was given by the bank to the purchaser sometime before 4 o'clock on the afternoon of 23 May 2002.  When I say this, I am doing no more than reciting the evidence presently before the Court rather than making any conclusive finding because the defendant has not had an opportunity to join issue on this allegation.

5. Taking, therefore, the evidence as asserted by the plaintiff and continuing, the position is that communication to the vendors of the grant of finance by the bank was given orally by telephone later on 23 May at about 4.45 pm.  On that same day at about 7.45 pm, written notification of the grant of approval of finance by the bank was given by the plaintiff to the defendant some 4 hours after the latest time.

6. On the evidence before the Court the vendors' agent was watching the progress very closely and had been inquiring throughout the day of the 23 May whether or not finance had been approved.  When 4 o'clock came and went without notification to the vendors or to the vendors' agent that bank finance had been approved the vendors' agent acted by letter delivered or transmitted at about half past four that afternoon purporting to terminate the contract for failure to communicate acceptance.

7. From that point on the position of the parties appears to have crystallised, the plaintiff purchaser contending that the grant of finance within time satisfied the obligations under the contract and the representatives of the vendors contending that the contract had been validly terminated for failure to communicate the grant of finance within time.

8. The resolution of those conflicting approaches to the contract will require the court to determine the proper construction of the finance conditions as they are contained in the contract.  This is not the occasion for that exercise to be performed.  Nevertheless, upon the basis of the submissions which have been made to me today and the contract which I have examined, I am satisfied that there is an arguable case for the plaintiff to contend that, although approval by the financial institution by the latest time was a conditional obligation under the contract, communication of that approval to the vendors by the latest time stood on a different footing.  It is plainly arguable that so long as communication was given pursuant to cl 1.2(b) of the contract immediately, that is, within a time perspective that takes its colour from the surroundings, the purchaser had satisfied her obligations.

9. Naturally, I make no final decision about the correctness of that contention at this stage of the proceedings but it does appear to me to be clearly arguable.  As it is upon that issue which the validity and endurance of this contract depends I consider that a cause has been demonstrated to justify the continuation of this caveat and I propose, therefore, to order that it shall continue until further order of the Court.

10. There is another matter.  Counsel for the defendant vendors, who have not yet had an opportunity to put evidence before the Court, has forecast that his clients will contend that the plaintiff's interest under this contract of sale has been extinguished by a subsequent contract releasing and discharging, for consideration, the obligations arising under the contract of sale of 5 May 2002. 

11. It seems to me that the defendants should have an opportunity to put that evidence before the Court and if it is plain and unanswerable that may well demonstrate that there is no purpose in continuing the caveat.  Against that contingency I will direct that there should be liberty to apply and allow the first defendants an opportunity to apply to discharge this order so that the caveat would lapse if and when that evidence is lodged and accepted.  However, it may be that the plaintiff will have some answer which may raise issues as to whether or not this question of discharge and release is effective.  Should that occur it is unlikely that this originating summons is a procedure which is sufficiently flexible and adaptable to allow the resolution of the issues which would arise in the proceedings.

12. Against that contingency I propose to follow the conventional course of directing, once I consider an arguable claim exists, that the claimant of an estate in the land shall commence an action in this Court to vindicate that interest.  I shall direct, therefore, that the plaintiff shall, within 60 days - I will hear the parties on whether it should be 60 days or some lesser period - commence an action for specific performance or other relief to establish the claim advanced by the caveat.