Cullia v Gook
[2011] VSC 412
•18 August 2011
| IN THE SUPREME COURT OF VICTORIA | Not Restricted | |
AT MELBOURNE
COMMON LAW DIVISION
PRACTICE COURT
No. 1942 of 2011
| MARY CULLIA | Plaintiff |
| v | |
| ALLAN MICHAEL GOOK | First Defendant |
| and | |
| SUZANNE GAYE GOOK | Second Defendant |
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JUDGE: | HARGRAVE J | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 17 August 2011 | |
DATE OF JUDGMENT: | 18 August 2011 | |
CASE MAY BE CITED AS: | Cullia v Gook | |
MEDIUM NEUTRAL CITATION: | [2011] VSC 412 | |
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SALE OF LAND – Claim for specific performance – Vendors’ claim for summary judgment – Whether arguable case that vendors obstructed completion of sale – Summary judgment refused – Civil Procedure Act 2010 (Vic), s 63(1).
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr A Schlicht | Chiodo & Madafferi |
| For the First Defendant | Ms N Lademann | Kempsons Lawyers |
| For the Second Defendant | Mr T R Messer | Wilsons Lawyers Pty Ltd |
HIS HONOUR:
The defendants have applied for summary judgment in the proceeding. The plaintiff claims orders for specific performance of a contract of sale or, in the alternative, an order for the return of the deposit paid under the contract.
The essential facts are as follows. The defendants, who were formerly husband and wife, own a residential property at 13 Belvedere Close, Maribyrnong. It was their matrimonial home. Orders were made in the Federal Magistrates' Court that the property be sold. The defendants sold the property to the plaintiff for the sum of $1,310,000. Under the contract, the plaintiff was required to pay a deposit of $100,000 and to pay the balance of the price on 22 November 2010. The plaintiff was unable to pay the balance of the price on that day. On 23 November 2010, the defendants' solicitors served a rescission notice requiring completion of the contract within 14 days, and giving notice that the contract would be rescinded if not.
Following service of that notice, the plaintiff's solicitor sought and was granted an extension of time to settle until 10 December 2010. That extension was granted on the basis that it was without prejudice to the defendants' rights under the rescission notice.
The plaintiff did not complete the contract on the extended date as agreed, 10 December 2010.
On 14 December 2010, the defendants' solicitors wrote to the plaintiff's solicitors advising that the contract was at an end and the deposit forfeited.
By caveat registered on 17 December 2010, the plaintiff claims an interest in the land pursuant to the contract of sale.
On 31 January 2011, the defendants' solicitors demanded removal of the caveat. There was then further delay until 16 March 2011 when the defendants lodged an application under s 89A of the Transfer of Land Act 1958 for removal of the caveat. Following service of that notice, the plaintiff commenced the present proceeding.
The test to be applied in resolving an application for summary judgment is now governed by s 63(1) of the Civil Procedure Act 2010, which provides that a court may give summary judgment in any civil proceeding if satisfied that a claim, a defence or a counterclaim, or part of a claim, defence or counterclaim, has no real prospect of success.
The test to be applied under s 63(1) contains some relaxation in the strictness of the test which previously applied to summary judgment applications, but the court must nevertheless exercise the power with great care; as summary judgment involves depriving the losing party of a trial involving a full investigation of the facts, including an opportunity to cross‑examine witnesses as to disputed facts.
In Ottedin Investments v Portbury Developments,[1] Dixon J described the applicable test for summary judgment under s 63(1) of the Civil Procedure Act in the following terms:
What is required is a practical judgment by the court as to whether a claim has more than a ‘fanciful’ prospect of success.[2]
[1][2011] VSC 222.
[2]Ibid, [18].
All parties accepted that this statement should be applied in this case. I will proceed accordingly.
The principal claim raised by the plaintiff is this. She contends that the defendants obstructed her endeavours to obtain access to the property to enable a valuation. The valuation was required to secure finance and thus enable her to complete the purchase by the extended date.
The plaintiff's husband has deposed in that regard:
5Settlement was arranged for 3.00pm on Friday 10 December 2010. However prior to settlement it was necessary for our bank, National Australia Bank (‘the Bank’), to do a final inspection and check valuation of the property. This was because the requirements of the Bank is that when a contract of sale is for in excess of $1m and settlement is longer than 90 days a check valuation is made shortly before settlement.
6From on or about 22 November 2010 I had attempted on many occasions to arrange for inspection of the property by the Bank. I and the agent, Fernando Costa of Hocking Stuart, attempted many times to contact Mr Gook. This proved to be unsuccessful. The attempts included leaving notes on his car, visiting his daughter and leaving notes at the property. However it was not until 7 December 2010 was I able to arrange for inspection to take place.
7However the First Defendant, Allan Gook, refused to attend the property and refused the Bank access to the property. There was no explanation given by Mr Gook for his behaviour and, as a result of this, settlement could not take place on 10 December 2010.
8I am advised and verily believe that [the plaintiff’s solicitor] then attempted to contact the solicitors for the Defendants in order to arrange access.
9At the inspection on 8 December 2010 my wife attended. Also in attendance was the agent and Allan Gook. I am advised by my wife and verily believe that she had a conversation with Mr Gook in which she apologised for the delay in settlement but that it would take place. He responded that that was OK and that he knew that settlement would take place and that they need not panic.
10Late on 7 December 2010 the solicitors for the Defendants arranged access for 12.00pm on 8 December 2010. Now produced and shown to me and marked with the letters ‘JC 2’ is a true copy of such email confirming same. However this did not allow sufficient time for the Bank to attend settlement on 10 December 2010.[3]
[3]Affidavit of Joseph Cullia sworn 10 August 2010, [5]-[10].
There is some objective evidence to support this version of events. The email sent by the defendants' solicitors late on 7 December 2010, shortly prior to the inspection which took place the next day, describes the accepted purpose of the inspection as: ‘To allow for the valuation and your client to carry out a final inspection’.
Further, it appears from the email that the defendants' agent did not have the keys and was not even responding to the defendants' calls, a further indication of difficulties in gaining access to the property in the normal manner.
The plaintiff's version of events also has some support in a letter from her finance broker in the following terms:
Dear Ms Cullia
Re Loan Application: 13 Belvedere Close, Maribyrnong Vic 3032
Lender: National Australia Bank
Mortgage Broker: AUSSIE DREAM LOANS Pty Ltd
We confirm our previous advice that it was our intention to inspect the above named property for the purpose of undertaking a valuation in late November 2010, however access to the property could not be obtained.
Access was eventually granted on 8 December 2010. As a result there was no opportunity to settle on 10 December 2010.
Aussie Dream Loans and National Australia Bank are not in fault and made every endeavour to assist you. If access had been granted late November or early December 2010 it would have allowed ample time for settlement of the above property on 10 December 2010.[4]
[4]Exhibit ‘JC 10’ to the affidavit of Joseph Cullia sworn 16 August 2011.
The evidence of the plaintiff's husband also contains statements that, after 14 December when the defendants' solicitors contended that the contract was at an end, there were further discussions between him and Mr Gook in which Mr Gook said he was happy to settle in January 2011 provided penalty interest was paid and that, as a result, numerous efforts were made by the plaintiff's solicitors to arrange a date for settlement in late December or in January.
In the course of the plaintiff's solicitor's correspondence in this regard, no allegation was made that the defendants were at fault for obstructing the settlement agreed for 10 December 2010. However, this may possibly be explained by the desire of the plaintiff to complete the purchase, and an understanding from discussions between Mr Cullia and Mr Gook that this would be allowed if penalty interest was paid. In these circumstances, having regard to the strained relations between the defendants, it may possibly have been prudent for the plaintiff's solicitors to act in a non‑confrontational manner to promote the prospects of a completion for sale. Whether or not this is so can only be determined at a trial.
If the plaintiff's evidence were to be accepted in full, an arguable and not fanciful case for relief against forfeiture would be established. The relevant principle was summarised by Dodds‑Streeton J, as she then was, in Aussie Invest Corporation v Pulcesia[5] in the following terms:
Although each case will turn on its own facts, a vendor’s obstruction of the purchaser’s performance, whether by an unreasonable or unfair refusal to afford an opportunity to tender it within the time stipulated or other relevant conduct, would usually render it unconscientious to insist on termination of the contract in reliance on the purchaser’s breach. Such conduct would exemplify substantial causation of, or contribution to, the purchaser’s breach which, as Tanwar established, may justify equitable relief.[6]
[5](2005) 13 VR 168.
[6]Ibid, 204, [291].
The reference in that passage to Tanwar is a reference to the decision of the High Court in Tanwar Enterprises Pty Ltd v Cauchi[7] where, in the joint judgment, it was said that the equity to grant relief in the absence of accident or mistake will necessarily involve the applicant for relief pointing to conduct of the vendor which has, in some significant respect, caused or contributed to the breach of the essential time stipulation.
[7](2003) 217 CLR 315, 335.
The defendants deny the critical aspects of the plaintiff's evidence on the obstruction issue. However, those factual disputes cannot be finally determined on application such as this. The defendants submit, however, that the plaintiff's evidence is so tenuous or improbable that there is no real prospect of it being accepted at trial, and thus no real prospect that they will make out a case for equitable relief based upon unconscientious conduct by the vendors in obstructing the valuation.
There is some force in these submissions. If the evidence at trial stood only as it is now, without supplementation, it may be thought unlikely that the plaintiff would succeed on the obstruction issue. However, I am not prepared to find on the evidence presently available that the plaintiff's case is so fanciful on that account that summary judgment should be ordered on the claim for specific performance.
In the event that the court so concluded, the defendants raised another point which they contend renders the plaintiff's prospects of success on their specific performance claim fanciful. The defendants contend that the plaintiff herself elected to rescind the contract and sought repayment of the deposit, albeit in the mistaken belief that she was entitled to do so on the ground that the defendants had repudiated the contract by refusing to settle in late December or during January as allegedly agreed between Mr Cullia and Mr Gook. As pleaded, the defendants’ contention is that the plaintiff informed the defendants that she was no longer ready, willing and able to settle the purchase but instead required her deposit back.
Although election has not been specifically pleaded, the matter was argued without objection and I will consider it.
The election contention was based upon a letter dated 27 January 2011 from the plaintiff's solicitors to the defendants' solicitors which states:
WITHOUT PREJUDICE
…
Dear Sir and Madam
RE: CULLIA PURCHASE FROM GOOK
PPTY: 13 BELVEDERE CLOSE, MARIBYRNONG
We refer to the above matter and it has become very clear that neither of the Vendors wish this matter to proceed.
Our client has made numerous attempts in personal contact and in correspondence to the Lawyers for the Vendor with a view to settling this matter and honouring her obligations pursuant to the Contract of Sale. All of which have been met with resistance by one or the other of the Vendors.
We note that after many attempts the matter was [booked] in for settlement on 10 December 2010, we then rang Kempsons Lawyers seeking an extension until Wednesday 15 December 2010, as our client had some difficulty to have the sums in time.
On 14 December 2010 correspondence was received from Kempsons indicating the [Rescission] Notice served in the Contract was now at an end and that the deposit had been forfeited.
We note that the [Rescission] Notice was issued on 23 November 2010 and not withstanding expiry of the same and the negotiations between the parties resulted in a further settlement date being set in 10 December 2010. We note that no new [Rescission] Notice was issued.
In the circumstances our client now seeks a return of the deposit, less necessary expenses that have been incurred [by the] Vendors.
We shall be pleased to hear from you once you have had an opportunity to obtain instructions from your clients.[8]
[8]Exhibit ‘JC 9’ to the affidavit of Joseph Cullia sworn 10 August 2011.
In my opinion there is an arguable and not fanciful case that this letter is not sufficiently unequivocal to constitute a binding election. First, it is expressed to be without prejudice. Second, it does not expressly state that the plaintiff is treating the contract as being at an end. Rather, it arguably conveys an offer to accept a return of the deposit less the vendor's necessary expenses. Thirdly, it seeks a response. This may also indicate that it was a mere offer to resolve a dispute rather than election to rescind on the basis of an alleged repudiation by the vendor. Fourth, there is no express assertion of breach or repudiation by the defendants. Fifth, in order to determine whether a party has irrevocably elected, it is necessary to consider the conduct said to give rise to the election in the context of all the relevant circumstances. All of the circumstances are not presently before the court and will not be until a trial.
For these reasons, the defendants' summons filed 22 July 2011 seeking summary judgment will be dismissed. That means that the caveat should remain. On that issue, I note that the caveat has been a blot on the title to the property for eight months. This matter must be resolved promptly. It should take no more than two days. I will direct that the trial be given such priority as the Court can afford it.
I will order costs in the cause.
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