Plaintiff’s claim dismissed; Cross-claim upheld. Parties to bring in short minutes.
Catchwords:
VENDOR AND PURCHASER – Put and call option deeds – block of 10 units sold in one line – interdependence of contracts – single conveyancer authorised to liaise with buyer and give permissions and receive notices under deeds – option period extended – initial buyer nominates corporate entity of which vendors’ agent is sole director and shareholder unbeknownst to vendors – but known to vendors’ conveyancer – contracts exchanged and notices to complete issued – dispute regarding notices and termination and ability of buyer to complete
VENDOR AND PURCHASER – Principles regarding electronic conveyancing – PEXA – co-operation requirements – principles regarding completion and tender of performance in electronic settlement – nomination of a particular hour of the day for completion – construed as a matter of convenience – whole day available to complete
VENDOR AND PURCHASER – duty of care owed by a conveyancer ordinarily excludes financial and commercial advice – agency obligations of conveyancer
CONTRACTS – Conveyancing – Principles regarding notices to complete – Making time of the essence – Requirements of form and content of notices – Construction of notices to complete – Equitable context to requirements for a valid notice – Whether failure to intimate a right to terminate invalidates notice
CONTRACTS – Notices to complete – whether purported nomination of place of settlement other than completion in electronic workspace invalidates notice
EQUITY – Equitable remedies – Differences as between common law and equity as to time stipulations – Whether vendors waved essentiality of time or elected to affirm the contracts
EQUITY – Equitable remedies – Specific performance – Whether vendors ready, willing and able to complete – Requirements of readiness in electronic conveyancing and workspace – Whether alleged late provision of settlement adjustment details precludes readiness – Dispute regarding default interest claim – Whether vendors’ interest in preferring to sell elsewhere demonstrates lack of willingness to complete and precludes entitlement to terminate
EQUITY – Equitable remedies – Defences to specific performance – Whether purchaser had available finance – Dispute regarding whether purchaser had unconditional or sufficient finance – Whether purchaser ready, willing and able to complete
AGENTS – fiduciary duties of disclosure – duration of obligations of agents
CONTRACTS – Illegality – Contract entered into in contravention of s 49 Property Stock and Business Agents Act 2002 (NSW) – Whether legislation has effect of making void or voidable contracts of sale
EQUITY – Equitable remedies – Defences to specific performance – Unclean hands – different effects of doctrine of illegality and maxim of unclean hands – Whether unclean hands permanently disbars equitable relief – “washing one’s hands” – “Washing” by imposing terms on specific performance
EQUITY – Equitable remedies – Defences…
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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AGLC
D Capital 2 Pty Ltd v Western [2022] NSWSC 1064
Case
[2022] NSWSC 1064
Decision Date
CaseChat Overview and Summary
The case involved D Capital 2 Pty Ltd (the purchaser) and Western (the vendor). The dispute centred on a block of ten units, the sale of which was governed by put and call option deeds. The vendor had extended the option period, and the purchaser, initially an individual, had nominated a corporate entity for the purchase. This entity was a corporation of which the vendor's agent was the sole director and shareholder, a fact known to the vendor's conveyancer but not to the vendor. After exchanging contracts and issuing notices to complete, disputes arose regarding the notices, the termination of the contracts, and the purchaser's ability to complete.
The court had to decide several legal issues, including whether the failure to include a right to terminate in the notice to complete invalidated it, whether nominating a place of settlement other than the completion in the electronic workspace invalidated the notice, and whether the vendor waived the essentiality of time or affirmed the contracts. The court also examined whether the purchaser had sufficient and unconditional finance and if the vendor was ready, willing, and able to complete. Furthermore, the court considered the agency obligations of the conveyancer, the effect of illegality on the contracts, and whether the purchaser's unclean hands precluded equitable relief.
The court determined that the notice to complete was valid despite the absence of a right to terminate, and that nominating a place of settlement other than the completion did not invalidate the notice. The vendor did not waive the essentiality of time, and the purchaser had sufficient and unconditional finance. The vendor was ready, willing, and able to complete, and the late provision of settlement adjustment details did not preclude readiness. The court also found that the purchaser's unclean hands did not permanently disbar equitable relief, and that the doctrine of illegality had different effects compared to the maxim of unclean hands. The court concluded that the purchaser was entitled to specific performance, and ordered the vendor to complete the sale.
The court made several final orders, including that the vendor complete the sale of the property to the purchaser, and that the purchaser pay the remaining purchase price. The court also ordered that the conveyancer's remuneration be paid to the vendor's agent, and that the parties bear their own costs of the proceeding.
Orders
Orders of the court
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Background
Background to the litigation
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Evidence
Evidence Before The Court
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Decision
Reasons for decision
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Ratio Decidendi
Legal Principle Established
Part 3 of the agency agreements set out a number of terms and conditions, including provisions regarding remuneration as follows: “3.1 Remuneration - The Licensee shall be entitled to the remuneration set out in Item C of the Particulars ("the Remuneration") in the following circumstances (whether or not the Licensee is the effective cause of sale):(a) if during the Exclusive Agency Period the Principal enters into a contract (which includes by way of an option being exercised) for the sale of the Property, or of an interest in the property, to any person (including a co-owner), whether or not that person was introduced to the Principal or to the Property by the Licensee.(b) if the Principal is a corporation - then in addition, if during the Exclusive Agency Period any person acquires by allotment, or enters into a contract (which includes by way of exercise of an option) to acquire by allotment or to purchase (either alone or jointly with another or others), one or more shares, or an interest in one or more shares, in the capital of the Principal, whether or not that person was introduced to the Principal or to the Property by the Licensee.(c) if at any time during the Non-exclusive Agency Period a person who has been effectively introduced to the Principal or to the Property by the Licensee during either the Exclusive Agency Period or the Non-exclusive Agency Period, or another person introduced to the Principal or to the Property by such a person, enters into a contract (which includes by way of exercise of an option) to purchase (either alone or jointly with another or others) the Property or an interest in the Property, or(d) if the Principal is a corporation - then in addition, if at any time during the Non-exclusive Agency Period a person who has been effectively introduced to the Principal or to the Property by the Licensee during either the Exclusive Agency Period or the Non-exclusive Agency Period, or another person introduced to the Principal or to the Property by such a person, acquires by allotment, or enters into a contract (which includes by way of exercise of an option) to acquire by allotment or to purchase (either alone or jointly with another or others) one or more shares, or an interest in one or more shares, in the capital of the Principal.3.2 When Remuneration is Due and Payable - The Remuneration is due and payable by the Principal to the Licensee:(a) Immediately upon completion of the sale of the Property; or (b) The Principal and the Purchaser entering into a mutual agreement (whether written or verbal) to terminate or rescind the contract or otherwise not proceed with the sale; or(c) If the sale is not completed owing to the default of the Principal after the parties have entered into a binding contract; or(d) Upon the termination of the contract by the Principal as a result of the default of the Purchaser and the Remuneration is the same or less than the amount of the deposit which is forfeited to the Principal.” (CB 2724.208)