Debus v Hewitt - [2003] NSWSC 176

Reported Decision:
(2003) NSW ConvR 56-054

Supreme Court

CITATION: Debus v Hewitt [2003] NSWSC 176

HEARING DATE(S): 11 March, 2003

JUDGMENT DATE:
11 March 2003

JURISDICTION:
Equity Division

JUDGMENT OF: Palmer J

DECISION: Declaration that contract validly rescinded by Plaintiff - Defendant ordered to repay amount paid by Plaintiff under contract together with interest.

CATCHWORDS: VENDOR AND PURCHASER - INSTALMENT CONTRACT - TIME OF ESSENCE - NOTICE TO COMPLETE - Contract for sale of share in company giving right to occupy land - purchase price payable by instalments over long period - substantial payments made by purchaser - purchaser defaults in payment of some instalments - vendor terminates - whether contract impliedly made time for payment of essence - whether notice making time of essence required - construction of contract - hallmarks of time of essence provision - hallmarks of notice making time of essence. HELD: Contract did not make time of essence by implication - notice of intention to terminate not a notice making time of essence - vendor wrongfully repudiated and purchaser validly rescinded - purchaser entitled to repayment of money paid under contract.

CASES CITED: - McDonald v Dennys Lascelles Limited (1933) 48 CLR 457
- Neeta (Epping) Pty Ltd v Phillips (1974) 131 CLR 286
- Park v Brothers (2001) 10 BPR 18,649

PARTIES :
Catherine Debus - Plaintiff
Melissa Anne Hewitt - Defendant

FILE NUMBER(S): SC 4862/02

COUNSEL: M. Ryckmans (Sol) - Plaintiff
T.H. Barrett - Defendant

SOLICITORS: Abbott Tout - Plaintiff
Ellis & Baxter - Defendant

Ex tempore

1    By a Deed dated 22 August 2000 between the Plaintiff and the Defendant, the Defendant sold to the Plaintiff a share numbered 3 in the issued capital of South Arm Enterprises Pty Ltd.

2    By Summons filed on 30 September 2002, the Plaintiff (“the Purchaser”) seeks a declaration that that Deed has been validly terminated by her. The Summons seeks a consequential order that the Defendant (“the Vendor”) repay the part payments of the purchase price made by the Purchaser pursuant to the Deed.
3    The facts are not in dispute and may be shortly stated. The share which is the subject of the Deed carries with it the right to occupy a certain portion of land situated at Uki. The relevant clauses of the Deed are as follows:

“1. It is hereby agreed that consideration for the transfer of the said Share shall be Seventy Five Thousand Dollars ($75,000.00) which shall be paid as follows:

(a) the sum of One Thousand Dollars ($1,000.00) on the execution of this Deed, such sum to be held by the Vendor’s Solicitor, as Stakeholder;

(b) the sum of Thirty Nine Thousand Dollars ($39,000.00) within thirty (30) days of the date of execution of this Deed, in which regard time shall be in-essential;

(c) the sum of Ten Thousand Dollars ($10,000.00) within six (6) months of the date of execution of this Deed;

(d) the balance of Twenty Five Thousand Dollars ($25,0000.00) by instalments of Eight Hundred Dollars…

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.

Continue reading Debus v Hewitt

Details

AGLC: Debus v Hewitt [2003] NSWSC 176
Case: [2003] NSWSC 176
Decision Date: 11 March 2003

CaseChat Overview and Summary

The matter between Debus and Hewitt involved a dispute over a contract for the sale of a share in a company, which also granted the right to occupy certain land. Hewitt, the purchaser, had made substantial payments towards the purchase price, which was to be paid in instalments over a long period. After Hewitt defaulted on some payments, Debus, the vendor, terminated the contract. Hewitt argued that the contract implicitly made time of the essence, or that a notice from Debus should have been interpreted as a notice making time of essence. The court was required to determine whether time was of the essence by implication in the contract, or whether the notice issued by Debus should be construed as a notice making time of the essence.

The court examined the contract to determine if it contained any express provisions making time of the essence or if such a term could be implied. The court considered the hallmarks of a time of the essence provision, which typically include clear and unambiguous language indicating that time is of the essence. The court also examined the notice given by Debus to Hewitt, assessing whether it contained the hallmarks of a notice making time of the essence, which usually includes a clear statement that the time for performance is of the essence. The court found that the contract did not contain any express provision making time of the essence, nor could such a term be implied. The notice given by Debus did not contain the hallmarks of a notice making time of the essence. Therefore, the contract did not make time of the essence by implication, and the notice did not have the effect of making time of the essence.

Consequently, Debus wrongfully repudiated the contract, and Hewitt was entitled to validly rescind the contract. The court ordered Debus to repay Hewitt the money Hewitt had paid under the contract. This ruling highlights the importance of clear and unambiguous language in contracts, particularly in relation to the time of payment and the consequences of default.

Orders