Dielos v Barrie

Case [2015] SASC 31

SUPREME COURT OF SOUTH AUSTRALIA

(Magistrates Appeals: Civil)

DIELOS v BARRIE

[2015] SASC 31

Judgment of The Honourable Justice Blue

27 February 2015

MAGISTRATES - APPEAL AND REVIEW - SOUTH AUSTRALIA - APPEAL TO SUPREME COURT - NATURE OF APPEAL

CONTRACTS - PARTICULAR PARTIES - PRINCIPAL AND AGENT - IN GENERAL

CONTRACTS - GENERAL CONTRACTUAL PRINCIPLES - PARTIES - GENERAL PRINCIPLES

CONTRACTS - GENERAL CONTRACTUAL PRINCIPLES - DISCHARGE, BREACH AND DEFENCES TO ACTION FOR BREACH

The plaintiff, Mr Dielos, appeals against the dismissal by a Magistrate of his claim to recover the deposit paid under a contract entered into in 2009 to purchase from the defendant, Mr Barrie, land for $1.25 million subject to, inter alia, a condition precedent that subdivisional development approval be granted by 29 September 2011.

The special condition was not satisfied and on 29 September 2011 Mr Dielos wrote to Mr Barrie's agent saying that the special conditions could not be satisfied and requesting that the deposit and accrued interest be returned immediately.

On 3 November 2011, the parties executed an addendum to contract providing for amendment of the contract deleting the special conditions, reducing the purchase price to $900,000 and extending the settlement date to 7 July 2012. Mr Dielos later gave evidence that, in executing the addendum, he was acting on behalf of another person and he disclosed this to Mr Barrie's agent.

Purchase of the land was not completed by the purchaser on 7 July 2012 and Mr Barrie purported to terminate the contract.

The Magistrate dismissed Mr Dielos' claim, holding that his letter of 29 September 2011 did not terminate the original contract, and he did not disclose to Mr Barrie that he was acting on behalf of another person in entering into the addendum to contract.

Held:

1. On its proper construction, Mr Dielos' letter of 29 September 2011 did terminate the original contract (at [58]-[64]).

2. The Magistrate’s finding that Mr Dielos did not disclose to Mr Barrie that he was acting for another person in entering into the addendum to contract was based upon her assessment of the credit of the witnesses and there is no basis to overturn the finding on appeal (at [88]-[90]).

3. There is no basis to conclude on appeal that entry into the addendum to contract was vitiated by Mr Dielos having been forced to do so (at [93]-[96]).

4. Appeal dismissed (at [98]).

Magistrates Court Act 1991 (SA), referred to.
Highfield Property Investments Pty Ltd v Commercial and Residential Developments (SA) Pty Ltd [2012] SASC 165; Pacific Carriers Ltd v BNP Paribas (2004) 218 CLR 451, discussed.
A & J Inglis v John Buttery & Co (1878) 3 App Cas 552; Codelfa Construction Pty Ltd v State Rail Authority of New South Wales (1982) 139 CLR 337; Fox v Percy [2003] HCA 22; (2003) 214 CLR 118; Goss v Lord Nugent (1883) 5 B & Ad 58 and 64–65 (110 ER 713); Harry v Fidelity…

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Dielos v Barrie [2015] SASC 31
Case
[2015] SASC 31
Decision Date

CaseChat Overview and Summary

In the matter of Dielos v Barrie, the appeal was brought before the Supreme Court of South Australia. The central dispute revolves around a contract for the sale of land, known as "the Doggy Lodge," owned by Mr Barrie and sold to Mr Dielos through Elders Real Estate – Modbury/Tea Tree Gully as the agent. The primary issues concern the validity and termination of the original contract and the enforceability of an addendum to the contract. Mr Dielos contends that the original contract was improperly terminated and that he should receive a refund of the deposit.

The court was required to determine whether the Magistrate erred in concluding that Mr Dielos' letter dated 29 September 2011 did not effectively terminate the original contract. Another issue was whether the Magistrate erred in finding that Mr Dielos did not disclose to Mr Barrie’s agent, Mr Howarth, that he was acting as an agent on behalf of Mr Tsapaliaris in entering into the addendum to the contract. A final issue was whether the entry into the addendum was vitiated because Mr Dielos was forced to do so. The court's analysis involved scrutinizing the contractual terms, the conduct of the parties, and the legal principles applicable to the termination and enforcement of contracts.

The court found that the Magistrate did not err in concluding that Mr Dielos' letter did not terminate the original contract, as it did not comply with the specific termination clause. Regarding the disclosure, the court upheld the Magistrate's finding that Mr Dielos did not inform Mr Howarth that he was acting as an agent for Mr Tsapaliaris. The court also rejected the argument of duress, noting that Mr Dielos had not presented any evidence of physical or other duress. Consequently, the appeal was dismissed, and the original decision of the Magistrate was affirmed. The court will consider the parties' submissions on the costs of the appeal.

Orders

Orders of the court

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Background

Background to the litigation

The appeal raises three issues:1.Did the Magistrate err in law in concluding that Mr Dielos’ letter dated 29 September 2011 was not effective to terminate the original contract?2.Did the Magistrate err in fact in finding that Mr Dielos did not disclose to Mr Barrie’s agent that he was acting as agent on behalf of Mr Tsapaliaris in entering into the addendum to contract?3.Should the Magistrate have held that Mr Dielos’ entry into the addendum to contract was vitiated because he was forced to do so?Background All material times, Mr Barrie owned land situated at Golden Grove, South Australia (the Land). The Land was known as “the Doggy Lodge” and Mr Barrie carried on a boarding kennel business on the Land. Mr Barrie engaged Elders Real Estate – Modbury/Tea Tree Gully as his agent to sell the Land. Paul Howarth and Pauline Henson were the principals of Elders Real Estate – Modbury/Tea Tree Gully and Mr Howarth had the conduct of the sale of the Land. Christopher Colmer was the conveyancer engaged by Mr Barrie to act as the vendor’s conveyancer in the sale of the Land to Mr Dielos. On 24 July 2009, Mr Barrie and Mr Dielos executed a contract (the Contract) for the sale of the land for $1,250,000[2] with settlement to take place on or before 29 October 2011. Clause 14 of the standard conditions to the Contract relevantly provided:[2] The Contract provided that the purchase price was to be $1,200,000 if settlement occurred on or before 29 October 2010, but this did not in fact transpire.14.1 This Agreement is subject to the satisfaction of the Special Conditions (if any).14.2The party required to satisfy a Special Condition must use its best endeavours to do so on or before the specified date in that Special Condition…14.3 If a party fails to satisfy a Special Condition then:14.3.1 If the party required to satisfy the Special Condition complies with clause 14.2, and such other terms and conditions as specified in the Special Condition, then either party may terminate this Agreement upon written notice to the other party; or14.3.2…14.4 If this Agreement is terminated pursuant to clause 14.3.1, then any moneys paid by oron behalf of the relevant party under this Agreement shall be refunded to that party. Clause 3 of the standard conditions to the Contract provided:3.1All moneys payable by the Purchaser prior to settlement will be paid to the Agent to be held on trust until Settlement and will be applied to any amounts due to the Agent and then to the Purchase Price.3.2The balance of the Purchase Price will be paid at Settlement, as directed by the Vendor. The Special Conditions contained in annexure 4 to the Contract included the following: A)This Contract is subject to the purchasor obtaining provisional Development Assessment Commission consent to divide the land substantially in accordance with the draft plan attached hereto on or before 29th day of September 2011. The purchasor must apply for the said consent on or before the 29th day of September 2009 and used the purchasor’s best endeavours to ensure that the said application is approved at the earliest possible time.… This condition will not be deemed to be satisfied unless the purchasor obtains approval for a minimum 26 allotments.…B)This Contract is further subject to the purchasor obtaining all relevant approvals pursuant to the Roads (Opening and Closing) Act to purchase that portion of the road reserve abutting the land as may be required to complete the land division contemplated by the said plan. Such consents must be granted on or before 29 September 2011 …

Evidence

Evidence Before The Court

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Decision

Reasons for decision

BLUE J
Another legal basis upon which Mr Dielos might have contended that the Addendum to Contract was not binding would have been if he was forced into it under the doctrines relating to duress. However, Mr Dielos did not suggest any physical or other duress capable of amounting to duress at common law. Given the Magistrate’s factual findings accepting the evidence of Mr Howarth as to his discussions with Mr Dielos, there was no conduct by Mr Howarth capable of amounting to duress or unconscionable conduct in equity in any event.Conclusion Mr Dielos has not established any basis to challenge the Magistrate’s credit and factual findings that Mr Dielos did not tell Mr Howarth that Mr Tsapaliaris was to be the purchaser under the Addendum to Contract. Accordingly, Mr Dielos has not established any basis to challenge the Magistrate’s conclusion that he defaulted in not settling on the purchase of the Land in July 2012 under the Addendum to Contract and that he was not entitled to return of the deposit. I dismiss the appeal. I will hear the parties as to costs.

Ratio Decidendi

Legal Principle Established

Established by: BLUE J

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