Ding v Su
[2012] NSWSC 629
•02 May 2012
Supreme Court
New South Wales
Medium Neutral Citation: Ding v Su [2012] NSWSC 629 Hearing dates: Wednesday 2 May 2012 Decision date: 02 May 2012 Jurisdiction: Equity Division - Duty List Before: Brereton J Decision: Order for specific performance
Catchwords: REAL PROPERTY - contract for the sale of land - whether interest payable on vendor's default - specific performance
PRACTICE AND PROCEDURE - Document served in accordance with contract - Vendor unable to be contacted - Contract for sale of land provides that service on party's solicitor is sufficient service - Service sufficient under UCPR r 10.6.Legislation Cited: (NSW) Uniform Civil Procedure Rules 2005, r 10.6 Cases Cited: Kapos v Jury [2011] NSWSC 1090 Category: Principal judgment Parties: Liancheng Ding (First Plaintiff)
Lei Fu (Second Plaintiff)
Shao Miao Su (Defendant)Representation: Mr Killalea (plaintiffs)
Hencent & Day Lawyers (plaintiffs)
File Number(s): 11/ 273978
Judgment (ex tempore)
HIS HONOUR: By summons filed on 25 August 2011 and amended on 6 March 2012, the plaintiffs Liancheng Ding and Lei Fu claim against the defendant Shao Miao Su specific performance of a contract made between the defendant as vendor and the plaintiffs as purchasers on 16 January 2004 of land situate at and known as XXX/X Black Lion Place, Raleigh Park, Kensington, in the State of New South Wales, being Lot 26 in Folio Identifier 26/SP 50XXX.
There is no appearance, and never has been any appearance, by the defendant, who, it appears, personally, is in China and has been there since about 2004. However, for the reasons that follow, I am satisfied that, for the purpose of these proceedings, there has been sufficient service of the proceedings, including of the amended summons and motion that bring it before the Court today.
Clause 20.6.3 of the contract provides that a document under, or relating to the contract, is served if it is served on the party's solicitor, even if the party has died, or any of them has died. In the contract, the vendor's solicitor is identified as William Chan and Co, solicitors, of suite 407, 208 Forest Street, Hurstville, with a phone, facsimile and DX number. Notice of the proceedings and, in particular, the amended summons, was served on the office of Mr Chan, at least, on 6 March 2012. Although the affidavit of service is deficient in form, the fact of service is confirmed by Mr Chan's response of the same date, in which he returned the documents asserting that he would not inform the defendant of the matter. This is apparently because since about 2007, there had been a dispute between Mr Chan and his former client, but, in the circumstances, that does not detract from the fact that Mr Chan is, for the purpose of the contract, the vendor's solicitor, as defined, on whom service can take place.
While, normally, in circumstances where there was a dispute between the solicitor and client of the type that has become apparent here, one would strive to achieve some alternative means of notifying the client, the evidence establishes that the material has been forwarded by post and by fax to an address in China from which, in the past, the defendant has responded but, more particularly, the defendant has repeatedly asserted that Mr Chan continues to act for her and continues to be her solicitor and, in those circumstances, can hardly be heard to complain that insufficient effort has been made to serve her personally.
As I pointed out in Kapos v Jury [2011] NSWSC 1090, in circumstances such as this, the Court need not insist on further attempts at service where there has been effective service under r 10.6 of the (NSW) Uniform Civil Procedure Rules 2005, which provides that:
Originating process may be served by one party on another in New South Wales or elsewhere in accordance with any agreement, acknowledgment or undertaking by which the party to be served is bound and service in accordance with that rule is taken for all purposes to constitute sufficient service.
As the summons is a document relating to the contract, Mr Chan is the vendor's solicitor for the purpose of the contract, and I am satisfied that the summons has been served under r 10.6.
When the contract was exchanged, it specified a completion date of 15 January 2005. On 25 November 2004, the solicitor then acting for the purchaser enquired whether the vendor would agree to extend the settlement date to 15 January 2007. On 14 December 2004, the vendor's solicitor responded, agreeing to the extension of the completion date to 15 January 2007.
It should be observed that the purchasers were in occupation of the property, and were paying rent to the vendor.
On 21 December 2006, the purchaser's solicitors enquired about an extension to 15 January 2009. It was proposed that the original contract might be rescinded and a new contract with a completion date of 15 January 2009 entered into. There was an equivocal response, said to be "without prejudice", from the vendor's solicitor on 17 January 2007, which proposed that the contract be consensually rescinded, the 10 per cent deposit forfeited, and a new contract entered into at 90 per cent of the original selling price, with the purchaser to bear the vendor's reasonable costs. On 22 January 2007, the purchaser's solicitor responded, agreeing in part to this, but proposing some additional, or alternative, terms.
On 29 January 2007, the vendor's solicitor responded that the vendor was not in a position to terminate the contract and prepare a new contract.
On 5 February 2007, Mr Chan sent a letter to the effect that he was ceasing to act.
The evidence does not clearly establish any agreement to extend the completion date to January 2009. However, the affidavit of Liancheng Ding of 21 February 2012 indicates that, following the letter from Mr Chan to which I have referred, the purchasers sent a letter to the vendor on 29 May 2007 and subsequently had a telephone conversation with her, in which they asked, "Are we still okay with the extension to 2009?", and the vendor replied, "Yes". Significantly, in later correspondence with the purchasers and in a letter sent to the Court, the vendor has asked that interest be paid on the balance purchase price from 2009. From that, together with the evidence of the conversation to which I have referred, I am prepared to infer that there was an agreement to extend the completion date to January 2009.
As I have said, the defendant has not appeared, but she did, in late 2011, send a letter to the Court asking, amongst other things, that the purchasers be required to pay interest from 2009.
Special Condition 33 of the contract is as follows:
33.1 Payment of interest
If completion does not occur on or before the completion date, the Purchaser shall pay to the Vendor, in cash on completion, interest calculated:
(a) daily at the rate of 10% per annum; and
(b) on the balance of the purchase price payable under this contract,
in respect of the period (Interest Period) commencing on the day following the completion date and ending on completion.
33.2 Essential Term
The Purchaser may not require the Vendor to complete this contract unless interest payable under this contract is paid to the Vendor on completion. It is an essential term of this contract that the interest is paid.
33.3 Delay by Vendor
Sub-clause 1 does not apply in respect of any part of the Interest Period during which completion has been delayed due to the fault of the Vendor.
There is no evidence of any agreed extension to the completion date after January 2009. Accordingly, interest would be payable unless clause 33.3 applies because completion after January 2009 has been delayed due to the fault of the vendor.
On that question, the relevant evidence is, again, in the affidavit of Liancheng Ding of 21 February 2012. He deposes to a conversation with the defendant in January 2009, in which the purchasers asked, "We think we need to settle the property soon", and the vendor responded, "I will sort it out with my solicitor". The purchasers heard nothing after that, and say that they did not want to push the defendant too hard at that stage and allow her some time to remediate her relationship with her lawyer who, after all, held the deposit.
In early 2010, the purchasers spoke to the defendant and asked:
We would like to know when we can settle the property or do we need another extension of time? We would want to settle as soon as possible.
The vendor replied:
William Chan is still my solicitor. He will sort it out for me.
Attempts by the purchasers' solicitor to correspond with Mr Chan were met by persistent assertions on the latter's part that he no longer acted for the defendant. Attempts by the purchasers to correspond with the defendant were consistently met which the answer, "Communicate with Mr Chan".
In those circumstances, it seems to me that it can be said that delay in settlement after January 2009 was attributable to the fault of the vendor.
Accordingly, although the completion date was not extended after that date, the delay after expiry of the completion date was due to the fault of the vendor, and interest does not accrue in respect of it.
Despite the long passage of time, neither party purports to have terminated the contract. No defence of laches has been raised and, given the agreed extensions and the circumstances to which I have referred, prima facie, such a defence would not defeat the claim. I am, therefore, satisfied that the plaintiffs are entitled to specific performance.
I make the following declarations and orders:
(1) Declare that the agreement made on 16 January 2005 between the defendant as vendor & the plaintiffs as purchasers for sale of the land situate at & known as XXX/X Black Lion Place, Raleigh Park, Kensington in the State of NSW being the land comprised in Folio Identifier 26/SP 50XXX ought to be specifically performed and carried into execution.
(2) Order that the defendant specifically perform and carry into execution the said agreement insofar as the same remains to be performed.
(3) Order that the Registrar: a) fix a time and place for completion of the agreement and, b) enquire into and certify the sum which upon completion ought to be paid by the plaintiffs to the defendant.
(4) Order that the defendant attend at the time and place so fixed for completion and upon tender to her of the sum certified under order 3(b) do deliver to the plaintiff a duly executed form of transfer of the said property in registrable form and all other forms necessarily to transfer the same to the plaintiffs together with all title documents relating thereto.
(5) Order that if the defendant fails to comply with order 4 the sum certified under order 3(b) be paid into court to the credit of their proceedings and the Registrar in Equity be appointed to execute the documents necessary to transfer the said property to the plaintiffs for and on behalf of the defendant.
(6) Order that the defendant pay the plaintiffs' costs.
25 June 2012
The plaintiffs have subsequently sought an order that the costs of be assessed on this indemnity basis. That application is based on an offer of compromise made on 22 December 2011, on the following terms:
The plaintiffs offer to settle the proceeding with the defendant on the following basis:
(a) Verdict for the plaintiffs and an order be made that the parties carry into execution and specifically perform the contract for sale of land dated 16 January 2004 ("the Contract") affecting 604/7 Black Lion Place, Raleigh Park, Kensington, NSW, Lot 26 Strata Plan 50708, made between the plaintiffs as purchaser and the defendant as vendor and such performance is to occur no later than 60 days after the acceptance of the offer.
This offer is open to be accepted within 28 days from the date is it served.
That offer corresponds with the relief sought in the proceedings, and the relief ultimately obtained. It involves no element of compromise. For that reason I am not prepared to make an indemnity costs order.
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Decision last updated: 29 June 2012
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