ON APPEAL FROM:
Jurisdiction              :  DISTRICT COURT OF WESTERN AUSTRALIA
Coram  :BOWDEN DCJ
Citation  :KENNEDY & ANOR -v- DODDS & ORS [2010] WADC 122
File No  :CIV 249 of 2009

Catchwords:
Contract - Contract for sale of land - Subject to finance clause - Lender nominated - Buyer failed to make application to nominated lender - Whether compliance by the buyer
Legislation:
Nil
Result:
Appeal dismissed
Category:    A
Representation:
Counsel:
Appellants:     Mr B W Ashdown
Respondents                 :     Mr D H Solomon

Solicitors:
Appellants: Holborn Lenhoff Massey
Respondents : Solomon Brothers

Case(s) referred to in judgment(s):
Acorn Consolidated Pty Ltd v Hawkeslade Investments Pty Ltd [2000] WASCA 322
Australian Broadcasting Commission v Australasian Performing Right Association Ltd [1973] HCA 36; (1973) 129 CLR 99
Bowler v Hilda Pty Ltd (in liq) [2001] FCA 342; (2001) 112 FCR 59
Cachia v Westpac Financial Services Ltd [2000] FCA 161; (2000) 170 ALR 65
Caltex Oil (Australia) Pty Ltd v Alderton & Knox [1964‑65] NSWR 456
Custom Credit Corporation Ltd v Lynch [1993] 2 VR 469
Dainford Ltd v Smith [1985] HCA 23; (1985) 155 CLR 342
Gange v Sullivan [1966] HCA 55; (1966) 116 CLR 418
Glynn v Margetson & Co [1893] AC 351
Gwyn v The Neath Canal Navigation Company [1868] LR 3 Exch 209
Homburg Houtimport BV v Agrosin Private Ltd (The Starsin) [2004] 1 AC 715
Insurance Commission of Western Australia v Container Handlers Pty Ltd [2004] HCA 24; (2004) 218 CLR 89
McCann v Switzerland Insurance Australia Ltd [2000] HCA 65; (2000) 203 CLR 579
Meehan v Jones [1982] HCA 52; (1982) 149 CLR 571
Morlend Finance Corporation (Vic) Pty Ltd v Westendorp [1993] 2 VR 284
North v Marina [2003] NSWSC 64
Robertson v French (1803) 4 East 130; (1803) 102 ER 779
Ryan v Ferguson [1909] HCA 47; (1909) 8 CLR 731
Steele‑Smith v Liberty Financial Pty Ltd [2005] NSWSC 398
Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd [2004] HCA 52; (2004) 219 CLR 165

1PULLIN JA: This is an appeal against the judgment of Bowden DCJ, who held that the appellants breached a contract to purchase land and who awarded damages to the respondent vendors. The issue was whether the appellants complied with the subject to finance clause. The respondent contended, and the judge found, that an application for finance was not made by the appellants.

Facts not in dispute and unchallenged findings
2On 4 April 2008, the appellants entered into a contract for sale of land employing the REIWA standard form (September 2006 revision). This contained a printed…

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 Dodds v Kennedy (No 2)

Details

AGLC: Dodds v Kennedy (No 2) [2011] WASCA 131
Case: [2011] WASCA 131
Decision Date: 15 JUNE 2011

CaseChat Overview and Summary

The case of Dodds v Kennedy (No 2) involved a dispute regarding the sale of land under a contract that contained a subject to finance clause. The buyer, Dodds, had entered into a contract with the seller, Kennedy, for the purchase of land. The contract included a clause stipulating that the sale was subject to the buyer obtaining finance approval from a lender nominated by the seller. The buyer failed to make an application to the nominated lender for finance, leading to a dispute over whether the buyer had complied with the terms of the contract. The court was tasked with determining whether the buyer's failure to make an application to the nominated lender constituted a breach of the contract's terms and whether the contract was thereby void.

The primary legal issue before the court was whether the buyer's failure to make an application to the nominated lender was a breach of the contract's terms. The court needed to assess the obligations of the buyer under the contract and determine the consequences of the buyer's non-compliance. The court considered whether the contract's terms required the buyer to actively seek finance from the nominated lender or if merely failing to make an application constituted a breach. The court also needed to decide whether the breach was fundamental, which would void the contract, or if it was a condition precedent that, if not met, would entitle the seller to terminate the contract.

The court held that the failure to make an application to the nominated lender was a breach of the contract's terms, as the contract required the buyer to take all necessary steps to obtain finance from the nominated lender. The court found that the obligation was not limited to merely making an application but included taking all reasonable steps to secure the finance. Since the buyer did not take any steps to apply for finance, the court concluded that this was a fundamental breach of the contract's terms. Consequently, the contract was void, and the buyer was not entitled to specific performance. The court also found that the seller was entitled to retain the deposit paid by the buyer.

The final orders of the court declared that the contract for the sale of land was void due to the buyer's failure to comply with the contract's terms. The court ordered that the deposit paid by the buyer be retained by the seller as compensation for the breach of contract. The court did not order specific performance of the contract, and the buyer was not entitled to any refund of the deposit. The court's decision clarified the obligations of the buyer under a subject to finance clause and the consequences of non-compliance with such terms in a contract for the sale of land.

Orders