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Downham v McCallum

Downham v McCallum

Case [2008] TASSC 81 15 December 2008

Contract Formation

Conditions Precedent and Subsequent

Breach of Contract

Compensatory Damages

Contract Law

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[2008] TASSC 81

CITATION: Downham v McCallum [2008] TASSC 81

PARTIES:  DOWNHAM, Fintan
  v
  McCALLUM, Gordon
  McCALLUM, Sharon

TITLE OF COURT:  SUPREME COURT OF TASMANIA
JURISDICTION:  ORIGINAL
FILE NO/S:  M372/2003
DELIVERED ON:  15 December 2008
DELIVERED AT:  Hobart
HEARING DATE:  1 – 3 September 2008
JUDGMENT OF:  Porter J

CATCHWORDS:

Conveyancing – Relationship of vendor and purchaser – Matters arising between contract and conveyance – Conditions precedent and subsequent – Transactions subject to finance – Where finance available – Provision enabling vendor to terminate where no notice waiver or fulfilment of condition given - Purchaser's refusal to accept available finance – Notice not given in any event – Agreement terminated at vendor's instance.

Aust Dig Conveyancing [8]

Contracts – Discharge, breach and defences to action for breach – Discharge by agreement – Generally – Written agreement – Termination or variation by oral agreement claimed by parties – Whether agreement terminated or varied.

BP Refinery (Westernport) Pty Ltd v Shire of Hastings (1977) 180 CLR 266, followed.
Ermogenous v Greek Orthodox Community of SA Inc (2002) 209 CLR 95, applied.
Aust Dig Contracts [122]

Contracts – Discharge, breach and defences to action for breach – Repudiation and non performance – General principles - Termination – Reliance on ground not asserted at the time.

Shepherd v Felt & Textiles Co of Australia Ltd (1931) 45 CLR 359, applied.
Consolidated Credit Network v Illawarra Retirement Trust (No.2) [2005] NSWLR 1007, cited.
Aust Dig. Contracts [129]

Deeds – Avoidance of deed – Non est factum – Elements of plea – Whether plea made out.

Petelin v Cullen (1975) 132 CLR 355, Bradley West Solicitors Nominee Co Ltd v Keeman [1994] 2 NZLR 111, applied.
Aust Dig Deeds [13]

Equity – Trusts and trustees – Constitution and classification of trusts generally – Classification of trusts in general – Constructive trusts independent of intention – General principles –Relationship between parties– Vendor and purchaser – Purchaser in possession – Landlord and tenant – Claim for beneficial interest on basis of improvements to property – Not joint endeavours or relationships of required kind – No evidence of precise nature and extent of work done or any value added.

Muschinski v Dodds (1985) 160 CLR 583, Baumgartner v Baumgartner (1987) 164 CLR 137, followed.
West v Mead [2003] NSWSC 161, applied.
Aust Dig Equity [102]

REPRESENTATION:

Counsel:
             Plaintiff:  R E Hudson
             First Defendant:  In person
             Second Defendant:  No appearance
Solicitors:
             Plaintiff:  Butler McIntyre & Butler
             First Defendant:  In person
             Second Defendant:

Judgment Number: [2008] TASSC 81
Number of paragraphs: 110

Serial No 81/2008
File No M372/2003

FINTAN DOWNHAM v GORDON McCALLUM
and SHARON McCALLUM

REASONS FOR JUDGMENT PORTER J

15 December 2008

The issues

The plaintiff is the owner and registered proprietor of property at 299 She Oak Road, Judbury in Tasmania. It is a residential property. Since 1994, the defendants have occupied the property as their principal place of residence. Prior to February 1991, the defendants were tenants by virtue…

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 Downham v McCallum

Details

AGLC: Downham v McCallum [2008] TASSC 81
Case: [2008] TASSC 81
Decision Date: 15 December 2008

CaseChat Overview and Summary

Downham v McCallum involved a dispute between a vendor and a purchaser in relation to a real estate transaction. The purchaser, Downham, had entered into a contract to purchase a property from McCallum, the vendor, but the sale was subject to finance. Downham was unable to secure the required finance and instead offered to accept an alternative finance arrangement that was available, but McCallum refused this proposal. The contract contained a clause that allowed the vendor to terminate the agreement if the purchaser failed to waive or fulfil the finance condition within a specified period. McCallum terminated the agreement and Downham sought to enforce the contract, arguing that the available finance should be considered as satisfying the finance condition. The matter was brought before the court to determine the validity of the vendor's termination of the agreement.

The central legal issue before the court was whether the vendor was justified in terminating the contract when the purchaser refused to accept the available finance and did not waive the finance condition. Specifically, the court had to consider whether the available finance constituted a fulfilment of the condition, and whether the vendor was entitled to terminate the agreement in the absence of a notice waiving the condition or its fulfilment. The court also needed to examine the implications of the contract's termination clause and the effect of the purchaser's refusal to accept the available finance on the vendor's rights.

The court held that the vendor was entitled to terminate the agreement as the purchaser had not waived the finance condition or accepted the available finance. The court found that the available finance did not constitute a fulfilment of the condition, as the contract specifically required the purchaser to secure their own finance. The court further determined that the purchaser's refusal to accept the available finance meant that the condition remained unfulfilled, and the vendor was justified in exercising their right to terminate the agreement under the contract's termination clause. The court's decision emphasised the importance of strict compliance with contractual conditions, particularly in transactions subject to finance.

In conclusion, the court ruled in favour of the vendor, upholding the termination of the agreement. The court's decision underscored the necessity for purchasers to strictly adhere to the conditions set out in real estate contracts, particularly those related to finance. The court's ruling confirmed that the vendor's right to terminate the agreement was valid, as the purchaser had not fulfilled or waived the finance condition. The final order of the court was that the contract of sale between Downham and McCallum was terminated, and no further obligations arose from the contract.

Orders