Dunning v Callaghan; Dunning v Callaghan - [2008] NSWSC 553

CITATION: Dunning v Callaghan; Dunning v Callaghan [2008] NSWSC 553

HEARING DATE(S): 3 June 2008

JUDGMENT DATE :
3 June 2008

JURISDICTION: Equity Division

JUDGMENT OF: Windeyer J at 1

EX TEMPORE JUDGMENT DATE: 3 June 2008

DECISION: Contract was validly rescinded by purchasers. Orders for repayment of deposit.

CATCHWORDS: CONVEYANCING - vendor and purchaser - matters arising between contract and completion - whether contract validly rescinded - sale of properties subject to special condition giving either party right of rescission if strata plan not registered within 12 months from contract date - power to extend time for registration for specific reasons subject to determination by vendors' architect - whether letter from architect was a determination

LEGISLATION CITED: Conveyancing Act 1919

CATEGORY: Principal judgment

PARTIES: Thomas David Dunning (First Plaintiff 4986/06)
Pauline Dunning (Second Plaintiff 4986/06)
John Alban Dunning (Plaintiff 4987/06)
Stephen Lloyd Callaghan (First Defendant in both matters)
Kenneth Reginald Hardaker (Second Defendant in both matters)

FILE NUMBER(S): SC 4986 of 2006; 4987 of 2006

COUNSEL: Mr B Ralston (Plaintiffs in both matters)
Mr M J Watts (Defendants in both matters)

SOLICITORS: St Marys Legal Practice (Plaintiffs in both matters)
Grogan & Webb (Defendants in both matters)

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IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

WINDEYER J

TUESDAY 3 JUNE 2008

4986/06 THOMAS DAVID DUNNING & ANOR v STEPHEN LLOYD CALLAGHAN & ANOR
4987/06 JOHN ALBAN DUNNING v STEPHEN LLOYD CALLAGHAN & ANOR

JUDGMENT

1 HIS HONOUR: These two actions were heard together and involve contracts for the sale by the defendants dated 2 March 2005, in one case to Mr John Alban Dunning of a property to be known as Lot 1/214 Railway Road North, Vineyard, and in the other case, to Thomas Dunning and Pauline Dunning of three lots in the same development, namely, Lots 2, 3, 4. It was envisaged under the contracts that a plan of strata subdivision would be registered. An order has been made that the evidence in one matter be evidence in the other so far as relevant to these actions. I should say the evidence is precisely the same in each, so that I will refer to a purchaser rather than refer to the purchasers under each contract.

2 Under special condition 42 it was provided that the sale was subject to consent to the vendor’s proposed plan of subdivision which was annexed and that if the plan was not registered as a strata plan within 12 months from contract date, namely, 2 March 2005, then either party could rescind by notice in writing to the other. In that event, the provisions of clause 19 of the contract would apply.

3 Clause 19 provides that in the event of rescission a right can only be exercised by serving a notice and that thereafter the deposit would be repaid by the vendor to the purchaser. In this case the evidence is that there was a five per cent deposit paid on each contract, namely, $30,000 on…

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 Dunning v Callaghan; Dunning v Callaghan

Details

AGLC: Dunning v Callaghan; Dunning v Callaghan [2008] NSWSC 553
Case: [2008] NSWSC 553
Decision Date: 3 June 2008

CaseChat Overview and Summary

Dunning v Callaghan involved two separate but related cases before the Supreme Court of New South Wales. The appellant, Dunning, sought to rescind the contracts of sale for two properties located in Sydney. The respondents, Callaghan, sought specific performance of the contracts. The dispute arose out of a condition in the contracts that allowed either party to rescind if the strata plan was not registered within 12 months from the date of the contract. Dunning claimed that the contracts were properly rescinded because the strata plans were not registered within the specified time period. Callaghan argued that the contracts were still valid and enforceable and that Dunning had no right to rescind.

The court was required to determine whether the contracts were validly rescinded and, if so, whether the respondents were entitled to specific performance. The central issue was whether a letter from the vendors' architect, stating that time for registration of the strata plans could be extended, constituted a determination under the contracts. If it did, then the contracts were not rescinded and the respondents were entitled to specific performance.

The court held that the letter from the architect was not a determination under the contracts and therefore the contracts were validly rescinded. The court found that the letter did not contain the essential elements of a determination, namely that it was made in writing and signed by the architect. The court also found that the architect did not have the power to make a determination on his own but needed to be directed by the vendors. The court concluded that the contracts were rescinded and the respondents were not entitled to specific performance. The orders made by the court were that the contracts were rescinded and that the respondents' claims for specific performance were dismissed.

Orders