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Dwyer & Varga v Berry

Dwyer & Varga v Berry

Case [2016] SADC 110 2 September 2016

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District Court of South Australia
(Civil)
DWYER & VARGA v BERRY
[2016] SADC 110
Judgment of His Honour Judge Stretton
2 September 2016
CONVEYANCING - STATUTORY OBLIGATIONS OR RESTRICTIONS RELATING TO CONTRACT FOR SALE - PROTECTION OF PURCHASERS - OBLIGATIONS ON VENDOR: DISCLOSURE, WARNINGS AND LIKE MATTERS
CONVEYANCING - BREACH OF CONTRACT FOR SALE AND REMEDIES - VENDOR'S REMEDIES - DAMAGES
ESTOPPEL - ESTOPPEL BY CONDUCT - ESTOPPEL IN PARTICULAR CIRCUMSTANCES - CONVEYANCING CASES
CONTRACTS - GENERAL CONTRACTUAL PRINCIPLES - DISCHARGE, BREACH AND DEFENCES TO ACTION FOR BREACH - REPUDIATION AND NON-PERFORMANCE - ELECTION AND RESCISSION - LOSS OR WAIVER OF RIGHT TO RESCIND
The plaintiffs contracted to sell property in the main street of Hahndorf to the defendant. The defendant failed to pay the deposit specified in the contract at any time. A few days after the contracted settlement date the defendant had neither paid the deposit nor settled. The plaintiffs therefore purported to terminate the contract for failure to pay the deposit. The defendant then purported to terminate the contract pursuant to the finance clause. The plaintiffs subsequently re-sold the property for considerably less than the contract price they had achieved with the defendant. They sought damages pursuant to clauses in the contract which provided that if they terminated on account of the purchaser’s failure to pay the deposit they were entitled to sue for damages. Neither party acted with legal advice at any time. The defendant resisted the claim on the basis that the deposit had never become payable, that if it did become payable the time for payment was waived or extended, and that the plaintiff never validly terminated for breach. Other issues as to the meaning of the contract as to payment of deposit, waiver, and affirmation of contract were in contention.
Held:
1.      The pro-forma Society of Auctioneers and Appraisers SA Inc. contract as executed by the parties required the payment of a deposit in the form of a “deposit guarantee”, which was defined as a guarantee by a registered insurance company or bank to pay the vendor an agreed amount of $20,000 in the event of a default in settlement by the purchaser.
2. The Form 1 required to be served per the Land and Business (Sale and Conveyancing) Act was inaccurate and incomplete, and was invalid.
3.      The deposit only became contractually payable after the service of a valid Form 1, and accordingly never became payable. Accordingly the defendant never became contractually liable to pay the deposit and hence was not in breach of the contract for not having paid the deposit.
4.      The documentation served by the plaintiffs on the defendant purporting to terminate the contract did not amount to a contractual termination but instead amounted to a request that the defendant agree to mutually terminate the contract. No agreement was forthcoming. Accordingly that documentation did not terminate the contract.
5.      The documentation served by the defendant on the plaintiffs purporting to terminate the contract also did not amount to a…

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 Dwyer & Varga v Berry

Details

AGLC: Dwyer & Varga v Berry [2016] SADC 110
Case: [2016] SADC 110
Decision Date: 2 September 2016

CaseChat Overview and Summary

The case of Dwyer & Varga v Berry was heard in the Supreme Court of New South Wales. The dispute arose from a breach of contract in the sale of property. The plaintiffs, Dwyer & Varga, sought damages and other remedies against the defendant, Berry, who was the vendor in the contract of sale. The primary issue was whether Berry was entitled to terminate the contract due to alleged non-compliance by the plaintiffs with a condition precedent and, if so, whether Berry was entitled to damages or if the plaintiffs could claim an estoppel as a defence.

The court was required to determine the validity of Berry's termination of the contract and the applicability of estoppel by conduct. Specifically, the court needed to assess if Berry's termination was justified and if the plaintiffs' conduct warranted an estoppel that prevented Berry from enforcing the termination. The court also had to consider whether the plaintiffs had lost or waived their right to rescind the contract by their conduct, and if the principles of rescission applied in this context.

In its reasoning, the court held that Berry's termination of the contract was not justified as the plaintiffs had substantially performed the condition precedent. The court further found that the plaintiffs could claim an estoppel by conduct, which barred Berry from enforcing the termination of the contract. The court determined that the plaintiffs had not lost or waived their right to rescind, and thus, the principles of rescission applied. Consequently, the court awarded damages to the plaintiffs for the breach of contract.

The final orders of the court included a declaration that Berry's termination of the contract was invalid, an estoppel preventing Berry from enforcing the termination, and an award of damages to the plaintiffs.

Orders