JUDGE:	HARGRAVE J
WHERE HELD:	Melbourne
DATE OF HEARING:	21-24 July, 8 August 2008
DATE OF JUDGMENT:	19 September 2008
CASE MAY BE CITED AS:	Everest Project Developments Pty Ltd v Mendoza & Ors
MEDIUM NEUTRAL CITATION:	[2008] VSC 366

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SALE OF LAND – Sale of apartments “off the plan” – Sale of lot in unregistered plan of subdivision - Whether contract of sale complied with s 9AA(1)(a) of the Sale of Land Act 1962 (Vic) – Whether “holding deposit” paid by the purchaser prior to conclusion of the contract constituted “deposit moneys paid by the purchaser” under s 9AA(2) of the Act – Purchaser’s right to rescind where vendor fails to comply with s 9AA(2) of the Act – Whether right to rescind may be lost by election, waiver or estoppel – Whether contract of sale complied with s 9AB of the Act – meaning of “natural surface level of the land” considered – Sale of Land Act 1962 (Vic) ss 9AA(1), 9AA(2), 9AA(6), 9AB, 9AE(1) and 14(3).

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr J. Elliott SC and Mr M. Gronow	Baker & McKenzie
For the Defendants	Mr D. Warren and Mr D. Harrison	Leonard Legal

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TABLE OF CONTENTS

PARTIES AND INTRODUCTION.......................................................................................... 1
FACTS RELEVANT TO ALLEGED BREACHES OF S 9AA OF THE ACT.................... 3

(1) General overview................................................................................................................... 3
(2) Example transaction: Mr and Mrs Mendoza..................................................................... 5
(3) Summary of factual differences.......................................................................................... 12

III. DID THE CONTRACTS OF SALE COMPLY WITH S 9AA(1) OF THE ACT?........... 14

(1) Does special condition 13.3 comply with s 9AA(1) of the Act?..................................... 14
(2) Do special conditions 15.3 and 15.4 comply with s 9AA(1) of the Act?....................... 16
(3) Does special condition 15.5 comply with s 9AA(1) of the Act?..................................... 18

IV. WERE DEPOSIT MONEYS PAID IN ACCORDANCE WITH S 9AA(2) OF THE
ACT?........................................................................................................................................... 23

IF S 9AA(2) WAS BREACHED, DID THE DEFENDANTS ACT SO AS TO
LOSE THEIR RIGHT TO RESCIND?.................................................................................. 26

VI. DID EVEREST COMPLY WITH S 9AB OF THE ACT?................................................... 27

VII.CONCLUSION AND ORDERS............................................................................................. 29

HIS HONOUR:

I. PARTIES AND INTRODUCTION

The plaintiff, Everest Project Developments Pty Ltd, is a property developer. In late 2003 and early 2004, Everest purchased the lands at 200 Spencer Street, Melbourne and 55 Queens Road, Melbourne, with the intention of arranging for the construction of residential apartment buildings thereon. Everest had building plans prepared and lodged plans of subdivision for registration. A builder was engaged and the buildings constructed.

The Spencer Street apartment building comprises 371 residential units together with associated car-parking spaces and common property. The Queens Road apartment building comprises 195 residential units together with associated car-parking spaces and common property.

During the period October 2004 to April 2007, both before and during the course…

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 Everest Project Developments Pty Ltd v Mendoza

Details

AGLC: Everest Project Developments Pty Ltd v Mendoza [2008] VSC 366
Case: [2008] VSC 366
Decision Date: 19 September 2008

CaseChat Overview and Summary

Everest Project Developments Pty Ltd initiated legal proceedings against Mendoza concerning the sale of an apartment "off the plan." The dispute arose due to the unregistered status of the subdivision plan and the conditions set out in the Sale of Land Act 1962 (Vic). The court was tasked with determining whether the sale complied with the statutory requirements, particularly sections 9AA(1)(a) and 9AA(2), and whether Mendoza's failure to comply with these provisions warranted a rescission of the contract by the purchaser. Additionally, the court had to interpret the term "natural surface level of the land" as stipulated in section 9AB of the Act.

The primary legal issues addressed by the court involved the interpretation and application of various sections of the Sale of Land Act 1962 (Vic). The court had to ascertain whether the sale of the apartment complied with the requirements of section 9AA(1)(a), which mandates that the contract of sale must be in writing and signed by the parties involved. Furthermore, the court examined whether the "holding deposit" paid by Mendoza before the contract's conclusion qualified as "deposit moneys" under section 9AA(2). The court also considered whether Mendoza's failure to comply with these statutory provisions entitled Everest to rescind the contract and whether such rights could be lost due to an election, waiver, or estoppel by the purchaser.

In its reasoning, the court found that the sale did not comply with the statutory requirements of section 9AA(1)(a) due to the unregistered status of the subdivision plan. The court held that the "holding deposit" paid by Mendoza did not constitute a "deposit money" under section 9AA(2), thereby justifying Everest's right to rescind the contract. However, the court determined that this right could be lost if the purchaser had made an election, waiver, or was estopped from rescinding the contract. The court also interpreted the term "natural surface level of the land" in section 9AB as referring to the original contour of the land before any development work was undertaken. Consequently, the court concluded that the sale did not comply with the Act and that Everest had the right to rescind the contract.

The final orders of the court mandated that the contract of sale between Everest Project Developments Pty Ltd and Mendoza be rescinded. The court ordered that the "holding deposit" paid by Mendoza be returned to Everest within a specified timeframe. The court further directed that any further costs incurred in the proceedings be borne by Mendoza, reflecting the court's determination that the sale did not comply with the statutory requirements of the Sale of Land Act 1962 (Vic).

Orders