Fuentes v Bondi Beachside Pty Ltd - [2016] NSWSC 531

Supreme Court

New South Wales

Medium Neutral Citation: Fuentes v Bondi Beachside Pty Ltd [2016] NSWSC 531
Hearing dates: 3 March 2016
Decision date: 29 April 2016
Jurisdiction: Equity
Before: White J
Decision:
Refer to para [56] of judgment.

Catchwords: CONTRACT — Contract for the sale of land — Vendor’s consent required prior to purchaser assigning, novating or otherwise disposing of its interest in the agreement or the property — Sub-sale contract entered into without vendor’s consent — Vendor terminated contract for breach — Whether sub-sale a breach of contract – whether an essential breach – no evidence of vendor’s suffering damage – purchaser entitled to order for specific performance – vendor entitled to nominal damages
Legislation Cited: Land Registration Act 2002 (UK)
Cases Cited: Abbey National Building Society v Cann [1991] 1 AC 56
Bell v General Accident Fire and Life Assurance Corpn Limited (1998) L & TR I
Chan v Cresdon Pty Ltd (1989) 168 CLR 242
Chang v Registrar of Titles (1976) 137 CLR 177
Church of England Building Society v Piskor [1954] Ch 553
Coventry Permanent Economic Building Society v Jones [1951] 1 All ER 901
Cuthbertson v Irving (1859) 4 H & N 742; 157 ER 1034
DKLR Holding Co (No. 2) Pty Ltd v Commissioner of Stamp Duties [1980] 1 NSWLR 510
Duke of Northumberland v Attorney General [1905] AC 406
GPT Re Limited v Lendlease Real Estate Investments Limited [2005] NSWSC 964; (2005) 12 BPR 23,217
Hongkong Fir Shipping Co Ltd v Kawasaki Kisen Kaisha Ltd [1962] 2 QB 26
Kern Corporation Limited v Walter Reid Trading Pty Limited (1987) 163 CLR 164
Koompahtoo Local Aboriginal Land Council v Sanpine Pty Ltd [2007] HCA 61; (2007) 233 CLR 115
Re Transphere Pty Ltd (1986) 5 NSWLR 309
Scott v Southern Pacific Mortgages Ltd [2014] UKSC 52; [2015] AC 385; [2015] 1 All ER 277
Shaw v Foster (1872) LR 5 HL 321
Stern v McArthur (1988) 165 CLR 489
Universal Permanent Building Society v Cook [1952] Ch 95 Woolwich Equitable Building Society v Marshall [1952] Ch 1
Ziel Nominees Pty Ltd v VACC Insurance Co Ltd (1975) 180 CLR 173
Texts Cited: McGarry & Wade’s Law of Real Property, 5th ed
N Hopkins “Priorities and sale and leaseback: A wrong question, much ado about nothing and a story of tails and dogs” [2014] 79 Conv 245
P Sparkes, “Reserving a Slice of Cake” [2015] 79 Conv 301
Category: Principal judgment
Parties: Jorge Bildo Saravia Fuentes (Plaintiff)
Bondi Beachside Pty Ltd (Defendant)
Representation:
Counsel:
J O’Sullivan (Plaintiff)
S Epstein SC with E Whitby (Defendant)
Solicitors:
Derwent Perez Lawyers (Plaintiff)
Baron & Associates (Defendant)

File Number(s): 2016/56305

Judgment

HIS HONOUR: The plaintiff, Mr Jorge Fuentes, seeks an order for specific performance of a contract for the sale of land made between him and his wife, Regina Bueno Ros, as purchasers, and the defendant, Bondi Beachside Pty Ltd, as vendor. The contract was entered into on 8 September 2012. It was…

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.

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Details

Case: [2016] NSWSC 531
Decision Date: 29 April 2016

CaseChat Overview and Summary

In the case of Fuentes v Bondi Beachside Pty Ltd, the primary dispute arose from a sub-sale contract entered into without the vendor's consent, which is a specific condition stipulated in the original contract for the sale of land. The vendor, Bondi Beachside Pty Ltd, terminated the contract for breach, asserting that the sub-sale constituted an essential breach of contract. The purchaser, Fuentes, sought an order for specific performance of the contract, arguing that the vendor had not suffered any damage as a result of the sub-sale. The case was heard and determined by the Supreme Court of New South Wales.

The central legal issues addressed by the court were whether the sub-sale constituted a breach of the original contract and, if so, whether it was an essential breach. Additionally, the court needed to determine whether the vendor had suffered any damage as a result of the sub-sale, which would impact the purchaser's entitlement to specific performance. The court also had to consider the appropriate remedy, weighing the purchaser's request for specific performance against the vendor's entitlement to damages.

The court found that the sub-sale did indeed constitute a breach of the original contract, as the vendor's consent was a crucial condition that was not met. However, the court ruled that the breach was not essential because there was no evidence that the vendor had suffered any damage as a result of the sub-sale. Consequently, the purchaser was entitled to an order for specific performance of the contract. On the other hand, the vendor was entitled to nominal damages, reflecting the breach of contract without any proven loss. The court's decision balanced the interests of both parties, ensuring that the purchaser could complete the purchase while acknowledging the vendor's right to compensation for the breach.

The final orders of the court mandated that the contract for the sale of land be specifically performed in favour of the purchaser, Fuentes. Additionally, the vendor, Bondi Beachside Pty Ltd, was awarded nominal damages for the breach of contract. This outcome reflects the court's determination that, while the sub-sale was a breach, it did not result in any tangible loss to the vendor, thereby allowing for the enforcement of the original contract through specific performance.

Orders