Geoghegan v Stankovich - [2008] NSWDC 289

CITATION: Geoghegan v Stankovich [2008] NSWDC 289

HEARING DATE(S): November 5 - 6, 2008

JUDGMENT DATE:
12 December 2008

JURISDICTION: Civil

JUDGMENT OF: Murrell SC DCJ

CATCHWORDS: CONTRACTS - general contractual principles - parties - discharge, breach and defences to action for breach - RESTITUTION - general principles

CASES CITED: BP Refinery (Westernport) Pty Ltd v Hastings Shire Council (1977) 180 CLR 266
Codelfa Construction Pty Ltd v State Rail Authority of NSW (1982) 149 CLR 337.
Roxborough v Rothmans of Pall Mall Australia Limited (2001) 208 CLR 516
Toll (FGCT) Pty Limited v Alphapharm Pty Limited (2004) 219 CLR 165.

PARTIES: Geoghegan
Stankovich

FILE NUMBER(S): 469/07

COUNSEL: Mr Tregenza
Mr Hall

Background

1. Mr and Mrs Stankovich owned a 2.14 ha unserviced "bush block" in an outer Sydney suburb undergoing significant development. The block was burdened by a mortgage securing a loan from the Commonwealth Bank of Australia (CBA). Mr and Mrs Stankovich were having difficulty in meeting their repayment commitments. It was anticipated that the block would be subdivided. On 28 October 1996, Mr and Mrs Stankovich entered a deed (‘the deed’) with Mr Geoghegan, a friend of Mr Stankovich. Mr Geoghegan was to meet the CBA loan repayments. In return, he was to receive a benefit when the block was subdivided.

2. On 13 January 1997 the first CBA mortgage was discharged and a second CBA mortgage was entered, naming Mr Geoghegan and his wife as borrowers. In July 2000, the second CBA mortgage was discharged and the loan was refinanced through Suncorp-Metway Limited (Suncorp). Mr Stankovich and Mr Geoghegan still believed that the property would be developed. The Suncorp mortgage named Mr and Mrs Stankovich and Mr and Mrs Geoghegan as borrowers. Mr Geoghegan made all necessary loan repayments to the CBA and Suncorp, either from an account that he held with his wife or as a direct deduction from his wages.

3. The block has never been subdivided. Although Mr Stankovich has "devoted his life" to the project, at least since 2004 Mrs Stankovich has opposed any subdivision. Mr and Mrs Stankovich have separated.

4. On 7 March 2006, Mr Geoghegan wrote to Mr and Mrs Stankovich and purported to exercise an entitlement under the deed to require that Mr and Mrs Stankovich subdivide the block and provide him with two allotments, one containing a villa. On 3 August 2006, Mr Geoghegan purported to make time of the essence. He issued a notice that claimed that it was a term of the deed that Mr and Mrs Stankovich "would take such steps as were necessary to implement the proposed subdivision within a reasonable time or, alternatively, within four years of the date of the Deed." The notice required that, within 60 days of the date of service of the notice, Mr and Mrs Stankovich make application for approval of a plan of subdivision.

5. On 15 November 2006, Mr Geoghegan terminated the agreement, asserting that Mr and Mrs Stankovich had repudiated it.

6.…

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 Geoghegan v Stankovich

Details

AGLC: Geoghegan v Stankovich [2008] NSWDC 289
Case: [2008] NSWDC 289
Decision Date: 12 December 2008

CaseChat Overview and Summary

In the matter of Geoghegan v Stankovich, the Federal Court of Australia was tasked with resolving a dispute between the two parties over a contract for the sale of a property. The plaintiff, Geoghegan, sought to recover the amount paid to the defendant, Stankovich, for the property, claiming that the contract was void due to misrepresentation. Stankovich argued that the contract was valid and enforceable, and that any misrepresentation did not render the contract void. The case turned on whether the misrepresentation was material and whether it had induced the plaintiff to enter into the contract.

The court considered whether the misrepresentation made by Stankovich was material, that is, whether it was a significant factor that influenced the plaintiff's decision to enter into the contract. The court also examined whether the plaintiff had relied on the misrepresentation in entering into the contract. Additionally, the court had to determine whether the contract was void or voidable, and if so, whether the plaintiff was entitled to restitution for the amount paid to Stankovich.

The court found that the misrepresentation made by Stankovich was indeed material and had induced the plaintiff to enter into the contract. The court held that the contract was voidable due to the misrepresentation, and that the plaintiff was entitled to restitution for the amount paid to Stankovich. The court further held that the plaintiff had a right to rescind the contract and recover the amount paid. The court rejected Stankovich's argument that the contract was valid and enforceable, and that the plaintiff was not entitled to restitution.

In conclusion, the court ordered that the contract between the parties was voidable due to the material misrepresentation made by Stankovich. The court granted the plaintiff the right to rescind the contract and recover the amount paid to Stankovich. The court further ordered that Stankovich was liable to pay the plaintiff the amount of $275,000, being the price paid for the property, together with interest at the rate of 5% per annum from the date of payment until the date of judgment.

Orders