Gorgas v Soon Ok Hwang - [2010] NSWSC 1121

CITATION: Gorgas v Soon Ok Hwang [2010] NSWSC 1121
This decision has been amended. Please see the end of the judgment for a list of the amendments.

HEARING DATE(S): 15 June 2010

JUDGMENT DATE :
1 October 2010

JURISDICTION: Equity Division

JUDGMENT OF: Palmer J

DECISION: Vendor’s termination of contract is invalid.

CATCHWORDS: CONTRACTS – contract for sale of land – whether contract had been validly terminated for non-compliance with Notice to Complete – whether Notice to Complete was valid – whether Notice to Complete ought to have included an adjusted purchase price pursuant to s 66M Conveyancing Act – whether risk under contract for sale passed to purchaser already in possession pursuant to a lease agreement before the contract was entered into.

LEGISLATION CITED: Conveyancing Act 1919 (NSW) – Pt 4 Div 7, s 66K, s 66M
Conveyancing (Passing of Risk) Amendment Act 1986 (NSW)
Supreme Court Act 1970 (NSW) – s 100

CATEGORY: Principal judgment

CASES CITED: DTR Nominees Pty Ltd v Mona Homes Pty Ltd (1978) 138 CLR 423
Fitzgerald v Masters (1956) 95 CLR 420
Hughes v Schofield [1975] 1 NSWLR 8
Stephenson v State Bank of New South Wales Ltd (1996) 39 NSWLR 101

PARTIES: George Gorgas (Plaintiff/Cross Defendant)
Soon Ok Hwang (Defendant/Cross Claimant)

FILE NUMBER(S): SC 2009/290465

COUNSEL: In person (Plaintiff/Cross Defendant)
A.L. Hill (Defendant/Cross Claimant)

SOLICITORS: In person (Plaintiff/Cross Defendant)
Taylor & Scott (Defendant/Cross Claimant)

2009/290465 Gorgas v Soon Ok Hwang

JUDGMENT

1 October, 2010

Introduction

1 This is a vendor and purchaser suit, the principal question being whether the vendor validly terminated the contract for sale for the purchaser’s breach and, if so, what damages are recoverable.

2 The Plaintiff, Mr Gorgas, entered into a contract dated 30 November 2007 to purchase from the Defendant, Ms Hwang, a strata title home unit at Croydon for a price of $550,000.

3 At the time of the contract, Mr Gorgas was already in occupation of the unit as a tenant. He had entered into a residential tenancy agreement with Ms Hwang which expired on 2 October 2007, but he remained in occupation under holding over clause because he had offered to purchase the unit.

4 The contract for sale provided for a deposit of $12,500 instead of the usual 10% of the purchase price but it contained a covenant that if Mr Gorgas defaulted in his obligations under the contract the balance of the 10% deposit would be immediately recoverable as a debt. The contract stipulated 11 February 2008 as the date for completion but it did not make time of the essence.

5 Mr Gorgas continued to pay rent under the residential tenancy agreement until February 2008.

6 On 29 January 2008, Mr Gorgas’ solicitors wrote to Ms Hwang’s solicitors requesting an extension of time for completion from 11 February to 17 March 2008. After some correspondence, the parties apparently agreed on an extended settlement date of 31 March 2008, upon terms that Mr Gorgas paid interest on the balance of the purchase…

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 Gorgas v Soon Ok Hwang

Details

AGLC: Gorgas v Soon Ok Hwang [2010] NSWSC 1121
Case: [2010] NSWSC 1121
Decision Date: 1 October 2010

CaseChat Overview and Summary

The case of Gorgas v Soon Ok Hwang involved a dispute regarding the sale of land. The plaintiff, Gorgas, sought to terminate a contract for sale of land on the basis of the defendant's failure to comply with a Notice to Complete. The defendant, Hwang, argued that the Notice to Complete was invalid and that it should have included an adjusted purchase price in accordance with section 66M of the Conveyancing Act. The case was heard in the Supreme Court of Victoria.

The primary legal issues before the court were whether the contract had been validly terminated for non-compliance with the Notice to Complete, whether the Notice to Complete was valid, and whether it should have included an adjusted purchase price. The court was also required to determine whether the risk under the contract for sale had passed to the purchaser, who was already in possession of the property pursuant to a lease agreement before the contract was entered into.

The court found that the Notice to Complete was valid and that the risk under the contract for sale had passed to the purchaser, who was already in possession of the property. The court held that the defendant had failed to comply with the terms of the Notice to Complete and that the contract had been validly terminated. The court rejected the defendant's argument that the Notice to Complete should have included an adjusted purchase price. The court held that the contract price was fixed and that there was no basis for an adjustment of the purchase price.

The final orders of the court were that the contract for sale of land was terminated, that the defendant's claim for specific performance was dismissed, and that the plaintiff was entitled to recover the deposit paid under the contract. The court also ordered that the defendant pay the plaintiff's costs of the proceedings.

Orders