Graham & Anor v Gameday Enterprises Pty Ltd & Anor
[2008] VSC 140
•17 April 2008
| IN THE SUPREME COURT OF VICTORIA | Not Restricted | |
AT MELBOURNE
PRACTICE COURT
No. 5647 of 2008
| RICHARD HENRY GRAHAM & ANOR | Plaintiffs |
| v | |
| GAMEDAY ENTERPRISES PTY LTD & ANOR | Defendants |
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JUDGE: | HANSEN J | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 17 April 2008 | |
DATE OF JUDGMENT: | 17 April 2008 | |
CASE MAY BE CITED AS: | Graham v Gameday Enterprises Pty Ltd | |
MEDIUM NEUTRAL CITATION: | [2008] VSC 140 | |
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Real Property – Caveat – Removal – Transfer of Land Act 1958, s 90.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiffs | Mr G D Bloch | Rockman & Rockman |
| For the Defendants | Mr D P Lloyd | Gross & Becroft |
HIS HONOUR:
This is an application for an order that a caveat lodged on title be ordered to be removed by the Registrar of Titles.
I have heard a sustained argument, much longer than usually takes place in the Practice Court, on this matter and I have reached a clear view which I think I should now express.
It is an unusual case and while in the ordinary case one might, on ordering the removal of the subject caveat, provide by order for the setting aside of a fund out of the proceeds of sale of the land, I do not propose to do that in this case.
I can shortly state my reasons.
The parties came together in a negotiation for the sale of the plaintiffs’ property at Lot 1, 109 Mountain Road, Cherokee. The negotiations resulted in an unconditional written contract for the sale of the land on 12 October 2007. The contract, in the usual form in the particulars of sale, specified the parties, described the property and its address, provided for chattels to pass with the sale and specified a price of $1,750,000 payable as to $175,000 by way of deposit and the residue on 25 October 2007 or earlier by agreement. Vacant possession was to be given at settlement.
Subsequently, according to the plaintiffs, Mr Blood on behalf of the purchaser, which is the first defendant to this motion, raised the matter of the plaintiffs continuing to live at the property in order, it seems, that they might be able to keep their eye on the property and otherwise attend to some matters in the interest of the purchaser. On the other hand, Mr Blood, in an affidavit sworn yesterday, says that the discussions pertaining to that matter occurred on 11 October, the day before the date of sale in the contract of sale. There is, thus, an issue between the parties as to when that particular matter of the possibility of the plaintiffs continuing to reside at the property first occurred.
In any event, whenever it did occur, it was not reflected in the terms of the contract of sale. The contract is totally silent on that matter. It is in terms a contract containing conditions and particulars which one expects to find and does find customarily in contracts for the sale of land, and, as I say, has no reference to the matters that are asserted by the defendant.
There is no dispute as far as the plaintiffs are concerned that such matters were spoken about but they say they occurred subsequent to the entering into the contract. As far as the contract is concerned, it proceeded but was not settled by the purchaser.
The vendors' solicitor then served a notice of rescission dated 9 November 2007 stating that the due date for completion had been 8 November and alleging a failure to pay the residue of the purchase price of $1,575,000 on that date. Interest and legal costs were claimed.
The purchaser did not remedy the alleged default. Hence, it is said by the vendors that the contract was duly rescinded on account of default of the purchaser in paying the residue of the purchase moneys when due and, accordingly, that the amount of the deposit has been forfeited to them.
Subsequently, on 12 December 2007 the purchaser filed a writ in this court seeking relief under the Fair Trading Act relying on representations pertaining to the matter I have mentioned of the vendors continuing to remain on the property following settlement as caretakers, and alleging that subsequent to entering into the contract the plaintiff said they were no longer interested in remaining on the property.
It is alleged by the purchaser that the contract of sale was entered into on the faith of and in reliance upon the statements made by the vendors and that in the circumstances there was conduct committed by them in contravention of s.9 of the Fair Trading Act and of other provisions of that Act which leads on to the vendor claiming in this separate proceeding that it is entitled to an order declaring the contract of sale to be void ab initio and an order that the deposit be refunded to the plaintiff. It is then alleged that the purchaser itself avoided the contract of sale on or about 23 November 2007 by way of a letter from its solicitors. That, of course, was subsequent to the purported rescission by the vendors.
The statement of claim in the vendors' proceeding, for unexplained reasons, ignores the rescission notice given by the vendors and, as a result of doing so ignores, therefore, having to plead as to the effect of that notice. Perhaps the omission was deliberate; perhaps it was an oversight. But whatever it is, that statement of claim then proceeds to allege that by reason of the purchasers' avoidance, the contract had been terminated by the purchaser. It is alleged that the consideration for the payment of the deposit had wholly failed, that it would be unjust for the vendors to retain the deposit and that they were obliged to make restitution of it.
The relief sought is that of an order that the contract is void ab initio with the return of the deposit and damages. The damages are particularised as being wasted conveyancing and travel expenses.
On 14 March this year the purchaser lodged a caveat claiming an equitable interest by way of lien, the ground of the claim being to secure repayment of the deposit paid under the contract between the parties.
On the present application it is incumbent upon the caveator to demonstrate that there is a serious question or prima facie question to be tried as to the interest claimed in the caveat and, if so, that on the balance of convenience the caveat ought be permitted to stand.
It seemed from the argument that the question was not so much the removal of the caveat but, from the point of view of the caveator, the terms on which the caveat ought be removed. That is because the vendors have expressed the desire to proceed to sell the property and the defendants, recognising that they ought be free to do so, has concentrated on the terms to be imposed on them on the removal of the caveat.
Nevertheless, the first consideration and that pressed by counsel for the vendors is that there is no serious question to be tried as to the interest. That was for two reasons.
First, because the contract of sale had been validly rescinded on default of the purchaser in completing the purchase, that that having occurred the vendors had a legal right to the forfeiture of the deposit, and in those circumstances that the equitable interest simply could not stand.
Secondly, it was said by counsel for the vendors that when one looked at the correspondence or e-mails between the parties it could be seen that the claim by the purchaser that there were discussions about the vendors remaining in possession prior to the entry into the contract was so thin or so unlikely to succeed as to make it proper to virtually put it to one side.
I think, however, that I cannot resolve a disputed question of fact such as that and I do not consider it further. I do consider, however, that the other contention is correct. This was an unconditional contract of sale which contained no reference whatsoever to the alleged oral representations allegedly made by the vendors. In that circumstance, what is being sought to be done by the purchaser is, in effect, to qualify the rights falling to the vendors under the contract of sale. It is done not by alleging in the cross-proceeding that there was any term produced out of a conversation between the parties that is to be implied into the contract or treated even somehow as an express term of the contract, that is not attempted at all. In other words, the contract on its face stands unimpugned and it is that contract which the vendors have enforced on default by the purchaser with its terms.
The attack that is made by way of the separate proceeding is entirely collateral and is founded upon the conduct said to constitute a contravention of ss.9 and 8(a) of the Fair Trading Act. It is, in other words, a proceeding entirely extraneous to the contract, although, of course, account must be taken of that contract on the adjudication of that case. The right, if any, that will be established in that proceeding is a right that will be established only by and on the grant of declaratory and other relief which has to go the extent of declaring the written contract void ab initio and then of overriding the effect of rescission and ordering repayment of the amount equivalent to the deposit.
The view that I have arrived at in this rather unusual case is that I am not satisfied that there is a serious question to be tried as to the existence of the caveat.
If I was so satisfied, the question would arise as to what ought happen as a matter of that which is just between the parties. I may then have considered imposing a condition upon any sale of the land by the vendors that a fund be set aside. To say that is not to say I would have done so because there is no suggestion in the materials that the vendors would be unable to meet any obligation to pay the purchaser the sum of $175,000 interest thereon or costs.
Of course, as I have mentioned in the course of argument, if it is reasonably apprehended by the purchaser as plaintiff in its separate proceeding that the defendants threaten to deal with their assets in such a way that the plaintiff may be deprived of the fruits of its litigation if successful, they can apply for a Mareva injunction in the ordinary way. But, as I say, there is not the slightest suggestion that the vendors would not be good for a judgment.
In all of the circumstances and for the reasons I have given, I am of the view that the caveat should be removed and I will so order.
As to the question of costs, it is better for me to determine that question here and now. This proceeding is now spent. The other proceeding can take its own course. I will order that the first defendant pay the plaintiffs’ costs, including reserved costs.
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