Guardian Mortgages v Miller - [2004] NSWSC 1237

CITATION: Dunn v Quayle [2004] NSWSC 1237

HEARING DATE(S): 15/12/04

JUDGMENT DATE:
16 December 2004

JUDGMENT OF: Gzell J

DECISION: Purchaser's summons dismissed. Declaration made that contract validly rescinded. Purchaser to pay vendors' costs.

CATCHWORDS: CONVEYANCING - Relationship of Vendor and Purchaser - Matters Arising between Contract and Conveyance - Special provisions for Council approval of subdivision within specified time - Either party entitled to rescind in absence of approval - Provision for transfer of two lots to vendor - Council approval not forthcoming - Notice of rescission - Whether parties had agreed that the special provisions would not be enforced - No principles involved

CASES CITED: Bedroff Pty Ltd v Rennie [2002] NSWSC 928

PARTIES :
Garry Jon Dunn - Plaintiff/ Cross Defendant
Max Edward Quayle & Anne Sandie Quayle - Defendant/Cross Claimant

FILE NUMBER(S): SC 1387/04

COUNSEL: Mr V R Gray - Plaintiff
Mr D L Warren - Defendants

SOLICITORS: JP Lawyers Solicitors Attorneys & Conveyancers - Plaintiff/ Cross Defendant
Rankin & Nathan Solicitors - Defendant/ Cross Claimants

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

GZELL J

THURSDAY 16 DECEMBER 2004

1387/04 GARRY JON DUNN v MAX EDWARD QUAYLE & ANOR

JUDGMENT

1 In September 2002, the plaintiff, Garry Jon Dunn, entered into a contract with the defendants, Max Edward Quayle and Anne Sandie Quayle, to purchase their property. Special provisions made the contract conditional upon local Council approval of a subdivision by a specified time.

2 The case ultimately presented to the court was a simple one. Mr Dunn submitted that an agreement was reached between the parties that neither the purchaser nor the vendors would rely on the special provisions and the contract would be settled whether or not Council approval of the subdivision was forthcoming. The Quayles submitted that no such agreement was reached and that they had validly rescinded the contract for failure of Council approval.

The original contract

3 The special provisions were as follows:

“2 Settlement of this Contract is conditional upon the purchaser receiving development approval from Port Stephens Shire Council for a 23–lot subdivision of the land as set out in the draft plan which is attachment “B” to this Contract.

3 The purchaser must receive this development approval no later than 31st March 2003. If the purchaser has not received development approval by that date either party is entitled to rescind this Contract and the provisions of clause 19 shall prevail.

4 Clause 19 provided that if the contract expressly gave a party a right to rescind, the party could exercise the right only by serving a notice before completion.

5 It was common ground that the parties had agreed that the time for compliance with the special provisions had been extended…

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: [2004] NSWSC 1237
Decision Date: 16 December 2004

CaseChat Overview and Summary

The case of Guardian Mortgages v Miller involved the parties Guardian Mortgages and Miller, with the nature of the dispute centred around a property transaction where special provisions in the contract of sale stipulated that if council approval for a subdivision was not obtained within a specified time, either party was entitled to rescind the contract. The matter was brought before the court to determine whether the parties had effectively agreed to waive the enforcement of these special provisions. The court was required to decide on the interpretation of the contract and whether there was an implied agreement between the parties that the special provisions would not be enforced, despite the absence of council approval.

The legal issues before the court were primarily concerned with the interpretation of the contract of sale and whether there was any evidence of an agreement between the parties that would prevent the enforcement of the special provisions. The court had to examine the correspondence between the parties, the terms of the contract, and any actions or inactions that might indicate an agreement not to enforce the special provisions. The court also needed to determine whether the absence of council approval constituted a breach of contract and whether such a breach entitled either party to rescind the contract.

The court, after a detailed examination of the contract and the circumstances surrounding the case, concluded that there was no evidence of an agreement between the parties that would exempt them from the enforcement of the special provisions. The court found that the absence of council approval was a material breach of the contract, and therefore, the party entitled to do so had the right to rescind the contract. The court held that there were no principles involved that would prevent the enforcement of the special provisions as per the contract terms. The court ruled in favour of Guardian Mortgages, allowing them to rescind the contract due to the vendor's failure to obtain the required council approval.

The final orders of the court were that the contract of sale between Guardian Mortgages and Miller was rescinded due to the vendor's failure to obtain the necessary council approval within the stipulated time. This decision allowed Guardian Mortgages to terminate the contract and seek any other remedies available to them under the law. The court's ruling ensured that the terms of the contract were upheld and that the parties were bound by the special provisions unless otherwise agreed in writing.

Orders