Harling Queensland Pty Ltd v A R. Kelly and/or Nominees; M. S Kelly v Arkdev Pty Ltd
[2005] QSC 230
•1st of August 2005
| SUPREME COURT OF QUEENSLAND | |
CITATION: | Harling Queensland Pty Ltd v A. R. Kelly and/or Nominees; M. S. Kelly & Ors v Arkdev Pty Ltd [2005] QSC 230 |
PARTIES: | ANTHONY RICHARD KELLY AND/OR NOMINEES |
| (Plaintiff) | |
| v | |
| HARLING QUEENSLAND PTY LTD ACN 068 605 210 | |
| (Defendant) | |
FILE NO: | S50/2005 |
PARTIES: | MICHAEL SEAN KELLY as trustee for the SEAN KELLY FAMILY TRUST and ANTONIUS VAN DEN BOSCH, LINDA ALICE VAN DEN BOSCH, PETER KARL VANDENBOGERT & CHRISTINE LOUIS VANDERBOGERT as trustees for the VAN DEN BOSCH FAMILY TRUST |
| (Plaintiff) | |
| v | |
| ARKDEV PTY LTD as trustee for THE KELLY FAMILY TRUST | |
| (Defendant) | |
FILE NO: | S35/2005 |
DIVISION: | Trial Division |
DELIVERED ON: | 1st of August 2005 |
DELIVERED AT: | Brisbane |
HEARING DATES: | 22nd of July 2005 |
JUDGE: | Dutney J |
ORDERS: | 1) Order that applications for summary judgment in S35/2005 and S50/2005 be dismissed; 2) Order that the application to remove the caveat be dismissed; 3) Order that action S35 of 2005 in the Mackay registry and S50 of 2005 in the Mackay registry be heard together; 4) Order that each of the parties in S50 of 2005 serve on the solicitors for the plaintiff in S35 of 2005 a copy of that party’s current and any subsequent amended pleadings or particulars; and 5) Order that the plaintiffs in action S35 of 2005 be given notice of any application made in action S50 of 2005 and be entitled to be represented at the hearing of that application and make submissions thereon; and 6) Order that at the trial of the actions the plaintiffs in action S35 of 2005 be entitled to examine or cross examine witnesses called in action S50 of 2005 as if those witnesses had been called in S35 of 2005; and 7) Order that such other directions as the parties require, with a view to quickly disposing of this action, be given; and 8) Order that the costs of all applications be reserved to the trial judge. |
CATCHWORDS: | PRACTICE AND PROCEDURE – SUMMARY JUDGMENT – whether serious issue to be tried Foran v Wright (1989) 168 CLR 385, cited. Land Title Act 1994 (QLD), s 61. |
COUNSEL: | Mr D. J. Campbell SC for the Plaintiff (S50/2005) Mr G. Handran for the Defendant Mr R. J. Clarke for the Plaintiff (S35/2005) |
SOLICITORS: | J K Smith Solicitor for the Plaintiff (S50/2005) McKays Solicitors for the Defendant MS Kelly & Co Solicitors for the Plaintiff (S35/2005) McKays Solicitors for the Defendant |
By a contract in writing dated 7 June, 2004, Harling Queensland Pty Ltd (“Harling”) agreed to sell a parcel of vacant land at Dalton Street Walkerston (“the land”) to Anthony Richard Kelly and/or nominee (“Kelly”) for a consideration of $350,000.00.
Settlement was to have taken place on a date determined by a mechanism provided for in the contract and which ultimately came to be 28 February, 2005. Time was of the essence of the contract.
In the meantime Kelly had nominated Arkdev Pty Ltd to be the purchaser. Arkdev had onsold the land to Michael Sean Kelly and Christine Louis Vabdenbogert (“the subsequent purchasers”).
On 28 February, 2005, Kelly’s solicitors wrote to Harling’s solicitors seeking an extension of time for settlement until 2 March, 2005. Harling refused the extension. Kelly’s solicitors again requested an extension, this time until 3 March 2005. Again the request for an extension was refused.
Kelly did not tender at settlement on 28 February, 2005 and on 1 March, 2005, Harling purported to terminate the contract.
On 9 June, 2005, Kelly commenced proceedings against Harling seeking specific performance of the contract.
Both sides have applied for summary judgment of the action.
There is no doubt that Kelly was in breach of the contract in failing to tender at settlement.
In the statement of claim filed with the claim for specific performance, Kelly alleges that at the time of the purported termination of the contract Harling was itself in breach. In his pleading, Kelly alleges two matters in support of the allegation that Haring was in breach. In the course of oral argument, a third was raised. Unless Kelly is entitled to rely on one of these matters to avoid settlement, Harling is entitled to summary judgment and to removal of the caveat lodged over the land by Kelly to protect his claimed interest under the contract. I shall deal with the issues seriatim.
The certificate of title shows the registered proprietor of the land as Harling Queensland Pty Ltd A.C.N. 068 605 210. The transfer documents executed and delivered to Kelly’s solicitor prior to the scheduled settlement record the vendor’s name exactly as it appears on the certificate of title. Despite this, a search in the records of the Australian Securities & Investment Commission discloses that the vendor was registered under the name Harling (Qld) Pty Ltd. The A.C.N. is correctly recorded on the certificate of title. The name on the common seal stamped on the transfer document also shows “Harling (Qld) Pty Ltd”.
Counsel for Kelly submitted that because the name on the certificate of title and transfer documents did not exactly match the name in the ASIC records the transfer was not in registrable form and could only be registered if supported by a statutory declaration explaining the difference. Clause 5.3 of the contract required the vendor to hand to the purchaser at settlement in exchange for payment a transfer capable of immediate registration.
While the vendor must itself be ready, willing and able to complete the contract before becoming entitled to rescind, where the purchaser does not tender, the vendor is not required to demonstrate more than that it was not precluded from properly completing the contract. Even if a further statutory declaration was been required, the vendor need not show more than that it was not impossible to obtain such a declaration at short notice.[1]
[1] See Foran v Wright (1989) 168 CLR 385.
In this case, if this was the only issue I would not be persuaded that Kelly had raised a sufficient issue to justify the matter proceeding to trial.
The second argument raised presents greater difficulty for Harling. Clause 7.2 of the contract provides that the property is sold “free of all encumbrances other than the title Encumbrances and Tenancies.” No “Title Encumbrances” are identified on the front page of the contract. The contract is, therefore, a contract to sell the land free of encumbrances. In this case, the Certificate of Title discloses that the land was subject to an easement in favour of the Mackay City Council. There is no suggestion that Harling had the capacity to remove that burden of that easement for the purpose of settlement. The terms of the easement are not before me.
Where land is sold free of encumbrance, the existence of an easement will commonly constitute a defect in title. Despite this, it is always open to a purchaser to waive a defect in title. Whether that was done in this case prior to the scheduled settlement date is a question of fact which the material before me does not really address. From the bar table, I was informed that either Kelly or the subsequent purchaser from Kelly has obtained development approval to subdivide the land and that the easement does not interfere with that proposed development. I do not know whether that approval was obtained before or after 28 February 2005. If it was obtained before and the effect of the planned subdivision is to render the easement obsolete, it might be easy to infer that the existence of the easement had been waived by Kelly. In saying this, I am assuming that Kelly became aware of the existence of the easement, at the latest, when the title search was obtained. An earlier subdivision of the adjoining land shows that the area covered by the easement on that land was used as a roadway. The position of that road and the shape of the land suggest that the same use is proposed in relation to the subject parcel of land. While the action of the purchaser in subsequently seeking specific performance might be thought to amount to a waiver of any defect that does not bear on the question of whether the purchaser had accepted the title the vendor was able to offer at the date of the original settlement.
It seems to me that the existence of a registered easement not disclosed in the contract is a matter which brings into question the vendor’s right to rescind the contract at the time it did. In the light of this, I am not satisfied that the case is so clear as to permit it to be disposed of summarily either in favour of the vendor or the purchaser.
The third issue concerned the execution of the transfer document. Beyond noting that s. 61 of the Land Title Act 1994 requires a transfer to be properly executed and repeating the observations made in paragraph [12] above, it is not necessary at this stage to resolve this dispute. It is simply another issue that will fall for consideration at the ultimate trial of this action.
These findings dispose of the cross applications for judgment which will be dismissed.
Irrespective of the outcome of the summary judgment applications, Harling seeks removal of the caveat lodged by Kelly to protect his interest. That caveat was not lodged until 1 June 2005. Between 28 February 2005 and 1 June 2005 Harling entered into a contract to resell the land to a third party. In the circumstances it was submitted by counsel for Harling that it had been prejudiced by the delay in Kelly lodging the caveat.
During the course of the hearing it was disclosed that the contract between Harling and the third party is due for settlement in December. There are two sittings of the Supreme Court in Mackay before December. There is no reason why this action cannot be resolved, subject to appeal, prior to that time. In the circumstances, and on that basis that I have found that the matter raises sufficient issues to justify a trial, I will not order the removal of the caveat provided Kelly gives the usual undertaking as to damages.
There is a further application before me to consolidate this action with an action by the subsequent purchasers against Arkdev Pty Ltd seeking specific performance of their contract.
Harling does not oppose the actions being heard together although it does not wish them to be formally consolidated. Counsel for the subsequent purchasers was concerned mainly to be informed as to the progress in the first action and to have the opportunity to make submissions in relation to the head contract.
In the circumstances, I propose to order that action S35 of 2005 in the Mackay registry and S50 of 2005 in the Mackay registry be heard together. I order each of the parties in S50 of 2005 to serve on the solicitors for the plaintiff in S35 of 2005 a copy of that party’s current and any subsequent amended pleadings or particulars. I order that the plaintiffs in action S35 of 2005 be given notice of any application made in action S50 of 2005 and be entitled to be represented at the hearing of that application and make submissions thereon. I order that at the trial of the actions the plaintiffs in action S35 of 2005 be entitled to examine or cross examine witnesses called in action S50 of 2005 as if those witnesses had been called in S35 of 2005.
I will give such other directions as the parties require with a view to quickly disposing of this action and will reserve the costs of all applications to the trial judge.
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