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Harris v K7@Surry Hills Pty Ltd

Harris v K7@Surry Hills Pty Ltd

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Case Copied 20 August 2019 61 min read

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IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMON LAW DIVISION

PROPERTY LIST

S CI 2016 01868

BRUCE ANDREW HARRIS	Plaintiff
v
K7@SURRY HILLS PTY LTD (ABN 84 508 292 379)	Defendant

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JUDGE:	Derham AsJ
WHERE HELD:	Melbourne
DATE OF HEARING:	5 and 6 March 2019
DATE OF JUDGMENT:	20 August 2019
CASE MAY BE CITED AS:	Harris v K7@Surry Hills Pty Ltd
MEDIUM NEUTRAL CITATION:	[2019] VSC 551

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PROPERTY LAW – Sale of land – Whether lawful rescission or wrongful repudiation by purchaser – Anticipatory breach by vendor of special condition in contract – Purchaser lawfully rescinded contract – Koompahtoo Local Aboriginal Land Council v Sanpine Pty Ltd (2007) 233 CLR 115.

PROPERTY LAW – Whether purchaser rescinded contract pursuant to s 9AC(2) of the Sale of Land Act 1962 (Vic) – Deming No 456 Pty Ltd v Brisbane Unit Development Corporation Pty Ltd (1983) 155 CLR 129; Besser v Alma [2012] VSC 460; JD No 6 (Dava) Pty Ltd & Anor v P Battlay Holdings Pty Ltd [2011] VSC 353; Lockwood v PSP Investments Pty Ltd [2013] VSC 10 and Ausgrand Pty Ltd v Stephanie Michele Freeland-Small [2016] VCC 942 considered.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr KE Mihaly	LMG Lawyers
For the Defendant	Mr BJ Murphy	Serry White

TABLE OF CONTENTS

Introduction........................................................................................................................................ 1

The facts............................................................................................................................................... 1

Plaintiff’s claims................................................................................................................................. 7

Defendant’s defences and counterclaim....................................................................................... 8

Construing the Contract.................................................................................................................... 9

Cross-examination of Harris and Vu Nguyen............................................................................ 10

Was the Contract repudiated by K7?............................................................................................ 12

Plaintiff’s submissions................................................................................................................ 16
Defendant’s submissions........................................................................................................... 18
Did Plan H comply with special condition 38?...................................................................... 19
The defendant’s intention from correspondence and the provision of Plan H................. 22

Termination under s 9AC of the SLA........................................................................................... 27

Interpretation............................................................................................................................... 27
Materially affect the lot.............................................................................................................. 30

Misleading or deceptive conduct claim....................................................................................... 36

Section 49(2) of the PLA.................................................................................................................. 40

Conclusions....................................................................................................................................... 40

HIS HONOUR:

Introduction

In this proceeding the plaintiff (Harris) claims to have lawfully rescinded (that is, terminated) a contract of sale by which he agreed to purchase off-the-plan from the defendant (K7) lots 306 and 307 on unregistered Plan of Subdivision PS 725930K together with two car parking spaces and two storage cages for the price of $850,000.00 (the Contract). Harris claims:

(a) a declaration that he has validly rescinded the Contract;

(b) the return of the deposit (paid by way of a bank guarantee) in the sum of $85,000.00, plus interest, alternatively the return of the deposit pursuant to s 49(2) of the Property Law Act 1958 (Vic) (PLA);

(c) pursuant to the Australian Consumer Law (ACL), as a result of alleged misleading or deceptive conduct, to vary the Contract so as to include a term that the defendant provide two fixed car parks next to each other and two full length storage cages (the Requirements);

(d) alternatively, damages.

K7 claims that Harris wrongfully repudiated the Contract, which repudiation it has accepted. K7…

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: [2019] VSC 551
Decision Date: 20 August 2019

CaseChat Overview and Summary

The matter of Harris v K7@Surry Hills Pty Ltd was heard by the Supreme Court of Victoria. The case involved a dispute between the plaintiff, Harris, and the defendant, K7@Surry Hills Pty Ltd, regarding the sale of a property. The central issue was whether the purchaser had lawfully rescinded the contract or if the vendor had wrongfully repudiated it. The dispute arose from an anticipatory breach by the vendor of a special condition in the contract of sale.

The legal issues the court had to decide included whether the purchaser had lawfully rescinded the contract, as per section 9AC(2) of the Sale of Land Act 1962 (Vic). The court considered several precedent cases such as Deming No 456 Pty Ltd v Brisbane Unit Development Corporation Pty Ltd, Besser v Alma, JD No 6 (Dava) Pty Ltd & Anor v P Battlay Holdings Pty Ltd, Lockwood v PSP Investments Pty Ltd, and Ausgrand Pty Ltd v Stephanie Michele Freeland-Small. These cases provided guidance on the interpretation of the statutory provision and the circumstances under which a contract can be rescinded.

The court found that the purchaser had lawfully rescinded the contract in accordance with the law and relevant precedents. The vendor's anticipatory breach of a special condition in the contract was deemed sufficient grounds for the purchaser to exercise their right to rescind. The court relied on the case of Koompahtoo Local Aboriginal Land Council v Sanpine Pty Ltd, which established that an anticipatory breach can justify rescission. The court concluded that the purchaser's rescission was lawful and that the vendor's subsequent actions did not invalidate the rescission.

The court's decision was that the purchaser had lawfully rescinded the contract, and the rescission was valid. The court did not find it necessary to make any further orders, as the rescission itself resolved the dispute between the parties.

Orders