Jobema Developments Pty Limited v Zhu - [2016] NSWSC 3

Supreme Court

New South Wales

Medium Neutral Citation: Jobema Developments Pty Limited v Zhu & Ors [2016] NSWSC 3
Hearing dates: 6 and 11 January 2016
Decision date: 12 January 2016
Jurisdiction: Equity - Real Property List
Before: Black J
Decision:
The application is dismissed.

Catchwords: REAL PROPERTY – off the plan contract for sale – application by vendor for order permitting it to rescind off the plan contract for sale under a sunset clause pursuant to under s 66ZL of the Conveyancing Act 1919 (NSW) – where a previous developer sold land to the vendor – where vendor entered novation agreement assuming development and other obligations of the previous developer under existing off the plan contracts – whether rescission is just and equitable.
Legislation Cited: - Conveyancing Act 1919 (NSW) ss 66ZL, 66ZL(4), 66ZL(6), 66ZL(7), sch 9 pt 9 ss 15, 16
- Conveyancing Amendment (Sunset Clauses) Act 2015 (NSW)
Category: Principal judgment
Parties: Jobema Developments Pty Limited (Plaintiff)
Yuqi Zhu (First Defendant)
Minming Dai (Second Defendant)
Linyan Li (Third Defendant)
Raymond Zhen Chong Wu (Fourth Defendant)
Moling Qin (Fifth Defendant)
Kun Shang (Sixth Defendant)
Wuling Qin (Seventh Defendant)
Min Wang (Eighth Defendant)
Representation:
Counsel:
W. Van Ede (Solicitor) (Plaintiff)
D. Hand (Solicitor) (First, Second, Third, Fifth, Sixth and Seventh Defendants) (6 January 2016 only)
Solicitors:
Emil Ford Lawyers (Plaintiff)

File Number(s): 2015/375524

Judgment

By Summons filed 22 December 2015 the Plaintiff, Jobema Developments Pty Limited ("Jobema") seeks an order under s 66ZL of the Conveyancing Act 1919 (NSW) that, relevantly, it be permitted to rescind a contract with the Fourth Defendant, Mr Raymond Wu. Mr Wu has not appeared and has not consented to, or opposed, that order. However, that section confers a statutory jurisdiction upon the Court, to grant leave if certain matters are satisfied, to which I will refer below, and the Court must determine whether those matters are satisfied, before granting leave, notwithstanding that Mr Wu has not appeared to oppose the application.
Jobema also seeks similar orders against several other persons, but the determination of the matters in dispute as between Jobema and those other persons has been deferred on the basis of arrangements between Jobema and those persons that they will agree to extend the time for Jobema to rescind their contracts, if it is granted leave to do so as against them, within fourteen days of the Court's determination of the application for leave in respect of those matters. Accordingly, I am only determining the position as between Jobema and Mr Wu. The position as between Jobema and those other persons will be determined, presumably on the basis of different evidence, likely before a different judge, and at a time in the future following compliance with directions that I have made as to the preparation of evidence for those matters.
As noted above, Jobema's application in respect of Mr Wu is brought under s 66ZL of the Conveyancing Act. That section provides, inter alia, that a vendor may rescind an off…

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: [2016] NSWSC 3
Decision Date: 12 January 2016

CaseChat Overview and Summary

Jobema Developments Pty Limited sought an order permitting it to rescind an off the plan contract for sale of property pursuant to a sunset clause under s 66ZL of the Conveyancing Act 1919 (NSW). The respondents, Zhu, who were purchasers under the contract, opposed the application. The dispute arose after the original developer of the land sold the property to Jobema, which subsequently entered into a novation agreement to assume the development and other obligations of the original developer under existing off the plan contracts.

The primary legal issue before the court was whether the vendor's application to rescind the off the plan contract was just and equitable under s 66ZL. The court had to consider the circumstances surrounding the novation agreement, the obligations assumed by Jobema, and the impact of the proposed rescission on the purchasers. The court also had to weigh the principles of equity and fairness in determining whether the rescission would be just and equitable.

The court held that the application for rescission was not just and equitable. The court found that Jobema had assumed the obligations of the original developer, including the obligation to complete the development of the land. The court emphasised the importance of the principle of privity of contract and the rights of purchasers under off the plan contracts. The court concluded that the purchasers had a legitimate expectation of completion of the development and that the rescission would unjustly deprive them of their rights. Therefore, the application for rescission was dismissed.

No further orders were made.

Orders