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Joseph Street Pty Ltd v Tan

Joseph Street Pty Ltd v Tan

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Case Copied 7 June 2012 40 min read

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SUPREME COURT OF VICTORIA

COURT OF APPEAL

S APCI 2011 0011

JOSEPH STREET PTY LTD (ACN 094 588 271), JONATHON O’DWYER & PRUE O’DWYER	Appellants
	and
KHAY TEK TAN, GWEK LIENG & THE REGISTRAR OF TITLES	Respondents

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JUDGES	WARREN CJ, NETTLE JA and CAVANOUGH AJA
WHERE HELD	MELBOURNE
DATE OF HEARING	10 February 2012. Last written submission received 17 February 2012
DATE OF JUDGMENT	7 June 2012
MEDIUM NEUTRAL CITATION	[2012] VSCA 113
JUDGMENT APPEALED FROM	Joseph Street Pty Ltd & Ors v Tan & Ors [2010] VSC 586 (J Forrest J) and [2011] VSC 41 (Costs Ruling)

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CONTRACT – Sale of land – Specific performance – Units on proposed plan of subdivision – Contract subject to express and implied conditions to use best endeavours to register plan of subdivision – Whether vendors used best endeavours – Whether vendors entitled to rescind – Subdivision Act 1988, Parts 1, 2, 3 and 4; Planning and Environment Act 1987, Part 9 Division 2.

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Appearances:	Counsel	Solicitors
For the Appellants	Mr M J Colbran QC with Mr G D Bloch	Hughes Legal Pty Ltd
For the Respondents	Dr J D Wilson SC with Mr W Lye and Mr F Lim	Francis Lim

WARREN CJ

NETTLE JA
CAVANOUGH AJA:

Overview

This appeal relates to a contract for the sale of a home unit ‘off the plan’. There were numerous issues at the trial but the only real issue remaining is whether the respondent vendors, who were also the developers, complied with their obligation to the purchaser under the contract to use their ‘best endeavours’ to procure the registration of the relevant plan of subdivision in a timely way. The critical question is whether the vendors breached the contract of sale by not seeking to enter into a certain kind of statutory agreement with the local council with a view to expediting the registration of the plan. If so, they were not entitled to rescind the contract as they purported to do, and they were liable to the purchaser for specific performance or alternative relief. In our view, the vendors were in breach of the contract in that way, and this appeal should be allowed accordingly.

The factual background

The factual history is set out in detail in the judgment of the learned trial judge.[1] As far as presently relevant, it is not in dispute. It will only be necessary to refer to limited aspects of the history.
[1]Joseph Street Pty Ltd & Anor v Tan & Anor [2010] VSC 586, [11]–[50].

The contract of sale

On 18 September 2005 the second appellant, Mr Jonathon O’Dwyer, contracted with the first and second respondents, Mr Khay Tek Tan and his wife Gwek Lieng (‘the vendors’), to purchase the home unit in question for $370,000 ‘off the plan’. A partial deposit was paid on that day. Issues arose at the trial about the payment of the balance of the deposit but those issues have been resolved. The balance of the…

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: [2012] VSCA 113
Decision Date: 7 June 2012

CaseChat Overview and Summary

Joseph Street Pty Ltd, as the purchaser, brought proceedings against Tan, the vendor, regarding the sale of lots on a proposed plan of subdivision. The dispute centred on whether the vendors had used their best endeavours to register the plan of subdivision. The matter was heard in the Supreme Court of Victoria. The purchaser argued that the vendors had failed to use their best endeavours, seeking specific performance of the contract, while the vendors contended they were entitled to rescind the contract due to the purchaser's failure.

The court was required to determine whether the vendors had complied with the condition in the contract that they would use their best endeavours to register the plan of subdivision. This involved examining the conduct of the vendors and the obligations imposed by the Subdivision Act 1988 and the Planning and Environment Act 1987. The court had to assess whether the vendors had indeed used their best endeavours and whether their efforts were reasonable and sufficient under the circumstances.

The court found that the vendors had not used their best endeavours to register the plan of subdivision. The evidence showed that the vendors had not taken all reasonable steps to achieve registration, and their efforts were not sufficient. Consequently, the court held that the purchaser was entitled to specific performance of the contract. The court further determined that the vendors were not entitled to rescind the contract, as the purchaser's failure to register the plan did not absolve the vendors of their obligation to use their best endeavours. The court's decision was grounded in the statutory obligations and the terms of the contract, which required the vendors to make reasonable efforts to complete the subdivision.

The final orders included a declaration that the purchaser was entitled to specific performance of the contract, and the vendors were restrained from hindering the purchaser in their efforts to complete the subdivision. The court also ordered that the vendors were required to take all necessary steps to register the plan of subdivision and complete the subdivision in accordance with the Subdivision Act 1988 and the Planning and Environment Act 1987. The vendors were further ordered to pay the purchaser's costs of the proceedings.

Orders