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Kazacos v Shuangling International Development Pty Ltd

Kazacos v Shuangling International Development Pty Ltd

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Case Copied 27 October 2016 66 min read

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Supreme Court

New South Wales

Medium Neutral Citation: Kazacos v Shuangling International Development Pty Ltd [2016] NSWSC 1504
Hearing dates: 30 October 2015; 2 November 2015
Decision date: 27 October 2016
Before: White J
Decision:
Order that the plaintiffs’ claims for relief be dismissed.

Catchwords: CONTRACTS — Contract for sale of land — Special condition requiring payment of deposit in two instalments — Purchaser failed to complete — Deposit paid on exchange forfeited — Property resold for a surplus — Whether Vendor entitled to payment of second instalment of deposit — Second instalment due under the contract only if purchaser fails to complete — Second instalment not in the nature of a deposit — Provision requiring payment of second instalment of deposit void as a penalty — Whether clause 9.3.1 requires that any surplus on resale and any retained deposit be credited against reasonable costs and expenses arising out of purchaser’s non-compliance and of resale — Held that clause 9.3.1 requires that any surplus on resale and any retained deposit be set off against reasonable costs and expenses arising out of purchaser’s non-compliance and of resale — Whether clause 9.3 requires a vendor to make an election between a right to sue for liquidated damages and a right to sue for damages for breach of contract — Held that clause 9.3 gives a vendor a choice between remedies not between rights — Choice between remedies can be kept open until judgment
Cases Cited: Agricultural and Rural Finance Pty Ltd v Gardiner (2008) 238 CLR 570; [2008] HCA 57
Andrews v Australia and New Zealand Banking Group Ltd (2012) 247 CLR 205; [2012] HCA 30
Ashdown v Kirk [1999] 2 Qd R 1
Luu v Sovereign Developments Pty Ltd [2006] NSWCA 40; (2006) 12 BPR 23,629
Berry v Mahony [1933] VLR 314
Boyarsky v Taylor [2008] NSWSC 1415; (2008) 14 BPR 26,553
BP Refinery (Westernport) Pty Ltd v President, Councillors and Ratepayers of the Shire of Hastings (1977) 180 CLR 266
Brien v Dwyer (1978) 141 CLR 378; [1978] HCA 50
Brien v Dwyer [1976] 2 NSWLR 420
Buchanan v Dunstan [2007] NSWSC 248; (2007) 13 BPR 24,521
Cloud Top Pty Ltd v Toma Services Pty Ltd [2008] NSWSC 568
Consolidated Credit Network Pty Ltd v Illawarra Retirement Trust Ltd (No. 2) [2005] NSWSC 1007
Cox v Parker (1987) 5 BPR 97,339
Delbridge v Low [1990] 2 Qd R 317
Denby v Khyat (1931) 26 Tas LR 152
Donnellan v Garlick [2006] NSWSC 132; (2006) 12 BPR 23,571
Galafassi v Kelly (2014) 87 NSWLR 119; [2014] NSWCA 190
Gogard Pty Ltd v Satnaq Pty Ltd [1999] NSWSC 1283; (1999) 9 BPR 17,171
Hadley v Baxendale (1854) 9 Ex 341; 156 ER 145
Havyn Pty Ltd v Webster [2005] NSWCA 182; (2005) 12 BPR 22,837
Hearse v Pallister [2008] NSWSC 504
Hoskins v Rule [1952] NZLR 827
Howe v Smith (1884) 27 Ch D 89
Iannello v…

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 1504
Decision Date: 27 October 2016

CaseChat Overview and Summary

Kazacos v Shuangling International Development Pty Ltd involved a dispute over the sale of a property in Queensland. The purchaser, Kazacos, entered into a contract with the vendor, Shuangling International Development Pty Ltd, for the sale of a property. The contract included a special condition that the deposit be paid in two instalments. When the purchaser failed to complete the contract, the deposit paid on exchange was forfeited. The property was subsequently resold for a surplus. The central issue was whether the vendor was entitled to the second instalment of the deposit and whether the clause requiring the second instalment was valid.

The court examined the nature of the second instalment of the deposit. It found that the second instalment was not in the nature of a deposit, as it was due only if the purchaser failed to complete. Consequently, the clause requiring the second instalment was deemed to be a penalty and was not enforceable. The court also considered the effect of clause 9.3.1, which required any surplus on resale and any retained deposit to be set off against reasonable costs and expenses arising from the purchaser's non-compliance and the resale. The court concluded that clause 9.3.1 mandated this set-off. Additionally, the court determined that clause 9.3 provided a choice between remedies, not rights, allowing the vendor to keep the choice open until judgment.

The court's ruling was that the vendor was not entitled to the second instalment of the deposit, as the clause requiring it was void. Furthermore, clause 9.3.1 required any surplus on resale and any retained deposit to be credited against reasonable costs and expenses. Clause 9.3 allowed the vendor to choose between remedies, but this choice could remain open until judgment. The court ordered that the surplus on resale and any retained deposit be set off against the costs and expenses incurred by the vendor due to the purchaser's non-compliance and the resale.

Orders