Khash Holdings Pty Limited v Varma

[2005] NSWSC 1215

CITATION:	Khash Holdings Pty Limited v Varma [2005] NSWSC 1215
HEARING DATE(S):	28 November 2005
JUDGMENT DATE :	28 November 2005
JURISDICTION:	EQUITY DIVISION
JUDGMENT OF:	Lloyd AJ
DECISION:	1. A Declaration that the contract made between the plaintiff as vendor and the defendant as purchaser on 13 December 2003 (as varied between the parties in writing on 18 June 2004) for the sale and purchase of the property referred to in Certificate of Title Folio Identifier 801/1068323 and situate at The Appian Way, Mt Vernon in the State of New South Wales is valid and enforceable. 2. An Order the aforesaid contract (as varied aforesaid) be specifically performed and carried into execution. 3. An Order that on 14 December 2005 at 12:00 pm the defendant do attend at the offices of the L Capolupo & Co, Solicitors, at Suite 4, 9 Station Street, Fairfield, to do all thins necessary to complete the aforesaid contract for the purchase of the property and to pay the plaintiff the sum of $1,273,052.00 (being the balance of the purchase price of 1,140,000.00 plus interest thereon calculated as and from 13 October 2004 to the date of settlement, 14 December 2005 in accordance with Special Condition 5, as varied by the parties on 18 June 2005). 4. An Order that the Amended Summons otherwise stand over generally with liberty to apply. 5. An Order that the defendant pay the plaintiff’s costs.

CATCHWORDS:	REAL PROPERTY: - Failure to complete contract for the sale of land - specific performance - defences to specific performance - impossibility - utility
CASES CITED:	Pasedina (Holdings) Pty Limited v Khouri (1977) 1 BPR 9460 Turner v Oates Properties Pty Limited [2004] NSWSC 732 Wollondily Shire Council v Picton Power Lines Pty Limited (1991) 5 BPR 11,503 Zorbas v Titan Properties (Aust) Pty Limited [2005] NSWSC 440
PARTIES:	Khash Holdings Pty Limited ACN 002 606 126 - Plaintiff Arun Deo Varma - Defendant
FILE NUMBER(S):	SC 2041 of 2005
COUNSEL:	M S Willmott SC and M Sneddon (barrister) - Plaintiff L Young - Defendant
SOLICITORS:	L Capolupo & Co - Plaintiff D Mosca - Defendant

LOWER COURT JURISDICTION:

- 3 -

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

Lloyd AJ

Monday, 28 November 2005

2041/05 KHASH HOLDINGS PTY LIMITED v ARUN DEO VARMA

EX TEMPORE JUDGMENT

1 HIS HONOUR: This is a claim for specific performance of a contract for the sale of land entered into between the plaintiff, as vendor, and the defendant, as purchaser, on 13 December 2003. The contract was for the sale of lot 801 in an unregistered plan of subdivision which was annexed to the contract. The purchase price was $1,200,000 and a deposit of $60,000 was paid.

2 The contract was conditional upon the vendor obtaining consent to the proposed plan of subdivision by the relevant authority; and upon such consent, the vendor was obliged to register the plan of subdivision as a deposited plan. Completion was to take place within fourteen days of notification to the purchaser that the plan of subdivision had been registered, or was to take place eight months from the date of the contract, whichever was the later.

3 On 18 June 2004, however, the parties agreed to vary the contract in two respects. Firstly, they agreed to extend the time for completion until 13 December 2004; and secondly, they agreed that the vendor would be entitled to recover liquidated damages on completion in accordance with Special Condition 5. Special Condition 5 provided that if the purchaser fails to complete the contract on the completion date, the vendor was entitled to recover from the purchaser as liquidated damages payable on completion, interest on the balance of the purchase price at the rate of 10 per cent per annum, calculated at a daily rate from completion date to the date of actual completion.

4 The evidence shows that the plan of subdivision was duly registered and notice of that fact was forwarded to the purchaser on 2 July 2004. The defendant, however, has not completed the contract and, it appears, has shown no inclination to complete the contract.

5 The defendant neither opposes nor consents to the relief being sought. No evidence has been adduced by or on behalf of the defendant. It is, therefore, not known why the defendant has not completed. There was a suggestion at some stage that financial considerations prevented the defendant from completing. In that event, it would be a question of whether or not impossibility of performance would arise, in which case there would be a right on the part of the vendor to rescind or repudiate. It is a clearly established principle that courts of equity will not require that to be done which cannot be done. In particular, the Court is reluctant to make orders in vain since disobedience is a contempt of court punishable by imprisonment.

6 As I have noted, however, the difficulty in the present case is that there is no evidence before me to show that this contract is one which is impossible of performance. It is also a well recognised principle that contracts for the disposition of interest in land are usually the subject of orders for specific performance, since damages are not generally an adequate remedy.

7 In this respect, if a party proposes to raise some particular reason to deny a vendor an order for specific performance, then it is incumbent upon that party to adduce evidence to demonstrate the ground for its inability, if any, to complete or otherwise perform the contract.

8 Counsel for the plaintiff has drawn my attention to a number of authorities for that proposition, namely Pasedina (Holdings) Pty Limited v Khouri (1977) 1 BPR 9460 at 9461; Wollondily Shire Council v Picton Power Lines Pty Limited (1991) 5 BPR 11,503 at 11,510; Turner v Oates Properties Pty Limited [2004] NSWSC 732 at par [8]; and finally, Zorbas v Titan Properties (Aust) Pty Limited [2005] NSWSC 440 at pars [11] and [12]. It is self evident that since there is no evidence demonstrating any lack of ability on the part of the defendant to perform the contract, or lack of utility in ordering specific performance, it follows that the plaintiff is entitled to relief that is sought.

9 Accordingly, the court makes the declaration and orders set out in the short minutes of order dated today.

I hereby certify that the preceding 9 paragraphs are a true copy of the reasons for judgment herein of the Honourable Mr Justice D H Lloyd.

Associate

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