Klein v McMahon - [2017] NSWSC 1531

Supreme Court

New South Wales

Medium Neutral Citation: Klein v McMahon [2017] NSWSC 1531
Hearing dates: 6 November 2017
Date of orders: 13 November 2017
Decision date: 13 November 2017
Jurisdiction: Equity
Before: Darke J
Decision:
Orders made for specific performance of contract for sale.

Catchwords: LAND LAW – conveyancing – the contract for sale – rescission – “off the plan” purchases – whether vendors complied with Conveyancing Act 1919 (NSW), s 66ZL– rescissions by vendors ineffective – specific performance ordered
Legislation Cited: Conveyancing Act 1919 (NSW), ss 66Q, 66ZL, Sch 9
Conveyancing Amendment (Sunset Clauses) Act 2015 (NSW)
Cases Cited: Bonette v Woolworths Ltd (1937) 37 SR (NSW) 142
Mehmet v Benson (1965) 113 CLR 295
Category: Principal judgment
Parties: Wilhelm Charles Paul Klein (Plaintiff)
Peter John McMahon (First Defendant)
Maree Cathie McMahon (Second Defendant)
Representation:
Counsel:
Mr G P McNally SC (Plaintiff)
Mr P McMahon (In person)
Solicitors:
Dignan & Hanrahan (Plaintiff)

File Number(s): 2016/335849
Publication restriction: None

Judgment

The plaintiff, Mr Klein, seeks orders for specific performance of a contract for the sale of certain land at Picton. The contract is dated 2 July 2015. It concerns Lot 1 in an unregistered plan of subdivision of Lot B in Deposited Plan 156341, which was owned by the defendants, Mr and Mrs McMahon.
Mr Klein is named as the purchaser in the contract. Mr and Mrs McMahon are named as the vendors. However, as referred to further below, it seems that Mr McMahon did not sign the contract; rather, Mrs McMahon, who was described in the contract as the Vendor’s Representative, signed the contract personally as well as for her husband.
The proposed subdivision was for two residential lots. The contract provided for Mr Klein to purchase proposed Lot 1 for $350,000. Mr Klein paid a deposit of $35,000 upon exchange of contracts. Half of the deposit was released to the vendors. That amount was paid into an account held by Mr and Mrs McMahon with the Commonwealth Bank of Australia.
The contract employed the 2005 edition of the Law Society/Real Estate Institute standard form, together with numerous special conditions. Special Condition 13 relevantly provided:

The vendor shall proceed with all due dispatch to obtain consent of the council to a plan of subdivision substantially in the form attached and thereafter will lodge the subdivision plan at Land and Property Information NSW for registration as a deposited plan. If the subdivision plan has not been registered as a deposited plan within 6 months after the date hereof either party may at any time thereafter, but prior to the subdivision plan being registered as a deposited plan, rescind this agreement by notice in writing given to the other. In no event shall the vendor be liable for any delay in such lodgement or registration unless it is due to a failure to do all things reasonable to achieve registration.

Printed clause 28, which applies where the land is described as a lot in an unregistered plan, remained in 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.

Continue reading Klein v McMahon

Details

AGLC: Klein v McMahon [2017] NSWSC 1531
Case: [2017] NSWSC 1531
Decision Date: 13 November 2017

CaseChat Overview and Summary

The case of Klein v McMahon concerned a dispute between the parties regarding a contract for the sale of a property. The plaintiffs, Klein, purchased a property "off the plan" from the defendants, McMahon. They sought to have the contract rescinded, alleging that the defendants had failed to comply with the statutory requirements under the Conveyancing Act 1919 (NSW), section 66ZL. The defendants, in turn, argued that the plaintiffs' right to rescind was invalid, and they sought specific performance of the contract. The matter was heard in the Supreme Court of New South Wales.

The primary legal issue before the court was whether the defendants had failed to comply with the statutory requirements for rescission under section 66ZL of the Conveyancing Act 1919 (NSW). The plaintiffs argued that the defendants had not provided the necessary information and documents required by the legislation, thus invalidating the rescission. The defendants contended that they had fulfilled their obligations and that the plaintiffs' right to rescind was therefore invalid. The court was required to determine whether the defendants' actions were sufficient to comply with the statutory requirements and whether the plaintiffs' right to rescind was valid.

The court found that the defendants had indeed failed to comply with the statutory requirements for rescission under section 66ZL of the Conveyancing Act 1919 (NSW). The court held that the defendants had not provided the necessary information and documents to the plaintiffs, as required by the legislation. As a result, the court found that the plaintiffs' right to rescind was valid, and the rescissions by the defendants were ineffective. The court further ordered specific performance of the contract, requiring the defendants to complete the sale of the property to the plaintiffs. The defendants were ordered to complete the sale within a specified timeframe, and to compensate the plaintiffs for any losses incurred as a result of the rescission.

In summary, the court found in favour of the plaintiffs, ordering specific performance of the contract for the sale of the property and declaring the rescissions by the defendants ineffective. The defendants were ordered to complete the sale of the property to the plaintiffs within a specified timeframe and to compensate the plaintiffs for any losses incurred as a result of the rescission. The decision highlights the importance of vendors complying with the statutory requirements for rescission under the Conveyancing Act 1919 (NSW), and the consequences of failing to do so.

Orders