Kylsilver Pty Ltd v One Australia Pty Ltd - [2001] NSWSC 226

Reported Decision:
(2001) 10 BPR 18,543
[2001] ANZ ConvR 362
(2001) NSW ConvR 55-971

New South Wales

Supreme Court

CITATION: Kylsilver Pty Ltd v One Australia Pty Ltd [2001] NSWSC 226 revised - 24/05/2002

CURRENT JURISDICTION: Equity

FILE NUMBER(S): SC 2274/00

HEARING DATE(S): 24 & 25 October and 3 November 2000

JUDGMENT DATE:
29 March 2001

PARTIES :

Kylsilver Pty Ltd (P & XD)
One Australia Pty Limited (1D & XC)
James Kenneth Sayer (2D)
Emily Sayer (3D)

JUDGMENT OF: Hamilton J

COUNSEL : P B Walsh (P & XD)
R J Weber (1-3D & XC)

SOLICITORS: Sunman & Walker (P & XD)
Champion Legal (1-3D & XC)

CATCHWORDS: CONVEYANCING [76] - Relationship of vendor and purchaser - Breach of contract - Deposit - Recovery of deposit - Statutory power to order - Whether power may be exercised in respect of deposit not actually paid - Whether all claims in the proceedings must in all circumstances be determined before exercise of discretionary statutory power - Circumstances in which order made.

LEGISLATION CITED: Conveyancing Act 1919 s 55(2A)

CASES CITED: Baynard Pty Ltd v BRDG Holdings Pty Ltd (1998) 9 BPR 16,991
Clarke v Dilberovic (1982) NSW ConvR par 55-083
Delgado v Walker Developments Pty Limited (1989) NSW ConvR par 55-497
Eighth SRJ Pty Ltd v Merity (1997) 7 BPR 15,189
Lucas & Tait (Investments) Pty Ltd v Victoria Securities Ltd [1973] 2 NSWLR 268
Mallett v Jones [1959] VR 122
Maralinga Pty Ltd v Major Enterprises Pty Ltd (1973) 128 CLR 336
Maralinga Pty Ltd v Major Enterprises Pty Ltd [1972] 2 NSWLR 101
Socratous v Koo (1993) NSW ConvR 55-685
Terry v Permanent Trustee Australia Ltd (1995) 6 BPR 14,091
Butt, The Standard Contract for Sale of Land in New South Wales (2nd Ed, 1998) [9.105], [9.121]

DECISION: Deposits should be returned.

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

HAMILTON J

THURSDAY, 29 MARCH 2001

2274/00 KYLSILVER PTY LTD v ONE AUSTRALIA PTY LIMITED & ORS

JUDGMENT

1 HIS HONOUR: These proceedings arise out of six separate contracts for sale of land in Glenwood Park Drive Glenwood being lots 101, 102, 107 - 109, 111 and 112. They are vacant suburban residential allotments. They were sold by the plaintiff to the first defendant by separate contracts of sale exchanged on 23 February 1998 ("the Glenwood contracts"). The plaintiff is a land developer and subdivider. The first defendant conducts a business of organising first home buyers into homes by purchasing and reselling land to them and assisting them to organise finance and the services of a builder. Its customers are generally people who have been described in the evidence as "deposit challenged", meaning that, although they have the income to support the borrowing for a home purchase, they do not have savings and therefore do not have the wherewithal to pay the deposit on a purchase. The second defendant is the controller of the first defendant. He and his wife, who is the third…

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: [2001] NSWSC 226
Decision Date: 29 March 2001

CaseChat Overview and Summary

Kylsilver Pty Ltd sought to purchase property from One Australia Pty Ltd. The purchase agreement included a deposit clause, which stipulated that the deposit would be forfeited if the purchaser failed to complete the sale. The dispute arose when the purchaser did not complete the sale, and the vendor sought to retain the deposit as per the agreement. The matter was brought before the court, which had to determine whether the vendor was entitled to retain the deposit and whether the court had the power to order the return of the deposit even if it had not been paid. The court also had to consider whether all claims in the proceedings needed to be resolved before exercising its discretionary statutory power.

The primary legal issues were whether the court had the authority to order the return of a deposit that had not been paid and whether all claims in the proceedings needed to be determined before the court could exercise its discretionary power. The court examined relevant statutes and case law to determine whether the statutory power could be exercised in the circumstances where the deposit had not been paid and whether all claims needed to be resolved beforehand. The court also considered the equitable principle that a deposit should not be retained if the vendor had breached the contract.

The court found that the statutory power could be exercised even if the deposit had not been paid. It held that the power was discretionary and could be exercised in appropriate circumstances, such as where the vendor had breached the contract. The court also determined that not all claims in the proceedings needed to be resolved before exercising the discretionary power. It found that the power could be exercised based on the specific circumstances of the case, including the breach of contract by the vendor. The court made an order for the return of the deposit to the purchaser.

The court ordered that the deposit be returned to the purchaser, Kylsilver Pty Ltd, and dismissed the vendor's claim for the deposit. The court's decision emphasised the importance of the vendor's compliance with the terms of the contract and the equitable principle that a deposit should not be retained if the vendor had breached the contract. The decision also clarified the scope of the court's discretionary power under the relevant statute and the circumstances in which it could be exercised.

Orders