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Lantry v Tomule Pty Ltd

Lantry v Tomule Pty Ltd

Case [2007] NSWSC 81 31 January 2007

Contract Formation

Breach of Contract

Condition Precedent

Rescission of Contract

Remedies for Breach of Contract

Contract Law

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Reported Decision:
(2007) ANZ Conv R 187

New South Wales

Supreme Court

CITATION: Hilary Ignatius Lantry & Anor v Tomule Pty Ltd & 2 Ors [2007] NSWSC 81

HEARING DATE(S): 29-30/01/07

JUDGMENT DATE :
31 January 2007

JURISDICTION: Equity Division

JUDGMENT OF: White J

EX TEMPORE JUDGMENT DATE: 31 January 2007

DECISION: See paragraphs 91, 93 and 94 of judgment.

CATCHWORDS: Contracts – Vendor and purchaser – rescission of contract of sale of land – Condition precedent to parties’ obligations to complete – S.C.23 authorised rescission by either party if vendor unwilling or unable to obtain a Building Certificate prior to completion – Vendors’ failure to satisfy condition precedent – No requirement that purchaser establish that vendors were “wholly and finally” unwilling or unable to carry out work required for issue of Building Certificate – No requirement that purchaser establish that he was ready, willing and able to complete before entitled to exercise right to rescind – Whether purchaser in breach of term requiring provision of documents for transfer of liquor licence – Whether timely compliance waived - Purchaser not precluded from exercising right of rescission where purchaser’s breach did not contribute to the vendors’ non-fulfilment of S.C.23 – Held that purchaser’s rescission valid.

LEGISLATION CITED: Conveyancing Act 1919 (NSW)
Environmental Planning Assessment Act 1979 (NSW)
Building Code of Australia
Civil Procedure Act 2005 (NSW)

CASES CITED: Suttor v Gundowda Pty Limited (195) 81 CLR 418
Gange v Sullivan (1966) 116 CLR 418 at 442
Perri v Coolangatta Investments Pty Limited (1982) 149 CLR 537
Aberfoyle Plantations Ltd v Khaw Bian Cheng [1960] AC 115
Shimden Pty Limited v Rona [2006] NSWCA 256
Immer (No. 145) Pty Ltd v The Uniting Church in Australia Property Trust (NSW) (1993) 182 CLR 26
Foran v Wight (1989) 168 CLR 385
Jeppesons Road Ltd v Di Domenico [2005] QCA 391
Nina's Bistro Bar Ltd (formerly Mytcoona Pty Ltd) v MBE Corporation (Sydney) Pty Ltd [1984] 3 NSWLR 613
Road Show Entertainment Pty Ltd v (ACN 053 006 269) Pty Ltd (1997) 42 NSWLR 462

PARTIES: Hilary Ignatius Lantry & Anor
v
Tomule Pty Ltd & 2 Ors

FILE NUMBER(S): SC 2977/05

COUNSEL: Plaintiffs: J Ghabrial
Defendants: J Priestley, S Ipp (31/01/07)

SOLICITORS: Plaintiffs: Parke Maher Solicitors
1st Defendant: Friedlieb Byrne Solicitors
2nd & 3rd Defendants: Carmody Crampton

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

WHITE J

Wednesday, 31 January 2007

2977/05 Hilary Ignatius Lantry & Anor v Tomule Pty Ltd & 2 Ors

JUDGMENT

1 HIS HONOUR: The principal issue in this case is whether the purchaser rescinded a contract for the purchase of the London Hotel in Mirrool Street, Ardlethan, before the vendors terminated the contract for non-compliance with a notice to complete.

2 The plaintiffs, Mr and Mrs Lantry, are the vendors. The first defendant is the agent who holds the deposit. It entered a submitting appearance. The second defendant, Mr McKay, is the purchaser. The contract described him as purchasing for and on behalf of…

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 Lantry v Tomule Pty Ltd

Details

AGLC: Lantry v Tomule Pty Ltd [2007] NSWSC 81
Case: [2007] NSWSC 81
Decision Date: 31 January 2007

CaseChat Overview and Summary

Lantry was the purchaser and Tomule Pty Ltd was the vendor of a property under a contract for sale. The dispute arose when Lantry sought to rescind the contract on the basis that Tomule Pty Ltd had failed to obtain a building certificate as required by a condition precedent in the contract. Lantry argued that the contract allowed either party to rescind if the vendor was unwilling or unable to obtain a building certificate prior to completion, and that Tomule Pty Ltd had failed to do so. The court had to determine whether Lantry's right to rescind was valid and whether any breach by Lantry of a term requiring the provision of documents for transfer of a liquor licence precluded the rescission.

The court held that the failure of Tomule Pty Ltd to obtain a building certificate before completion was a breach of the condition precedent in the contract. The court found that there was no requirement for Lantry to establish that Tomule Pty Ltd was "wholly and finally" unwilling or unable to carry out the work required for the issue of the building certificate, or that Lantry was ready, willing and able to complete before being entitled to exercise the right to rescind. The court also held that Lantry's breach of a term requiring the provision of documents for transfer of a liquor licence did not preclude the rescission if the breach did not contribute to Tomule Pty Ltd's non-fulfilment of the condition precedent. Therefore, the court found that Lantry's rescission was valid.

The court concluded that the failure of Tomule Pty Ltd to obtain a building certificate prior to completion was a breach of the condition precedent in the contract. As such, Lantry was entitled to rescind the contract. The court found that Lantry's breach of a term requiring the provision of documents for transfer of a liquor licence did not preclude the rescission where the breach did not contribute to Tomule Pty Ltd's non-fulfilment of the condition precedent. Therefore, the court held that Lantry's rescission was valid.

The court ordered that the contract be rescinded and that the parties be returned to the position they were in before the contract was entered into. The court also ordered that Tomule Pty Ltd pay Lantry's costs of the proceedings.

Orders