Lenferna v Torane - [2022] NSWSC 635

Supreme Court

New South Wales

Medium Neutral Citation: Lenferna v Torane [2022] NSWSC 635
Hearing dates: 18 May 2022
Date of orders: 18 May 2022
Decision date: 18 May 2022
Jurisdiction: Equity - Expedition List
Before: Parker J
Decision:
See [21]

Catchwords:
REAL PROPERTY – specific performance – contract for the purchase of residential property – vendors refusing to complete – purchasers fail to pay all of the deposit on time – vendors decide to terminate but fail to communicate termination – purchasers pay balance of deposit – vendors refuse to complete – hardship – vendors not having alternative accommodation – specific performance ordered

Cases Cited:
Caird Seven Pty Ltd v Attia (No 3) (2016) 92 NSWLR 457

Category: Principal judgment
Parties: Ian Henri Lenferna (First Plaintiff)
Alexandra Patricia Lenferna (Second Plaintiff)
Marcus Torane (First Defendant)
Jessy Torane (Second Defendant)
Representation:
Counsel:
M Klooster (Plaintiffs)
H Fielder (Defendants)
Solicitors:
Country Law Practice & Associates Pty Limited (Plaintiffs)
Stonebraker Lawyers (Defendants)

File Number(s): 2022/55650
Publication restriction: Nil

Judgment – EX TEMPORE

(Revised from transcript; issued 20 May 2022)

This is an application for specific performance of a contract for the purchase of land. The subject land is a residential property at Box Hill in the Hills District of north-western Sydney. The contract is in standard form, presumably including special conditions. It is not necessary, for the purposes of this judgment, to go into its terms.
The plaintiffs are a married couple who entered into the purchase contract with the defendants, who are also a married couple, on 26 October 2021. The property is currently used as a home by the defendants, and the plaintiffs wish to use it as their home.
The contract price was $1.5 million with a ten per cent deposit which was to be paid by 9 November 2021. The plaintiffs paid $3,750 (0.25 per cent of the purchase price) on the day of the exchange. They did not pay the balance of the deposit by 9 November as the contract required. It seems that the conveyancer acting for the defendants agreed to give the plaintiffs an extension. The plaintiffs paid a further $71,250 on 10 November, bringing the amount paid up to five per cent of the purchase price. The remainder of the deposit was paid on 1 December 2021.
It seems that the decision by the defendants' conveyancer on 9 November to give the plaintiffs an extension of time to pay the deposit was not authorised by the defendants themselves. In fact, the first defendant, who represented the defendants in their dealings with their agent and their conveyancer, gave written instructions on 9 November that the contract was "hereby terminated". But it seems that this was never passed on to the plaintiffs, and no point was taken in these proceedings that the conveyancer’s lack of authority was known to, or affected the enforceability of the contract by, the plaintiffs.
After the plaintiffs paid the balance of the deposit on 1 December they tried to proceed towards…

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: [2022] NSWSC 635
Decision Date: 18 May 2022

CaseChat Overview and Summary

The case of Lenferna v Torane was heard by the Supreme Court of New South Wales. The dispute involved the purchase of a residential property in Sydney by the purchasers, the Lenfernas, from the vendors, the Toranes. The purchasers alleged that the vendors refused to complete the sale and terminated the contract, despite the purchasers' payment of the entire deposit. The vendors argued that the purchasers had not paid the deposit on time, leading them to terminate the contract and subsequently refuse to complete the sale. The purchasers applied for an order of specific performance, while the vendors argued against it on the basis of the purchasers' failure to pay the deposit on time and their own lack of alternative accommodation.
The court was required to determine whether the purchasers' failure to pay the deposit on time was a breach of contract that justified the vendors' termination of the agreement. Additionally, the court needed to assess whether the vendors' failure to communicate the termination to the purchasers constituted a valid termination of the contract. The court also had to consider whether the hardship caused to the purchasers by the vendors' refusal to complete the sale outweighed any breach by the purchasers.
The court found that the purchasers' failure to pay the deposit on time was not a material breach of the contract, as the vendors had not communicated the termination of the contract to the purchasers. The court held that the vendors' failure to communicate the termination meant that the contract remained in effect, and the purchasers were entitled to specific performance. The court also found that the hardship caused to the purchasers by the vendors' refusal to complete the sale was significant, and the vendors did not have alternative accommodation, which supported the granting of specific performance. The court ordered the vendors to complete the sale of the property to the purchasers.

Orders