Malouf v Sterling Estates Development Corporation Pty Ltd - [2002] NSWSC 920

CITATION: Malouf v Sterling Estates Development Corporation Pty Ltd [2002] NSWSC 920

CURRENT JURISDICTION: Equity Division

FILE NUMBER(S): SC 3218/02

HEARING DATE(S): 23/09/02

JUDGMENT DATE: 24 September 2002

PARTIES :

Sam John Malouf (P1)
Christine Malouf (P2)
Sterling Estates Development Corporation Pty Ltd (D1)
Dexta Corporation Ltd (D2)

JUDGMENT OF: Young CJ in Eq

COUNSEL : M Pesman (P)
S T White (D1)

SOLICITORS: Patrick Hargraves & Co (P)
Kemp Strang (D1)

CATCHWORDS: CONVEYANCING [64]- Time- When notice to complete may be given- Vendor to fix special defects in building before completion- Debate whether defect special or general- Held special- Vendor's termination invalid. - WORDS & PHRASES- "Urgent".

CASES CITED: Abraham v Mallon (1975) 1 BPR 9157
Brachmanis v Columbus Property Developments Pty Ltd [2001] NSWSC 163
Dayton City v Borchers 232 NE (2nd) 437 (Ohio) (1967)
Hampson v Clyne [1967] 2 NSWLR 591
Jillinda Pty Ltd v McCourt (1983) NSW ConvR 55-145
McNally v Waitzer [1981] 1 NSWLR 294
Prince Jefri Bolkiah v KPMG [1999] 2 AC 222
Spencer v Cali [1986] 2 Qd R 456
Tropical Traders Ltd v Goonan (1964) 111 CLR 41
Wilde v Anstee (1999) 48 NSWLR 387

DECISION: Orders made.

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

YOUNG CJ in EQ

Tuesday 24 September 2002

3218/02 - MALOUF v STERLING ESTATES DEVELOPMENT CORPORATION PTY LTD

JUDGMENT

1 HIS HONOUR: On 14 February 2000 the plaintiffs agreed to purchase a unit in a proposed building at Camperdown from the first defendant. The contract was in the 1996 edition of the standard form, but with a number of special conditions. The purchase price was $560,000. A deposit of $56,000 was secured by a deposit bond.

2 It was part of the contract that the building in which the unit would be part would be constructed by contractors on behalf of the vendor. The building was expected to be ready somewhere about the end of the following year.

3 Special condition 31 of the contract provided that before completion the vendor must cause the property to be finished as specified. However, the requisitions and complaints that the purchaser could make were limited by special condition 31, so that the purchaser could complain of special faults before completion, but faults and defects which were not within the category of “special faults” were to be notified not with the vendor's solicitor, but with some officer of the vendor, and could be fixed within a limited time after completion.

4 “Special faults” were defined in special condition 23 of the contract in the following terms:

“Special fault means a fault or defect in the property which:

(a) is structural; or

(b) because of its nature requires urgent attention; or

(d) make the property uninhabitable.”

5 The vendor's solicitor wrote to the purchasers' solicitor on 5 February 2002 indicating that practical completion was likely to be reached about 20 February, and the strata plan would be registered…

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: [2002] NSWSC 920
Decision Date: 24 September 2002

CaseChat Overview and Summary

Malouf v Sterling Estates Development Corporation Pty Ltd was a case before the Supreme Court of New South Wales, where the plaintiff, Mr Malouf, sought to enforce a contract for the sale of a property against the defendant, Sterling Estates Development Corporation Pty Ltd. The dispute arose due to the defendant's refusal to complete the sale on the agreed date, claiming that the property had not been made ready for occupation as per the contract terms. The defendant argued that the property had defects that needed to be fixed before completion, and therefore, they had the right to terminate the contract. Mr Malouf, on the other hand, argued that the defects were minor and did not warrant termination, and he sought specific performance of the contract.

The legal issues before the court were whether the defects in the property were significant enough to be considered "special defects" under the contract and whether the defendant had the right to terminate the contract based on these defects. The court had to determine the nature of the defects and whether they were significant enough to warrant termination or if they were minor defects that did not affect the habitability of the property. The court also had to consider whether the defects were urgent and whether the defendant had acted reasonably in terminating the contract.

The court found that the defects in the property were not significant enough to be considered "special defects" that would justify termination of the contract. The court held that the defects were minor and did not affect the habitability of the property. The court also found that the defendant had not acted reasonably in terminating the contract as they had not given Mr Malouf an opportunity to fix the defects before terminating the contract. The court held that the termination was invalid, and Mr Malouf was entitled to specific performance of the contract. The court ordered the defendant to complete the sale of the property on the agreed date and to transfer the property to Mr Malouf. The court also awarded damages to Mr Malouf for the loss of use of the property during the period of the dispute.

Orders