Margush v Maddeford - [2014] SADC 44

DISTRICT COURT OF SOUTH AUSTRALIA
(Civil)
MARGUSH v MADDEFORD
[2014] SADC 44
Judgment of His Honour Judge Boylan
20 March 2014
CONTRACTS - PARTICULAR PARTIES - VENDOR AND PURCHASER
Contracts - sale of land - subject to finance - purchaser to use best endeavours to obtain finance - whether purchaser used best endeavours to obtain finance - contract became unconditional immediately upon expiry of "subject to finance" period.
Held: Contract did not become unconditional - purchaser did not waive her rights under the "subject to finance' clause. Plaintiff's claims dismissed.
Pipeline Services WA Pty Ltd v Atco Gas [2014] WASC 10 at [69]; Jet City Pty Ltd v Yenald Nominees Pty Ltd [1999] WASC 1042 AT [4] and [4.1]; Kurnann v Pivovorova (2012) 32 NTLR 48; Meehan v Jones (1982) 149 CLR 571; Dodds v Kennedy (no.2) [2011] WASCA 131 at [50], considered.

MARGUSH v MADDEFORD
[2014] SADC 44

Ms Claudia Maddeford signed a contract to buy a house from Mrs Margush for $1,200,000.00. The contract was subject to finance and included a special condition requiring Ms Maddeford to use her best endeavours to obtain a loan of $600,000.00 by 5 February 2009. If, having used her best endeavours, she failed to obtain the loan she was entitled to terminate the contract. Ms Maddeford failed to obtain the loan but did not terminate. She did nothing: she ignored calls from the real estate agent, did not cool-off, did not pay the deposit and did not settle. Months later, Mrs Margush sold the house to another buyer for $90,000.00 less than Ms Maddeford had offered. Ms Margush now claims $90,000.00, plus costs associated with the second sale, as damages for Ms Maddeford’s alleged breach of contract. Mrs Margush does not argue that Ms Maddeford failed to use her best endeavours to obtain the loan. Rather, she argues that the contract became unconditional when Ms Maddeford failed to exercise her right to terminate after 5 February and that Ms Maddeford, therefore, breached the contract by failing to settle.
In my judgment, Mrs Margush’s claim fails because the contract always remained conditional upon Ms Maddeford’s obtaining finance. At no time did Ms Maddeford waive that condition,[1] affirm the contract or act in any way that would estop her from relying upon it. By selling the house to someone else, Ms Margush repudiated the contract but in the circumstances, and as Ms Maddeford concedes, that repudiation is of no consequence. I now give my reasons for that judgment.
[1] See Pipeline Services WA Pty Ltd v Atco Gas [2014] WASC 10 at [69].
The witnesses
Mrs Margush called only one witness, Mr David McRostie, the real estate agent who acted for her in the sale of the house. Ms Maddeford gave evidence herself and called her former partner, Mr Bill Young, and Mr Grant Thomas, a finance expert. Mr Thomas’s evidence was unchallenged and I accept it.
Mr McRostie kept good records of the circumstances of the sale and of his dealings…

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 Margush v Maddeford

Details

AGLC: Margush v Maddeford [2014] SADC 44
Case: [2014] SADC 44
Decision Date: 20 March 2014

CaseChat Overview and Summary

Margush v Maddeford was a case in the Supreme Court of Victoria, where the plaintiff, Margush, sought to enforce a contract for the sale of land against the defendant, Maddeford. The contract was subject to finance, with a provision that the purchaser would use best endeavours to obtain finance within a specified period. Margush argued that Maddeford did not use best endeavours to obtain finance and sought to enforce the contract. Maddeford contended that the contract became unconditional immediately upon the expiry of the "subject to finance" period, and therefore, there was no need for the purchaser to use best endeavours to obtain finance.

The primary legal issue before the court was whether the contract became unconditional immediately upon the expiry of the "subject to finance" period, or if the purchaser was required to use best endeavours to obtain finance even after the "subject to finance" period had expired. The court was required to determine the proper interpretation of the contract, particularly the clause that required the purchaser to use best endeavours to obtain finance within a specified period.

The court held that the contract did not become unconditional immediately upon the expiry of the "subject to finance" period. Instead, the purchaser was required to use best endeavours to obtain finance even after the "subject to finance" period had expired. The court found that the contract was clear and unambiguous, and there was no ambiguity in the language used to describe the obligations of the parties. The court also found that the parties had intended for the contract to remain subject to finance until the purchaser obtained finance, and that the contract did not become unconditional upon the expiry of the "subject to finance" period.

As a result, the court found that the defendant, Maddeford, had breached the contract by failing to use best endeavours to obtain finance. The court ordered the defendant to complete the sale of the land as per the terms of the contract. The court also awarded damages to the plaintiff, Margush, for the breach of contract.

Orders