Masterton Homes P/L v Executive Builders and Developers P/L - [2003] NSWSC 908

CITATION: MASTERTON HOMES P/L v EXECUTIVE BUILDERS AND DEVELOPERS P/L [2003] NSWSC 908 revised - 13/10/2003

HEARING DATE(S): 2-3/10/2003

JUDGMENT DATE:
10 October 2003

JURISDICTION:
EQUITY

JUDGMENT OF: Bryson J at 1

DECISION: Interlocutory Injunction as claimed - see para.27

CATCHWORDS: VENDOR and PURCHASER - sale off the plan - entitlement to rescind where not registered in time available - Purchaser obtained interlocutory injunction to restrain rescission where prima facie case that Vendor in breach of contractual obligation to do whatever is reasonably necessary: 2000 Edition cl.29.

LEGISLATION CITED: Building and Construction Industry Security of Payment Act 1999 (NSW)

CASES CITED: Hawes v. Cuzeno Pty Ltd (1999) 10 BPR 18,011; NSW ConvR 55-930
Mitchell v. Pattern Holdings Pty Ltd [2002] NSWCA 212; 11 BPR 20,241 [2002]

PARTIES :
Masterton Homes Pty Ltd - Plaintiff
Executive Builders and Developers Pty Ltd - First Defendant
Peter James Roddam and Glenda Joyce Roddam - Second Defendants
Michael Isakka - Third Defendant

FILE NUMBER(S): SC 4626/2003

COUNSEL: V. Gray - Plaintiff
C. O'Donnell - First Defendant

SOLICITORS: Yandell Wright Stell - Plaintiff
Clark McNamara Lawyers - First Defendant

OF NEW SOUTH WALES
EQUITY DIVISION

BRYSON J.

FRIDAY 10 OCTOBER 2003

4626/2003 MASTERTON HOMES P/L v EXECUTIVE BUILDERS & DEVELOPERS P/L & 2 ORS

JUDGMENT

1 HIS HONOUR: The first defendant Executive Builders & Developers Pty Ltd is a developer which has carried out and almost completed a subdivision development at Meroo Road, Meroo Meadow near Berry New South Wales, called the Maddor Park Residential Estate, containing 72 residential lots. Executive Builders entered into 20 separate but interdependent contracts each for the sale of one lot to the plaintiff Masterton Homes, and each dated 3 October 2002. The conditions of the contracts are uniform except as to lot numbers and prices and Exhibit A relating to Lot 2 represents these contracts.

2 Masterton Homes commenced the proceedings by Summons on 2 September 2002 and claimed specific performance of the contracts, and other remedies directed to ensuring the withdrawal of caveats lodged by two other defendants; the claims relating to the caveats have been resolved and the plaintiff has discontinued against those other defendants. By Special Condition 46 of the contracts Masterton Homes was disentitled from lodging caveats. The plan of subdivision was unregistered when the contracts were entered into; when the evidence concluded on 3 October it was still unregistered. Special Condition 51 related to the subdivision and provided to the effect (sc51(a)) that completion was subject to and conditional upon registration of the plan of subdivision. Subclause 51(b) provided:

In the event that the plan of subdivision has not been registered within 12 months from the date of this contract than either party hereto may rescind this contract by written notice served on the other and clause 19 shall apply.

3 I have accepted for the purpose of this application that the last day of the period available for registration was 3 October 2003.

4 Clause 19 is one 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.

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Details

Case: [2003] NSWSC 908
Decision Date: 10 October 2003

CaseChat Overview and Summary

The case of Masterton Homes P/L v Executive Builders and Developers P/L involved a dispute between the vendor, Masterton Homes, and the purchaser, Executive Builders and Developers, regarding the sale of property off the plan. The dispute centred on the purchaser's entitlement to rescind the contract where the registration of the sale was not completed within the stipulated timeframe. The purchaser had obtained an interlocutory injunction to prevent the vendor from rescinding the contract, arguing that there was a prima facie case that the vendor had breached the contractual obligation to do whatever was reasonably necessary to ensure the registration of the sale.

The primary legal issue before the court was whether the purchaser had established a prima facie case that the vendor breached their contractual obligation to do whatever was reasonably necessary to facilitate the registration of the sale within the agreed timeframe. The court had to consider the terms of clause 29 of the 2000 Edition contract and determine whether the purchaser's entitlement to rescind the contract was contingent on the registration being completed within the specified period. The court also needed to assess whether the purchaser had demonstrated sufficient grounds to obtain an interlocutory injunction to prevent the vendor from rescinding the contract.

The court examined the terms of the contract and concluded that the purchaser had made out a prima facie case that the vendor had failed to meet the obligation to ensure registration within the agreed timeframe. The court found that the vendor's failure to register the sale within the stipulated period constituted a breach of the contractual obligation to do whatever was reasonably necessary. Consequently, the court held that the purchaser had established a valid basis for seeking to rescind the contract. The court further determined that the purchaser had demonstrated sufficient grounds to obtain the interlocutory injunction, as there was a real prospect that the vendor's breach would result in the purchaser suffering irreparable loss if the injunction was not granted.

The final orders of the court included the grant of an interlocutory injunction to restrain the vendor from rescinding the contract, pending the outcome of the substantive proceedings. The court also ordered that the case proceed to a full hearing to determine the purchaser's entitlement to rescind the contract and any other consequential relief. The court's decision underscored the importance of strict compliance with contractual obligations and the potential consequences for a vendor who fails to meet the agreed registration deadlines in off-the-plan sales.

Orders