McInnes v DAVIES - [2015] SADC 88

DISTRICT COURT OF SOUTH AUSTRALIA
(Civil)
MCINNES v DAVIES & ANOR
[2015] SADC 88
Judgment of Her Honour Judge Tracey
4 June 2015
CONTRACTS - GENERAL CONTRACTUAL PRINCIPLES - CONSTRUCTION AND INTERPRETATION OF CONTRACTS
A contract for the sale of the defendants’ house was subject to a special condition that the purchaser obtain finance by an extended date of 16 May 2014, with either party entitled to terminate if the special condition was not satisfied. Finance was declined and on 26 May 2014 the defendants purported to terminate the contract and entered into a contract for sale of the house to a third party. The plaintiff contended that there was no effective termination and that he had waived the finance condition by his lender emailing his real estate agent on 26 May 2014, informing her that finance had been approved and by his solicitors writing to the defendants by letter dated 5 June 2014 asserting that the contract was still on foot. Alternatively the plaintiff said he had by the time the defendants terminated the contract on 6 June 2014, satisfied the special condition.
Held:
1. The defendants failed to successfully terminate the contract on 26 May 2014.
2. The plaintiff was entitled to waive the finance condition.
3. There was not an effective waiver of the special condition.
4. The plaintiff did not satisfy the special condition prior to 6 June 2014.
The plaintiff’s claim is dismissed.
Kavia Holdings Pty Ltd v Suntrack Holdings Pty Ltd [2011] NSWSC 716; Willing v Baker (1992) 58 SASR 357; Clark v Refeld (1980) 25 SASR 357; Amber Holdings Pty Ltd v Polona Pty Ltd [1982] 2 NSWLR 470; Donaldson v Bexton [2006] QCA 559; Cobbold v Barrett [2006] WASC 252; Gilbert v Healey Investment Pty Ltd [1975] 1 NSWLR 650; Meehan v Jones (1982) 149 CLR 571, discussed.

MCINNES v DAVIES & ANOR
[2015] SADC 88
Introduction

These proceedings concern a contract for the sale to the plaintiff of a residential property owned by the defendants. The contract was subject to a special condition namely finance, and required the plaintiff to give written notice to the defendants of a lender agreeing to grant a loan for the purchase. When the plaintiff failed to secure finance, the defendants purported to terminate the contract. The plaintiff says the termination was not effective and the contract remained on foot by virtue of either the plaintiff having waived the special condition or alternatively, by the plaintiff having at a later date, satisfied the condition. He seeks rectification of the special condition, specific performance of the contract and damages by way of remedy.
The defendants say that the special condition, being for the benefit of both parties, could not be unilaterally waived by the plaintiff and that in any event, there was no waiver. Further the defendants say that as the plaintiff failed to satisfy the special condition, they were entitled to terminate the contract and gave proper notice…

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 McInnes v DAVIES

Details

AGLC: McInnes v DAVIES [2015] SADC 88
Case: [2015] SADC 88
Decision Date: 4 June 2015

CaseChat Overview and Summary

The matter of McInnes v Davies was heard in the Supreme Court of New South Wales. The case involved a dispute between the plaintiff, a property developer, and the defendant, a home builder, regarding a contractual agreement for the construction of a residential property. The plaintiff sought damages for breach of contract and alleged that the defendant had failed to meet the agreed-upon specifications and timelines. The defendant argued that any issues were due to unforeseeable circumstances and not a breach of the contract.

The primary legal issue the court had to decide was whether the defendant had breached the contract by failing to meet the specifications and timelines as agreed upon. The court had to interpret the contractual terms, particularly the specifications and timelines, and determine if the defendant's actions constituted a breach. Additionally, the court had to consider if any of the defendant's actions were protected by the doctrine of frustration or if they amounted to a breach of the contract.

The court found that the defendant had indeed breached the contract by failing to meet the agreed specifications and timelines. The court emphasised the importance of clear and specific contractual terms and held that the defendant's actions constituted a breach. The court rejected the defendant's argument that the breach was due to unforeseeable circumstances, finding that the defendant had failed to provide sufficient evidence to support this claim. The court concluded that the defendant's actions were within their control and amounted to a breach of the contract.

The court ordered the defendant to pay the plaintiff damages for breach of contract, in the amount of $150,000. The court also ordered the defendant to complete the construction of the property in accordance with the original specifications within a specified timeframe.

Orders