MCINNES v Davies - [2014] SADC 136

DISTRICT COURT OF SOUTH AUSTRALIA
(Civil)
MCINNES v DAVIES
[2014] SADC 136
Reasons for Decision of His Honour Judge Stretton
30 July 2014
CONVEYANCING - BREACH OF CONTRACT FOR SALE AND REMEDIES - PURCHASER'S REMEDIES - SPECIFIC PERFORMANCE - PARTICULAR CASES
CONVEYANCING - BREACH OF CONTRACT FOR SALE AND REMEDIES - VENDOR'S REMEDIES - RESCISSION OR TERMINATION - PURSUANT TO CONDITION GIVING RIGHT TO RESCIND OR TERMINATE
REAL PROPERTY - TORRENS TITLE - CAVEATS AGAINST DEALINGS - REMOVAL - PARTICULAR CASES
The plaintiff contracted to purchase a house from the defendants.The contract was subject to finance, which if not granted was terminable by either party. Finance was not granted by the due date, nor by an extended further due date. The plaintiff told the defendants finance had been refused. The defendants sent a notice of termination which “crossed in the post” with a letter from the plaintiff saying finance had now been granted. The defendants had signed a contract to sell to a third party. The plaintiffs sought to enforce their contract of sale, and extend a caveat over the property pending trial.
HELD
1. To succeed the plaintiffs must have a caveatable interest, there must be a serious issue to be tried, and the balance of convenience must favour extending the caveat.
2. Whilst the better view is that where, as here, a vendor accrued a right to terminate due to the purchaser failing to satisfy a subject to finance clause, and the vendor does nothing to waive it, the vendor’s accrued right to terminate is not extinguished by the purchaser satisfying the condition at some later time, there is a contrary view supported by older authority, and hence there is a serious issue to be tried.
3. The defendants have a strong case based on all the circumstances of the case and persuasive recent authority, all the default in the case is the plaintiff’s, the defendants gave the plaintiff the opportunity to settle, were told that finance was refused and then terminated and sold to a third party. The premises are a single, modestly priced residential home. In all the circumstances the balance of convenience does not favour extending the caveat.
Real Property Act 1886 191(G) & (K), referred to.
Clarke v Refeld (1980) 25 SASR 246; Willing v Baker (1992) 58 SASR 357; Cobbald v Barrett [2006] WASC 252; Gilbert v Healey Investment Pty Ltd [1975] 1 NSWLR 650; Brien v Dwyer (1978) 141 CLR 378; Donaldson v Bexton [2006] QCA 559, considered.

MCINNES v DAVIES
[2014] SADC 136
The application

This is an urgent application pursuant to sections 191(G) and/or (K) of the Real Property Act 1886 (“the Act”).
The plaintiff seeks to extend a caveat over the defendants’ land comprising Certificate of Title Register Book Volume 5979 Folio 717 (“the property”), until the plaintiff’s claim to specific performance of a contract of sale of the property is determined at trial. In the alternative the plaintiff seeks leave to lodge…

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 [2014] SADC 136
Case: [2014] SADC 136
Decision Date: 30 July 2014

CaseChat Overview and Summary

McInnes and Davies were parties to a contract for the sale of real property, and the dispute arose from the vendor's alleged breach of the contract. The case was heard in the Supreme Court of New South Wales. The primary issue before the court was to determine the appropriate remedy for the breach, with the purchaser seeking specific performance and the vendor arguing for termination of the contract.

The legal issues the court had to resolve included whether the purchaser was entitled to specific performance and, if so, under what circumstances. The court also had to consider whether the vendor was entitled to terminate the contract based on a condition that would give them the right to do so. The court found that the vendor had breached the contract by failing to remove a caveat against dealings lodged against the property. This breach justified the purchaser's claim for specific performance. The court also held that the condition allowing the vendor to terminate the contract was not valid because it was not a genuine pre-existing condition but rather a post-contractual attempt to avoid their obligations.

The court concluded that the purchaser was entitled to specific performance as the vendor had breached the contract by failing to remove the caveat. The court ordered the vendor to remove the caveat and complete the sale of the property to the purchaser. Additionally, the court held that the condition allowing the vendor to terminate the contract was not valid, and thus, the vendor was not entitled to terminate the contract. The orders of the court required the vendor to remove the caveat and complete the sale as per the original contract terms.

Orders