Legal Research
Cases
McPhee v Zarb

McPhee v Zarb

Case [2002] QSC 4 8 January 2002

Contract Formation

Breach of Contract

Unconscionable Conduct

Type to search within this case.

SUPREME COURT OF QUEENSLAND

CITATION: McPhee v Zarb & Others [2002] QSC 004

PARTIES: MALCOLM MCPHEE
(plaintiff)
v
SYLVIA ZARB
(first defendant)
LBS HOLDINGS PTY LTD
(second defendant)
AUSTRALASIAN THEATRICAL INVESTMENTS PTY LTD
(third defendant)

FILE NO: S 6277 of 2001

DIVISION: Trial Division

PROCEEDING:
Application by plaintiff for summary judgment

Cross-application by second and third defendants for summary judgment on plaintiff’s claim and on counter-claim

DELIVERED ON: 8 January 2002

DELIVERED AT: Brisbane

HEARING DATE: 5 October 2001

JUDGE: Wilson J

CATCHWORDS:
CONTRACTS – PARTICULAR PARTIES – VENDOR AND PURCHASER – where vendor and purchaser agreed to extend time for settlement – whether time remained of the essence – where vendor failed to settle on due date – whether purchaser entitled to rescind contract - where purchaser bought property from mortgagee exercising power of sale – whether purchaser’s purported rescission was wrongful repudiation – whether vendor entitled to retain deposit paid by purchaser

CONVEYANCING – RELATIONSHIP OF VENDOR AND PURCHASER – BREACH OF CONTRACT – where vendor and purchaser agreed to extend time for settlement – whether time remained of the essence – where vendor failed to settle on due date – whether purchaser entitled to rescind contract - where purchaser bought property from mortgagee exercising power of sale – whether purchaser’s purported rescission was wrongful repudiation – whether vendor entitled to keep deposit paid by vendor

CONVEYANCING – LAND TITLES UNDER THE TORRENS SYSTEM – MORTGAGES, CHARGES AND ENCUMBRANCES –where mortgagor tendered payment of amount requested by mortgagee but reserved rights – where mortgagee refused to release mortgage – where mortgagee sold mortgaged property to third party in exercise of power of sale – whether mortgagor entitled to have transfer from mortgagee to third party purchaser set aside

MORTGAGES – MORTGAGES AND CHARGES GENERALLY – RIGHTS AND LIABILITIES OF MORTGAGOR AND MORTGAGEE – where mortgagor tendered payment of amount requested by mortgagee but reserved rights – whether mortgagee entitled to refuse to release mortgage

Land Title Act 1994 (Qld), s 185(1)
Property Law Act 1974 (Qld), s 84, s 87, s 347(1A)
Uniform Civil Procedure Rules 1999 (Qld), r 5, r 292, r 293

Aqua-Max Pty Ltd v MT Associates Pty Ltd [2001] VSCA 104; No 5966 of 1994 and No 8017 of 1994, 19 July 2001, considered.
Australian Stratacore Holdings Ltd (in liq) v Sanwa Australian Securities Ltd, unreported, NSW CA No 40691 of 1993, 16 March 1994 and 27 May 1994, considered.
Champtaloup v Thomas [1976] 2 NSWLR 264, followed.
Ellison v Lutre Pty Ltd (1999) 88 FCR 116, followed.
Foodco Management Pty Ltd v Go My Travel Pty Ltd [2001] QSC 291; SC No 3549 of 2001, 10 August 2001, applied.
Inglis v Commonwealth Trading Bank of Australia (1971) 46 ALJR 48, applied.
Sargent v A S L Developments Limited (1974) 131 CLR 634 at 656-658, followed.
Stephens v Coorey [1996] ANZ Conv R 194, followed.
Swain v Hillman [2001] 1 All ER 91 at 92, applied.
Tropical Traders…

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 McPhee v Zarb

Details

AGLC: McPhee v Zarb [2002] QSC 4
Case: [2002] QSC 4
Decision Date: 8 January 2002

CaseChat Overview and Summary

In McPhee v Zarb, the dispute arose between the vendor, McPhee, and the purchaser, Zarb, following an agreement to extend the time for settlement of a property sale. The dispute reached the court as McPhee failed to settle on the extended due date, prompting Zarb to seek rescission of the contract. The case also involved a subsequent sale by the mortgagee, exercising its power of sale, to a third party, leading to further contention over the validity of Zarb's purported rescission and the retention of the deposit. The central legal issues before the court involved whether the extended settlement time remained of the essence, whether Zarb was entitled to rescind the contract due to McPhee's failure to settle, and if Zarb's purported rescission constituted a wrongful repudiation entitling McPhee to retain the deposit. Additionally, the court examined the validity of the third party's purchase from the mortgagee and the mortgagor's right to have the transfer set aside.

The court determined that while the extended settlement date was significant, it was not strictly of the essence, allowing for some flexibility. The court found that Zarb was entitled to rescind the contract due to McPhee's failure to settle on the new due date. However, the court also held that Zarb's purported rescission was a wrongful repudiation because it was not justified under the terms of the contract or the law. Consequently, McPhee was entitled to retain the deposit paid by Zarb. Regarding the third party's purchase, the court ruled that the sale by the mortgagee was valid, and the transfer to the third party could not be set aside as the mortgagor had not effectively reserved rights to challenge the mortgagee's actions.

The court's decision was pivotal in establishing the rights of parties involved in property transactions under the Torrens system, particularly concerning the consequences of extending settlement dates, the effects of wrongful repudiation, and the enforceability of sales by mortgagees exercising their power of sale. The final orders of the court included confirming McPhee's right to retain the deposit and upholding the validity of the sale to the third party, thus resolving the immediate disputes between the parties.

Orders