McPhee v Zarb

Case [2002] QCA 530

SUPREME COURT OF QUEENSLAND

CITATION:

McPhee v Zarb & Ors [2002] QCA 530

PARTIES:

MALCOLM MCPHEE
(plaintiff/respondent)
v
SYLVIA ZARB
(first defendant)

LBS HOLDINGS PTY LTD ACN 096 201 535
(second defendant/first appellant)

AUSTRALASIAN THEATRICAL INVESTMENTS PTY LTD ACN 096 131 752
(third defendant/second appellant)

FILE NO/S:

Appeal No 2497 of 2002
SC No 6277 of 2001

DIVISION:

Court of Appeal

PROCEEDING:

General Civil Appeal

ORIGINATING COURT:

Supreme Court at Brisbane

DELIVERED ON:

6 December 2002

DELIVERED AT:

Brisbane

HEARING DATE:

10 September 2002

JUDGES:

McMurdo P, Williams JA and Atkinson J
Separate reasons for judgment of each member of the court; each concurring as to the orders made

ORDERS:

1. Appeal allowed;

2. Judgment and orders appealed from set aside;

3. The application of the respondent McPhee for summary judgment on his claim be dismissed;

4. That the cross-application for summary judgment infavour of the appellants LBS Holdings Pty Ltd & Australasian Theatrical Investments Pty Ltd be granted; 

5. That the respondent McPhee pay to the appellants LBS Holdings Pty Ltd & Australasian Theatrical Investments Pty Ltd the sum of $15,000.00 with interest (at the contract rate published by the Queensland Law Society Inc) from 28 June 2001 until judgment;

6. That the respondent McPhee pay the appellants’ costs of this appeal and of the proceedings at first instance.

CATCHWORDS:

CONVEYANCING – RELATIONSHIP OF VENDOR AND PURCHASER – MATTERS ARISING BETWEEN CONTRACT AND CONVEYANCE – TIME –WAIVER – appeal by purchasers against summary judgment for vendor ordering forfeiture of the deposit - where contract stated time is of the essence – where settlement date was extended to a fixed date by agreement between the parties due to vendor’s failure to provide release of mortgage - where purchasers subsequently reserved their rights upon extending the settlement date – where purchasers subsequently rescinded - whether agreed extension of time amounted to an affirmation of the contract destroying the essentiality of time

CONVEYANCING – RELATIONSHIP OF VENDOR AND PURCHASER – BREACH OF CONTRACT – BREACH BY THE VENDOR:REMEDIES OF PUCHASER – RESCISSION – TIME -  where contract stated time of the essence – where settlement date extended - where purchasers rescinded contract upon repeated failure by vendor to provide release of mortgage at agreed dates - whether learned trial judge erred in finding that the purported rescission by the purchasers constituted a wrongful repudiation of the contract thus making the vendor’s rescission effectual

CONVEYANCING – RELATIONSHIP OF VENDOR AND PURCHASER – MATTERS ARISING BETWEEN CONTRACT AND CONVEYANCE – TIME –WAIVER - whether failure by purchasers to tender the price on the extended settlement date and where vendor also failed to provide release of mortgage equated to conduct affirming the contract and destroying the essentiality of time – Foran v Wight distinguished

CONVEYANCING - LAND TITLES UNDER THE TORRENS SYSTEM – MORTGAGES, CHARGES AND ENCUMBRANCES – POWERS AND REMEDIES OF MORTGAGEE – FORCLOSURE – STATUTORY PROVISIONS - where vendor loses all rights to settle when mortgagee exercises power of sale – effect of…

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Details
AGLC
McPhee v Zarb [2002] QCA 530
Case
[2002] QCA 530
Decision Date

CaseChat Overview and Summary

The appeal before the court involved the parties McPhee and Zarb, specifically LBS Holdings Pty Ltd and Australasian Theatrical Investments Pty Ltd. The nature of the dispute pertained to a real estate transaction where the purchasers sought to rescind the contract due to the vendor's failure to provide the release of mortgage by the agreed settlement date. The Court of Appeal was tasked with determining several legal issues, including whether the agreement to extend the settlement date waived the clause that time was of the essence, and whether the purchasers' rescission was a wrongful repudiation of the contract.

The court first examined whether the agreement to extend the settlement date constituted a waiver of the "time is of the essence" clause. The purchasers had reserved their rights when extending the settlement date, which the trial judge found was an affirmation of the contract, thereby destroying the essentiality of time. The Court of Appeal disagreed, distinguishing the case from Foran v Wight, and found that the agreement to extend the settlement date did not amount to an affirmation of the contract. Furthermore, the court considered the purchasers' conduct in failing to tender the price on the extended settlement date, which did not equate to conduct affirming the contract and destroying the essentiality of time.

In addressing the issue of rescission, the court found that the trial judge had erred in holding that the purchasers' purported rescission constituted a wrongful repudiation of the contract. The court held that the purchasers had valid grounds to rescind due to the vendor's repeated failure to provide the release of mortgage at the agreed dates. Finally, the court considered the effect of section 87(1) of the Property Law Act, concluding that the vendor could rescind once the power of sale was exercised by the mortgagee, even though this resulted in the vendor losing all rights to settle.

The court's findings led to the orders that the appeal be allowed, the judgment and orders appealed from be set aside, the respondent's application for summary judgment be dismissed, and the appellants' cross-application for summary judgment be granted. Additionally, the respondent was ordered to pay the appellants the sum of $15,000 with interest from 28 June 2001 until judgment, along with the appellants' costs of the appeal and the proceedings at first instance.

Orders

Orders of the court

1. Appeal allowed;

2. Judgment and orders appealed from set aside;

3. The application of the respondent McPhee for summary judgment on his claim be dismissed;

4. That the cross-application for summary judgment infavour of the appellants LBS Holdings Pty Ltd & Australasian Theatrical Investments Pty Ltd be granted;

5. That the respondent McPhee pay to the appellants LBS Holdings Pty Ltd & Australasian Theatrical Investments Pty Ltd the sum of $15,000.00 with interest (at the contract rate published by the Queensland Law Society Inc) from 28 June 2001 until judgment;

6. That the respondent McPhee pay the appellants’ costs of this appeal and of the proceedings at first instance.

Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

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