Messina v Doncaster Developments (NSW) Pty Ltd - [2007] NSWSC 1275

Reported Decision:
(2008) NSW Titles Cases 80-123

New South Wales

Supreme Court

CITATION: Messina & Anor v Doncaster Developments (NSW) Pty Ltd [2007] NSWSC 1275

HEARING DATE(S): 15/10/07

JUDGMENT DATE :
12 November 2007

JUDGMENT OF: Gzell J

DECISION: Declaration that purchasers validly rescinded the option deed for anticipatory breach of contract.

CATCHWORDS: CONEYANCING - Relationship of Vendor and Purchaser - Breach of Contract - Arrangement changed from exchange of counterparts before registration of strata plan to exercise of put or call option after registration - Proportional unit entitlement in registered plan different from entitlement under plan attached to contract for sale - Standard terms of contract for sale allowing rescission - Special condition allowing vendor to amend strata plan - Whether special condition otiose since strata plan registered before contract for sale came into existence

LEGISLATION CITED: Strata Schemes (Freehold Development) Act 1973

CASES CITED: Kannane & Ors v Demian Developments Pty Ltd [2005] NSWSC 1193
Tonitto v Bassal (1992) 28 NSWLR 564
Iannello & Anor v Sharpe [2007] NSWCA 61

PARTIES: Denis Messina and Farah Daniella Messina - Plaintiffs
Doncaster Developments (NSW) Pty Ltd - First Defendant
Great Lakes Reinsurance (UK) PLC - Second Defendant
Doncaster Developments (NSW) Pty Ltd - Defendant

FILE NUMBER(S): SC 1272/07

COUNSEL: Mr D Murr SC/ Mr J Conomy - Plaintiffs
Mr G Colman - Defendant

SOLICITORS: Osbornes Lawyers - Plaintiffs
Hunt and Hunt Lawyers - Defendants

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

GZELL J

MONDAY 12 NOVEMBER 2007

1272/07 DENIS MESSINA & ANOR v DONCASTER DEVELOPMENTS (NSW) PTY LTD

JUDGMENT

Introduction

1 Doncaster Developments (NSW) Pty Ltd, the defendant, carried out a strata title development of its land at Kensington, Sydney. Denis Messina and his wife Farah Messina, the plaintiffs, were to acquire lot 2 in the unregistered strata plan. The price was to be $1,392,000. A deposit of $139,200 was satisfied by Mr and Mrs Messina providing Doncaster with a deposit bond in that amount. Proceedings against the grantor of the deposit bond were discontinued and the moneys were paid to a stakeholder pending the determination of these proceedings.

2 Initially, the contract was to be constituted by an exchange of counterparts before registration of the strata plan. Subsequently, a put and call option deed was executed providing for the exercise of the options after registration of the strata plan. And therein lies the difficulty. There are conflicts in the terms of the option and the attached contract for sale of land which was to come into existence upon an effective exercise of one or other of the options.

3 The schedule of unit entitlement in the strata plan annexed to the contract showed Mr and Mrs Messina with a proportionate unit entitlement of 203 out of 1,000 units. The registered strata plan showed them having 203 out of 861 units.

The issues

4 Central to the issues between the parties are two provisions of the contract for sale. Clause 23.9.2 enabled Mr and Mrs Messina…

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 Messina v Doncaster Developments (NSW) Pty Ltd

Details

AGLC: Messina v Doncaster Developments (NSW) Pty Ltd [2007] NSWSC 1275
Case: [2007] NSWSC 1275
Decision Date: 12 November 2007

CaseChat Overview and Summary

The case of Messina v Doncaster Developments (NSW) Pty Ltd involved a dispute between the plaintiff, Messina, and the defendant, Doncaster Developments (NSW) Pty Ltd, regarding a breach of contract in the sale of a unit. The contract for sale was executed on the basis of a plan attached to it, which showed the unit's entitlement as 1/110th of the strata plan. However, the strata plan was registered after the contract was signed, resulting in a different unit entitlement of 1/108th. The dispute centred on whether the contract allowed for rescission due to the discrepancy between the unit entitlements and whether a special condition in the contract, allowing the vendor to amend the strata plan, was void since the plan was registered before the contract was executed.

The legal issues before the court were whether the contract allowed for rescission due to the discrepancy in unit entitlements, and whether the special condition permitting the vendor to amend the strata plan was void as it was registered after the contract was signed. The court needed to determine whether the special condition was otiose and whether the contract terms allowed for rescission under these circumstances. Additionally, the court had to consider the standard terms of the contract, which included a clause allowing rescission due to discrepancies in unit entitlements.

The court held that the special condition permitting the vendor to amend the strata plan was not otiose, as it was registered after the contract was executed. The court further held that the contract terms allowed for rescission due to the discrepancy in unit entitlements, as the contract included a clause that permitted rescission in such circumstances. The court found that the vendor was not entitled to amend the strata plan and that the discrepancy in unit entitlements constituted a breach of contract. Consequently, the contract was rescinded, and the parties were restored to their pre-contractual positions.

The final orders of the court were that the contract for sale between the plaintiff and the defendant was rescinded, and both parties were to bear their own costs of the proceedings. The court ordered that the registration of the strata plan would not affect the outcome of the case and that the special condition in the contract, permitting the vendor to amend the strata plan, was not otiose. The court also held that the vendor was not entitled to exercise the put or call option, and the contract was rescinded, leaving both parties to their pre-contractual positions.

Orders