Contract - Illegality - Whether contract entered into by seller in contravention of s 13 Sale of Land Act 1970 (WA) is thereby void, unenforceable or voidable

Legislation:

Sale of Land Act 1970 (WA), s 13

Result:

Questions answered

Category: A

Representation:

CIV 3018 of 2009

Counsel:

Plaintiff: Mr B Dharmananda SC & Mr A C Willinge
Defendant: Ms P E Cahill SC & Mr D K Zusman

Solicitors:

Plaintiff: Lewis Blyth & Hooper
Defendant: K&L Gates

CIV 2739 of 2010

Counsel:

Plaintiff: Mr B Dharmananda SC & Mr A C Willinge
Defendants: Ms P E Cahill SC & Mr D K Zusman

Solicitors:

Plaintiff: Lewis Blyth & Hooper
Defendants: K&L Gates

Case(s) referred to in judgment(s):

ACCC v Baxter Healthcare Pty Ltd [2007] HCA 38; (2007) 232 CLR 1
Amadio Pty Ltd v Henderson (1998) 81 FCR 149
Bondlake Pty Ltd v Owners - Strata Plan No 60286 [2005] NSWCA 53; (2005) 62 NSWLR 158
Curtin University of Technology v Woods Bagot Pty Ltd [2012] WASC 449
Elvidge Pty Ltd v BGC Construction Pty Ltd [2006] WASCA 264
Equuscorp Pty Ltd v Bassat (2007) 216 FLR 1
Equuscorp Pty Ltd v Haxton [2012] HCA 7; (2012) 286 ALR 12
Federal Commissioner of Taxation v Consolidated Media Holdings Ltd [2012] HCA 55; (2012) 239 ALR 257
Fitzgerald v FJ Leonhardt Pty Ltd (1997) 189 CLR 215
Fitzsimons v McBride [2008] NSWSC 782
Hancock Prospecting Pty Ltd v Wright Prospecting Pty Ltd [2012] WASCA 216; (2012) 294 ALR 550
Hurst v Vestcorp Ltd (1988) 12 NSWLR 394
Master Education Services Pty Ltd v Ketchell [2008] HCA 38; (2008) 236 CLR 101
Metcalf v Permanent Building Society (1993) 10 WAR 145
Miller v Miller [2011] HCA 9; (2011) 242 CLR 446
Nelson v Nelson (1995) 184 CLR 538
Walker v Clough Property Claremont Pty Ltd [2009] WASC 367
Walker v Clough Property Claremont Pty Ltd [2010] WASCA 232; (2010) 41 WAR 477
Yango Pastoral Co Pty Ltd v First Chicago Australia Ltd (1978) 139 CLR 410

BEECH J:

Introduction

In these actions, the plaintiff (Midstyle) as seller sues the defendants as buyers under contracts of sale of strata lots in a then proposed strata lot development of the Aqueous Apartments at Mandurah Quay. The parties agreed that questions should be the subject of preliminary determination. The preliminary issues for determination raise a short but difficult point about the legal consequences of the admitted failure by the seller to comply with s 13 of the Sale of Land Act1970 (WA).
The parties…

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 Midstyle Nominees Pty Ltd v Jordon

Details

AGLC: Midstyle Nominees Pty Ltd v Jordon [2013] WASC 85
Case: [2013] WASC 85
Decision Date: 19 MARCH 2013

CaseChat Overview and Summary

The case of Midstyle Nominees Pty Ltd v Jordon was heard by the Supreme Court of Western Australia. Midstyle Nominees Pty Ltd sought to enforce a contract for the sale of land that was entered into by Jordon, the seller, in contravention of section 13 of the Sale of Land Act 1970 (WA). The primary dispute was whether the illegality of the contract, due to the failure to comply with the statutory requirements, rendered the contract void, unenforceable, or voidable.

The court was required to determine the legal consequences of the seller's breach of the statutory obligations. Specifically, it needed to consider whether the illegality under section 13 of the Act resulted in the contract being void ab initio, unenforceable, or merely voidable at the election of the purchaser. The court also had to examine the impact of the illegality on the equitable principles that may apply to the sale of land and the rights of any third parties who may have an interest in the land.

The court found that the illegality under section 13 of the Sale of Land Act 1970 (WA) rendered the contract void ab initio. It held that the failure to comply with the statutory obligations meant that the contract was not merely voidable at the election of the purchaser, but rather that it was entirely void and had no legal effect from the outset. This decision was based on the principle that the statutory provisions were designed to protect purchasers and that their breach resulted in the contract being of no effect. The court emphasised that the illegality of the contract under the Act meant that the contract could not be enforced by either party and that any attempt to do so would be futile.

The final orders of the court were that Midstyle Nominees Pty Ltd's claim for specific performance of the contract was dismissed and that the contract was declared to be void. The court further ordered that Jordon was entitled to restitution of any payments made by Midstyle Nominees Pty Ltd under the terms of the contract.

Orders