Monzer Tabbouch v Scott Devlin - [2008] NSWSC 600

No judgment structure available for this case.

CITATION: Monzer Tabbouch v Scott Devlin & Ors [2008] NSWSC 600

HEARING DATE(S): 10/06/08, 11/06/08, 12/06/08

JUDGMENT DATE :
20 June 2008

JURISDICTION: Equity Division

JUDGMENT OF: Einstein J

DECISION: Plaintiff's case against third defendant made out. Plaintiff's case against fourth defendant not made out.

CATCHWORDS: Conveyancing - Notices to complete - Whether original notice to complete ever efficacious to make time of the essence - Where a notice to complete specifies only a date for completion, whether recipient must complete by the end of the ordinary business hours on that day or has until midnight of that day in which to complete - Proper construction of provision permitting notice to complete to be issued within 14 days such time being deemed reasonable and sufficient and in which respect time is said to be of the essence - Whether such a provision exclusively defines the period of notice to be specified in a notice to complete - Expression "within 14 days" intended to be a shorthand way of saying "within a period of not less than 14 days" - Purchaser having given notice to complete to expire on or before 3.00pm on the 14th day agrees with the vendors that completion will take place at a nominate time on 15th day - Purchaser then purports to terminate the contract on the 15th day but prior to the nominate time

LEGISLATION CITED: Conveyancing Act 1919 (NSW)
Law Reform (Miscellaneous Provisions) Act 1946 (NSW)

CATEGORY: Principal judgment

CASES CITED: Afovos Shipping Co SA v Pagnan & Anor [1983] 1 All ER 449
Benyon v Wongala Holdings Pty Ltd (1999) 9 BPR 16,781
Byrne & Anor v Gagie (1991) NSW ConvR 55-604
Canning v Temby (1905) 3 CLR 419
Carr v Keys-Arenas (1982) NSW ConvR 55-069
Carr v JA Berriman Pty Ltd (1953) 89 CLR 327
Clark v Donald [unreported, Supreme Court of New South Wales, Wootton J, 19 December 1974]
Commodities and Services International SA v Clemence Properites (Grays Inn) Ltd (unreported, Walton J, High Court, Eng, 1986; noted [1991] Conv 476
Dodds v Walker [1981] 2 All ER 609
Falconer v Wilson [1973] 2 NSWLR 131
Holland v Wiltshire (1954) 90 CLR 409
Karangahape Road International Village Ltd v Holloway (1989) 1 NZLR 83
Keys-Arenas v Carr (1982) NSW ConvR 55-068
Lester v Garland (1808) 15 Ves 248, 33 ER 748
Lohar Corporation Pty Ltd v Dibu Pty Ltd (1976) 1 BPR 9177
Lowe v Evans [1989] 1 Qd R 295
Lucas & Tait (Investments) Pty Ltd v Victoria Securities Ltd [1973] 2 NSWLR 268
M & L Hazelton Pty Ltd v Woodfield (1982) 2 BPR 9558
Michael Realty Pty Ltd v Carr [1977] 1 NSWLR 553
Mission Corporation Ltd v Telecom Auckland Ltd [1994] 2 NZLR 357
Paclyn Pty Ltd v GP Harris Real Estate Pty Ltd (1987) 4 BPR 9267
Panoutsos v Raymond Hadley Corporation of New York [1917] 2 KB 473
Peter Turnbull and Co Pty Ltd v Mundus Trading Co (Australasia) Pty Ltd (1954) 90 CLR 235
Poort v Development Underwriting (Victoria) Pty Ltd (No 2) [1976] VR 779 and (No 2) [1977] VR 454
Raco v Grove Homes Pty Ltd (1974) 2 BPR 9411
Rightside Properties Ltd v Gray [1975] Ch 72
Robertson, Ex Parte [1983] 1 Qd R 526
Schindler v Pigault (1975) 30 P & Cr 328
Senavale Pty Ltd v Nolan [2000] NSWSC 619
Stickney v Keeble [1915] AC 386
Taylor v Raglan Developments Pty Ltd [1981] 2 NSWLR 117
Vyse v Wakefield (1840) 6 M & W 442; 151 ER 491

TEXTS CITED: Peter Butt, The Standard Contract for Sale of Land in New South Wales, 2nd Ed (1998), LBC Information Services

PARTIES: Monzer Tabbouch (Plaintiff)
Scott Devlin (First Defendant)
Simone Devlin (Second Defendant)
MLG Conveyancing Pty Limited (Third Defendant)
John Burnett Adam, John Robert Marsden, James Herbert Marsden, Kenneth James Searle, Andrew Ian Percival and Adam Joseph Seton t/as “Marsdens Law Group” (Fourth Defendant)

FILE NUMBER(S): SC 1392/06

COUNSEL: Ms L Chan (Plaintiff)
Mr J Gooley (Third Defendant)
Mr G Butterfield (Fourth Defendant)

SOLICITORS: Colin Daly Quin (Plaintiff)
Maccullum Lawyers (Third Defendant)
Marsden Group (Fourth Defendant)

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

Einstein J

Friday 20 June 2008

1392/06 Monzer Tabbouch v Scott Devlin & Ors

JUDGMENT

The proceedings

1 These proceedings concern a conveyancing transaction and the intricacies of the problems which may arise:

ii. where the contract deems such a period of 14 days as reasonable and sufficient to make time of the essence; and

the last day

2 The interesting question of principle involves whether or not special condition 6 of the contract, although providing for the giving of 14-days notice, may be characterised as “a facultative provision” only, such that it should not be read as exclusively defining the period of notice that could be specified in a notice to complete capable of being issued pursuant to the contract. A submission has been put that such approach may be said to be appropriate when qualifying words such as “if and only if” or “but not otherwise” are not used so as to qualify the need for 14 days to complete in every instance.

3 There are number of other interrelated issues which fall for determination in the somewhat complex web of causes of action and cross claims flowing from an essentially simple conveyancing transaction.

The facts

4 In what follows I proceed to set out the findings of fact, noting that:

i. the first defendant's, Mr and Mrs Devlin, were at all material times the registered proprietors of the house and land situated at 229 Eagle View Road, Minto;

5 MLG Conveyancing [which is the second defendant and itself a cross defendant] carried on the business of a licensed conveyancer. The Marsden Group, which is the fourth defendant, carried on business as a legal practice.

6 In about October 2004 for Mr Tabbouch retained MLG Conveyancing to act for him on the purchase of the property.

7 The following were among the terms of the contract:

i. the completion date was 42 days after the date of the contract, that is 7 December 2004 (see page 1);

ii. the parties must complete by the Completion Date and, if they do not, a party can serve a notice to complete if the party is otherwise entitled to do so (clause 15);

iii. the purchase price was $615,000.00 (see page 1);

iv. the Deposit was $61,500.00 (see page 1) payable as to $1,537.50 by the 26 October 2004 and as to the balance being $59,962.50 before 5pm on the expiration of the “cooling off” period (see special condition 18);

v. the “cooling off” period was agreed to be 10 days (special condition 17);

vi. the vendors would attend to the removal of all car parts, the 5 or 6 disused cars, the truck and the caravans and attend to the mowing of the grounds and clean the inside of the dwelling (special condition 19);

8 Further, special condition 6 of the contract provided that:

9 On 8 December 2004 MLG Conveyancing sent by facsimile a Notice to Complete to the solicitors for the Devlins. The Notice to Complete required completion to take place “on or before 3 p.m., at the office of the Law Society of New South Wales, 170 Phillip Street, Sydney on Wednesday, 22 December 2004 and in this respect time is of the essence of the contract of Sale”.

10 Despite the issue of the Notice to Complete, arrangements were made to settle the sale on a number of occasions. The evidence in this regard is that arrangements were made by MLG Conveyancing and the solicitors for the Devlins to settle as follows:

i. on 14 December 2004 MLG Conveyancing wrote to the solicitors for the Devlins and confirmed that settlement had been booked for 17 December 2004. Settlement did not occur on that latter date.

ii. on 16 December 2004 MLG Conveyancing wrote to the solicitors for the Devlins and confirmed that settlement had been booked for 21 December 2004. Settlement did not occur on that latter date.

11 It seems clear enough from the evidence given by Mr Tabbouch [as well as the file notes taken by Ms Winten] that:

i. there had been many difficulties encountered because the Devlins had not taken steps to remove the car parts, the disused cars, the truck and the caravans and otherwise to comply with the terms of special condition 19;

ii. Mr Tabbouch had met with Mr Devlin on about 20 December and they had agreed that settlement would take place on 23 December;

12 On or about 23 December 2004 MLG Conveyancing advised Mr Tabbouch that he was legally entitled to terminate the contract and obtained instructions from him to issue a notice of termination to the Devlins.

13 On 23 December 2004 there was an exchange of correspondence between MLG Conveyancing and the solicitors acting for Mr and Mrs Devlin:

a) MLG Conveyancing notified the Devlins that the plaintiff had terminated the contract because of the vendors failure to proceed to settlement in accordance with the terms of the contract, read together with the terms of the notice to complete;

b) the solicitors acting for the Devlins received the facsimile and telephoned MLG Conveyancing to ask what the plaintiff was prepared to accept;

1. referred to their earlier telephone discussions of that day;

2. noted that the purchaser agreed to settle at 11:30 a.m. on 23 December despite the notice to complete expiring on 22 December;

3. noted that the purchaser was making arrangements to keep certain items on the property [for example a container] and to have other items removed prior to settlement;

4. stated that both of those matters would in their opinion void the notice to complete, if it were a valid notice;

5. stated that the notice to complete was not valid in form and in substance, in particular referring to the fact that the purchaser had only allowed 14 days including the date of service and making plain that the notice to complete required 14 days, not including the date of service, in order to be valid;

6. observed that there was no evidence that the purchaser was ever ready willing and able to complete since the vendor still had the opportunity to provide vacant possession;

7. submitted that even if there were some items on the premises, this did not entitle the plaintiff to rescind;

8. asked that MLG urgently contact the writer upon receipt of the facsimile with MLG's instructions as to whether the purchaser could settle at the appointed time or later in the day, since they would need to notify the parties;

14 On 17 January 2005 Mr Tabbouch engaged a representative of the Marsden Group to give legal advice with respect to his legal rights under the contract.

15 On 27 January 2005 the Marsden Group advised the Devlins’ solicitors and the vendors’ agent that the Marsden Group had taken over the carriage of the matter from MLG Conveyancing.

16 On 1 February 2005 the Marsden Group reaffirmed the validity of the Notice to Complete.

17 The Devlins later resold the property.

18 The Devlins have refunded to Mr Tabbouch an amount of $26,366.00 “in return for withdrawal of Caveat AB310738 registered on title”. An issue arises concerning whether or not this arrangement constituted a waiver of the plaintiff’s claims concerning the balance of the deposit monies.

The plaintiff’s claims

19 Mr Tabbouch:

a) claiming that he had validly terminated the contract and was entitled to the return of the outstanding deposit from the Devlins; or

Conveyancing Act

20 However at the commencement of the final hearing Mr Tabbouch's counsel announced that Mr Tabbouch had abandoned his claims to relief against the Devlins. At the same time it should be noted that the case advanced for Mr Tabbouch was that:

i. his purported termination of the contract on 23 December 2005 had been invalid;

21 The abandonment of these claims was further sought to be justified upon the basis that pursuing the Devlins was a lost cause as they had never appeared [an order for substituted service having been made against Mr Devlin]; they had never filed any defence; and they had never filed any evidence. It was submitted that the evidence before the Court permitted an inference that the Devlins were at all material times relevantly impecunious.

22 In consequence the only claims which were pressed were the alternative cases pursued against MLG Conveyancing and against the Marsden Group.

23 The basis of the alternative case against MLG Conveyancing is as follows:

i. MLG Conveyancing owed to Mr Tabbouch a duty to act with all due care, skill and diligence;

ii. It was an implied term of the retainer of MLG Conveyancing by Mr Tabbouch that MLG Conveyancing would exercise all due professional skill, care and diligence when acting for Mr Tabbouch;

[The particulars being:

(a) failing to issue a valid notice to produce;

(b) terminating the contract based upon non compliance with an invalid notice to complete;

(c) advising the plaintiff that he was legally entitled to terminate the contract and obtaining instructions from the plaintiff to issue a notice of termination on the first and second defendants]

24 The basis of the alternative case against the Marsden Group is as follows:

i. The Marsden Group owed to Mr Tabbouch a duty to act with all due care, skill and diligence;

ii. That was an implied term of the retainer of the Marsden Group by Mr Tabbouch that the Marsden Group would exercise all due professional skill, care and diligence when acting for Mr Tabbouch;

iii. If either the Notice to Complete or Notice of Termination were invalid, then the affirmation by the Marsden Group of the validity of the Notice to Complete and the Notice of Termination constituted a breach by the Marsden Group of the implied term and a breach of duty;

MLG Conveyancing's defence

25 In its defence to the amended statement of claim, MLG Conveyancing:

i. denies that Mr Tabbouch has suffered loss and damage through the negligence and/or breach of implied term of MLG Conveyancing;

ii. pleads in answer to the whole of the Amended Statement of Claim that if Mr Tabbouch suffered loss and damage as alleged then such loss and damage was caused or contributed to by Mr Tabbouch’s negligence [said to be Mr Tabbouch's failure to complete the purchase and failure to recover the whole of the deposit from Mr and Mrs Devlin];

The Marsden Group’s first cross-claim

26 On 16 November 2007 the Marsden Group filed the first cross-claim against MLG Conveyancing seeking contribution pursuant to section 5 of the Law Reform (Miscellaneous Provisions) Act 1946 (NSW) and contribution at common law and in negligence.

The principles

27 Close questions with respect to the issue of notices to produce have a particular longevity in terms of the authorities. Amongst the many authorities commonly referred to are Carr v JA Berriman Pty Ltd (1953) 89 CLR 327 and Michael Realty Pty Ltd v Carr [1977] 1 NSWLR 553.

28 There are many occasions when valid notices to complete may be given, and given either when provisions similar to special condition 6 are present in the contract or even when no such provision was made at all. The Court is always engaged in the question of assessing the reasonableness of whatever time be furnished for completion: cf Lohar v Dibu. The differences in relation to the circumstance where a provision such a special condition 6 is present and the situation where there is no such special condition is no more than that the parties in the former situation have consensually agreed to be bound by a 14 day notice to complete as being reasonable and sufficient.

29 It is trite that in a conveyancing context it is possible for a vendor, having first purported by notice to make time of the essence of a contract and thereafter purported to terminate the contract for failure to comply with the time so delimited, to then, without prejudice to the claimed validity of the termination, give a second notice purporting to make time of the essence of the contract. Such a second notice is properly construed as an " offer to start up again" [that is to say as an offer to re-instate the contract, being an offer capable of being accepted by the purchaser]: Lohar Corporation Pty Ltd v Dibu Pty Ltd (1976) 1 BPR 9177.

30 In Michael Realty Mahony JA observed as follows:

A notice to complete will, normally, be necessary to achieve the result that the vendor is in breach of the contract, and that the breach is of such a kind as to warrant the purchaser terminating the contract at law. The relevant obligation is the obligation to settle. In one sense, there has been a default by the vendor in that, let it be assumed, a reasonable time for settlement has already expired, but there has been no settlement. But that alone does not put the vendor in breach, and in such a breach as entitles the purchaser to terminate at law. The obligation upon a vendor to settle is dependent and concurrent: he will not normally be in breach unless the purchaser also tenders performance of the obligations to be performed by him on settlement. I have recently discussed the authorities in this regard in Philip Maurice (Realty) Pty Ltd v Impala Properties Pty Ltd (Court of Appeal, June, 1977,

unreported. Case settled. Judgment not delivered). .

Before a vendor will be in breach for failure to complete, it will be
normally necessary for the purchaser to call upon him to settle and to settle at an appropriate time. Thus, accepting that a reasonable time for settlement had already passed, a purchaser could not, nevertheless, put the vendor in breach by attending unannounced at the vendor's premises and demanding settlement. This is one of the cases in which, having regard to the relative positions of the parties, a party is entitled to appropriate notice to perform his obligations, or notice of the details of performance, before he can be put in breach: the principle is illustrated by such cases as Vyse v Wakefield (1840) 6 M & W 442; 151 ER 491 and Canning v Temby (1905) 3 CLR 419. See also Panoutsos v Raymond Hadley Corporation of New York [1917] 2 KB 473 and Peter Turnbull and Co Pty Ltd v Mundus Trading Co (Australasia) Pty Ltd (1954) 90 CLR 235. If a purchaser sued a vendor for breach by reason of the vendor's failure to complete, he would normally fail, unless he established that, by an appropriate notice and otherwise, he had satisfied those conditions precedent to, or concurrent with, the vendor's obligation to complete.

It is this function which, in such a case, a notice to complete may
perform at law. Once there be established a breach of the vendor's obligation to complete, then, upon the basis that at law time is prima facie of the essence in relation, at least, to completion by settlement: Falconer v Wilson [1973] 2 NSWLR 131], the purchaser will have established a basis at law for termination of the contract.

In determining what is appropriate notice to complete, in so far as the notice is to serve this function at law, the essential question is not what time does the purchaser in fact need to do that which is necessary for completion, and is in fact not yet done. At law, a party is not entitled to rely upon his own wrong or default. Given that a reasonable time for completion has already elapsed, the function of a notice specifying a time for completion is, at law, prima facie to enable a party, who is assumed to be in an appropriate state of readiness to perform his obligations, to do
those things, e.g., have ready the appropriate conveyance and title
deeds, relevant for the performance of those obligations.

But the purchaser, if he desires effectively to terminate the contract, must also do what, in equity, will be seen as a sufficient reason for refusing specific performance. In general, equity will order specific performance, notwithstanding that a plaintiff is in breach as to a provision as to time, unless the circumstances over and above the mere breach make it unjust or inequitable to do so: see, e.g. Holland v Wiltshire [(1954) 90 CLR 409]. But non-compliance with a notice effectively making time of the essence for completion will normally be seen as a reason for refusing specific performance. The notice to complete, therefore, serves this function in equity.

Equity has, of course, always required that such a notice give a reasonable time for completion. But, again, the stipulation as to time is, in such a case, not directed to securing performance of the contract. It is directed to giving such a time that, at the end of the time specified, it would be inequitable or unjust for specific performance to be ordered. The time is, therefore, to be calculated by reference, inter alia, to the interests of the party giving the notice, and the inequity of maintaining him effectively bound by the contract thereafter.

Where a purchaser gives such a notice with the purpose of procuring specific performance, the position, though not the same, is analogous. It is not necessary to consider the circumstances in which a purchaser will obtain an order for specific performance, notwithstanding that the vendor is not yet in breach, or in such a breach as would warrant termination at law. It will normally be significant to put a vendor in breach at law, if only for considerations touching costs of the proceedings in equity. An appropriate notice to complete will, of course, achieve this purpose.

31 Glass JA put the matter as follows:

(1) Where the contract fails to make time of the essence, failure to complete by the time fixed for completion is at law, but not in equity, an essential breach, which entitles the purchaser to rescind.

(2) The vendor will, however, be guilty of an essential breach, in equity also, if he fails to complete within the time limited by a valid notice to complete. For such breach the purchaser may validly rescind.

(3) A notice to complete will not be valid unless, inter alia, it limits a time for completion which is, in all the circumstances, reasonable. In determining the reasonableness of the time limited, the Court should consider, not merely what remains to be done by the vendor at the date of notice, but all the circumstances of the case.

(4) The question whether the time limited by the notice is, in all the circumstances reasonable, is identical with the question whether equity would consider it just and equitable to relieve the vendor who fails to complete at the expiration of the notice, and to grant specific performance
at his instance.

(5) It follows that the question whether it is reasonable to allow the vendor less time than he needs to prepare for completion is a correlative of whether it is just and equitable to hold the purchaser to the contract for
as long as the vendor requires before he will be able to complete.

(6) All the circumstances of the case in light of which these questions are to be decided include, but are not confined to, the delay of the vendor and the urgency of the purchaser's need to complete. Other variants of the behaviour of vendor and purchaser, the categories of which cannot be determined in advance, may raise circumstances which make it unjust and inequitable to allow the defaulting vendor as much time as he needs.

Stickney v Keeble

Michael Realty Pty Ltd v Carr

Decision

32 In truth the carefully argued question of whether or not the notice to complete was effective to make time of the essence, likely does not have to be determined because of the arrangement which was reached between Mr Tabbouch and Mr Devlin. That arrangement reached on 20 December to settle on 23 December meant that, in the circumstances:

i. the anterior notice to complete, had it been valid, simply fell away;

33 It is not possible to interpret the arrangement reached between Mr Tabbouch and Mr Devlin as implicitly amounting to an acceptance by the Devlin parties that time was to be required as of the essence in respect of the new date [the 23rd of December].

34 All that one can read into the arrangement is that there was an intention by both parties, reached on 20 December, that settlement would take place on 23 December. That arrangement is entirely consistent with the need, if settlement did not take place on that date, for Mr Tabbouch, by a new notice to complete, to make time of the essence. Such a further notice to complete may well [in light of the anterior delays in the purchaser complying with the terms of special condition 19 and settling on the several occasions when this had been anticipated] not have required to give a period of 14 days in which to complete. The issue is always about reasonableness of the time delimited by a notice to complete and one of the factors to be taken into account will be whether an earlier notice to complete had been issued but was waived: cf: LoharCorporation Pty Ltd v Dibu Pty Ltd (1976) 1 BPR 9177; Stickney v Keeble [1915] AC 386 at 419; Taylor v Raglan Developments Pty Ltd [1981] 2 NSWLR 117 at 134; Clark v Donald [unreported, Supreme Court of New South Wales, Wootton J, 19 December 1974].

35 Mr Gooley, counsel for MLG Conveyancing submitted, as I understood him, that:

i. either time had become of the essence of the contract at 3 p.m on 22 December 2004 by reason of the giving of the notice to complete and the failure of the Devlins to complete by that time on that day, or;

ii. time had become of the essence as at the end of that day by reason of the giving of the notice to complete and the failure of the Devlins to complete on that day;

iii. the circumstance that the parties had arranged to complete at 11:30 a.m. on 23 December 2004 did not constitute any impediment to Mr Tabbouch terminating the contract earlier that morning;

36 I found it difficult to follow the logic of this set of propositions because they did not appear to recognize at least the following matters:

i. it is trite that a valid notice to complete binds both parties so that there can be no failure to comply with such a notice until the time that allows for completion has run its full course;

37 Effectively Mr Gooley's argument fails from the fallacy of the undistributed middle:

i. It seeks to suggest that the notice to complete, having made time of the essence at 3 p.m. on 22 December, time remained of the essence the next day;

a) the continuing effect of the notice to complete having made time of the essence on the previous day;

38 It is not to the point that it may have been apparent to the purchaser on the morning of 23 December that the vendors appeared hopelessly unable to comply with special condition 19 by 11:30 a.m. that morning. That may have constituted a form of anticipatory breach capable of being acted upon, had the original notice to complete:

i. been valid when given;

not fallen away

39 However the original notice to complete had fallen away on the making of the arrangement and Mr Tabbouch had to make time of the essence by a further notice to complete, even giving a very limited time in which to complete. This was not done.

40 The vendors in light of the new arrangement were entitled to proceed upon the basis that if they did not complete at 11.30am on 23 December, the contract would remain on foot unless and until:

i. a valid notice to complete was served and the vendors failed to complete within the requisite time so delimited; or

Carr v Berriman

41 The problem for the third defendant is that even had time been made of the essence by the notice to complete [as to which see the reasons below], Ms Winten did not give any advice to Mr Tabbouch to the effect that the above-described arrangement would have had the effect that time was no longer of the essence, so that Mr Tabbouch could not any longer terminate the contract without giving a new notice to complete which would make time of the essence again.

42 That failure [and indeed her advice that determination of the contract would be valid] amounts to the reason why the third defendant is liable to Mr Tabbouch.

Was the notice to complete on 22 December valid when given?

43 While it is no longer necessary to determine this issue, it was closely argued, and I therefore propose to answer the question.

44 The third defendant has contended that given the wording of special condition 6 of the contract:

i. a shorter period could still have been used;

45 Theoretically, of course, the special condition, although obviously likely intended by the parties to be utilised, was not an exclusive method binding either party in terms of its perceived otherwise entitlement to give a notice to complete in a shorter time: cf Byrne & Anor v Gagie (1991) NSW ConvR 55-604. But in this case the circumstances would not have justified the giving of any notice to complete which delimited a time less than was required by the special condition to be given.

46 In The Standard Contract for the Sale of Land in New South Wales Professor Butt observes as follows [at 15.28]:

Keys-Arenas v Carr

Ex parte Robertson

Afovos Shipping Co SA v Pagnan

Rightside Properties Ltd v Gray

Commodities and Services International SA v Clemence Properites (Grays Inn) Ltd

”

Raco v Grove Homes Pty Ltd

.

47 In Senavale v Nolan [2000] NSWSC 619 Macready M held as follows [at 26] and [27]:

In calculating the period of days "within" which something has to be done, the first day is excluded and the person has until the end of the final day. See Lester v Garland (1808) 15 Ves 248, 33 ER 748, Dodds v Walker [1981] 2 All ER 609 Carr v Keys v Arenas (1982) NSW Conv R 55-069 and Mission Corporation Ltd v Telecom Auckland Ltd [1994] 2 NZLR 357. Taking service to be on 23 March one thus excludes 23 March and the 14 days required by special condition 2(b). Accordingly, sufficient time was allowed to make time of the essence for 6 April.

Karangahape Road International Village Ltd v Holloway

Lowe v Evans

Paclyn Pty Ltd v GP Harris Real Estate Pty Ltd

48 In my own view the notice to complete which was issued could not be relied upon in terms of its validity, if the basis for so doing required compliance with special condition 6 [which if complied with, would result in the time delimited by the notice to complete being deemed reasonable and sufficient to make time of the essence]. As held by Macready M, the giving of the 3pm time for completion was simply premature.

49 In M & L Hazelton Pty Ltd v Woodfield (1982) 2 BPR 9558, McLelland J dealt with contracts for sale of land in the usual form which provided that completion would take place within 30 days from exchange, and if not, then “either party may serve upon the other a notice to complete requiring settlement within 14 days and such time limited shall be accepted as being a good and sufficient time”. At the expiration of the 30 days the vendor gave a notice to complete allowing 14 days from the date of the notice, but, because the notices were not received until four days later, only 10 days were in fact given. The vendor purported to terminate the contract and the purchaser sought specific performance.

50 His Honour observed as follows:

51 That analysis is indistinquishable from the present case and I agree with it. [cf Doyle v Howey (1990) 6 BPR 13,401]

52 Further, the matter inheres in fairness to the vendors, where, having received a notice to complete which was precise in its terms, they were entitled to assume that they could take the whole of the time which the notice to complete stipulated in readying themselves for completion by the date and time nominated. This is all about giving reasonable notice: cf Lohar.

53 In the circumstances of this case it is plain that had the special arrangement not been entered into, the Devlins were entitled to disregard the notice to complete, treating it as having no potency whatever [except as possibly justifying the giving of a later notice to complete with a shorter period of time being given, the giving of the original invalid notice to complete being one of the factors to be taken into account in terms of whether or not the later notice to complete delimited a reasonable period].

Conclusion

54 The issue of the notice to complete was ineffective to make time of the essence in the circumstances. It did not do so.

55 It is not impossible that, in some circumstances of a very unusual nature, a purchaser who gave such a notice to complete could be able to prove that the vendors had, after receiving the notice, been guilty of repudiatory behaviour entitling the purchaser to rescind the contract even before the date and time stipulated for completion in the notice to complete. However, this case does not exhibit any such circumstances.

The potential for a claim under section 55 (2A) of the Conveyancing Act

56 The third defendant claims that, had the Devlins been pursued by Mr Tabbouch in terms of an application pursuant to section 55 (2A) of the Conveyancing Act, such an application would have been successful.

57 The history, scope and purpose of section 55(2A) of the Conveyancing Act were considered by Powell JA in Benyon v Wongala Holdings Pty Ltd (1999) 9 BPR 16,781 at 16,785 and it has been held that the jurisdiction pursuant to that section is wider than one to be exercised only if there is unconscionable conduct. The Court needs to consider generally the conduct of the parties: Schindler v Pigault (1975) 30 P & Cr 328 at 336-7.

58 There is no substance to the third defendant’s above-described claim. It rests upon the misconceived proposition there were special or exceptional circumstances showing that it would have been unjust or inequitable for the Devlins to retain the deposit :see generally Lucas & Tait (Investments) Pty Ltd v Victoria Securities Ltd [1973] 2 NSWLR 268; Poort v Development Underwriting (Victoria) Pty Ltd I (No 2) [1976] VR 779 and (No 2) [1977] VR 454.

59 The simple fact is that Mr Tabbouch was at fault in:

i. first having purported to make time of the essence of the contract by a notice which did not have that effect;

ii. then proceeding to substitute a new arrangement prior to the arrival of even the time which had purported to be delimited in the notice to complete, which new arrangement meant that the notice to complete, even had had been valid upon issue, was now rendered otiose;

60 None of this suggests an entitlement in the contractor to obtain relief under section 55 (2A) of the Act. It has not been shown that in circumstances it would have been unjust or inequitable for the Devlins to retain the deposit.

The claim that the loss was not caused by MLG conveyancing

61 This claim rests upon the proposition that MLG Conveyancing's conduct was not causative of any loss to Mr Tabbouch. MLG seeks to move the liability for the loss of recovery of the deposit to the new solicitors, the Marsden Group, who commenced to act for Mr Tabbouch when MLG Conveyancing cease to act for him. Whilst it is true that Mr Tabbouch was given various options by the new solicitors, the evidence given by Mr Searle was that he had not been able to advise Mr Tabbouch as to whether or not the notice to complete had been valid nor as to whether or not the purported determination of the contract by Mr Tabbouch was valid. All that Mr Searle appears to have been in a position to do, was to put various alternatives to an already bewildered Mr Tabbouch. Mr Seale himself was shortly required to indicate to Mr Tabbouch that he was unable to continue giving advice due to a conflict of interest, caused by the association between his firm and MLG Conveyancing.

62 The real cause of Mr Tabbouch's loss and damage had already taken place when Ms Winton had given incorrect advice to him: that is to say, had advised that the notice to complete had been valid and that the termination had been valid. Those were the matters which caused the loss of an entitlement to the return of the deposit. By the time that Mr Tabbouch was told that MLG Conveyancing could no longer act for him and that he had to go to a new firm, that damage/loss had already occurred and was irrecoverable.

Failure to mitigate

63 Nor is there any substance in the proposition that the case exhibits a failure by Mr Tabbouch to mitigate any loss or damage.

64 It was put by the third defendant that the failure to mitigate was constituted by Mr Tabbouch having failed to pursue the claim against the Devlins in the circumstances. Much was made of the fact that at the commencement of these proceedings, Mr Tabbouch had abandoned his claim that the Devlins were liable to refund the deposit moneys and that the first occasion when the third and fourth defendants learned that this claim was to be abandoned was when the hearing began.

65 The proposition which was put was that no explanation had been offered as to why that claim had been discontinued. The submission was that the failure to pursue the Devlins was a calculated risk taken by Mr Tabbouch, in circumstances where he knew that the Devlins had filed no evidence in opposition to the claim brought.

66 The issue is arid in light of the findings that, even had the case against the Devlins been pursued, it would have failed.

67 During the hearing evidence was adduced by Mr Tabbouch to the effect that Mrs Devlin is an un-discharged bankrupt as from March 2006. Unsuccessful attempts had been made to serve the statement of claim on Mr Devlin, and in due course orders for substituted service were made and complied with. Mr Daly, the plaintiff's solicitor, had never been able to locate or speak to Mr Devlin. Furthermore, a purchaser's index search at the Land and Property Information Register, seeking to establish whether any property was currently owned by Mr Devlin and whether any property had previously been owned by him, disclosed that there was no current real properties owned and that there previously had been four properties owned.

68 To my mind this evidence in the light of the whole of the general circumstances permits of a proper inference that even had Mr Tabbouch had a viable case against Mr and Mrs Devlin, the further pursuit by the Mr Tabbouch of either Mr or Mrs Devlin in terms of these proceedings would have been unlikely to yield any success in terms of a monetary order which could be enforced.

69 As already observed, the matter is otiose in mind of the reasons already given. But to the extent that close argument took place in terms of the suggested failure to mitigate, the evidence which was adduced satisfied me that Mr Tabbouch had a proper basis for giving up any claims to relief against the vendors.

Contributory negligence

70 There is no substance in the contention that Mr Tabbouch contributed to any loss he sustained. He was in the hands of MLG Conveyancing and took their advice. That advice was incorrect. It was given negligently and in breach of the duty of care owed to Mr Tabbouch. He suffered loss in the form of the deposit moneys now claimed.

Conclusion

71 Mr Tabbouch has succeeded in his claims against the third defendant.

72 Mr Tabbouch has failed in his claims against the fourth defendant.

Short minutes of order

73 The parties are to bring in short minutes of order on which occasion costs may be argued.

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Citations

Monzer Tabbouch v Scott Devlin [2008] NSWSC 600

Most Recent Citation

Cole v Raykir Holdings Pty Ltd [2019] NSWSC 1017

Cases Citing This Decision

2

Cole v Raykir Holdings Pty Ltd [2019] NSWSC 1017

Cases Cited

5

Statutory Material Cited

2

Carr v JA Berriman Pty Ltd [1953] HCA 31

Canning v Temby [1905] HCA 45

CITATION:	Monzer Tabbouch v Scott Devlin & Ors [2008] NSWSC 600
HEARING DATE(S):	10/06/08, 11/06/08, 12/06/08
JUDGMENT DATE :	20 June 2008
JURISDICTION:	Equity Division
JUDGMENT OF:	Einstein J
DECISION:	Plaintiff's case against third defendant made out. Plaintiff's case against fourth defendant not made out.
CATCHWORDS:	Conveyancing - Notices to complete - Whether original notice to complete ever efficacious to make time of the essence - Where a notice to complete specifies only a date for completion, whether recipient must complete by the end of the ordinary business hours on that day or has until midnight of that day in which to complete - Proper construction of provision permitting notice to complete to be issued within 14 days such time being deemed reasonable and sufficient and in which respect time is said to be of the essence - Whether such a provision exclusively defines the period of notice to be specified in a notice to complete - Expression "within 14 days" intended to be a shorthand way of saying "within a period of not less than 14 days" - Purchaser having given notice to complete to expire on or before 3.00pm on the 14th day agrees with the vendors that completion will take place at a nominate time on 15th day - Purchaser then purports to terminate the contract on the 15th day but prior to the nominate time
LEGISLATION CITED:	Conveyancing Act 1919 (NSW) Law Reform (Miscellaneous Provisions) Act 1946 (NSW)
CATEGORY:	Principal judgment
CASES CITED:	Afovos Shipping Co SA v Pagnan & Anor [1983] 1 All ER 449 Benyon v Wongala Holdings Pty Ltd (1999) 9 BPR 16,781 Byrne & Anor v Gagie (1991) NSW ConvR 55-604 Canning v Temby (1905) 3 CLR 419 Carr v Keys-Arenas (1982) NSW ConvR 55-069 Carr v JA Berriman Pty Ltd (1953) 89 CLR 327 Clark v Donald [unreported, Supreme Court of New South Wales, Wootton J, 19 December 1974] Commodities and Services International SA v Clemence Properites (Grays Inn) Ltd (unreported, Walton J, High Court, Eng, 1986; noted [1991] Conv 476 Dodds v Walker [1981] 2 All ER 609 Falconer v Wilson [1973] 2 NSWLR 131 Holland v Wiltshire (1954) 90 CLR 409 Karangahape Road International Village Ltd v Holloway (1989) 1 NZLR 83 Keys-Arenas v Carr (1982) NSW ConvR 55-068 Lester v Garland (1808) 15 Ves 248, 33 ER 748 Lohar Corporation Pty Ltd v Dibu Pty Ltd (1976) 1 BPR 9177 Lowe v Evans [1989] 1 Qd R 295 Lucas & Tait (Investments) Pty Ltd v Victoria Securities Ltd [1973] 2 NSWLR 268 M & L Hazelton Pty Ltd v Woodfield (1982) 2 BPR 9558 Michael Realty Pty Ltd v Carr [1977] 1 NSWLR 553 Mission Corporation Ltd v Telecom Auckland Ltd [1994] 2 NZLR 357 Paclyn Pty Ltd v GP Harris Real Estate Pty Ltd (1987) 4 BPR 9267 Panoutsos v Raymond Hadley Corporation of New York [1917] 2 KB 473 Peter Turnbull and Co Pty Ltd v Mundus Trading Co (Australasia) Pty Ltd (1954) 90 CLR 235 Poort v Development Underwriting (Victoria) Pty Ltd (No 2) [1976] VR 779 and (No 2) [1977] VR 454 Raco v Grove Homes Pty Ltd (1974) 2 BPR 9411 Rightside Properties Ltd v Gray [1975] Ch 72 Robertson, Ex Parte [1983] 1 Qd R 526 Schindler v Pigault (1975) 30 P & Cr 328 Senavale Pty Ltd v Nolan [2000] NSWSC 619 Stickney v Keeble [1915] AC 386 Taylor v Raglan Developments Pty Ltd [1981] 2 NSWLR 117 Vyse v Wakefield (1840) 6 M & W 442; 151 ER 491
TEXTS CITED:	Peter Butt, The Standard Contract for Sale of Land in New South Wales, 2nd Ed (1998), LBC Information Services
PARTIES:	Monzer Tabbouch (Plaintiff) Scott Devlin (First Defendant) Simone Devlin (Second Defendant) MLG Conveyancing Pty Limited (Third Defendant) John Burnett Adam, John Robert Marsden, James Herbert Marsden, Kenneth James Searle, Andrew Ian Percival and Adam Joseph Seton t/as “Marsdens Law Group” (Fourth Defendant)
FILE NUMBER(S):	SC 1392/06
COUNSEL:	Ms L Chan (Plaintiff) Mr J Gooley (Third Defendant) Mr G Butterfield (Fourth Defendant)
SOLICITORS:	Colin Daly Quin (Plaintiff) Maccullum Lawyers (Third Defendant) Marsden Group (Fourth Defendant)