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Mordue v Kroone

Mordue v Kroone

Case [2009] NSWSC 255 20 February 2009

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CITATION: Mordue v Kroone [2009] NSWSC 255

HEARING DATE(S): 20 February 2009

JURISDICTION: Equity Division
Expedition List

JUDGMENT OF: Brereton J

EX TEMPORE JUDGMENT DATE: 20 February 2009

DECISION: Motion for leave to rescind contract dismissed with costs

CATCHWORDS: CONTRACT – Specific Performance – Application by defendant/vendor for leave to rescind - Where Court has already ordered specific performance of the contract but remains uncompleted - Contractual right to rescind cannot be exercised by party in default - Whether valid notice to perform provided by Defendant - Whether failure to comply gives rise to right to terminate or rescind - Notice provided by Defendant was not a notice to perform

LEGISLATION CITED: Uniform Civil Procedure Rules r 36.5(2)(b)

CATEGORY: Principal judgment

CASES CITED: Abraham v Mallon (1975) 1 BPR 9157
Hardy v Wardy [2001] NSWSC 1141
Masters v Belpate Pty Ltd [2001] NSWSC 169
Michael Realty Pty Limited v Carr [1977] 1 NSWLR 553
Mitchell v Pattern Holdings Pty Ltd [2002] NSWCA 212, (2002) 11 BPR 20,241
Pelley v Tebran Pty Ltd [2006] NSWSC 1072
Plumor Pty Ltd v Handley (1996) 41 NSWLR 30
Sanctuary Investments Pty Limited v St Gregory’s Armenian School Incorporated (1998) 9 BPR 16,823
Suttor v Gundowda Pty Ltd (1950) 81 CLR 418

PARTIES: Richard John Mordue (first plaintiff)
Lynelle June Mordue (second plaintiff)
Chandi Kroone (defendant)

FILE NUMBER(S): SC 5636/04

COUNSEL: P R Sternberg (plaintiffs)
C Rundle (defendant)

SOLICITORS: Callachor & Helby (plaintiffs)
Whiteley, Ironside & Shillington (defendant)

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION
EXPEDITION LIST

BRERETON J

Friday 20 February 2009

5636/04 Richard John Mordue & anor v Chandi Kroone

JUDGMENT (ex tempore)

1 HIS HONOUR: The defendant Chandi Kroone applies for leave to rescind a contract made on 21 March 2000 between her as vendor and the plaintiffs Richard John Mordue and Lynelle June Mordue as purchasers of two hectares of land comprised in two lots of what is now an unregistered plan of subdivision of lot 12 in DP XXX277, at 74 Back Yamma Road, Parkes, which Hammerschlag J on 30 April 2007 ordered be specifically performed, but which remains uncompleted.

2 The subject contract was itself made pursuant to the exercise on 21 March 2000 of an option contained in an earlier contract made on 11 December 1996 by which the Mordues agreed to sell the land that has since become lot 12 to Ms Kroone and her husband. Special Condition 24 of the December 1996 contract granted to the Mordues an option to repurchase an area of land consisting of approximately seven acres. Hammerschlag J found that that option was duly exercised on 21 March 2000, and that as a result the subject contract – called the “reconveyance contract” the form of which was annexed to the original contract – came into effect on that date.

3 In the reconveyance contract Special Condition 23 provided:

The parties agree that this sale is made pursuant to an agreement between them that the land…

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 Mordue v Kroone

Details

AGLC: Mordue v Kroone [2009] NSWSC 255
Case: [2009] NSWSC 255
Decision Date: 20 February 2009

CaseChat Overview and Summary

The case of Mordue v Kroone involved a dispute between the defendant, Kroone, and the plaintiff, Mordue. The nature of the disagreement was that Kroone, as the vendor, sought leave to rescind a contract of sale for a property. This application arose after the court had already ordered specific performance of the contract, which had not yet been completed. The case was heard in the Supreme Court of Queensland.

The legal issues before the court were twofold: firstly, whether the contractual right to rescind could be exercised by a party in default, and secondly, whether the notice provided by Kroone to Mordue was a valid notice to perform. The court needed to determine whether the notice provided by Kroone was sufficient to allow them to terminate or rescind the contract. Specifically, the court had to examine whether the notice was in fact a notice to perform or if it was some other form of communication.

In delivering the judgment, the court held that a party in default cannot exercise a contractual right to rescind. The court found that the notice provided by Kroone to Mordue was not a notice to perform but was instead a notice of a different nature. The court reasoned that since the notice did not comply with the requirements of a valid notice to perform, it did not provide grounds for termination or rescission of the contract. Consequently, the application by Kroone to rescind the contract was dismissed.

The court’s decision was that the notice provided by Kroone did not constitute a valid notice to perform. The court therefore rejected Kroone's application for leave to rescind the contract of sale. This ruling confirmed that the contractual obligations remained in force and that the court's earlier order for specific performance remained binding.

Orders