Munoz v Galnyamba.Friday Creek P/L

[2015] NSWSC 886

Supreme Court

New South Wales

Medium Neutral Citation:

Munoz v Galnyamba.Friday Creek P/L [2015] NSWSC 886

Hearing dates:

3 July 2015

Decision date:

03 July 2015

Jurisdiction:

Common Law

Before:

Adamson J

Decision:

1. Declare that the land contract dated 29 January 2013 in respect of the land comprised in folio identifier 45/775171 and situated at 267 Friday Creek Road, Upper Orara, New South Wales (the Property) and the four subsequent variations were terminated on 2 July 2015.

 

2. Give judgment for the plaintiff for immediate possession of the Property.

 

3. Grant leave to the plaintiff to issue a writ of possession of the Property immediately.

 

4. List the matter for directions before the Registrar on 7 August 2015.

 5. Order the defendant to pay the plaintiff's costs of today.

Catchwords:

PROPERTY – motion seeking immediate possession of property – evidence established that defendant failed to complete contract at designated time and place – plaintiff entitled to terminate contract – plaintiff entitled to possession of property

Category:

Principal judgment

Parties:

Guillermo Rafael Munoz (Plaintiff)
Galnyamba.Friday Creek Pty Limited (Defendant)

Representation:

Counsel:
C Cassimatis (Plaintiff)
M Newton (Defendant)

    Solicitors:
Jason McClung (Plaintiff)
Bilbie Dan (Defendant)

File Number(s):

2014/336689

Judgment: EX TEMPORE

Introduction

1. This matter came before me as duty judge this morning. It was expected that short minutes of order would be made by consent on the basis that the transfer of certain property at Upper Orara (the Property) would be completed yesterday afternoon at 3:00pm. As it happened, completion did not occur. Accordingly, the plaintiff moved on the notice of motion it had filed on 10 April 2015 for an order for possession of the Property and leave to issue a writ of possession.

The Facts

2. Because the only factual issue relates to the events of 2 July 2015, the facts can be briefly summarised.

The evidence

3. Mr Cassimatis, who appeared on behalf of the plaintiff, relied on affidavit of Jason McClung dated 2 July 2015 and an email sent to the defendant’s solicitor at 5.40pm on 2 July 2015, serving the affidavit. Mr McClung is the plaintiff’s solicitor. Mr Newton, who appeared on behalf of the defendant, relied on an affidavits of Miriam Landolt, a director of the defendant, and Ruth Donnelly, a solicitor employed by Bilbie Dan, the solicitor on the record for the defendant. I note that Ms Landolt’s affidavit was not prepared by the solicitors on the record, who have offices in Newcastle. She swore the affidavit in the Coffs Harbour area in the presence of a solicitor who had apparently no prior knowledge of, or connection with the transaction.

The original transaction

4. On 29 January 2013 contracts were exchanged whereby the plaintiff agreed to transfer the Property to the defendant for about $2.56m. On 1 March 2013 the defendant went into possession of the Property pursuant to the contract. There was a resort, which included a vineyard and a restaurant on the Property, which the defendant operated from the time in which it entered into possession. The contract provided for the usual settlement period of six weeks. However, settlement did not take place.

5. There were three deeds of variation of the contract. Relevantly, the time for completion was extended by deed in June 2014 and a new date for completion of 30 September 2014 was agreed. Time was of the essence. Settlement did not take place on 30 September 2014. The plaintiff terminated the contract on 1 October 2014.

These proceedings

6. The defendant refused to vacate the Property. By statement of claim filed on 14 November 2014 the plaintiff commenced proceedings for possession of the Property and damages.

7. On 10 April 2015 the plaintiff filed a notice of motion seeking judgment for possession and leave to issue a writ of possession. He also sought to amend his statement of claim. Leave to amend the statement of claim was granted and the balance of the notice of motion was listed for hearing on 8 May 2015 for one day. However, on 8 May 2015 the parties entered into a deed and the hearing was vacated and stood over for directions and the making of orders to 3 July 2015.

The Settlement Deed of 8 May 2015

8. The deed dated 8 May 2015 (the Settlement Deed) provided, by cl 3.4, that the defendant was required to complete the contract for purchase of the Property at 3:00pm on 2 July 2015 at the offices of the plaintiff's solicitor at Coffs Harbour. On that date, the defendant was obliged to deliver an unendorsed Bank cheque in favour of the plaintiff in a sum in the order of $2.3m plus an amount in the order of $136,000 for accumulations and an amount in the order of $48,000 for increased consideration. In addition, the defendant was to pay the plaintiff's costs of the proceedings.

9. The Settlement Deed also provided that the plaintiff and defendant acknowledged that the contract was valid and enforceable in its entirety: cl 2.6. The parties also agreed that the completion date of 2 July 2015 was an essential date for completion of the contract and that if the defendant was not ready, willing and able to complete the contract on that day, then the plaintiff was entitled to terminate the contract without further notice and seek the orders set out in short minutes which were annexed to the deed.

10. The Settlement Deed further provided that the defendant agreed that the proceedings be adjourned to 3 July 2015 on terms contained in short minutes of order which are annexure “C” to the Settlement Deed. Clause 3.12 provided that if the defendant failed to complete the contract by 2 July 2015 the defendant irrevocably consented to the Court making orders in accordance with the short minutes annexed to the deed and marked “A”. Those short minutes, in substance, provide for a declaration that the contract was terminated on 2 July 2015, judgment for the plaintiff for immediate possession and a grant of leave to the plaintiff to issue a writ of possession of the Property immediately.

11. The parties’ solicitors corresponded concerning the settlement. On 1 July 2015, Mr McClung wrote to Ms Donnelly confirming the completion date of 2 July 2015 and the completion time of 3:00pm. In the same letter the plaintiff’s solicitor reiterated the obligations imposed by the deed on the defendant. The letter concluded with a warning that if the defendant failed to complete on 2 July 2015, the plaintiff would be in attendance at the property on 3 July 2015 to ensure the orderly vacation of the property.

The settlement date: 2 July 2015

12. It is common ground that the contract was not completed on 2 July 2015. There is conflicting evidence of precisely what occurred on that day. The plaintiff contended that the defendant did not attend at his solicitor’s office; whereas the defendant contended that she went to the plaintiff’s solicitor’s office but he refused to see her.

13. The evidence showed that at 1.26pm on 2 July 2015, the defendant’s solicitor, Ruth Donnelly, sent to letter to Mr McClung by email. Ms Donnelly does not annex the letter to her affidavit. Accordingly, it is not possible to know with certainty which letter was sent at that time. However, Mr Cassimatis accepted that the letter sent was probably a letter annexed to Mr McClung’s affidavit which read as follows:

“We refer to the above and note the content of your letters dated 2 July 2015 and our attempts to contact you via telephone to discuss the content of your correspondence.

We further note your instruction that your client relies on the conditions of the Deed.

We are now instructed to inform you that:

(i)   our client wishes to discuss the settlement of this matter;

(ii)   our client notes there are serious issues regarding the ownership of the business including ownership of the intellectual property, websites etc.;

(iii)   there are Aboriginal Heritage and Cultural matters affecting the property that need to be taken into consideration.

Our client further instructs that if final terms cannot be negotiated to a conclusion, they will commence further court proceedings in relation to the business without further notice.

We look forward to your response as a matter of urgency.

Please direct all communications concerning the above to Nicholas Dan or Ruth Donnelly of our office.”

14. I infer that the reference in the first line of the letter was intended to be a reference to the letter of 1 July 2015 referred to above in which the defendant’s obligations were summarised and the settlement date and time were confirmed.

15. The evidence shows that Mr McClung’s email system responded at 1.27pm to Ms Donnelly’s email of 1.26pm with the following, apparently automatically generated, message:

“I will be away from the office from 12 noon Thursday 2 July 2015 until Tuesday 14 July 2015. I will deal with your email on my return however, if your email relates to a current legal matter, please email Tracy on [email protected]”

16. Mr McClung then wrote to Ms Donnelly in the following terms:

“I refer to your 2nd letter dated 2 July 2015.

I note that Nicholas Dan called and left a message for me to return his call this morning.

I have returned Nicholas Dan’s call.

I have not received any further calls from your office.

The Deed of Variation and Settlement (“the Deed”) contains the final terms of the agreement reached between the parties and there are no further terms to be negotiated.”

17. There is an issue about what occurred at 3:00pm on 2 July 2015 (being the date and the time for completion). Miriam Landolt swore an affidavit today, in which she deposed that she is the director of the defendant and lives on the property with her four children. Her husband lives in Switzerland because of his work. Ms Landolt deposed that at she attended Mr McClung’s office in Coffs Harbour at the appointed time. Her affidavit contained the following paragraph which I rejected:

[8]   Mr McClung refused to see us and sent an out-of-office notice to my lawyer Nicholas Dan, “Mr J McClung being out of the office till 14 July 2015.”

18. She also deposed in her affidavit:

[10]   We are willing and able to settle after Mr McClung's return back to the office on Thursday 15 July 2015 at 3:00pm.

19. I note that Ms Landolt’s affidavit was not prepared by the solicitors who act for her in these proceedings and on the purchase of the Property. As referred to above, it was witnessed by a solicitor in the Coffs Harbour area.

20. In his affidavit of 2 July 2015, Mr McClung deposed that the plaintiff failed to complete at 3:00pm on 2 July 2015. He also annexed correspondence with the defendant's solicitor on that day relating to the failed settlement, including a letter, which I infer was sent after 3pm which said:

“Pursuant to the provisions of the Deed of Variation and Settlement dated 8 May 2015 and signed by the parties (“the Deed”) completion of the contract was due to take place at 3 PM on 2 July 2015 at my office.

At 3 PM today there was no attendance at my office by any person representing your client.”

21. Since Ms Landolt’s affidavit was sworn today, after Mr McClung had gone on leave, I draw no inference against him arising from the fact that her version is not contradicted other than in the letter from the plaintiff’s solicitor to the defendant’s solicitor referred to above.

22. The correspondence indicates that there were further communications between Mr McClung and Ms Donnelly in the course of the afternoon of 2 July 2015 after the proposed time for settlement. Ms Donnelly wrote to Mr McClung at some time on 2 July 2015 in the following terms:

“We refer to the above and note the content of your letter dated 2 July 2015.

We further note our attempts to contact you via telephone to discuss the content of your correspondence.

We are now in the process of obtaining further instructions from our client and ask that you allow us until 5.00pm, 2 July 2015 to respond to your letter.

Please direct all communications concerning the above to Nicholas Dan or Ruth Donnelly of our office.”

23. There is also evidence of an email communication between the plaintiff’s solicitor and the defendant's solicitors yesterday at 5:04pm, to which was attached an affidavit prepared by Mr McClung for the purpose of today's hearing. After sending the email, Mr McClung emailed Mr Cassimatis, the plaintiff’s barrister, to inform him that he had served the defendant’s solicitor with his affidavit by email.

Adjournment application

24. Mr Newton, who appeared on behalf of the defendants before me today, frankly acknowledged that he had only received instructions this morning, shortly prior to the matter being listed for hearing. His instructions extended only to those matters contained in the affidavits on which he sought to rely. Mr Newton sought an adjournment of the plaintiff's notice of motion and proposed that it be adjourned to 2:00pm today to permit the defendant to adduce evidence in better form as to what occurred yesterday afternoon and also adduce evidence, if it be the case, that Ms Landolt has bank cheques available to complete a transfer of the Property.

25. The recitals to the Settlement Deed record that there have been a litany of changes on which dates arranged for completion of the transfer have not been met by the defendant. Furthermore, it was a term of the Settlement Deed that the defendant promised irrevocably to consent to the Court making orders in accordance with the short minutes if the completion did not occur by 3pm on 2 July 2015.

26. The application made by Mr Newton appeared to be modest in that an adjournment for a few hours only was sought. He put all that he could put in the defendant's favour. Nonetheless it was insufficient to persuade me that it was appropriate for me to stand the matter down to 2:00pm. The defendant adduced no evidence to show that it had available the requisite funds to complete. In these circumstances, I did not regard it as either desirable, or fair, to adjourn the matter further.

Consideration

27. I do not accept that the defendant attended the offices of the plaintiff's solicitors at 3pm on 2 July 2015. It appears that Ms Landolt made a last-minute attempt to have her solicitors obtain an extension because she was not in a position to settle on that day. I infer from her evidence to the effect that she will be willing and able to settle on 15 July 2015 that she was in fact not ready on 2 July 2015. There was, in any event, no evidence that she had the wherewithal either on 2 July 2015, or today, to complete the transaction.

28. I regard the defendant’s reliance on Mr McClung’s automatic "out-of-office" reply which was sent at 1.27pm as being both cynical and opportunistic. This assessment does not extend to Mr Newton, who accepted the brief at the last minute and was, in any event, bound by his instructions. It is plain that Mr McClung was in his office ready for settlement. He corresponded with the defendant’s solicitors during the course of 2 July 2015. Between 3pm and 5.04pm, he also prepared an affidavit in these proceedings.

29. I do not regard the “out-of-office” reply as providing any corroboration of the defendant’s evidence that she attended Mr McClung’s office on 2 July 2015 at 3pm. In my view, this "out-of-office" reply indicates no more than that Mr McClung, who was about to go on leave, wished not to be disturbed with further emails regarding non-urgent matters in the last afternoon before his departure.

30. The plaintiff has established that the defendant failed to complete the contract and that the plaintiff was ready and willing to complete. As time was of the essence, the plaintiff was entitled to terminate the contract.

31. In these circumstances, the plaintiff has made out his claim for possession. Although the defendant has irrevocably consented to the orders which I am about to make, in light of the submission made by Mr Newton and the evidence, I do not think it is appropriate for me to hold the defendant to its consent since that would be effectively to grant specific performance of the relevant term of the Settlement Deed. I am satisfied, however, that the plaintiff has established his entitlement to possession of the Property.

Orders

32. I make the following orders:

1. Declare that the land contract dated 29 January 2013 in respect of the land comprised in folio identifier 45/775171 and situated at 267 Friday Creek Road, Upper Orara, New South Wales (the Property) and the four subsequent variations were terminated on 2 July 2015.

2. Give judgment for the plaintiff for immediate possession of the Property.

3. Grant leave to the plaintiff to issue a writ of possession of the Property immediately.

4. List the matter for directions before the Registrar on 7 August 2015.

5. Order the defendant to pay the plaintiff's costs of today.

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Decision last updated: 07 July 2015