Nichols Constructions P/L v Intensia P/L - [2017] QDC 319

DISTRICT COURT OF QUEENSLAND

CITATION:

Nichols Constructions P/L v Intensia P/L [2017] QDC 319

PARTIES:

NICHOLS CONSTRUCTIONS PTY LTD
(ACN 010 763 505)
(plaintiff)

v

INTENSIA PTY LTD (ACN 144 893 363)
(defendant)

FILE NO/S:

(Southport) D20/13

DIVISION:

PROCEEDING:

Civil trial

ORIGINATING COURT:

District Court of Queensland

DELIVERED ON:

22 December 2017

DELIVERED AT:

Brisbane

HEARING DATE:

12, 13, 14 and 15 December 2016 and written submissions to 23 May 2017

JUDGE:

Andrews SC DCJ

ORDER:

1.   Declare that the plaintiff is entitled to forfeit the deposit of $172,500.

2.   The counterclaim is dismissed.

3.   The parties are at liberty to apply in respect of interest and costs.

CATCHWORDS:

CONTRACT – RESCISSION – Where contract for sale of land – where land contaminated with asbestos after contract – whether seller knew land would become contaminated – whether breach of warranty that seller not aware of any facts or circumstances that may lead to the land as being classified as contaminated land within the meaning of the Environmental Protection Act 1994

CONTRACT – RESCISSION – Where seller warrants there is no outstanding obligation to give a notice under the Environmental Protection Act 1994 of notifiable activity being conducted on the land – where removal of asbestos from buildings into a bin for transport away from land sold – whether breach of warranty – whether asbestos was being “disposed of on the land” within the meaning of the Environmental Protection Act 1994

CONTRACT – RESCISSION – ESSENTIAL TERM – Whether obligation not to do anything regarding the property that may significantly alter it or result in later expense for the buyer is an essential term – whether by reason of asbestos contamination the seller breached that obligation – whether that breach gave the buyer a right to terminate

CONTRACT – RESCISSION – Where sewer line undisclosed on title and by contract – whether material error, encroachment or mistake – whether material to the buyer – whether material objectively – whether buyer entitled to terminate

STATUTES – INTERPRETATION – Where removal of asbestos from buildings into a bin for transport away from land – whether a “notifiable activity is being carried out on the land” within the meaning of the Environmental Protection Act 1994

Environmental Protection Act 1994 (Qld) section 371, 373, 374, schedule 3

Frankel v Paterson [2015] NSWSC 1307

Kelly v Arkdev Pty Ltd [2005] QSC 318

Liverpool Holdings Ltd v Gordon Lynton Car Sales Pty Ltd [1978] Qd R 279

Tarbet Investments Pty Ltd v Overett [1983] 1 Qd R 280

Travinto Nominees Pty Ltd v Vlattas (1973) 129 CLR 1

COUNSEL:

Thomae for the plaintiff

Charles Wilson for the defendant

SOLICITORS:

Parker Simmonds Solicitors & Lawyers for the plaintiff

Small Myers Hughes for the defendant

Issues

A buyer of land gave notice of termination of contract prior to settlement. The notice alleged asbestos contamination of the land. The primary issue is whether the buyer’s termination was valid. It maintains four discrete bases for validity of its termination.

The buyer…

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.

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Details

Case: [2017] QDC 319
Decision Date: 22 December 2017

CaseChat Overview and Summary

Nichols Constructions P/L, the plaintiff, initiated legal proceedings against Intensia P/L, the defendant, to seek rescission of a contract for the sale of land based on various grounds. The contract had been executed, but prior to settlement, the land was discovered to be contaminated with asbestos. The parties disputed whether the seller had knowledge of the contamination and whether the removal of asbestos from the buildings constituted a notifiable activity under the Environmental Protection Act 1994. Furthermore, the contract contained a warranty that there was no outstanding obligation to notify the authorities of any notifiable activity being conducted on the land. The court had to decide whether this warranty had been breached. Additionally, the contract included an essential term that the seller would not undertake any actions regarding the property that could significantly alter it or result in future expenses for the buyer. The plaintiff argued that the contamination constituted a breach of this term, entitling them to terminate the contract. Lastly, the title and contract did not disclose a sewer line running through the property, and the plaintiff sought to establish whether this omission constituted a material error, encroachment, or mistake that warranted rescission.

The court examined whether the seller had knowledge of the asbestos contamination and if they breached the warranty by removing asbestos from the buildings into a bin for transport. The court also considered whether this activity constituted a "notifiable activity" under the Environmental Protection Act 1994. The court assessed whether the omission of the sewer line on the title and in the contract constituted a material error, encroachment, or mistake, and whether the buyer was entitled to terminate the contract on this basis. Additionally, the court examined whether the obligation not to alter the property in a way that would result in future expenses for the buyer was an essential term of the contract, and if the seller breached this term by allowing the contamination to occur.

The court found that the seller did not know about the asbestos contamination and, therefore, did not breach the warranty regarding the disposal of asbestos. The removal of asbestos from the buildings into a bin for transport did not constitute a "notifiable activity" under the Environmental Protection Act 1994. The omission of the sewer line on the title and in the contract was not a material error, encroachment, or mistake, and did not entitle the buyer to terminate the contract. The obligation not to alter the property in a way that would result in future expenses for the buyer was not considered an essential term of the contract. Consequently, the court ruled in favour of the defendant, dismissing the plaintiff's claim for rescission.

The court declared that the plaintiff is entitled to forfeit the deposit of $172,500. The counterclaim was dismissed, and the parties were at liberty to apply in respect of interest and costs.

Orders

Orders of the court

1. Declare that the plaintiff is entitled to forfeit the deposit of $172,500.

2. The counterclaim is dismissed.

3. The parties are at liberty to apply in respect of interest and costs.

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

Full text does not contain this section.

Ratio Decidendi

Legal Principle Established

Full text does not contain this section.

CITATION:	Nichols Constructions P/L v Intensia P/L [2017] QDC 319
PARTIES:	NICHOLS CONSTRUCTIONS PTY LTD (ACN 010 763 505) (plaintiff) v INTENSIA PTY LTD (ACN 144 893 363) (defendant)
FILE NO/S:	(Southport) D20/13
DIVISION:
PROCEEDING:	Civil trial
ORIGINATING COURT:	District Court of Queensland
DELIVERED ON:	22 December 2017
DELIVERED AT:	Brisbane
HEARING DATE:	12, 13, 14 and 15 December 2016 and written submissions to 23 May 2017
JUDGE:	Andrews SC DCJ
ORDER:	1. Declare that the plaintiff is entitled to forfeit the deposit of $172,500. 2. The counterclaim is dismissed. 3. The parties are at liberty to apply in respect of interest and costs.
CATCHWORDS:	CONTRACT – RESCISSION – Where contract for sale of land – where land contaminated with asbestos after contract – whether seller knew land would become contaminated – whether breach of warranty that seller not aware of any facts or circumstances that may lead to the land as being classified as contaminated land within the meaning of the Environmental Protection Act 1994 CONTRACT – RESCISSION – Where seller warrants there is no outstanding obligation to give a notice under the Environmental Protection Act 1994 of notifiable activity being conducted on the land – where removal of asbestos from buildings into a bin for transport away from land sold – whether breach of warranty – whether asbestos was being “disposed of on the land” within the meaning of the Environmental Protection Act 1994 CONTRACT – RESCISSION – ESSENTIAL TERM – Whether obligation not to do anything regarding the property that may significantly alter it or result in later expense for the buyer is an essential term – whether by reason of asbestos contamination the seller breached that obligation – whether that breach gave the buyer a right to terminate CONTRACT – RESCISSION – Where sewer line undisclosed on title and by contract – whether material error, encroachment or mistake – whether material to the buyer – whether material objectively – whether buyer entitled to terminate STATUTES – INTERPRETATION – Where removal of asbestos from buildings into a bin for transport away from land – whether a “notifiable activity is being carried out on the land” within the meaning of the Environmental Protection Act 1994 Environmental Protection Act 1994 (Qld) section 371, 373, 374, schedule 3 Frankel v Paterson [2015] NSWSC 1307 Kelly v Arkdev Pty Ltd [2005] QSC 318 Liverpool Holdings Ltd v Gordon Lynton Car Sales Pty Ltd [1978] Qd R 279 Tarbet Investments Pty Ltd v Overett [1983] 1 Qd R 280 Travinto Nominees Pty Ltd v Vlattas (1973) 129 CLR 1
COUNSEL:	Thomae for the plaintiff Charles Wilson for the defendant
SOLICITORS:	Parker Simmonds Solicitors & Lawyers for the plaintiff Small Myers Hughes for the defendant