Nwai Pty Ltd v Johnston - [2005] NSWSC 1368

CITATION:
Nwai Pty Ltd v Johnston & Ors [2005] NSWSC 1368

HEARING DATE(S): 29 July 2005

JUDGMENT DATE :

29 July 2005

JURISDICTION:
Equity Division

JUDGMENT OF:
Windeyer J at 1

DECISION:
Judgment for the plaintiff.

CATCHWORDS:
CONVEYANCING - vendor and purchaser - contract for sale of land - notice to complete given and contract terminated - notice valid despite an obligation of the vendor outstanding that was required to be cured before completion - plaintiff entitled to forfeit deposit - no relief under s55(2A)

LEGISLATION CITED:
Conveyancing Act 1919 s55(2A)

CASES CITED:
Alarm Facilities Pty Ltd v Jackson Constructions Pty Ltd (NSW Court of Appeal, 10 May 1977 unreported)
Coast Securities No 9 Pty Ltd v Alabac Pty Ltd [1984] 1 QdR 25
McNally v Waitzer [1981] 1 NSWLR 294

PARTIES:
Nwai Pty Ltd (Plaintiff)
Paul Ronald Johnston (First Defendant)
Elene Johnston (Second Defendant)

FILE NUMBER(S):
SC 1678 of 2005

COUNSEL:
Mr R Scruby (Plaintiff)
Mr J E Thomson (Defendants)

SOLICITORS:
O'Sullivan Saddington (Plaintiff)
Mullane & Lindsay (Defendants)

LOWER COURT JURISDICTION:

- 7 -

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

WINDEYER J

FRIDAY 29 JULY 2005

1678/05 - NWAI PTY LTD v PAUL RONALD JOHNSTON & ORS

JUDGMENT

1 HIS HONOUR: In this matter the plaintiff seeks to recover the amount of a deposit payable by the purchasers under contract for the sale and purchase of a property being Unit 902, The York, 61 Shortland Esplanade, Newcastle. The contract is dated 7 June 2002. The purchase price payable under the contract was $1,475,000. The contract was a contract for purchase off the plan and when entered into the expected date for registration of the strata plan was 30 March 2004. The contract had a provision under which the vendor was entitled to extend that date if it gave notice six months prior to the original registration date. It gave such notice extending the registration date to 30 September 2004.

2 The contract provided that the purchasers could pay the ten per cent deposit by means of a bond which it did. The contract included provisions as to the requirement for the bond, namely, as to its term, and a provision that if the registration date were extended, then the purchasers after being notified of that must substitute a new deposit guarantee bond with an expiry date no earlier than three months after the extended date. What that meant was that when the registration date was extended to 30 September 2004, the expiry of the bond would have to be 30 December 2004. In fact, the substituted bond was not provided; that was a clear breach of the obligations of the purchasers under the contract.

3 There is a question as to whether or not this failure was a failure to comply with an essential term of the contract, having the result that no notice was required before the vendor was entitled to terminate the contract for breach. In my view, having regard to the provisions…

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 Nwai Pty Ltd v Johnston

Details

AGLC: Nwai Pty Ltd v Johnston [2005] NSWSC 1368
Case: [2005] NSWSC 1368
Decision Date: 29 July 2005

CaseChat Overview and Summary

In the case of Nwai Pty Ltd v Johnston, the dispute arose from a contract for the sale of land. Nwai Pty Ltd, the vendor, had given a notice to complete to Johnston, the purchaser, under the terms of the contract. The contract was terminated upon the giving of this notice. Despite the fact that the vendor had an outstanding obligation to be cured before completion, the notice to complete was deemed valid. The primary legal issue the court had to address was whether the notice to complete was valid and if Nwai Pty Ltd was entitled to forfeit the deposit. The court also considered whether there was any relief available to the purchaser under section 55(2A) of the relevant legislation.

The court determined that the notice to complete was validly given and that Nwai Pty Ltd was entitled to forfeit the deposit. The outstanding obligation of the vendor did not invalidate the notice to complete, as the contract clearly stipulated the conditions under which the notice could be issued. The court found that the purchaser had failed to complete the transaction by the specified date, which triggered the automatic termination of the contract. Consequently, the vendor was entitled to keep the deposit as liquidated damages for the breach. Regarding section 55(2A), the court held that it did not provide any relief to the purchaser in this situation, as the conditions for its application were not met.

The court's decision upheld the forfeiture of the deposit by the vendor and dismissed the purchaser's application for relief under section 55(2A). The court emphasised the importance of adhering to the terms of a contract for the sale of land and the consequences of failing to complete the transaction as agreed. The final orders of the court confirmed that Nwai Pty Ltd was entitled to retain the deposit and that the contract was terminated. No relief was granted to the purchaser under the legislation cited.

Orders