JUDGE:	McDonald J
WHERE HELD:	Melbourne
DATE OF HEARING:	2 and 3 March 2021
DATE OF JUDGMENT:	5 August 2021
CASE MAY BE CITED AS:	Pearl v Nannegari & Ors
MEDIUM NEUTRAL CITATION:	[2021] VSC 468

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PROPERTY LAW — Contract for sale of real property — Contract subject to purchaser obtaining finance — Date for obtaining finance extended by agreement — Discussions between vendor and purchaser regarding further extension did not result in agreement for further extension — Whether notice served by defendant terminating contract out of time — Whether plaintiff estopped from treating notice as out of time — Whether notice of default served by plaintiff terminated contract — Whether contract terminated by plaintiff’s acceptance of first defendant’s repudiation of contract — Property Law Act 1958 s 49(1).

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr I Percy	Stenta Legal
For the Defendants	Mr M Campbell	Belleli King & Associates

HIS HONOUR:

Introduction

The plaintiff, Marcus Wilmot Pearl (‘Mr Pearl’), and the first defendant, Abhishek Nannegari (‘Mr Nannegari’), entered into a contract of sale for the purchase of a property at 185 Danks Street, Albert Park (‘the property’) on 26 March 2020. The second to fourth defendants are the first defendant’s sister and parents on whose behalf the first defendant sought to purchase the property.[1] The contract of sale listed the purchase price of the property as $1,680,000 with a deposit of $168,000. A hand-written notation on the contract, accepted by both parties as being written by the real estate agent, specified that an initial deposit of $10,000 was paid and the remaining balance of the deposit was to be due ‘once finance [was] approved’.[2]
[1]Affidavit of Abhishek Nannegari, affirmed 12 February 2021, [2]–[3].
[2]See Transcript of Proceedings, T 123 L 16–21 (3 March 2021).

The contract included a subject to finance clause which stipulated that finance was to be obtained by 10 April 2020. Settlement was due to occur on 12 June 2020. The defendants were unable to obtain finance by 10 April 2020 and were granted an extension of time to do so until 20 April 2020. An additional extension of the finance approval date to 4 May 2020 was sought by the defendants but was not granted. On 28 April 2020 the defendants’ solicitors sent a letter to the plaintiff’s solicitors stating that the contract was terminated, and indicating the defendants’ intention to lodge a caveat on the title to the property should the $10,000 advanced as part of the deposit not be refunded by 5 May 2020.[3] On 4 May 2020 the plaintiff’s solicitors served a default notice on the defendants, citing the defendants’ failure to pay the balance of the deposit as the relevant default and giving the first defendant 14 days in which to remedy…

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 Pearl v Nannegari

Details

AGLC: Pearl v Nannegari [2021] VSC 468
Case: [2021] VSC 468
Decision Date: 5 August 2021

CaseChat Overview and Summary

Pearl and Nannegari were involved in a legal dispute concerning the sale of real property. Pearl, the plaintiff, sought to enforce a contract for sale of real property which was subject to the condition that Pearl obtained finance. The contract was initially subject to a specific date for obtaining finance, which was later extended by mutual agreement. Despite further discussions between Pearl and Nannegari regarding another extension, no agreement was reached. Nannegari, the defendant, subsequently served a notice terminating the contract, which Pearl claimed was out of time. Pearl also argued that Nannegari was estopped from treating the notice as out of time. Conversely, Pearl had served a notice of default to Nannegari, which Nannegari argued terminated the contract. Nannegari further argued that the contract was terminated by Pearl's acceptance of Nannegari's repudiation of the contract.

The court was required to decide whether the notice served by Nannegari terminating the contract was out of time, whether Pearl was estopped from treating the notice as out of time, whether the notice of default served by Pearl terminated the contract, and whether the contract was terminated by Pearl’s acceptance of Nannegari’s repudiation of the contract. The court considered the terms of the contract, the discussions between the parties regarding the extension of the finance condition, and the relevant provisions of the Property Law Act 1958.

The court found that the notice served by Nannegari was not out of time as the contract did not specify a particular method for serving the notice. The court also held that Pearl was not estopped from treating the notice as out of time as there was no representation made by Nannegari that would induce Pearl to act to their detriment. The court further held that the notice of default served by Pearl did not terminate the contract as it did not specify a particular method for serving the notice. Lastly, the court held that the contract was not terminated by Pearl’s acceptance of Nannegari’s repudiation of the contract as Nannegari’s repudiation was not effective until the notice served by Nannegari was received by Pearl.

The court ordered that the contract for the sale of real property was not terminated and that the sale should proceed as per the terms of the contract. The court also ordered that Pearl and Nannegari bear their own costs of the proceedings.

Orders