Rapatten P/L v JJ Anderson
[1998] QSC 93
•14 May 1998
IN THE SUPREME COURT
OF QUEENSLAND
No. 4026 of 1998
Brisbane
Before Mr Justice Muir
[Rapatten P/L v J.J. Anderson & Anor]
IN THE MATTER of the Property Law Act 1974
and
IN THE MATTER of an application by RAPATTEN PTY LTD ACN 006 0 702 356 pursuant to s.70 of the Property Law Act 1974
and
IN THE MATTER of a contract between RAPATTEN PTY LTD and JOHN JOSEPH ANDERSON and SONYA MARGARET ANN ANDERSON as trustees for the ANDERSON FAMILY TRUST
REASONS FOR JUDGMENT - MUIR J.
Judgment delivered : 14 May 1998
CATCHWORDS: CONTRACT - subdivision of land - express and implied terms.
Counsel:Mr Crowe for the applicant
Mr Hinson for the respondents
Solicitors: Bain Gasteen for the applicant
Dunhill Madden Butler for the respondents
Hearing Date: 12 May 1998
IN THE SUPREME COURT
OF QUEENSLAND
No. 4026 of 1998
Brisbane
Before Mr Justice Muir
[Rapatten P/L v J.J. Anderson & Anor]
IN THE MATTER of the Property Law Act 1974
and
IN THE MATTER of an application by RAPATTEN PTY LTD ACN 006 0 702 356 pursuant to s.70 of the Property Law Act 1974
and
IN THE MATTER of a contract between RAPATTEN PTY LTD and JOHN JOSEPH ANDERSON and SONYA MARGARET ANN ANDERSON as trustees for the ANDERSON FAMILY TRUST
REASONS FOR JUDGMENT - MUIR J.
Judgment delivered : 14 May 1998
Introductory
The applicant Rapatten Pty Ltd (“the purchaser”) is the purchaser under a contract of sale and purchase (“the contract”) between itself and the respondents John and Sonya Anderson (“the vendors”). Under the contract the vendors agreed to sell and the purchaser agreed to purchase one parcel of land of some 10 acres 3 roods 15 perches and another of 2.98 hectares for a purchase price of $2,310,000. Such land (“the land”) was acquired by the purchaser, to the knowledge of the vendors, for development as a residential subdivision and subsequent sale. Included within the land and fronting an existing road, there is an area of land on which the vendors had erected a dwelling house and garage (“the garage”). The garage is a substantial structure consisting of carport, work room, roller door garage area, shower and toilet facilities. Located in the work room are facilities for the vacuum maid system built into the house, as well as the power board for the house's electricity, its telephone connection and main control panel for the watering system used in the house yard.
A condition of the contract was that the purchaser obtain subdivisional approval generally in accordance with the plan annexed to the contract and marked “B” (“plan B”). Plan B made provision for the subdivision of the land into a number of lots including a lot of 2,280 m2 in area bounded on one side by the existing road and on another by a proposed new road. A plan annexed to the contract and marked “K” shows the dwelling house located in approximately the centre of that proposed new lot (“lot 3” or the “house block”). This plan does not show the location of the garage. Nor does plan B. The matter which gives rise to the dispute between the parties is that the garage is located partly on lot 3 and lot 45, a lot adjoining and immediately to the north of lot 3 which also has a frontage onto the proposed new road. An additional complication is that there is some encroachment by eaves and guttering of the garage onto the area of the proposed new road.
The contract provides that, upon creation of a separate title for lot 3, the parties will enter into a contract under which that lot will be sold by the purchaser to the vendor to a nominal consideration.
Settlement has taken place under the contract but the house block has not been re-transferred by the purchaser to the vendors. Construction of the proposed subdivision has commenced. In the course of construction employees or servants of the purchaser sought to demolish the garage but the vendors asserted that it would be unlawful for them to do so.
The respective contentions of the parties
The purchaser contends that upon a proper construction of the contract the “garage is to be demolished”. The vendors contend that they are entitled to a transfer of lot 3 together with improvements including the garage, except to the extent that the garage encroaches onto proposed lot 45. They contend that this conclusion flows from a number of considerations including -
the area of lot 3 is defined in the contract as being “a total area of 2333 square metres (more or less)”;
subdivisional approval is to be obtained “generally in accordance with the plan”;
there is no particular difficulty in the purchaser relocating the boundaries of lot 3 so as to ensure no encroachment by parts of the garage onto the new road;
those provisions of the contract which, in effect, prevent the purchaser from interfering with the vendors' enjoyment of lot 3.
Relevant provisions of the contract
“5.3.The Buyer covenants that it will pursue the rezoning and subdivisional approval to a conclusion with due diligence and will comply with all Brisbane City Council conditions of the rezoning and subdivisional approval and will at the cost of the Buyer cause:
(a)a plan of subdivision subdividing the property generally in accordance with the plan annexed to this Contract and marked ‘B’ to be prepared and drawn;
(b)all works associated with the rezoning and subdivisional approval relating to the property to be completed;
(d)the plan of subdivision to be sealed by the Brisbane City Council; and
(e)the plan of subdivision to be lodged and registered with the Department of Natural Resources and separate indefeasible titles created for the lots subdivided by the plan of subdivision.
12.1.The Buyer must within nine months following completion of this Contract (the ‘transfer back period’) or within the transfer back period as extended in accordance with Special Condition 12.2 transfer title in the house block to the Seller. The consideration for the transfer of the house block from the Buyer to the Seller is $1.00. To this end, the Buyer is to:
(i)perform all works required to obtain a separate title for the house block and to fully service the house block;
(ii)cause a plan of subdivision to be prepared, sealed by the Brisbane City Council and registered at the Department of Natural Resources generally in accordance with the plan annexed to this Contract and marked ‘B’; and
(iii)cause a separate title to be created for the house block.
The seller shall raise no objection if the house block is encumbered by way of easement etc in favour of a statutory body.”
Clause 1.1 provides -
“For the purpose of this Contract ‘house block’ means the land hatched in red on the plan marked Annexure ‘B’ hereto comprising a total area of 2333 square metres (more of less).”
“12.3The Buyer will within 2 business days of a separate indefeasible title being created for the house block deliver to the Seller or the Seller's Solicitors a Contract in the form of the Contract annexed to this Contract marked ‘F’ (‘the house block contract’). The Seller will sign or cause the Seller's nominee to sign the house block contract as buyer within 2 business days of receiving the house block contract from the Buyer. The parties are authorised to complete the house block contract as follows: ...
15.1The Buyer will allow the Seller (or any other person or persons nominated by the Seller) to remain in possession of the house block after the Settlement Date.
15.2The Buyer indemnifies and shall keep indemnified the Seller against any damage, loss, or expense caused or contributed to by the Buyer its servants or agents to the dwelling house located on the house block.
15.3The Buyer shall not in performing its obligations under this Contract do or suffer to be done any act, matter or thing which is or may become a nuisance, damage, annoyance or inconvenience to the Seller in its possession of the house block, provided that the Seller acknowledges that there shall be construction activity (including noise & soil disturbance) resulting therefrom & the seller will raise no objection thereto.
...
15.10The Buyer must ensure that if required by the Seller there are temporary connections for the house block to maintain the supply of water, electricity and telephone services to the house block.
15.11The Buyer must ensure that after Settlement Date the Seller is given reasonable pedestrian and vehicular access to and from the house block to either Beenleigh Road or Jack Place which are identified on the plan marked Annexure ‘B’.”
Clause 1.5 provides -
“For the purpose of this Contract ‘dwelling house’ means the building hatched in blue on the plan marked Annexure ‘K’ hereto.”
Annexure “K” shows lot 3 with the rectangular site of a dwelling house marked blue roughly in its centre. No other improvements on lot 3 are identified on the plan.
“20.1The Seller must prior to settlement of the house block contract erect along the northern and southern boundaries of the house block a good quality timber paling fence 6 feet in height along the northern and southern boundaries but tapering in height from the alignment of the dwelling house on the house block to 3 foot in height at each end of the northern and southern boundaries of the house block. The Seller must prior to settlement of the house block contract erect along the western and eastern frontages of the house block a white picket fence which can be of a height less than 3 feet. All palings shall face the road or neighbouring lots (ie not towards the dwelling house).”
Construction of the contract
The plan used for the purposes of identifying the “house block”, plan B, is identical to the plan which is Ex. A to a deed annexed to the contract. One can see from Ex. A an area of 2,280 m2 marked on the proposed lot 3. Under cl.5.3 the purchaser had an obligation to prepare a plan of subdivision generally in accordance with plan B and to cause that plan to be sealed by the Brisbane City Council. It is not contended by the vendors that the plan in fact prepared was not “generally in accordance with” plan B. Its vice, as seen by the vendors, is that, if drawn differently, it could have ensured that there was no encroachment by the garage onto the proposed new road.
Was there an express or implied obligation on the part of the purchaser to prepare a plan of subdivision to achieve such an objective? In my view, the vendors' contentions face two significant threshold difficulties. The first is that the contract appears to have left the purchaser, perhaps not unexpectedly, with the obligation of preparing the final plan of subdivision and of selecting the precise location of boundaries of the lots in the proposed subdivision. Secondly, on any view of the matter, the contract (by clause 5 and plan B) contemplated that the boundary between lot 3 and lot 45 would run through the garage so that a substantial part of the garage would be within lot 45.
Once it is accepted that a substantial part of the garage would be located on the land not to be re-transferred to the vendors and that the purchaser was entitled to unfettered use and occupation of such land, it is difficult to conclude that there is an express or implied obligation on the purchaser to draw the boundaries of lot 3 in such a way as to ensure that the part of the garage not on lot 45 falls entirely within the boundaries of lot 3.
In my view, the contrary is in fact the position. Clause 12.1 specifically identifies a parcel of land, the house block, which must be the subject of separate title and re-transfer. The clause is not concerned with improvements on that parcel of land. Clause 15 is concerned to protect the vendors in their use and enjoyment of the house block. It is significant that the indemnity provided in cl.15.2 by the purchaser to the vendors in respect of any damage, loss or expense is limited to the dwelling house only. By implication, the vendors have no such rights in respect of the garage.
The wording of cl.15.3 is sufficiently broad to encompass damage or destruction to the garage. That clause, however, must be read together with the other provisions which I have already discussed, such as clause 5.3 which provides the obligation to abstain subdivisional approval in relation to plan B. Other provisions which are relevant are clauses 15.10 and 20.1. The former contemplates a disruption, or perhaps more accurately, alteration to the services to lot 3 and the former proceeds on the assumption that it will be possible to fence all the boundaries of lot 3. Those provisions, in my view, make it plain that the vendors are not entitled to have the garage remain intact. The vendors' argument concedes that the purchaser has a right to vacant possession (ie, possession free from encroachment by the garage) of proposed lot 45. I see no reason in principle why the purchaser does not have a right to ensure that the garage does not encroach beyond lot 3 onto any other part of the land. If the vendors' contentions are to be accepted, one would think that the purchaser would have an obligation to accommodate as much as possible of the garage within the boundaries of lot 3 and, to that end, to adjust to boundaries of lot 3, if possible.
If any obligation to draw lot boundaries in such a way as to limit the adverse affectation of the garage exists, it must arise out of an implied term.
In my view no such term would “go without saying” or “be necessary to give business efficacy to the contract”: c.f. Codelfa Construction Pty Ltd v State Rail Authority of N.S.W. (1981-1982) 149 CLR 337 at 347.
On the other hand, in my view, a term is to be implied in the contract that the purchaser may do all such things as are reasonably necessary on its part to obtain a plan of subdivision which meets the requirements of cl.5.3 of the contract and to ensure that it is able to sell lots in the proposed subdivision free from any encroachment by the garage.
The purchaser also argued that demolition of the garage was necessary to comply with the terms and conditions of the subdivisional approval and that, if demolition of the garage did not take place, the Council would not seal the plan of subdivision. Its principal argument was that demolition was required to comply with the condition of subdivisional approval that required removal of buildings so as to “ensure that only one residential building remains on each proposed allotment/lot”.
I am not satisfied that the garage is a “residential building” for relevant purposes but it is not necessary for me to express a concluded view on that point.
It was conceded in argument that the plan of subdivision would not be sealed in circumstances in which a lot boundary ran through a building. That, was probably the basis, or part of the basis, for the concession that the purchaser was entitled to demolish that part of the garage located on lot 45.
Proposed orders
I do not propose to make a declaration in the unqualified terms sought by the applicant. Instead, the declaration and orders I propose to make, subject to first hearing argument by the parties, are as follows:-
Declare that the applicant is entitled to demolish the garage referred to in the summons to the extent necessary to ensure that -
(a)there is no encroachment by the garage onto lot 45 or the proposed new road identified on drawing C180-13B, Ex. MWH, to the affidavit of Michael Walter filed herein by leave on 12 May 1998; and
(b)there is compliance with any lawful requirement of the Town Plan of the City of Brisbane, rezoning or subdivisional approvals in respect of the land referred to in the summons and/or by-laws of the Brisbane City Council;
Order that the respondents pay the costs of and incidental to the application to be taxed.
Liberty to apply.
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