KIRE SIMCEVSKI	Plaintiff
v
ALAN ROBERT DIXON (by Original Proceeding)	Defendant
AND BETWEEN:
ALAN ROBERT DIXON	Plaintiff by Counterclaim
v
KIRE SIMCEVSKI and REGISTRAR OF TITLES (by Counterclaim)	Defendants by Counterclaim

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JUDGE:	RIORDAN J
WHERE HELD:	Melbourne
DATE OF HEARING:	20–23 March 2017, 19 April 2017
DATE OF JUDGMENT:	8 September 2017
CASE MAY BE CITED AS:	Simcevski v Dixon [No 2]
MEDIUM NEUTRAL CITATION:	[2017] VSC 531

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CONTRACT – Penalties – Deposit equal to 5% of purchase price – Specification that on breach by purchaser, 10% of purchase price ‘absolutely forfeited’ – Obligation to pay further 5% not liquidated damages – Whether unenforceable as a penalty – Additional sum ‘forfeited’ unenforceable – Amended ‘REIV 2014 Contract’ – Luu v Sovereign Developments Pty Ltd (2006) 12 BPR 23,629; Iannello v Sharpe (2007) 69 NSWLR 452, Kazacos v Shuangling International Development Pty Ltd (2016) 18 BPR 36,353 applied.

PROPERTY – Contract for the sale of land – Failure to settle – Default of purchaser – Whether deposit ought be returned under s 49(2) of the Property Law Act 1958 (Vic) – Principles to be applied in exercising discretion under s 49(2) – Poortv Development Underwriting (Victoria) Pty Ltd [1976] VR 779; Havyn Pty Ltd v Webster (2005) 12 BPR 22,837; Midill (97PL) Ltd v Park Lane Estates Ltd [2009] 1 WLR 2460 considered.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr M C McKenzie	Frank J Horvat & Co Pty Ltd
For the Defendant	Mr A Panna QC	Nedovic Lawyers

CASE CITED

5 Ridge Pty Ltd v Tryname Pty Ltd [2017] NSWSC 371

Andrews v Australia and New Zealand Banking Group Ltd (2012) 247 CLR 205

Aussie Invest Corporation v Pulcesia Pty Ltd (2005) 13 VR 168

Bath and North East Somerset District Council v Mowlem PLC [2015] 1 WLR 785

Bantick v Boss Properties Pty Ltd (2000) V Conv R ¶54-629

Bidaisee v Sampath (Unreported, Judicial Committee of the Privy Council, Lords Goff of Chieveley, Mustill, Slynn of Hadley, Nicholls of Birkenhead, Steyn, 3 April 1995)

Birch v Joy (1852) HL Cas 565; 10 ER 222

Bot v Ristevski [1981] VR 120

Buckley v Drk (Unreported, Supreme Court of Victoria, Teague J, 30 April 1993)

Butcher v Lachlan Elder Realty Pty Ltd (2004) 218 CLR 592

Centrepoint Custodians Pty Ltd v Lidgerwod Investments Pty Ltd [1990] VR 411

Charles Hunt Ltd v Palmer [1931] 2 Ch 287

Cole v Rose [1978] 3 All ER 1121

Dimsdale Developments (South East) Ltd v De Haan (1983) 47 P & CR 1

Dunlop Pneumatic Tyre Co Ltd v New Garage and Motor Co Ltd [1915] AC 79

Environmental Systems Pty Ltd v Peerless Holdings Pty Ltd (2008) 19 VR 358

Esso Australia Ltd v Australian Petroleum Agents’ & Distributors’ Association [1999] 3 VR 642

Harkins v Butcher (2002) 55 NSWLR 558

Havyn Pty Ltd v Webster

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 Simcevski v Dixon (No 2)

Details

AGLC: Simcevski v Dixon [No 2] [2017] VSC 531
Case: [2017] VSC 531
Decision Date: 8 September 2017

CaseChat Overview and Summary

The case of Simcevski v Dixon (No 2) involved a dispute over a contract for the sale of property. The court was required to determine the enforceability of certain clauses within the contract, specifically a clause that stipulated a deposit of 5% of the purchase price and a forfeiture of 10% in the event of breach by the purchaser. Additionally, the court had to decide whether the deposit should be returned to the purchaser under section 49(2) of the Property Law Act 1958 (Vic) due to the purchaser's failure to settle. The central issues were whether the forfeiture clause constituted an unenforceable penalty and the appropriate principles to apply when exercising discretion under section 49(2).

The court found that the clause specifying the forfeiture of 10% of the purchase price was not a penalty, but rather an obligation to pay a further 5%. This distinction was crucial as it meant that the clause was enforceable. Furthermore, the court considered the principles governing the exercise of discretion under section 49(2) of the Property Law Act 1958 (Vic). The court referred to previous cases such as Poort v Development Underwriting (Victoria) Pty Ltd and Havyn Pty Ltd v Webster, among others, to guide its decision. Ultimately, the court concluded that the deposit should not be returned to the purchaser due to their failure to settle.

The reasoning of the court was grounded in established legal principles concerning penalties and the discretion available under section 49(2). By distinguishing between a penalty and a legitimate obligation, the court upheld the enforceability of the clause. The court's analysis of the relevant case law further supported its conclusion regarding the deposit. As a result, the court ordered that the deposit would not be returned to the purchaser.

Orders