Smith v Parfit
[2005] WASC 250
SMITH & ANOR -v- PARFIT & ORS [2005] WASC 250
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [2005] WASC 250 | |
| 15/11/2005 | |||
| Case No: | CIV:1593/2005 | 24 OCTOBER 2005 | |
| Coram: | MASTER SANDERSON | 25/10/05 | |
| 17 | Judgment Part: | 1 of 1 | |
| Result: | Caveat and injunction extended | ||
| B | |||
| PDF Version |
| Parties: | PHILIP STEPHEN SMITH DOROTHY ANNE SMITH CHRISTOPHER PARFIT LIEN DIEP HONG REGISTRAR OF TITLES LOUISE JACQUELINE ATKINSON MICHAEL SIMEON ARNDT ANGELA LEAH ARNDT ANDREW RAYMOND NEATE SALLY MARIE LARDER CHRISTINE ANN BLONDEL DAVID ROBIN WATT GARY JOHN SMITH ELIZABETH FLORENCE SMITH ALBERT LESLIE MORGAN NICHOLAS JOHN HARRADINE LISA JAYNE HARRADINE |
Catchwords: | Practice and procedure Application for extension of caveat and an interlocutory injunction Turns on own facts |
Legislation: | Nil |
Case References: | Custom Credit Corp Ltd v Ravi Nominees Pty Ltd (1992) 8 WAR 42 Total Marine Services Pty Ltd v Waller [2002] WASC 8 A v Hayden (No 1) (1984) 56 ALR 73 Adderley v Dixon (1824) 1 Sim & St 607 American Cyanamid Co v Ethicon Ltd [1975] AC 396 Carr v J A Berriman Pty Ltd (1953) 89 CLR 327 Castlemaine Tooheys Ltd v South Australia (1986) 161 CLR 148 Doradel Holdings Pty Ltd v Tiger Kart Club Inc [2003] WASC 221 Evans Marshall & Co Ltd v Bertola SA [1973] 1 WLR 349 Films Rover International Ltd v Cannon Film Sales Ltd [1987] 1 WLR 670 Helm Maritime Corp v Coplex Resources NL [1999] WASC 21 Kirk Contractors Pty Ltd v Lasnom Pty Ltd, unreported; SCt of WA (Owen J); Library No 950262; 31 May 1995 Kuper v Keywest Constructions Pty Ltd (1990) 3 WAR 419 Mott v Mount Edon Goldmines (Australia) Ltd (1994) 12 ACLC 319 State Transport Authority v Apex Quarries Ltd [1988] VR 187 Treweeke v Wolseley Road Pty Ltd (1973) 128 CLR 274 Tropical Traders Ltd v Goonan (1964) 111 CLR 41 |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
- IN CHAMBERS
- DOROTHY ANNE SMITH
Plaintiffs
AND
CHRISTOPHER PARFIT
LIEN DIEP HONG
First Defendants
REGISTRAR OF TITLES
Second Defendant
(Page 2)
FILE NO/S : CIV 1596 of 2005 MATTER : application pursuant to s 138C of the Transfer of Land Act 1893 in relation to Lot 7 on Strata Plan 45906
BETWEEN : LOUISE JACQUELINE ATKINSON
- Plaintiff
AND
CHRISTOPHER PARFIT
LIEN DIEP HONG
First Defendants
REGISTRAR OF TITLES
Second Defendant
BETWEEN : MICHAEL SIMEON ARNDT
- ANGELA LEAH ARNDT
Plaintiffs
AND
CHRISTOPHER PARFIT
LIEN DIEP HONG
First Defendants
REGISTRAR OF TITLES
Second Defendant
(Page 3)
FILE NO/S : CIV 1598 of 2005 MATTER : application pursuant to s 138C of the Transfer of Land Act 1893 in relation to Lot 5 on Strata Plan 45906
BETWEEN : ANDREW RAYMOND NEATE
- SALLY MARIE LARDER
Plaintiffs
AND
CHRISTOPHER PARFIT
LIEN DIEP HONG
First Defendants
REGISTRAR OF TITLES
Second Defendant
BETWEEN : CHRISTINE ANN BLONDEL
- DAVID ROBIN WATT
Plaintiffs
AND
CHRISTOPHER PARFIT
LIEN DIEP HONG
First Defendants
REGISTRAR OF TITLES
Second Defendant
(Page 4)
FILE NO/S : CIV 1601 of 2005 MATTER : application pursuant to s 138C of the Transfer of Land Act 1983 in relation to Lot 8 on Strata Plan 45906
BETWEEN : GARY JOHN SMITH
- ELIZABETH FLORENCE SMITH
Plaintiffs
AND
CHRISTOPHER PARFIT
LIEN DIEP HONG
First Defendants
REGISTRAR OF TITLES
Second Defendant
BETWEEN : ALBERT LESLIE MORGAN
- Plaintiff
AND
CHRISTOPHER PARFIT
LIEN DIEP HONG
First Defendants
REGISTRAR OF TITLES
Second Defendant
(Page 5)
FILE NO/S : CIV 1604 of 2005 MATTER : application pursuant to s 138C of the Transfer of Land Act 1893 in relation to Lot 10 on Strata Plan 45906
BETWEEN : NICHOLAS JOHN HARRADINE
- LISA JAYNE HARRADINE
Plaintiffs
AND
CHRISTOPHER PARFIT
LIEN DIEP HONG
First Defendants
REGISTRAR OF TITLES
Second Defendant
Catchwords:
Practice and procedure - Application for extension of caveat and an interlocutory injunction - Turns on own facts
Legislation:
Nil
Result:
Caveat and injunction extended
(Page 6)
Category: B
Representation:
CIV 1593 of 2005
Counsel:
Plaintiffs : Mr R C Ioppolo
First Defendants : Mr P J Hannan
Second Defendant : No appearance
Solicitors:
Plaintiffs : Wojtowicz Kelly
First Defendants : Tottle Partners
Second Defendant : No appearance
CIV 1596 of 2005
Counsel:
Plaintiff : Mr R C Ioppolo
First Defendants : Mr P J Hannan
Second Defendant : No appearance
Solicitors:
Plaintiff : Wojtowicz Kelly
First Defendants : Tottle Partners
Second Defendant : No appearance
(Page 7)
CIV 1597 of 2005
Counsel:
Plaintiffs : Mr R C Ioppolo
First Defendants : Mr P J Hannan
Second Defendant : No appearance
Solicitors:
Plaintiffs : Wojtowicz Kelly
First Defendants : Tottle Partners
Second Defendant : No appearance
CIV 1598 of 2005
Counsel:
Plaintiffs : Mr R C Ioppolo
First Defendants : Mr P J Hannan
Second Defendant : No appearance
Solicitors:
Plaintiffs : Wojtowicz Kelly
First Defendants : Tottle Partners
Second Defendant : No appearance
CIV 1600 of 2005
Counsel:
Plaintiffs : Mr R C Ioppolo
First Defendants : Mr P J Hannan
Second Defendant : No appearance
Solicitors:
Plaintiffs : Wojtowicz Kelly
First Defendants : Tottle Partners
Second Defendant : No appearance
(Page 8)
CIV 1601 of 2005
Counsel:
Plaintiffs : Mr R C Ioppolo
First Defendants : Mr P J Hannan
Second Defendant : No appearance
Solicitors:
Plaintiffs : Wojtowicz Kelly
First Defendants : Tottle Partners
Second Defendant : No appearance
CIV 1602 of 2005
Counsel:
Plaintiff : Mr R C Ioppolo
First Defendants : Mr P J Hannan
Second Defendant : No appearance
Solicitors:
Plaintiff : Wojtowicz Kelly
First Defendants : Tottle Partners
Second Defendant : No appearance
CIV 1604 of 2005
Counsel:
Plaintiffs : Mr R C Ioppolo
First Defendants : Mr P J Hannan
Second Defendant : No appearance
Solicitors:
Plaintiffs : Wojtowicz Kelly
First Defendants : Tottle Partners
Second Defendant : No appearance
(Page 9)
Case(s) referred to in judgment(s):
Custom Credit Corp Ltd v Ravi Nominees Pty Ltd (1992) 8 WAR 42
Total Marine Services Pty Ltd v Waller [2002] WASC 8
Case(s) also cited:
A v Hayden (No 1) (1984) 56 ALR 73
Adderley v Dixon (1824) 1 Sim & St 607
American Cyanamid Co v Ethicon Ltd [1975] AC 396
Carr v J A Berriman Pty Ltd (1953) 89 CLR 327
Castlemaine Tooheys Ltd v South Australia (1986) 161 CLR 148
Doradel Holdings Pty Ltd v Tiger Kart Club Inc [2003] WASC 221
Evans Marshall & Co Ltd v Bertola SA [1973] 1 WLR 349
Films Rover International Ltd v Cannon Film Sales Ltd [1987] 1 WLR 670
Helm Maritime Corp v Coplex Resources NL [1999] WASC 21
Kirk Contractors Pty Ltd v Lasnom Pty Ltd, unreported; SCt of WA (Owen J); Library No 950262; 31 May 1995
Kuper v Keywest Constructions Pty Ltd (1990) 3 WAR 419
Mott v Mount Edon Goldmines (Australia) Ltd (1994) 12 ACLC 319
State Transport Authority v Apex Quarries Ltd [1988] VR 187
Treweeke v Wolseley Road Pty Ltd (1973) 128 CLR 274
Tropical Traders Ltd v Goonan (1964) 111 CLR 41
(Page 10)
1 MASTER SANDERSON: These eight actions concern the purchase "off the plan" of certain units on a property conveniently described as Strata Plan 45906 ("the Property"). The facts in relation to all of these eight actions are slightly different, but it is possible, by reference to one action only, to outline facts which are common to all. The slight differences in the facts do not alter the result of each application and I made the same orders in each matter.
2 Each of these actions was commenced by originating summons. The summons sought an order that the caveats in each action be extended until further order. Having issued the originating process, the plaintiffs then sought, by way of chamber summons, an interim order extending the caveat. Those applications came on before Justice Simmonds on 2 June 2005. His Honour granted the order and made further programming directions allowing for reconsideration of the interim order at a later date. On 29 September 2005 the plaintiffs applied for interlocutory injunctions. These injunctions sought to restrain the first defendants from granting any leasehold interest in the property the subject of the caveats pending determination of the questions raised by the application to extend the operation of the caveats.
3 This matter came on before me on 30 September 2005 when I granted the injunctions. At that hearing I suggested to the parties that the question of whether the caveats ought be maintained and the question of whether the injunctions ought be continued could be dealt with at one hearing. That hearing took place on 24 October 2005. After hearing argument, I reserved my decision until the following day. On 25 October 2005 I indicated to the parties that I was satisfied the caveats ought be maintained until further order and that the injunctions ought also be maintained. I made these orders conditional in two respects. I will deal with the conditions and the reason why they were imposed below. I also indicated to the parties that I would provide written reasons for my decision. These are those reasons.
4 By dealing with one action CIV 1593 of 2005 it is possible to indicate why I made the orders I did in all the actions. The first defendants are the registered proprietors of the Property. The Property has been developed into a number of strata titled units. Each of the strata title lots are contained in Strata Plan 45906. The development on the Property is called "George Mews". The Property was developed with a finance facility obtained from Bendigo Bank. The development and financing were budgeted on the basis that revenue from the sale of the units would be used to service the bank facility. The funds advanced by
(Page 11)
- Bendigo Bank were secured by, inter alia, a first registered mortgage over the Property. This was mortgage number I574751 registered on 31 July 2003. It is common ground between the parties that the units were sold "off the plan" before the construction of the units was completed and before the issue of the individual strata titles.
5 On 24 October 2003 Mr and Mrs Smith (who for present purposes I will refer to as "the plaintiffs") made a written offer to purchase Unit 14 which was to be constructed on the Property. On 28 October 2003 that offer was accepted. A copy of the offer and acceptance appears as part of Annexure "PSS1" to the affidavit of Philip Stephen Smith sworn 30 May 2005. Throughout the proceedings the document which appears as "PSS1" and which includes the offer and acceptance, is referred to as the "Preliminary Contract". I will adopt that nomenclature.
6 The offer and acceptance refers to Unit 14 and specifies a purchase price of $199,500. The purchase was subject to finance. The lender was said to be the Commonwealth Bank and the latest time for approval of finance was 4 pm on 25 November 2003. The amount of the loan was $210,000. Condition 4 of the offer and acceptance referred to additional conditions set out in Annexures "A and B". Annexure "A" sets out seven conditions which form part of the offer and acceptance and consequently the contract between the parties. Annexure "B" sets out the basic specifications for the Unit and various plans and drawings. Annexure "B" is not relevant to this dispute. But Annexure "A" is of some importance.
7 Clause 1(a) of Annexure "A" is in the following terms:
"The parties acknowledge that this contract constitutes a preliminary agreement between the parties which is to be confirmed and ratified by the execution of a further contract ('Formal Contract') which must be executed by the parties within 180 days of the date of this contract failing which this contract will automatically terminate."
8 Clause 6 of Annexure "A" specifies that conditions 2(4), 5(2), 7(2), 8, 11, 12(1) to (11) and 16 of the General Conditions shall not apply to the Preliminary Contract or the Formal Contract. It is to be noted that under cl 3 of the offer and acceptance, the Preliminary Contract between the parties was said to incorporate the 2000 Joint Form of General Conditions for the Sale of Land "so far as they are not varied by or inconsistent with the express terms" of the offer and acceptance. Clearly then, where there was conflict between the Joint Form and the Preliminary Contract as
(Page 12)
- evidenced by the offer and acceptance and the annexures thereto, the Preliminary Contract would prevail.
9 The plaintiffs did not obtain finance by 25 November 2003. They did eventually obtain finance but that did not happen until late December 2003. It is relevant to this application to look briefly at the contractual consequences of the plaintiffs' failure to obtain the finance. Finance is dealt with generally in cl 1 of the conditions contained on the offer and acceptance. Clause 1.1 says that the contract is conditional upon finance approval being obtained before the "Latest Time". As I have indicated, this Latest Time was 25 November 2003. Clause 1.3 is in the following terms:
"If on or before the Latest Time:
(a) the Purchaser is notified by the Lender that the application for Finance Approval is rejected; or
(b) no Finance Approval is obtained then the Purchaser shall immediately notify the Vendor or the Vendor's Agent of such rejection or no receipt as the case may be, and provide evidence in writing of the rejection."
10 The plaintiffs did not comply with the requirements of cl 1.3 of the offer and acceptance. That failure on the plaintiffs leads into cl 1.5. Clause 1.5 relevantly reads as follows:
"If the Purchaser fails to notify the Vendor or the Vendor's Agent in accordance with … 1.3 the Purchaser shall be in default and the Vendor may without prejudice to any other remedies and rights available immediately terminate the Contract by notice in writing to the Purchaser."
11 For the sake of completeness, I ought also make reference to cl 1.6. It is in the following terms:
"This clause shall operate for the benefit of both the Vendor and the Purchaser except that the Purchaser by waiving the Purchaser's rights pursuant to this clause at any time before the Latest Time shall be deemed to have received Finance Approval."
12 Given these provisions of the offer and acceptance, the plaintiffs then, as at 26 November 2003, found themselves in this position. They
(Page 13)
- were in breach of cl 1.3 of the offer and acceptance. There was no way that they could remedy that breach. They had not waived their rights under the clause prior to 25 November 2003. Advising at some later date that finance had become available would not, without more, retrieve their position. The defendants on the other hand could, by notice in writing, terminate the Preliminary Contract. But this they did not do. In fact, neither party did anything until 31 December 2003 when a copy of a finance approval from the Commonwealth Bank dated 28 December 2003 was forwarded by the defendants' real estate agents to the plaintiffs' settlement agent. None of the parties apparently turned their mind to the provisions of the Preliminary Contract.
13 Mr Smith says that towards the end of July 2004 he and his wife received from the defendants' selling agent a document which is entitled "Contract of Sale". Mr Smith refers to this document in his affidavit as "the Variation Contract" for reasons which are not entirely clear. In my view, it is more convenient to refer to it by its specified title, that is - Contract of Sale. This document runs to 68 pages. Included in the Contract of Sale is the original offer and acceptance signed by the plaintiffs on 24 October 2003 and by the defendants on 28 October 2003. As I have indicated above, the offer and acceptance makes reference to Annexures "A and B". In fact, there are six annexures in the Contract of Sale together with four attachments. Annexure "B" differs from the annexure with that letter which was originally attached to the offer and acceptance. The document in the Contract of Sale is far longer and more complicated. Of course, the Contract of Sale was signed long after the latest time for approval of finance had passed. Yet, apart from incorporating the offer and acceptance, nothing in the Contract of Sale says anything about finance or whether the Contract of Sale is still subject to any finance approval.
14 It is also to be remembered that the contract set up by the signing of the offer and acceptance was, to use the words of cl 1(a) of Annexure "A", the "Preliminary Contract". The parties were to enter into the further contract - called the "Formal Contract" - within 180 days of the signing of the offer and acceptance. It is unclear whether it was intended the Contract of Sale would constitute the Formal Contract. But even if it did, it was signed well after the 180-day deadline had passed. In other words, it was signed at a time when the Preliminary Contract had, pursuant to cl 1(a) of Annexure "A", automatically terminated. Remarkably, no one seems to have turned their mind to considering whether or not the Contract of Sale was to be regarded as the Formal Contract and what the
(Page 14)
- consequences might have been of the automatic termination - if indeed there was an automatic termination - of the Preliminary Contract.
15 The chain of events which followed the signing of the Contract of Sale can be explained by reference to the relevant documents. On 14 September 2004 West End Settlements, acting for the defendants, wrote to CS Legal, the plaintiffs' settlement agents, advising that the Certificate of Title for Unit 14 was approximately three months away from issuing. West End Settlements wrote again to CS Legal on 3 December 2004 advising that they understood the issue of the title was imminent and anticipating settlement by 23 December 2004. On 8 December 2004 West End Settlements wrote to CS Legal advising the strata plan number. They also said:
"Please confirm in writing that the finance on this matter is unconditional."
16 On 9 December 2004 Primestyle Homes wrote to the plaintiffs' real estate agent. Primestyle Homes had been authorised by the defendants to act on their behalf. Relevantly, the letter reads as follows:
"We have been advised that the 14 contracts are still not unconditional since the finance is subject to valuation by the respective banks. These contracts are suppose to be unconditional.
We require confirmation within the next 7 days that the contracts are in fact unconditional and that the purchasers will be in order to settle upon the titles being in order for dealing as per the contracts.
We reserve our rights therein."
17 On 22 February 2005 West End Settlements wrote to CS Legal in the following terms:
"We refer to the abovementioned transaction [the sale of Unit 14] and advise that we have now been notified by the vendor that the contract for this transaction is now at an end. Please arrange for the stamp duty cancellation form to be forwarded to this office for vendor's completion."
(Page 15)
18 It was subsequent to the receipt of this letter that the plaintiffs lodged their caveat. They claim that they have an interest in Unit 14 as the purchasers of the fee simple.
19 As is readily apparent from the above, it is not an easy matter to work out the contractual position of the parties and their respective rights and obligations. For their part, the plaintiffs say that by their actions the defendants waived any rights they may have had under the Preliminary Contract consequent upon the plaintiffs' failure to notify before the Latest Time that finance was not available. This waiver, it is said, is evidenced by the fact, inter alia, that the Contract of Sale was provided to them by the defendants and signed by all parties. They say that the correspondence passing between the respective settlement agents is further support for the waiver argument. As an alternative they say that there has been no effective termination notice as required by special condition 10.1 of the conditions found in the Contract of Sale. But this is very much a subsidiary argument. It is said by the plaintiffs that taken together the documents passing between the parties and the actions of each of them indicate a binding contract which a court would specifically enforce.
20 For the defendants it is said, in effect, that whatever the precise contractual arrangement between the parties, the contract was subject to finance. As no finance approval was in place as at September 2003, it was open to the defendants to terminate the contract. As an alternative it is said that the contractual arrangement between the parties came to an end because no formal contract was entered into within 180 days of the signing of the offer and acceptance. It was said that the Contract of Sale could not, properly viewed, have given the plaintiffs the right to acquire Unit 14. It was said that no termination notice was required and, if such a notice was required, there had been an effective communication of the termination of the contract. Accordingly, the plaintiffs had no right to acquire Unit 14.
21 There was no dispute between the parties as to the proper test to be applied when determining whether or not a caveat ought be extended. Both counsel were content to rely upon what was said by Owen J (as his Honour then was) in Custom Credit Corp Ltd v Ravi Nominees Pty Ltd (1992) 8 WAR 42. His Honour said (at 48):
"… the onus lies on a caveator in proceedings under s 138 to demonstrate that there is a valid caveatable interest, or more
(Page 16)
- correctly, that there is a serious question to be tried on the issue."
22 There is no doubt in this case that there is a serious question to be tried. Only after hearing all of the evidence and considering all of the documents could a court come to a concluded view as to the contractual relationship between the parties. As I have said, the position is most unclear. It is true that in large measure the contractual position will have to be determined by reference to the documents and the uncontested evidence of the parties. But on an interlocutory application where no oral evidence is led a full examination of the facts is not possible. The arguments of both parties have merit. The outcome will be known only after a full hearing.
23 On that basis then, I determined that the proper order was that the operation of the caveat should be extended until trial of this action.
24 Having reached that conclusion it was a relatively simple matter to determine that the injunction preventing the defendants leasing the unit should be extended. As I have indicated, there is no doubt that there is a serious question to be tried. The defendants would not have the right to lease the premises if the plaintiffs have in place a valid contract for its purchase. That position is unarguable. So the test of a serious question to be tried has been satisfied.
25 The second question is then, where does the balance of convenience lie? The answer is, I think, that it lies with the plaintiffs. The plaintiffs have contracted to buy a new unit. It does not matter whether they intend to occupy that unit themselves or whether it was purchased for the purposes of investment to be rented out. What they have contracted to purchase (assuming that they do have a contract) is a new unit. It will not be a new unit if it is leased out. In that circumstance damages cannot provide an adequate remedy. Almost precisely this question was considered by Roberts-Smith J (as his Honour then was) in Total Marine Services Pty Ltd v Waller [2002] WASC 8. His Honour in that decision examined all of the issues and concluded that an injunction was appropriate. His Honour's reasoning is compelling and I see no reason to differ from his conclusion. Accordingly, I indicated that the injunction would be continued.
26 As I indicated at the commencement of these reasons, I extended both the operation of the caveat and the injunction on conditions. These conditions were two in number and they were as follows. First, the
(Page 17)
- plaintiffs were within 7 days to issue proceedings seeking specific performance of the alleged Contract of Sale of the unit. As I have mentioned, the Property was developed by the defendants with the assistance of a loan facility from the Bendigo Bank. While there is nothing in the evidence to suggest that the financiers are about to act against the defendants because they are in default under the loan agreement, this dispute is clearly holding up repayment of the facility. In fairness to the defendants it must be resolved quickly. The originating summons in this matter deals only with the question of whether or not the caveat can be maintained. These proceedings are not, in my view, a proper vehicle for determining the respective rights and interests of the parties. Disputes of fact are involved and, in those circumstances, proceeding by way of writ is appropriate.
27 The second condition follows on from the first. The plaintiffs are, within 7 days of the defendants filing an appearance, to apply to have this matter entered into the expedited list. It is of course a matter for the Expedited List Judge as to whether or not the action qualifies for entry into the list. But requiring the plaintiffs to make the application ensures that all steps are taken so as to lead to a prompt resolution of the dispute. Again, fairness to the defendants requires that such an order be made.
28 There are, as I have said, some differences between each of the actions which were heard together. I am satisfied that these differences are not such as to lead to a different conclusion in any of the cases. It would serve no purpose to go through the very slight differences in each case. Suffice it to say I am satisfied each of the plaintiffs have a caveatable interest and each is entitled to injunctive relief to prevent the defendants leasing the unit in which the plaintiffs claim an interest.
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