Strahle v. CKG Duporth Pty Ltd
[2009] QSC 56
•19 March 2009
SUPREME COURT OF QUEENSLAND
CITATION:
Strahle v CKG Duporth Pty Ltd [2009] QSC 56
PARTIES:
NOEL ARTHUR STRAHLE
(applicant)
v
CKG DUPORTH PTY LTD ACN 108 157 259 AS TRUSTEE
(respondent)FILE NO:
BS1911 of 2009
DIVISION:
Trial Division
PROCEEDING:
Originating application
DELIVERED ON:
19 March 2009
DELIVERED AT:
Brisbane
HEARING DATE:
13 March 2009
JUDGE:
Mullins J
ORDER:
1. Application dismissed
2. The applicant must pay the respondent’s costs of the application to be assessedCATCHWORDS:
CONTRACTS – GENERAL AND CONTRACTUAL PRINCIPLES – CONSTRUCTION AND INTERPRETATION OF CONTRACTS – OTHER MATTERS – where contract for buyer to purchase a lot in a development to be constructed – where cl 8.2 of the contract provided that the seller could extend the date for establishment of a community titles scheme and obtaining the certificate of classification for the development if delays in completion of the development were due to events specified in cl 8.3 – where contract provided that any dispute between the buyer and the seller as to whether the delays in completion had been caused by a cl 8.3 event must be referred to the seller’s architect to decide – where architect required to act as an expert and not as an arbitrator and the architect’s decision was final and binding – where the buyer sought a declaration as to the construction of cl 8.3 – whether there was any utility in the court making the declaration
Bass v Permanent Trustee Co Ltd (1999) 198 CLR 334, consideredCOUNSEL:
PW Hackett for the applicant
DJS Jackson QC and C Heyworth-Smith for the respondentSOLICITORS:
NR Barbi for the applicant
Schultz Toomey O’Brien Lawyers for the respondent
MULLINS J: The applicant as the buyer and the respondent as the seller entered into contract dated 28 November 2006 (the contract) for the sale of Lot Number 201 in the proposed Riva Community Titles Scheme. The contract was an “off the plan” contract to purchase a lot in a building that was yet to be constructed.
This application was filed by the applicant on 20 February 2009 seeking a declaration in the following terms:
“1. A declaration that upon the proper construction of the contract made on or about 28 November 2006 between the applicant and the respondent for the sale of lot number 201 Riva ["the contract"] any extension of the date in clause 8.2 (namely, 30 January 2009) pursuant to clause 8.3 must be by up to the number of days the events specified in clause 8.3 caused the delay in completion of the Development:
(a) after 15 June 2007 (or alternatively, entry into the contract), and
(b) according to the respondent's construction program.”
Chronology of events
The respondent entered into a construction contract with the builder on 12 April 2007. The respondent is obliged under cl 6.1 of the contract to cause the development and the lot to be constructed. It is specified in cl 6.5 of the contract, that the contract was subject to certain conditions, including obtaining all approvals necessary to commence construction of the development by 15 June 2007. Under cl 6.6 of the contract, the seller was given a right to terminate the contract if the relevant conditions had not been satisfied by 15 June 2007. The respondent’s solicitors gave notice to the applicant’s solicitor on 21 June 2007 that the conditions in cl 6.5 of the contract had been satisfied.
On 20 November 2007 the applicant’s solicitor raised his client’s concerns about the delays in the progress of the development. In response, the respondent’s solicitors advised that there had been a delay of about eight weeks caused by a breach of the diaphragm wall that was beyond the respondent’s control and the respondent reserved its right to claim an extension for the delay at some future date, but advised that it was expected that the building would be completed in early November 2008.
The respondent’s solicitors by letter dated 17 September 2008 notified the applicant’s solicitors that completion of the development had been delayed by causes beyond the seller’s control and that the seller had extended the date referred to in cl 8.2 of the contract from 30 January 2009 to 30 August 2009. The applicant’s solicitor responded by letter dated 14 October 2008 that there had been no evidence supplied as to whether the delays were due to factors referred to in cl 8.3 of the contract. The applicant’s solicitor therefore requested the respondent’s solicitors to provide evidence of the reasons for the delay and certification by the architect. That drew the response from the respondent’s solicitors dated 20 October 2008 that there were delays of 334 days, and that the seller had elected to extend the date under cl 8.2 of the contract by only 212 days, but reserved the right to claim further extensions in accordance with cl 8.3 of the contract should it become necessary. The respondent’s solicitors conveyed their instructions as to the reasons for the delays including inclement weather, a water leak to the basement, delays with council in obtaining amendments to the development approval for the building and operational works approval and other delays beyond the control of the seller that had been approved under the terms of the building contract.
The applicant’s solicitor conveyed in his letter dated 22 October 2008 that the response was not complete, because the construction delays were not detailed and that there was therefore a dispute between the applicant and the respondent about the extension under cl 8.3 because of the lack of evidence. The applicant’s solicitor therefore requested that the matter be referred to the architect under cl 8.4 of the contract.
By letter dated 30 October 2008 the respondent’s solicitors forwarded to the applicant’s solicitors a copy of an unsigned letter from the respondent’s architect dated 12 September 2008 that certified that there had been delays exceeding 212 days that resulted from delays with authorities in obtaining approvals for the development and construction delays due to causes beyond the control of the seller. Understandably, the applicant did not accept the unsigned letter from the architect dated 12 September 2008 as compliance with cl 8.4 of the contract.
The applicant’s solicitor sent a further letter dated 16 January 2009 to the respondent’s solicitors setting out the history of the correspondence and disputing the referral of the dispute to the architect being resolved by the unsigned architect’s letter dated 12 September 2008. A written response was requested before 21 January 2009. By letter dated 29 January 2009, the respondent’s solicitors advised that they had now received instructions from the respondent to refer the matter to the architect.
At the date of the hearing of this application, the architect had not yet made a decision under cl 8.4 of the contract. The applicant pursued the claim for the declaration on the basis that it would be of assistance to the architect in carrying out the task referred to the architect pursuant to cl 8.4 of the contract.
Relevant clauses of the contract
Clause 8 of the contract provides:
“REGISTRATION OF THE PLAN
8.1 Settlement of this Contract is subject to registration of the Plan creating the Lot.
8.2 If the Seller has not given the Buyer notice that the Scheme has been established, and that the Council has issued a Certificate of Classification for the building containing the Lot by
30 January 2009, or by any extended date under Clause 8.3, then the Buyer or the Seller may terminate this Contract by giving a notice of termination to the other party, whereupon the Deposit shall be refunded to the Buyer and neither party shall have any further Claim against the other.
8.3 The Seller may extend the date in Clause 8.2 by giving notice to the Buyer if there are delays in completion of any aspect of the Development because of:-
(a) bad weather;
(b) disputes with neighbours;
(c) industrial disputes;
(d) delays in obtaining approvals for the Development;
(e) damage by fire, explosion or act of God; or
(f) a combination of these or any other causes beyond the Seller's control.
8.4 If there is any dispute between the Buyer and the Seller as to whether the delays in completion of any aspect of the Development have been caused by the matters referred to in Clause 8.3, the matter must be referred to the Architect to decide. The Architect acts as an expert and not as an arbitrator and the Architect's decision is final and binding.”
The applicant’s contention
The applicant contends that any extension of the date in cl 8.2 of the contract pursuant to cl 8.3 must be by up to the number of days the events specified in cl 8.3 caused the delay in completion of the development after 15 June 2007 (or alternatively, entry into the contract) and according to the respondent’s construction program.
The respondent’s contention
The respondent contends that the application for a declaration should be refused because there is of no utility in granting the relief sought. It is submitted that the contract provides for the matter that is in dispute to be decided by the architect as an expert and there is no evidence that the expert has threatened to address the wrong question under the contract. There was no suggestion that the seller had contended that the extension of the date under cl 8.2 could be by more than the delay in completion of any aspect of the development. There was also no dispute between the parties about any delay occurring before the date of the contact of 28 November 2006. The respondent contends that the date of 15 June 2007 was for the purpose of cl 6.5 of the contract and was not a relevant date for the operation of cl 8.2 and cl 8.3. The respondent also contends that there is no basis for limiting the architect’s task by reference to any construction program of the respondent, when there is no reference to such a construction program in the contract.
No utility in making a declaration
Although the respondent did not immediately respond to the applicant’s request to refer the dispute about the extension to the architect under cl 8.4 of the contract, that had been done prior to the filing of the originating application. As was pointed out in the respondent’s submissions, the parties are bound contractually by cl 8.4 to refer the dispute on whether the date in cl 8.2 has been extended to 30 August 2009 to the architect for decision as an expert and that decision will determine whether or not the date under cl 8.2 has been extended to 30 August 2009 or earlier date. The declaration that is sought as to the construction of cl 8.3 of the contract will not resolve any issue between the applicant and the respondent, as that task has been given to the architect under cl 8.4 of the contract. The court does not make a declaration as to the construction of a contractual provision, where there is no issue to be determined between the parties as to that construction: Bass v Permanent Trustee Co Ltd (1999) 198 CLR 334, 355-356 [47].
If it were necessary to consider the construction proposed by the applicant, there was no warrant for treating the date of 15 June 2007 as significant for determining what were relevant delays, as the purpose of that date in cl 6.5 of the contract has nothing to do with the calculation of delays under cl 8.3 of the contract. There is also no warrant in cl 8.4 of the contract for limiting the determination of delays by reference to a construction program that is not referred to in the contract.
After the submissions on the substantive issue were made by counsel, I raised the question of costs, if the application were to be dismissed. It was common ground that the applicant could not resist an order for costs. It follows that the orders which should be made are:
1. Application dismissed
2. The applicant must pay the respondent’s costs of the application to be assessed
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