Tanwar v Cauchi - [2002] NSWCA 35

Reported Decision:
(2003) NSW ConvR 56-048

New South Wales

Court of Appeal

CITATION: Tanwar v Cauchi [2002] NSWCA 35

FILE NUMBER(S): CA 40610/01

HEARING DATE(S): 6 February 2002

JUDGMENT DATE:
15 March 2002

PARTIES :

Tanwar Enterprises Pty Limited
v
Joseph Cauchi & Ors

JUDGMENT OF: Handley JA at 1; Beazley JA at 39; Mathews AJA at 40

LOWER COURT JURISDICTION : Supreme Court - Equity Division

LOWER COURT
FILE NUMBER(S) : ED 3321/01; ED 4891/00

LOWER COURT
JUDICIAL OFFICER : Windeyer J

COUNSEL: Appellant - D E Grieve QC/B Slowgrove
Respondent - I M Wales SC

SOLICITORS: Appellant - Alexander Lee & Associates Blacktown
Respondent - Low Doherty & Stratford Blacktown

CATCHWORDS: EQUITY - rescission - forfeiture - unconscionable conduct - exceptional circumstances

LEGISLATION CITED: Conveyancing Act 1919 (NSW)

CASES CITED:
Legione v Hateley (1983) 152 CLR 406
Stern v McArthur (1988) 165 CLR 489
Steedman v Drinkle [1916] 1 AC 275
Kilmer v British Columbia Orchard Lands Ltd [1913] AC 319
Union Eagle Ltd v Golden Achievement Ltd [1997] AC 514
Ciavarella v Balmer (1983) 153 CLR 438

DECISION: Appeal dismissed with costs

40610/01
ED 3321/01 ED 4891/00

HANDLEY JA
BEAZLEY JA
MATHEWS AJA

15 March 2002

TANWAR ENTERPRISES PTY LIMITED v JOSEPH CAUCI & ORS

EQUITY – rescission – forfeiture – unconscionable conduct – exceptional circumstances

The vendors entered into contracts for the sale of land to the appellant for $4,502,526 with completion to take place on 28 February 2000. The date for completion was later extended to August 2000. Completion did not then take place because the purchaser had difficulties with some of its finance. The vendors purported to rescind but their right to do so was disputed by the purchaser. The dispute was settled when deeds were executed on 3 June 2001 which extended the completion date to 25 June with time of the essence. Completion did not occur on this date, because the purchaser did not have all its finance available. After exchange the purchaser obtained development consents for sub-divisions which could be availed of by any owner. Pending completion the purchaser had made substantial payments to the vendors on account of the purchase price. The vendors’ solicitor rescinded the contracts on 26 June although he and the vendors knew that the balance of the funds were then available. The trial Judge found that the failure of funds to arrive in time for settlement on 25 June 2001 was not due to what equity would consider accident and refused relief against forfeiture because the vendors had not acted unconscionably in terminating the contracts.

The appellant submitted that the property had increased in value as a result of the development consents and its other expenditure on the property. It also submitted that the delay of one day was trivial in the circumstances, and it was unconscionable for the vendors to take advantage of that breach to capture for themselves the increase in the value of the land, and to forfeit the part payments in…

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 Tanwar v Cauchi

Details

AGLC: Tanwar v Cauchi [2002] NSWCA 35
Case: [2002] NSWCA 35
Decision Date: 15 March 2002

CaseChat Overview and Summary

The parties to this appeal were Tanwar, the vendor, and Cauchi, the purchaser, under a contract for the sale of land. The dispute concerned the vendor's purported termination of the contract due to the purchaser's late payment of an instalment. The purchaser sought to rescind the contract, alleging unconscionable conduct by the vendor. The appeal was heard in the Court of Appeal of New South Wales.

The central legal issue before the Court of Appeal was whether the vendor's conduct in terminating the contract was unconscionable, thereby entitling the purchaser to equitable relief by way of rescission. This required the court to consider the circumstances surrounding the late payment and the vendor's actions in response, particularly in light of the purchaser's claim that the vendor had acted unconscionably.

The Court of Appeal found that the vendor's conduct did not amount to unconscionable conduct in equity. The court applied established principles of contract law and equity, noting that while equity may intervene to prevent unconscionable conduct, such intervention is exceptional. The court determined that the purchaser had failed to establish the necessary elements for equitable rescission, particularly the existence of unconscionable conduct on the part of the vendor. The vendor was entitled to enforce the terms of the contract.

The appeal was dismissed, and the appellant was ordered to pay the costs of the appeal.

Orders

Orders of the court

Appeal dismissed with costs.

Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

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CITATION:	Tanwar v Cauchi [2002] NSWCA 35
FILE NUMBER(S):	CA 40610/01
HEARING DATE(S):	6 February 2002
JUDGMENT DATE:	15 March 2002
PARTIES :	Tanwar Enterprises Pty Limited v Joseph Cauchi & Ors
JUDGMENT OF:	Handley JA at 1; Beazley JA at 39; Mathews AJA at 40

LOWER COURT JURISDICTION :	Supreme Court - Equity Division
LOWER COURT FILE NUMBER(S) :	ED 3321/01; ED 4891/00
LOWER COURT JUDICIAL OFFICER :	Windeyer J

COUNSEL:	Appellant - D E Grieve QC/B Slowgrove Respondent - I M Wales SC
SOLICITORS:	Appellant - Alexander Lee & Associates Blacktown Respondent - Low Doherty & Stratford Blacktown
CATCHWORDS:	EQUITY - rescission - forfeiture - unconscionable conduct - exceptional circumstances
LEGISLATION CITED:	Conveyancing Act 1919 (NSW)
CASES CITED:	Legione v Hateley (1983) 152 CLR 406 Stern v McArthur (1988) 165 CLR 489 Steedman v Drinkle [1916] 1 AC 275 Kilmer v British Columbia Orchard Lands Ltd [1913] AC 319 Union Eagle Ltd v Golden Achievement Ltd [1997] AC 514 Ciavarella v Balmer (1983) 153 CLR 438
DECISION:	Appeal dismissed with costs