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Telfer v Fairfax

Telfer v Fairfax

Case [2016] NSWSC 60 12 February 2016

Contract Formation

Equitable Charge

Compensatory Damages

Statutory Construction

Contract Law

Equity

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Supreme Court

New South Wales

Medium Neutral Citation: Telfer v Fairfax [2016] NSWSC 60
Hearing dates: 15 – 16 October 2015
Date of orders: 12 February 2016
Decision date: 12 February 2016
Jurisdiction: Equity
Before: Robb J
Decision:
1. Direct the parties to bring in short minutes of order to give effect to these reasons for judgment.
2. The court will hear the parties as to costs.
Catchwords:
CONTRACTS – construction and interpretation – identification of debts referred to in deed – whether deed created equitable charge over property or only equitable charge over proceeds of sale of property under contract of sale – held deed created equitable charge over property by deposit of certificate of title and by consent of registered proprietor to lodge caveat against title and equitable charge over proceeds of sale under contract – determination of amount secured by deed – whether equitable charge secured payment of compensation for breach of deed – dependant on proper construction of deed – meaning of “reimburse” in charging provision – deed intended to ensure payee suffered no loss – held equitable charge secured payment of compensation

EQUITY – competing equitable charge over property and equitable interest in property of a purchaser under a contract of sale – where the equities are equal the first in time prevails – equities equal – equable charge first in time – equitable charge entitled to priority – purchaser’s interest in property under contract of sale valid – purchaser entitled to completion of contract upon payment of amount secured by equitable charge
DAMAGES – no express provision in deed for payment of interest on default of timely payment of amounts payable under deed – whether obligation to pay interest implied – no implied obligation to pay interest – payee entitled to compensation for breach – calculation of compensation having regard to interest rate provided for in s 100 Civil Procedure Act 2005 (NSW) – principles applicable – compensation based on statutory interest rate
Legislation Cited: Civil Procedure Act 2005 (NSW)
Cases Cited: Cook v Fowler (1874) LR 7 HL 27
Electricity Generation Corporation v Woodside Energy Ltd [2014] HCA 7; (2014) 251 CLR 640
Hawkesbury Valley Developments Pty Ltd v Custom Credit Corporation Ltd (1994) 6 BPR 14,053, (1994) NSW Conv R 55 – 731
Hardie v Shadbolt [2004] WASCA 175
Kyleast Pty Ltd v Yogoat Pty Ltd (In Liq) unreported, 20 November 1995 BC9506745
Lai v Gong (1997) 8 BPR 15,837
Mainteck Services Pty Ltd v Stein Heurtey SA [2014] NSWCA 184; (2014) 310 ALR 113
Murphy v Wright (1992) 5 BPR 11,734
Re Andersons Seeds Ltd [1971] 2 NSWLR 120
Sotiropoulos v Sotiropoulos [2015] NSWSC 855
Stratton Finance Pty Ltd v Webb [2014] FCAFC 110
Theodore v Mistford Pty Ltd [2005] HCA 45; (2005) 221 CLR 612
Tricontinental Corporation Ltd v Associated Securities Ltd (1981) 6 ACLR 122
Troncone v Aliperti (1992) 6 BPR 13,291
Zürich Australian Insurance Ltd v Fruehauf Finance Corporation Pty Ltd (1993) 7…

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 Telfer v Fairfax

Details

AGLC: Telfer v Fairfax [2016] NSWSC 60
Case: [2016] NSWSC 60
Decision Date: 12 February 2016

CaseChat Overview and Summary

In the matter of Telfer v Fairfax, the dispute revolved around the interpretation of a deed and the nature of the equitable charges created by it. The parties involved were Telfer, the appellant, and Fairfax, the respondent. The dispute was heard in the Supreme Court of New South Wales. The primary issue was to determine the extent to which the deed created an equitable charge over the property and the proceeds from its sale, and whether it secured compensation for breach of the deed.

The court was tasked with interpreting the wording of the deed to ascertain whether it created an equitable charge over the property or merely the proceeds from a sale under a contract. The court found that the deed created an equitable charge over the property itself, evidenced by the deposit of the certificate of title and the registered proprietor's consent to lodge a caveat. Additionally, the deed created an equitable charge over the proceeds of sale under the contract. The court then considered the meaning of the term “reimburse” within the deed’s charging provision, concluding that the equitable charge was intended to ensure that the payee suffered no loss, thus securing compensation for breach of the deed.

The court further addressed the competing claims of equitable charges over the property and equitable interests in the property under a contract of sale. Given that the equities were equal, the principle that the first in time prevails was applied. The equitable charge was found to be the first in time, thus entitled to priority over the purchaser’s interest under the contract of sale. Consequently, the purchaser was entitled to complete the contract upon payment of the amount secured by the equitable charge. The court also determined that there was no obligation to pay interest on default under the deed, but compensation for breach was payable. The compensation was calculated considering the statutory interest rate provided in section 100 of the Civil Procedure Act 2005 (NSW).

The court concluded by ordering that the equitable charge secured by the deed was to be prioritized, and the purchaser was entitled to complete the contract of sale upon payment of the amount secured by the equitable charge. The compensation for breach was to be calculated in accordance with the statutory interest rate.

Orders