Territory Rural Housing (NT) Pty Ltd v Carine Nominees Pty Ltd - [2000] NTSC 40

Territory Rural Housing (NT) Pty Ltd v Carine Nominees Pty Ltd
[2000] NTSC 40
PARTIES:TERRITORY RURAL HOUSING (NT) PTY LTD

v
CARINE NOMINEES PTY LTD

TITLE OF COURT:  SUPREME COURT OF THE NORTHERN TERRITORY
JURISDICTION:  SUPREME COURT OF THE NORTHERN TERRITORY EXERCISING TERRITORY JURISDICTION
FILE NO:No 103 of 1994 (9411025)
DELIVERED:  15 June 2000
HEARING DATES:  28, 29 February 2000 and 1 March 2000
JUDGMENT OF:  ANGEL J
REPRESENTATION:
Counsel:
Plaintiff:—
Defendant:Mr P Barr
Solicitors:
Plaintiff:Mr M Rowley (Director of the Plaintiff )
Defendant:Cridlands
Judgment category classification:           C
Judgment ID Number:  ang20002
Number of pages:  10

Ang90002
IN THE SUPRME COURT
OF THE NORTHERN TERRITORY
OF AUSTRALIA
AT DARWIN

Territory Rural Housing (NT) Pty Ltd v Carine Nominees Pty Ltd [2000] NTSC 40

No. 103 of 1994 (9411025)
BETWEEN:

TERRITORY RURAL HOUSING (NT) PTY LTD
Plaintiff

AND:

CARINE NOMINEES PTY LTD
Defendant

CORAM: ANGEL J
REASONS FOR JUDGMENT
(Delivered 15 June 2000)

This is an action for damages for breach of contract. At all times the defendant was the registered proprietor of a disused drive-in picture theatre in the Town of Katherine which, to the knowledge of the plaintiff, had been re-zoned to R3 to a permit high density housing development. At all material times the plaintiff carried on business as a builder and developer. On 3 August 1993 the parties executed a Development and Marketing Deed whereby the plaintiff agreed to sub-divide and develop and market the defendant’s land for sale.

On 10 February 1994, in purported pursuance of clause 6 of the Development and Marketing Deed the defendant served a Notice of Termination of the Deed dated 9 February 1994 upon the plaintiff. The Notice of Termination was in the following terms:
“ NOTICE OF TERMINATION
“WHEREAS:
A.On the 3^rd day of August 1993 you entered into a Development and Marketing Deed (“the Deed”) with Carine Nominees Pty Ltd (“Carine”) in respect of the development, marketing and sale of certain parcels of land situated with the Town of Katherine.
B.Pursuant to Clause 5.2(h) of the Deed you agreed to “do all such things … required by the Northern Territory Planning Authority and any other competent authority and as shall be necessary in order to obtain:
(i)the approval of the Northern Territory Planning Authority to
the Agreed Plan (as therein defined) pursuant to Part V of the Planning Act within 60 days from the date hereof …”
C.You have failed to do all such things necessary in order to obtain the approval of the Northern Territory Planning Authority to the Agreed Plan (as defined in the Deed) within the time stipulated in the Deed and such approval has not yet been obtained.
D.Pursuant to clause 6.1 of the Deed Carine is entitled to terminate the Deed, notwithstanding any delay or previous waiver, upon any breach by you or failure by you to fulfil any of the covenants, agreements or obligations on your part contained or incorporated by reference or implied in the Deed. Prior notice of default is not required and time is expressed to be of the essence in respect of any failure by you to take some step or complete some action within the time specified for the taking of such step or the completion of such action under the Deed.
E.Pursuant to clause 23 of the Deed time is of the essence in every case and in every respect.
NOW TAKE NOTICE AS FOLLOWS:
1.Carine hereby terminates the Deed pursuant to the provisions of clause 6.1 of the Deed and without prejudice to any antecedent breaches and any rights or entitlements that may have accrued to it under the Deed in respect of your default as hereinbefore referred and any other default.
2.Without limiting the generality of the foregoing the agreement to sell Lot 2378 Town of Katherine as referred to in clause 26 of the Deed and the form of contract annexed thereto is hereby terminated.”.
The plaintiff says the termination was unlawful and amounted to a repudiation of the Deed. The defendant says that the plaintiff was in breach of the Deed and that the defendant’s termination was lawful.
It is convenient to set out certain portions of the Deed. Clause 6.1 provides, inter alia, as follows:
“DEFAULT
6.1Carine shall be entitled to terminate this Deed and the agreements herein contained by giving notice of termination to the Developer (notwithstanding any delay or previous waiver of the provisions of this clause by Carine) upon the happening of any one or more of the following events:-
(a)Any breach by the Developer or failure by the Developer to fulfill any of the covenants agreements or obligations on its part contained or incorporated by reference or implied in this Deed provided however that in the event of a default (other than a failure by the Developer to take some step or complete some action within a specified time – it being acknowledged that time is of the essence of any such provision) – Carine shall give notice of such default to the Developer and allow the Developer a period of seven (7) days in which to rectify such default prior to giving notice of termination hereunder;”.
The plaintiff’s obligations with respect to the application for sub-division of the defendant’s land are contained in clause 5.2 of the Deed and with particular relevance to the present dispute are sub-clauses (f) and (h)(i) which provide as follows:
“(f)The Developer shall obtain the consent and approval of Carine to the Draft Plan and within sixty (60) days from the date hereof lodge with the Northern Territory Planning Authority a final form of the said plan of sub-division (hereinafter called “the Agreed Plan”) along with such other documents details and particulars that may be required by the said Northern Territory Planning Authority.
……..
(h)The Developer shall do all such things including (but without limiting the generality of the foregoing) all sub-division and other works (hereinafer called “the sub-division works”) required by the Northern Territory Planning Authority and any other competent authority and as shall be necessary in order to obtain:-
(i)the approval of the Northern Territory Planning Authority to the Agreed Plan pursuant to Part V of the Planning Act within sixty (60) days from the date hereof (the date of such approval being herein called “the Subdivision Approval Date”); ”.
Clause 23 provides as follows:
“Time shall be of the essence of this Deed in every case and in every respect.”.
Mr Barr, Counsel for the defendant, conceded that the Notice of Termination did not permit the plaintiff a period of seven days in which to rectify any alleged fault on the part of the plaintiff in accordance with clause 6.1(a). His justification of the lawfulness of the termination centred upon two propositions; first, that upon its proper construction clause 5.2(h)(i) required the plaintiff to obtain the approval of the Northern Territory Planning Authority to the sub-division proposal within 60 days from the date of the Deed, ie. by 2 October 1993 (time being of the essence), and secondly, that if clause 5.2(h)(i) meant no more than that the plaintiff was required to do all things necessary in order to obtain the Northern Territory Planning Authority’s approval within the 60 day limit, the plaintiff had failed to negotiate and reach an agreement with the Katherine Town Council to the proposed sub-division. On either view it was submitted the plaintiff was in breach of the 60 day time limit and thus exposed to a summary termination of the agreement by the defendant.
The plaintiff, by leave, was represented by its director Mr Michael Rowley, who submitted that clause 5.2(h)(i) did not require Northern Territory Planning Authority’s approval of the plaintiff’s sub-division proposal within 60 days of the execution of the Deed on 3 August 1993 and that the plaintiff had done everything required of it as was necessary under the Deed.
Having, in compliance with the Development Deed, obtained the defendant’s consent to the form of the application for sub-division the plaintiff lodged the application with the Northern Territory Planning Authority on 16 September 1993 and paid the requisite lodging fee. The plaintiff had no contact with the Katherine Town Council prior to lodging the application. The plaintiff lodged both an application for sub-division of the subject land and an application to re-zone a portion of the land from R3 to R1. On 21 September 1993 the Northern Territory Planning Authority wrote to the Katherine Town Council concerning the proposed sub-division and by letter dated 13 October 1993 the Katherine Town Council wrote to the Planning Authority outlining the Council’s “concerns” that no provision had been made in the application for open space, parks and bicycle tracks, that the Council strongly objected to a flat development of four stories, that existing facilities on the land “which have never been accepted by the Council, should comply with Council Regulations”, as to certain other matters and that a meeting should be held with the plaintiff to discuss the Council’s concerns. Neither the plaintiff nor the defendant saw a copy of that letter until some months later at the earliest. Mr Michael Rowley the sole witness for the plaintiff and who was charged by the plaintiff with the responsibility of lodging the sub-division application with the Planning Authority first became aware of the Council’s concerns shortly prior to his meeting with the Council on 19 October 1993.
Faced with the situation that no Council requirement emerged until after the expiration of the 60 day period in clause 5.2(h)(i) Mr Barr for the defendant submitted that the plaintiff, knowing the Katherine Town Council’s interest in sub-division within its municipality, ought to have contacted the Council and ascertained its requirements within the 60 day period. He submitted that the terms of clause 5.2 of the Deed required the plaintiff to seek out requirements of “any other competent authority” as shall be necessary in order to obtain the approval of the Northern Territory Planning Authority and that this included the Katherine Town Council.
The first question is whether the plaintiff was obliged to obtain the Planning Authority’s consent to its application within the 60 day period. The defendant argued that because the words ‘within 60 days from the date thereof’ follow immediately after the reference to obtaining the approval of the Northern Territory Planning Authority in a separate subparagraph of 5.2(h), that the actual approval had to be obtained within 60 days. He also argued that this construction would be consistent with the time limits specified in clauses 5.2(h) (ii) (iii) and (iv).
However the words ‘within 60 days thereof’ are in sub-clause (h)(i) because each other sub-clause has a different time limit. The defendant’s argument is no reason to think actual approval is required within the 60 day period.
Mr Barr also argued that if the clause was read otherwise than to mean actual approval within 60 days, then the lodgment obligation in clause 5.2(f) would be meaningless. However Clause 5.2(h) so construed does not create any inconsistency with Clause 5.2(f). Both clauses create different obligations – one to lodge the application, and the other to do ‘all subdivision and other works’ necessary to obtain the consent.
In my opinion Clause 5.2(h)(i) of the Deed, properly construed, did not require the plaintiff to obtain the approval of the Northern Territory Planning Authority within 60 days. The clause says ‘in order to obtain’ rather than ‘to obtain’. Actual approval is not required within that 60 day period. All that is necessary is that the application must be in such a form that the consent of the Planning Authority can be given to it.
The question which follows is: What were the plaintiff’s obligations in order to have the application in the appropriate form in order to obtain consent? The plaintiff submitted that by lodging the application, they had done everything that the Deed required of them in order to obtain the consent of the Planning Authority. They contended that they had fulfilled all their obligations under the Deed within the 60 day period because no other requirements had been made or communicated to the plaintiff. The further requirements of the Katherine Town Council were not known to the plaintiff until after the expiry of the 60 days.
Mr Barr argued that there was an obligation on the plaintiff to anticipate future requisitions, that is, it was the responsibility of the developer to anticipate those things in terms of doing everything necessary within 60 days in order to obtain approval. He pointed to s 93 of the Planning Act (NT) 1993 which sets out matters to be taken into account by the consenting authority in considering subdivision applications, including, inter alia, means of access to each lot, whether kerbing, guttering and footpaths should be provided and provision of public open space. These are matters which the developer should be aware that the consenting authority would take into account in assessing the subdivision application, the onus therefore being on the developer to ensure that all those matters are addressed.
The idea that the plaintiff must seek out the Northern Territory Planning Authority and ‘any other competent authority’ or to anticipate further requisitions, does appear to be quite onerous; nevertheless, the Deed represents the parties’ agreement. The plaintiff’s obligation extended beyond merely lodging the application to ensuring that their application was in the appropriate form in order for it to obtain approval.
The plaintiff’s knew they were constrained by a time limit of 60 days. The Planning Authority was under no such time constraint, consequently, it was the plaintiff who needed to be actively inquiring of the Planning Authority and other competent authorities that the application was suitable in order to obtain approval.
The defendant’s particulars of the plaintiff’s failure is that the plaintiff failed to ‘negotiate and reach agreement with the Katherine Town Council, a competent local government authority for the Katherine Area and one which the Northern Territory Planning Authority consulted on the proposed subdivision, the grant by the owner of the land the subject of the subdivision of open space and/or parks and/or bicycle tracks satisfactory to the Katherine Town Council’.
The fact that the plaintiff was unaware of the Council’s further requirements until the 60 day period had lapsed is not relevant, as the obligation was on the plaintiff to ensure that they knew of any further requirements and addressed them in the application before the 60 days expired.
It follows that the plaintiff was in breach of Clause 5.2(h)(i) of the Deed by failing to do all such things necessary in order to obtain the consent of the Northern Territory Planning Authority.
The plaintiff’s action is dismissed.