Tracey v Osland

[2021] NSWSC 1074

Supreme Court

New South Wales

Medium Neutral Citation:

Tracey v Osland [2021] NSWSC 1074

Hearing dates:

25 August 2021

Date of orders:

25 August 2021

Decision date:

25 August 2021

Jurisdiction:

Equity

Before:

Kunc J

Decision:

Orders made for specific performance of contract

Catchwords:

LAND LAW — Conveyancing — Requirements of writing — Agreement to create or dispose of interest in land — Sibling co-owners of the land — Sister’s solicitor accepts brother’s offer to purchase sister’s interest set out in letter from brother to solicitor — Whether specific performance should be granted

Legislation Cited:

Conveyancing Act 1919 (NSW)

Cases Cited:

GR Securities Pty Ltd v Baulkham Hills Private Hospital Pty Ltd (1986) 40 NSWLR 631

Pianta v National Finance & Trustees Ltd (1964) 180 CLR 146; [1964] HCA 61

Category:

Principal judgment

Parties:

Vivien Tracey (Plaintiff)
Edward Osland (Defendant)

Representation:

Counsel:

L Fermanis (Plaintiff)

Solicitors:

Giles Payne & Co (Plaintiff)
HWL Ebsworth Lawyers (Defendant)

File Number(s):

2020/78599

Publication restriction:

No

EX TEMPORE Judgment (Revised)

1. This is an application for specific performance of an alleged contract for the sale of an interest in a property in Paddington (the Property). Without any disrespect intended I shall refer to the parties by their given names.

2. The plaintiff, Vivien, and the defendant, Edward, are sister and brother. They are the executors and beneficiaries in equal shares as tenants in common of the estate of their late mother, Gloria. The Property has passed to them under Gloria’s will made on 30 August 2000, probate of which was granted to them by order of this Court on 11 May 2011.

3. The evidence discloses that there were discussions in 2018 between Vivien and Edward, in which Edward agreed to buy Vivien’s interest in the Property for $1.25 million. Those discussions culminated in this letter from Edward to Vivien’s solicitor of 31 July 2018:

“Dear Mr Giles,

I refer to your letter dated 27 June 2018 regarding my sister's interest in XX XXXX Street, Paddington, New South Wales.

It is regretted that the full funds of $1,250,000 as requested are not immediately available. However, I have a proposal for consideration. Under this proposal the payment of that amount of $1,250,000 will be made in four stages. The first three stages will provide $1,000,000.

A bank cheque for $50,000 is enclosed as a stage one payment.

Subject to the acceptance of this proposal a second stage payment of $50,000 will be made within 15 business days of the receipt of advice of the acceptance of this proposal.

It is trusted that these payments will provide immediate relief of the liquidity shortage.

The third stage will be $900,000 payable within approximately 45 business days of the receipt of advice of the acceptance of this proposal.

The fourth stage will be the payment of the balance of $250,000 in late 2019.

Please note that this proposal will allow an orderly realisation of assets to provide the total funds required.

Please advise whether this proposal is acceptable so that action can be taken to release the funds.

Alternatively, if this proposal is not acceptable, please advise the steps required to be taken to resolve this matter.

Yours faithfully

Edward J. Osland”

4. On 31 August 2018, Vivien’s solicitor responded:

“Dear Mr Osland

Re: Vivien Tracey’s Interest in XX XXXX Street Paddington

Thank you for your letter received on 1 August 2018.

Our client accepts the terms of your offer.

We expect that the second stage payment of $50,000.00 will be made now, with the third stage payment of $100,000.00 paid nine (9) weeks from 31 July 2018, which is 2 October 2018. Please confirm these dates.

We will prepare a Transfer for our client's interest in the Property as Beneficiary and have her sign it in anticipation of the Transfer in 2019.

Would you please contact us in late September, confirming that the amount will be available and we can show you a copy of the signed Transfer, which we will hold in escrow.

Would you please advise what date in 2019 you anticipate paying the balance of the $250,000.000, following which we will hand the Transfer to you.

Yours Faithfully

Giles Payne & Co”

5. As will be apparent from the foregoing, Edward enclosed what was referred to as the “stage one payment” of $50,000 with his letter of 31 July 2018. He made the “second stage payment” (slightly late) on 17 October 2018.

6. Since then, Edward has failed to make the third and fourth stage payments despite demands having been made. Vivien now sues for specific performance of the contract said to have arisen by the exchange of correspondence set out above.

7. The Court is satisfied that orders for specific performance should be made. This conclusion is based upon the helpful written and oral submissions of Mr L Fermanis of Counsel who appeared today for Vivien. There was no appearance for Edward for reasons which I will next set out.

8. The proceedings were commenced by statement of claim filed on 11 March 2020. On 10 August 2020, in lieu of a defence, a solicitor acting for Edward filed a submitting appearance in these terms:

“Edward Osland, defendant, appears and submits to the making of all orders and the giving or entry of judgment in respect of all claims made.”

9. At today’s hearing, Viven moved on an amended statement of claim that was filed on 26 February 2021. There has been no appearance today by the solicitor still on the record for Edward, although I record that his firm communicated with my chambers as a matter of courtesy to inform the Court that they had received no further relevant instructions and did not propose to appear today. That was an entirely appropriate thing to do.

10. By reason of the tender of some further correspondence between Edward’s solicitors and Vivien’s solicitors, I am satisfied that Edward consented to the filing of the amended statement of claim and was content to rely on his earlier submitting appearance as a response to that amended statement of claim. There is, therefore, no difficulty in the Court proceeding today in the absence of Edward.

11. It is convenient next to record my short conclusions based on Vivien’s evidence and acceptance of Mr Fermanis’ submissions:

1. The letter of 31 July 2018 (the terms of which were accepted by the letter of 31 August 2018) is a sufficient written memorandum of the contract for the sale of Vivien’s interest in the Property and signed by Edward as the party to be charged for the purposes of s 54A of the Conveyancing Act 1919 (NSW). If there was any doubt about this, it would be resolved by Edward having made the first and second stage payments, which constitute acts of part performance directly referable to the contract evidenced by the letter of 31 July 2018.

2. The parties intended to be legally bound by the terms of the letter of 31 July 2018. The circumstance that this is a sale between brother and sister as joint executors and joint beneficiaries of their late mother’s estate, and the terms of the two letters sufficiently identifying the parties, the subject matter and the price, displace what might be referred to as the usual presumption or expectation that parties will not be taken to have intended to enter into a binding contract for the sale of land other than by use of the usual Law Society form: GR Securities Pty Ltd v Baulkham Hills Private Hospital Pty Ltd (1986) 40 NSWLR 631 at 634–5 per McHugh JA; Kirby P and Glass JA agreeing.

3. Vivien’s solicitor had authority to accept on her behalf the offer constituted by the letter of 31 July 2018 (noting that in general a solicitor does not have authority to make a contract on behalf of his or her client: Pianta v National Finance & Trustees Ltd (1964) 180 CLR 146; [1964] HCA 61).

4. I have considered whether the slightly loose language in terms of when the third and fourth stage payments were to be made (“within approximately 45 business days of the receipt of advice of the acceptance of this proposal” and “the balance of $250,000 in late 2019”) might be said to be too uncertain to give rise to an enforceable contract. In my respectful view, in the context of a transaction of this kind (see [11(2)]) they are not too uncertain and are capable of performance in accordance with their terms.

5. By reason of the matters set out in [11(1)–(4)], the contract evidenced by the letter of 31 July 2018 is valid, binding on the parties and enforceable at the suit of either of them.

6. Vivien is ready, willing and able to complete the contract evidenced by the letter of 31 July 2018.

7. Vivien is entitled to interest on the outstanding third and fourth stage payments at pre-judgment interest rates up to and including the date upon which settlement will occur. As I have discussed with Mr Fermanis, the Court will order settlement to occur on 1 October 2021.

12. During the course of argument, Mr Fermanis and I have had exchanges concerning the appropriate form of the orders for specific performance. Draft short minutes reflecting those discussions are to be provided to my chambers together with an updated interest calculation. The orders will be made in chambers with a direction to be taken out forthwith.

13. It will be necessary for the orders to be personally served upon Edward, notwithstanding that he still has solicitors on the record, and I have allowed some time for that to occur in determining a settlement date of 1 October 2021. There will also be liberty to any party to apply in relation to the working out of the Court’s orders.

**********

Decision last updated: 25 August 2021