SUPREME COURT OF QUEENSLAND
CITATION: Vercorp Pty Ltd v Lin [2006] QSC 419 PARTIES: VERCORP PTY LTD ACN 010 198 268
(plaintiff)
v
CHING TE LIN
(defendant)FILE NO: BS 2941 of 2004 DIVISION: Trial Division PROCEEDING: Trial ORIGINATING
COURT:Supreme Court, Brisbane DELIVERED ON: 22 December 2006 DELIVERED AT: Supreme Court, Brisbane HEARING DATE: 4, 5, 6 September 2006 JUDGE: Douglas J ORDER: Declare that the contract made 7 January 2004 pursuant
to which the defendant agreed to sell and the plaintiff
agreed to buy land at 417 Seaside Drive, Banksia Beach,
Bribie Island in the State of Queensland more properly
described as Lot 417 on SP133280, County of Canning,
Parish of Woorim bearing title reference 50367602 ought
to be specifically performed and carried into execution.Further submissions sought as to the form of the order and costs. CATCHWORDS: EQUITY - EQUITABLE REMEDIES – SPECIFIC
PERFORMANCE – PARTICULAR CONTRACTS – SALE
OF LAND – where defendant purchaser was party to a
contract where right of pre-emption existed in favour of the
seller if certain conditions existed – where those conditions
existed and the right to pre-emption accrued and the seller
assigned its rights under the contract to the plaintiff – where
the plaintiff agreed to buy the land from the seller pursuant to
the terms of the contract – whether an order for specific
performance should be made requiring the defendant to sell
to the plaintiff on the terms of the contract – whether the
purchase price was certain – whether there was consideration
for the grant of the right of pre-emption - whether the
contract contained an invalid and unenforceable restraint on
alienation – whether the defendant did provide proper notice
under the contract, and the plaintiff was out of time in
exercising its right to pre-emption – whether an issue of
estoppel arisesBurnitt v Pacific Paradise Resort Pty Ltd [2004] QDC 218,
applied
Caboche v Ramsay (1993) 119 ALR 215, applied
Caxton Street Agencies Pty Ltd v Korkidis [2002] QSC 210,
cited
Elton v Cavill [No 2] (1994) 34 NSWLR 289, cited
Franks v Norfolk Estates Pty Ltd [2004] QSC 301, cited
Gheko Developments Pty Ltd v Azzopardi [2005] QCA 283,
cited
Hall v Busst (1960) 104 CLR 206, cited
Hoggett v O’Rourke [2002] 1 Qd R 490, cited
John Nitschke Nominees Pty Ltd v Hahndorf Golf Club Inc
(2004) 88 SASR 334, applied
Micarone v Perpetual Trustees Australia Pty Ltd (1999) 75
SASR 1, cited
Mission Development Group Pty Ltd v Rhett [2004] QSC
359, cited
Norco Co-operative Ltd v Parmalat Australia Ltd [2006]
QSC 38, applied
Norco Co-operative Ltd v Parmalat Australia Ltd [2006]
QCA 129, cited
Nullagine Investments Pty Ltd v Western Australian Club Inc
(1993) 177 CLR 635, cited
Peppers Hotel Management Pty Ltd v Hotel Capital Partners
Limited [2004] NSWCA 114, cited
Petersen v Moloney (1951) 84 CLR 91, cited
Reuthlinger v MacDonald [1976] 1 NSWLR 88, cited
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- AGLC
- Vercorp Pty Ltd v Lin [2006] QSC 419
- Case
- [2006] QSC 419
- Decision Date
CaseChat Overview and Summary
The central legal issues in the case were whether the right of pre-emption was supported by consideration and whether it constituted an unenforceable restraint on alienation. The court examined the contract to determine the period during which the right of pre-emption persisted and whether it was supported by mutual promises within the contract. The court also considered whether the right of pre-emption, as a restraint on alienation, was enforceable under equitable principles.
In reaching its decision, the court held that the right of pre-emption was indeed supported by consideration, as evidenced by the mutual promises within the contract. Specifically, the seller's promise to allow the buyer to repurchase the property was supported by the buyer's promise to notify the seller of any intention to sell and to pay a deposit if the seller decided to accept the offer. The court also determined that the right of pre-emption did not amount to an ineffective restraint on alienation, as it was limited to a period up to two years from the date of settlement and only applied if the buyer had not commenced construction on the land. The court concluded that the contract should be specifically performed and carried into execution.
The court ordered that the contract for the sale of the land be specifically performed and executed as agreed between the parties. This decision ensured that the contractual obligations were upheld and provided a clear outcome for both parties involved in the dispute.
Orders
Orders of the court
Declare that the contract made 7 January 2004 pursuant
to which the defendant agreed to sell and the plaintiff
agreed to buy land at 417 Seaside Drive, Banksia Beach,
Bribie Island in the State of Queensland more properly
described as Lot 417 on SP133280, County of Canning,
Parish of Woorim bearing title reference 50367602 ought
to be specifically performed and carried into execution.
Background
Background to the litigation
Full text does not contain this section.
Evidence
Evidence Before The Court
Full text does not contain this section.
Decision
Reasons for decision
Full text does not contain this section.
Ratio Decidendi
Legal Principle Established
In my view the net purchase price paid by the buyer to the seller was $510,000 and certain. Lack of consideration The defendant’s argument is that the right of pre-emption purports to grant the seller rights to purchase the property but creates no obligation to do so. The plaintiff argues that the consideration for the grant of the right of pre-emption is to be found in the range of mutual promises in the agreement as a whole as well as those to be found in cl. 26. I agree with that submission. Even when cl. 26 is considered in isolation it includes a promise by the seller in cl. 26.2.2, if it receives the notice of intention to sell from the buyer required by cl. 26.2.1, to pay $1,000 within 28 days as a deposit if it decides to accept the offer constituted by the delivery of that notice. As Vercorp also submitted, the rebate of $10,000 in cl. 24 was given in return for the promise by the defendant to comply with all provisions of the contract. In other words the obligation on the buyer to notify the seller of his intention to sell is supported at least by the promise to allow the rebate and gives the seller the right or opportunity to repurchase the property in accordance with the conditions promised in cl. 26.2.2. In my view it does not matter that the seller is not obliged to repurchase. It gave the rebate and made its other promises in the contract in return for the promise that it would have the right to repurchase should it so wish. I am satisfied that the right of pre-emption is supported by consideration. Restraint on alienation That then requires me to consider the argument that the right of pre-emption amounts to a restraint on alienation that should be treated as ineffective. The first issue to determine in this context is the period during which, on the proper construction of the contract, the right of pre-emption persists. Prima facie it appears to be unlimited, but it needs to be looked at in context. The special conditions, of which the right of pre-emption is part, are set out above at para. [8]. The buyer undertakes to commence construction on the land, within two years of settlement, of a house designed by an approved designer or architect; cll. 22, 23 and 24. There is an option to repurchase given to the seller that is exerciseable at any time after the period of two years from the date of settlement, but only if the buyer has not commenced construction of the house; cl. 25. The right of pre-emption in cl. 26 is not said explicitly to exist only if construction of the house has not commenced, but it makes commercial sense only if it is understood as existing during the period up to two years after the date of settlement and where the buyer has not commenced construction of the house. Otherwise, construed literally, it would apply at any stage after settlement and when a house, obviously intended to be a well designed and expensive structure, had been erected on the land. It is also significant that there is no attempt to exact a similar promise from subsequent purchasers.