William John Overell v Jeffrey John Redpath and Caroline Redpath No. SCGRG 93/116 Judgment No. 4005 Number of Pages 4 Conveyancing

[1993] SASC 4005

COURT IN THE SUPREME COURT OF SOUTH AUSTRALIA MILLHOUSE J

CWDS
Conveyancing - relationship of vendor and purchaser - breach of contract - sale of land - option to buy - "subject to finance clause" crossed out and initialled by purchaser - purchaser believing nevertheless contract subject to finance - purchaser failed to obtain finance - vendor sued successfully on contract in Magistrates Court. Appeal by purchaser dismissed. Magistrates Court Acts34(l) ,s37(l).

HRNG ADELAIDE, 3 June 1993 #DATE 25:6:1993
Counsel for appellant:     Mr R Nunn
Solicitors for appellant:    Nyland Hains
Counsel for respondent:     Mr S J Manuel
Solicitors for respondent: Piper Alderman

ORDER
Appeal dismissed.

JUDGE1 MILLHOUSE J This is an appeal from a magistrate, Mr Andrew Cannon, SM, sitting in the civil division. He awarded the plaintiff $14 134.30. 2. The action concerned a parcel of land, referred to as "section 171", near Balaklava. The plaintiff, now respondent and cross-appellant, was the vendor and the defendant, now appellant, the proposed purchaser of it. 3. The appellant had already bought from the respondent and his wife three sections which were contiguous to, if they did not almost surround, section 171. The facts are complex and the sales of the two parcels intertwined but for the purposes of deciding the appeal I need not go into them. They appear sufficiently in the Reasons of the learned special magistrate. The hearing before him had gone on for many days and at the end of it the magistrate gave his Reasons ex tempore for the sake of the parties so that they would not have to wait longer to know the outcome of the litigation. No complaint can be made about that. Because the Reasons are ex tempore they are perhaps not as crisply expressed as they could have been if the magistrate had taken time to prepare them but the facts and the way in which he reached his decision are sufficiently clear. 4. The respondent had given the appellant an option to buy section 171. At the same time an agreement for sale and purchase, using what looks like a standard printed 2 form, was drawn up by the respondent's agent, Cock. The printed form contained a clause, 26, beginning, "This Agreement is subject to the purchaser obtaining approval on or before the day of to his application for a loan of not less than $ for a term of years at an interest rate not exceeding % upon the security of a Mortgage over the with in land and/or the property already owned by the purchaser being Sections Hundred of ................................. " 5. That clause has been ruled out and in the margin appear the initials of the respondent and of his wife as well as those of the appellant. The agreement therefore did not contain a clause making the purchase subject to the appellant obtaining finance. The agreement has been signed by the appellant. The option, likewise, contained no reference to its exercise being subject to the appellant obtaining finance. 6. Nevertheless the appellant's contention was that he understood that by exercising the option in the circumstances in which he did that he was agreeing to buy section 171 under a fresh agreement to be drawn up (to include as a party his new partner-in-life) subject to finance. The magistrate rejected this and found for the respondent. He said: " Although some years on the bench have taught me to be, if not outright suspicious, at least discerning when assessing evidence from land agents, Cock, I thought, was an honest witness, albeit not a particularly good one. Mr Overell, although I accept most, but not all that he has told us, strikes me as a person not willing to accept the consequences of his actions and willing to deceive himself about what he did. I assess him as being very naive. I am not trying to be rude to the man, though, inescapably I suppose he will see it like that. I see him as naive and just going on blindly hoping that everything would turn out all right in the end. ........... Finance was discussed and I cannot accept that Cock would have written the word 'deleted' - and scribbled through the 'subject to finance' without any reason to do so. By 'reason' I mean information received from Overell and I am forced to the conclusion that Cock explained to Overell that if he exercised the option, the contract coming into force thereby was not subject to finance. Overell did not demur from the fact that the option was exercised and by his subsequent conduct confirmed it had been by sending off the nomination and the deposit under the contract. Even if I am wrong and Overell did not abandon his position that the exercise of option was subject to finance, in my view the plaintiff's claim is still alive." 7. (The Magistrate then went on to discuss whether an option could be exercised conditionally (and decided it could not be) and estoppel. There is no need for me to discuss what he said about those matters.) 8. The magistrate was amply justified in his findings. They are based first on his view of the credibility of the witnesses. That is most difficult to impugn on appeal and has not been. Furthermore, despite the arguments of Mr Roger Nunn for the appellant, the learned magistrate's view is confirmed by the documentary evidence. 9. No more than the Magistrate can I understand how the appellant (described in the agreement for sale and purchase as "a teacher") could possibly have believed that the agreement was subject to finance - the details of which no where appear - when he had initialled the alteration cutting out that clause] 10. As well, one would not expect the exercise of an option to be subject to finance. Surely the option simply is not exercised until the person exercising it has organised his finance? 11. The grounds of appeal and Mr Nunn's argument in support were all based on matters of fact. The magistrate has not been shewn to have made any mistake of fact and accordingly the appeal must fail. 12. I come to the cross-appeal. In the Notice there are four grounds. Grounds 1 and 2 concern damages and were, during argument, abandoned by Mr S Manuel for the respondent. That left only questions of interest and costs. 13. The learned magistrate has not allowed the respondent any interest on the judgment sum. Section 34(1) of the Magistrates Court Act:- " Unless good reason is shown to the contrary, the Court will, on the application of a party in whose favour a monetary judgment has been, or is to be, given include in the judgment an award of interest in accordance with this section." 14. Although I have not found it in the transcript, in the absence of demur before me by Mr Nunn, I assume that Mr Manuel did make an application for interest. The land was subsequently sold to someone else (incidentally at a higher price). Interest could run from the date of that contract for sale and purchase but I prefer to take the date of the issue of the summons - 23 July 1992 - and allow interest to judgment 14 January 1993. That is about seven months. I am told that the appropriate rate is 9%. I award $750 for interest. 15. Finally costs. The magistrate had some quite harsh things to say about solicitors and about counsel who 5 appeared before him. Without reproducing what he said, I merely say that I agree with his comments. 16. As to costs he said:-
    " First of all we discussed cost penalties. Because the
    defendant made an offer of $5,000 plus costs (well short of
    the judgment) and the plaintiff fell well short of the amount
    claimed, I dispense with the operation of Rules 52 and 53 so
    there is no cost penalty applicable. I award the plaintiff
    costs. The action was not converted to a complex action in
    accordance with the rules. I don't intend to interfere with
    that. The plaintiff will get costs on the routine Scale on
    the basis of a judgment for $13,712.30. (Corrected to
    $14,134.30)." 17. Section 37(1) of the Magistrate Court Act says, "......costs in any civil proceedings will be in the discretion of the Court." The magistrate exercised his discretion and despite Mr Manuel's argument, I do not think it miscarried. 18. The cross-appeal therefore is allowed only in the sum of $750.00. 19. The appeal is dismissed and the cross appeal allowed in the sum of $750.00.