Zanee Pty Ltd v C G Maloney Pty Ltd - [1992] QCA 69

IN THE COURT OF APPEAL	[1992] QCA 069
SUPREME COURT OF QUEENSLAND	No. 1818 of 1989
Before the Court of Appeal The President Mr Justice Pincus Mr Justice McPherson
BETWEEN:

ZANEE PTY. LTD.

(Plaintiff) Respondent

AND:

C.G. MALONEY PTY. LTD.

(First Defendant) Appellant

AND:

D.J. CUSSAN PTY. LTD.

(Second Defendant) Appellant

JUDGMENT - THE PRESIDENT and McPHERSON J.A.

Delivered the 14th day of April, 1992

By a contract dated 16 January 1989 in the printed REIQ form (1982 ed.), the appellants as vendor agreed to sell to the respondent as purchaser five registered lots on a building plan comprising residential units in the "Golden Sands" development at Main Beach for a total purchase price of $1,000,015 dollars. By the terms of the contract, completion was due between 9.00 a.m. and 5.00 p.m. on 28 April 1989 at the office of the solicitors for the vendor, time being of the essence.

The contract was not completed and, in an action in the Supreme Court, judgment was given in favour of the purchaser for the return of the deposit totalling $300,000 paid by it under the contract. The vendor's counter-claim in the action for specific performance of the contract was dismissed. This appeal is brought by the vendor against those orders. Clause 2 of the printed terms of the contract provided that the balance of purchase price after deposit should be paid on the date for completion in exchange for possession "together with a duly executed transfer in favour of the Purchaser capable of immediate registration ... in the appropriate office free from encumbrances ... ." On the day fixed for completion, the vendor was registered in the Office of the Director of Freehold Land Titles as proprietor of the lots, but the purchaser refused to complete because of a number of registered and unregistered dealings.

On 9 February 1988, the Commonwealth Bank had lodged a caveat, number J371976K, claiming an interest under an equitable mortgage dated 1 August 1985 in respect of a loan of a sum of money. The certificates of title deposited to create the equitable mortgage had not been produced with the caveat as required by s.30A of the Real Property Act 1877. Accordingly, the caveat, which was registered on 15 February 1988, had lapsed three months after it was lodged in accordance with s.39 of the Real Property Act 1877. The lapsing of the caveat had not been recorded on the certificates of title but had been recorded on the caveat itself on 23 May 1988.

Another caveat, number J372684, had been lodged on 10 February 1988 by D.J. Cussan Pty. Ltd. (one of the vendors and a defendant in the action) and Margaret Mary Cussan, a director of that vendor company. That caveat, which claimed an interest as chargee of an estate in fee simple pursuant to an agreement dated 8 February 1988 entered into the between the caveators, the other vendor, C.G. Maloney Pty. Limited, and Cyril Gardner Maloney, was still unregistered

on the…

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.

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Details

Case: [1992] QCA 69
Decision Date: 14/04/1992

CaseChat Overview and Summary

In this case, the appellants, C.G. Maloney Pty Ltd and D.J. Cussan Pty Ltd, as vendors, were involved in a dispute with the respondent, Zanee Pty Ltd, as the purchaser, over the sale of five registered lots in the "Golden Sands" development at Main Beach. The dispute arose from a contract between the parties, which was not completed on the agreed date. The respondent claimed the return of its deposit, and the vendors sought specific performance of the contract. The Court of Appeal allowed the vendors' appeal, set aside the judgments in the Supreme Court, and ordered specific performance of the contract in favour of the vendors.

The legal issues before the Court of Appeal were whether the vendors were in breach of their obligations under the contract, and whether the purchaser was entitled to terminate the contract based on the presence of caveats and unregistered withdrawals of caveats. The Court of Appeal found that the purchaser was not entitled to insist on the registration of the caveats and withdrawals of caveats as a prerequisite to completing the contract, and that the vendors were not in breach of their obligations. The Court of Appeal also distinguished the case from Cawood v. Infraworth Pty Ltd, as the circumstances in the present case were substantially different.

The Court of Appeal found that the Commonwealth Bank caveat, which had lapsed, could have no effect on the register at the date of settlement, and could not have prevented registration of the transfer to the purchaser. The risk presented by the interest referred to in the other caveat was only slightly more substantial, as the withdrawal of the caveat had been lodged, and there was no realistic prospect that the caveators would or could successfully assert their interest against the purchaser prior to registration of its transfer. The Court of Appeal concluded that, given these circumstances, there was no basis on which the purchaser was justified in refusing to complete the contract. The appeal was allowed, and the judgments in the Supreme Court were set aside, with judgment to be entered for the defendants on the plaintiff's claim, and a decree of specific performance of the contract in favour of the defendants against the plaintiff on the defendants' counter-claim. The defendants were granted liberty to apply to a judge for further orders to give effect to that decree. The respondent was to pay the appellant's costs of and incidental to this appeal and the action to be taxed, and there was to be a certificate in favour of the respondent under the Appeal Costs Fund Act 1973.

Orders