Zele v Clark - [2022] NSWSC 925

Supreme Court

New South Wales

Medium Neutral Citation: Zele v Clark [2022] NSWSC 925
Hearing dates: 11 July 2022
Date of orders: 11 July 2022
Decision date: 11 July 2022
Jurisdiction: Equity - Expedition List
Before: Parker J
Decision:
See [37]-[38]

Catchwords:
REAL PROPERTY – specific performance – contract for the purchase of residential property – enforceability – vendor alleges contracts exchanged without his authority – vendor refusing to complete – hardship – futility – two registered mortgages over the property – caveats over the property – specific performance ordered

Legislation Cited:
Real Property Act 1900, s 57(2)(b)

Cases Cited:
Caird Seven Pty Ltd v Attia and Shopsmart Pharmacy Franchising Pty Ltd (No 3) (2016) 92 NSWLR 457
Dougan v Ley (1946) 71 CLR 142
Ryde Ex Services Memorial and Community Club Ltd v Kaloriziko Ryde Pty Ltd [2017] NSWSC 1576

Category: Principal judgment
Parties: Paul Stefan Zele (First Plaintiff)
Anne Margaret Zele (Second Plaintiff)
Richard Bernard Clark (Defendant)
Representation:
Counsel:
P Folino-Gallo (First and Second Plaintiffs)

In person:
R Clark (Defendant)
Solicitors:
TH Walker (First and Second Plaintiffs)

File Number(s): 2022/83507
Publication restriction: Nil

Judgment – EX TEMPORE

Revised from transcript and annotated; issued 14 July 2022

These are proceedings for specific performance which have been brought before the Court on an expedited basis. The subject matter of the proceedings is a residential property at Wyong. The plaintiffs are the purchasers under a written contract for the sale of land dated 17 December last year. The defendant is the vendor under that contract.
The contract provided for a purchase price of $1.5 million with a deposit of $150,000. That deposit included a 0.2% holding deposit which was paid before the contract was signed.
The contract provided for a date of completion of 31 January this year. Following the failure by the defendant, Mr Clark, to complete on that date, a notice to complete was issued which was then withdrawn pursuant to a provision of the contract. It is not necessary to go into the details of what happened. The plaintiffs, Mr and Mrs Zele, rely on a notice to complete which is dated 1 March and provided for completion to take place on 16 March.
Mr Clark, who represented himself, raised two broad objections to the Zeles’ application for specific performance. First, he contested that the contract was enforceable. Alternatively, if the contract was enforceable Mr Clark contended that the Court should refuse specific performance and remit the Zeles to a claim for damages at common law.

Validity and enforceability of contract

Under this heading Mr Clark raised two points. First, he asserted that his conveyancer had exchanged contracts on his behalf without his authority. Secondly, he asserted that the deposit was paid late and this rendered the contract unenforceable.
As to Mr Clark’s first point, the copy of a contract in evidence bears his signature, the validity of which is not in dispute. Mr Zele gave affidavit evidence as follows:

On or about 17 December 2021, my…

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.

Continue reading Zele v Clark

Details

AGLC: Zele v Clark [2022] NSWSC 925
Case: [2022] NSWSC 925
Decision Date: 11 July 2022

CaseChat Overview and Summary

Zele, the purchaser, initiated proceedings against Clark, the vendor, seeking specific performance of a contract for the purchase of residential property. The dispute arose when Clark refused to complete the sale, alleging that the contracts had been exchanged without his authority. Zele sought an order for specific performance, arguing that Clark's refusal to complete was unjustified and caused undue hardship. The court had to determine whether the contract was enforceable, whether Clark's refusal was valid, and if specific performance was an appropriate remedy given the presence of multiple mortgages and caveats over the property.

The primary legal issue before the court was whether the contract for the purchase of the residential property was binding and enforceable against Clark. The court considered whether Clark had the authority to exchange contracts, the validity of the refusal to complete, and whether specific performance was an appropriate remedy in light of the multiple mortgages and caveats over the property. Additionally, the court had to assess the hardship caused by Clark's refusal and whether there was any futility in ordering specific performance.

The court found that the contract was indeed binding and enforceable against Clark. It determined that Clark had the authority to exchange contracts and that his refusal to complete was unjustified. The court concluded that specific performance was an appropriate remedy despite the presence of multiple mortgages and caveats over the property, as these did not constitute sufficient grounds to deny the remedy. The court found that the hardship caused by Clark's refusal outweighed any potential detriment to the other parties with interests in the property. The court ordered specific performance of the contract, requiring Clark to complete the sale of the property to Zele.

The court ordered Clark to complete the sale of the residential property to Zele, despite the presence of multiple mortgages and caveats over the property. The order for specific performance was made on the basis that the contract was binding, Clark's refusal to complete was unjustified, and the hardship caused by his refusal outweighed any potential detriment to the other parties with interests in the property.

Orders