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[2011] NSWCA 35

Statewide Developments Pty Ltd v Higgins

1. Appeal dismissed. 2. The appellant pay the respondent's costs of the appeal. [Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.]

Catchwords

CONTRACT - damages - purchaser under a contract for the sale of a unit defaults - vendor terminates contract - vendor claims as damages mortgage interest payments - whether evidence established that the claimed loss was caused by the purchaser's breach CONVEYANCING - primary Judge orders return of deposit under s 55(2A) of the Conveyancing Act 1919 (NSW) by reason of the vendor's misrepresentation prior to the contract - whether any error shown in the exercise of the primary Judge's discretion

Cases cited

  • Alexander v Cambridge Credit Corporation Ltd(1987) 9 NSWLR 310
  • Carpenter v McGrath(1996) 40 NSWLR 39
  • Flight v Booth (1834) 1 Bing NC 370; 131 ER 1160
  • Hadley v Baxendale (1854) 9 Exch 341; 156 ER 145
  • Havyn Pty Ltd v Webster[2005] NSWCA 182, ATPR (Digest) 46-266
  • Higgins v Statewide Developments Pty Ltd[2010] NSWSC 183
  • Higgins v Statewide Developments Pty Ltd[2010] NSWSC 383
  • Hungerfords v Walker[1989] HCA 8; 171 CLR 125
  • Jampco Pty Ltd v Cameron (No 2)(1985) 3 NSWLR 391
  • March v E & HM Stramore Pty Ltd[1991] HCA 12; 171 CLR 506
  • Murphy v Overton Investments Pty Ltd[2004] HCA 3; 216 CLR 388
  • Nassif v Caminer[2009] NSWCA 45; 74 NSWLR 276
  • Palasty v Parlby[2007] NSWCA 345; (2008) NSW Conv R 56-205
  • Robinson v Harman (1848) 1 Ex 850; 154 ER 363
  • The Commonwealth v Amann Aviation Pty Ltd[1991] HCA 54; 174 CLR 64

Legislation cited

  • Trade Practices Act 1974 (Cth), § 51A, 52, 82
  • Conveyancing Act 1919 (NSW), § 55(2A)
  • Uniform Civil Procedure Rules 2005 (NSW)

Judgment

Judgment

  1. [1]

    MACFARLAN JA: I agree with Sackville AJA.

  2. [2]

    HANDLEY AJA: I agree with Sackville AJA.

  3. [3]

    SACKVILLE AJA: The appellant (" Vendor ") appeals from a decision of a Judge of the Supreme Court (Barrett J). His Honour ordered that the deposit paid under a contract of sale of a residential unit between the Vendor and the respondent (" Purchaser ") be repaid to the Purchaser: Higgins v Statewide Developments Pty Ltd [2010] NSWSC 183. His Honour also dismissed a cross-claim by the Vendor for damages by reason of the Purchaser's breach of the contract of sale.

  4. [4]

    The primary Judge found that the Vendor had been entitled to terminate the contract by reason of the Purchaser's breach. That finding is no longer is dispute. The issues on the appeal are whether the primary Judge erred: (i) in rejecting the Vendor's claim to damages by reason of the Purchaser's breach, particularly in rejecting the Vendor's claim to recover interest costs said to be the result of the Purchaser's breach of contract; and (ii) in determining that the deposit paid by the Purchaser should be returned to him pursuant to s 55(2A) of the Conveyancing Act 1919 (NSW) (" Conveyancing Act ").

  5. [5]

    By reason of a notice of contention filed by the Purchaser, the first issue includes the question of whether the Vendor failed to prove that any loss it may have sustained was a result of the Purchaser's breach of the Contract.

  6. [6]

    The second issue requires reference to s 55(2A) of the Conveyancing Act . It provides as follows: "In every case where the court refuses to grant specific performance of a contract, or in any proceedings for the return of a deposit, the court may, if it thinks fit, order the repayment of the deposit with or without interest thereon".

The Contract

  1. [7]

    The Vendor was the developer of a substantial home unit development at Homebush Bay. On 30 October 2003, the Purchaser entered into a contract of sale to purchase " off-the-plan " a residential unit and two car spaces within the development (" Contract "). At that time, the development site was vacant. The unbuilt unit was designated in the contract as " Apartment G02 " (" Apartment ").

  2. [8]

    The Contract was in the standard form approved by the Law Society and Real Estate Institute (2000 Edition) and included a number of special conditions. The purchase price for the Apartment was $761,000. The Contract provided for a deposit of 10% of the purchase price ($76,100). That amount was paid by the Purchaser, initially by way of a bond as the Contract contemplated, and subsequently in cash.

  3. [9]

    Under the Contract, completion of the sale was due fourteen days after service of a notice by the Vendor following registration of the Strata Plan subdividing the development site (Special Condition 31.1). The Vendor gave the notice contemplated by Special Condition 31.1 on 16 February 2007. The notice nominated the date for completion as 2 March 2007.

  4. [10]

    Standard cl 9 of the Contract provided as follows: " Purchaser's default If the purchaser does not comply with this contract (or a notice under or relating to it) in an essential respect, the vendor can terminate by serving a notice. After the termination the vendor can - "9.1 keep or recover the deposit (to a maximum of 10% of the price); 9.2 hold any other money paid by the purchaser under this contract as security for anything recoverable under this clause - 9.2.1 for 12 months after the termination ; or 9.2.2 if the vendor commences proceedings under this clause within 12 months, until those proceedings are concluded; and 9.3 sue the purchaser either - 9.3.1 where the vendor has resold the property under a contract made within 12 months after the termination , to recover - the deficiency on resale (with credit for any of the deposit kept or recovered; and the reasonable costs and expenses arising out of the purchaser's non-compliance with this contract or the notice and of resale and any attempted resale; or 9.3.2 to recover damages for breach of contract." (Emphasis added.)

  5. [11]

    The Contract also included the following Special Conditions:

Unofficial copy. Source: NSW Caselaw. Refer to the official version for authoritative text.