Desyner Pty Ltd v Bernborough Developments (Qld) Pty Ltd
[2004] QDC 291
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- Desyner Pty Ltd v Bernborough Developments (Qld) Pty Ltd[2004] QDC 291
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Desyner Pty Ltd v Bernborough Developments (Qld) Pty Ltd[2004] QDC 291
Desyner Pty Ltd v Bernborough Developments (Qld) Pty Ltd[2004] QDC 291
DISTRICT COURT | No BD1356 of 2004 |
CIVIL JURISDICTION
JUDGE McGILL SC
Desyner PTY LTD (ACN 105 733 944) | Plaintiff |
and
BERNBOROUGH DEVELOPMENTS (QLD) PTY LTD (ACN 080 930 696) | Defendant |
BRISBANE
..DATE 29/07/2004
JUDGMENT
HIS HONOUR: This is an application for summary judgment. The plaintiff was the purchaser of a parcel of land under a contract of sale in the usual REIQ form, so approved by the Queensland Law Society which was dated the 22nd of October 2003. Under the contract in clause 2.6 the vendor is liable for outgoings up to and including the settlement date, and the buyer is liable for outgoings after the settlement date. Outgoings are defined to include rates and other local government charges. The clause goes onto provide that outgoings must be adjusted for those assessed but unpaid on the amount payable.
The matter proceeded to settlement and on settlement there was an agreed adjustment in respect of rates, but the adjustment did not reflect the amount actually payable to the local authority in respect of the land.
As a result of that the plaintiff purchaser, after completion of the purchase, has found itself liable to pay to the local authority an additional amount of $48,770.75. That amount had to be paid, and ultimately was paid by the purchaser, because it remained as against the local authority a charge on the land, however the responsibility for paying it really rested on the vendor, both under the contract and on general principles.
The plaintiff, however, is only really concerned with the action on the contract. In response the plaintiff has demanded that the defendant reimburse the plaintiff for that money and the defendant has failed to do so.
The issue sought to be raised on behalf of the defendant in response to the application for summary judgment was that the obligation under the contract merged on settlement pursuant to the ordinary doctrine of merger, and that accordingly the claim could not now be pursued, at least not in its present form.
In relation to the question of whether the obligation merged on the conveyance, on settlement and conveyance, it is relevant to bear in mind that under clause 10.6 of the contract there was an expressed provision that despite settlement and registration of the transfer any term of this contract that can take effect after settlement or registration remains in force.
There is also appellate authority in New South Wales and Victoria to the effect that the obligation to pay outgoing such as rates under a contract is an obligation which does not merge at settlement. The New South Wales authority is Palace v. Munro (1970) 72 SR (NSW) 507 and the Victorian authority is Pascon Proprietary Limited v. San Marco in Lamase Cooperative Social Club Limited, [1991] 2 VR 227.
It may be that strictly speaking those statements were dicta, but they are of high authority, and by way of contrast, no authority is relied on for the proposition that an obligation of this nature would merge on settlement and conveyance so as to destroy the right under the contract and so as to destroy the effect of the contractual obligation of the defendant to pay outgoings including rates and other local authority charges up to and including the date of settlement. Accordingly in my opinion that obligation does not merge and survived the completion of the sale.
Although that is something which might be capable of argument, it is a pure question of law, there is no issue of fact involved and it seems to me that it is sufficiently clear for me to be able to decide it on an application under this rule in chambers. No factual issue has been raised on behalf of the defendant in relation to the matter, and accordingly having resolved that issue of law I have no great difficulty in my view.
It does seem clear enough that the defendant has no real prospect of succeeding on its defence. The approach to summary judgment under rule 292 has been discussed in a number of cases in the Court of Appeal, most recently in a matter of Gray v. Morris [2004] QCA 5, where it seems to me that the correct approach is that in the judgment of McMurdo J.
Insofar as the judgment of Chesterman J differs from that approach, I do not consider that it reflects the majority view of the Court and it seems to me with respect to be in error in two respects; firstly, that it equates the test on a summary judgment application to the General Steel test on a strike-out application, and there is other recent authority in the Court of Appeal which rejects that approach, and, secondly, because it reads the rule as if the word “real” were omitted before the expression “prospect of succeeding on all or part of its defence,” and it seems to me that there is no justification for judicial amendment of the rule in that way.
I consider that the rule should be applied and is properly, on Court of Appeal authority, applied according to its terms. The issue before me is whether the defendant has any real prospect of succeeding on all or part of its defence and, in my opinion, it does not and there is no need for a trial, so I will give judgment as sought.
...
HIS HONOUR: No need to enter judgment any more, just a judgment that there be summary judgment pursuant to the Uniform Civil Procedure Rules, rule 292(2), that the defendant pay the plaintiff $49,968, including $1,197 interest.
...
HIS HONOUR: Well, subject to those amendments there will be a judgment in terms of the draft.