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Medwill Pty Ltd v YWCA Queensland[2017] QDC 233

Medwill Pty Ltd v YWCA Queensland[2017] QDC 233

DISTRICT COURT OF QUEENSLAND

CITATION:

Medwill Pty Ltd v YWCA Queensland [2017] QDC 233

PARTIES:

MEDWILL PTY LTD (CAN 101 615 669)

(Appellant)

v

YWCA QUEENSLAND (ACN 158 977 952)
(Respondent)

FILE NO/S:

4603/17

DIVISION:

Civil

PROCEEDING:

Appeal in accordance with s 222 of the Justices Act 1899

ORIGINATING COURT:

Magistrates Court at Brisbane 

DELIVERED ON:

15 September 2017

DELIVERED AT:

District Court at Southport

HEARING DATE:

16 June 2017

JUDGE:

Dick SC DCJ

ORDER:

Appeal dismissed

Appellant to pay respondent’s costs of and incidental to the appeal

CATCHWORDS:

CONTRACT LAW – GENERAL CONTRACTUAL PRINCIPLES – CONSTRUCTION AND INTERPRETATION OF CONTRACTS – s 22 of the Justices Act 1886 (Qld) – where there was a contract for sale and purchase of property – where there was a dispute regarding the interpretation of  an express contract term – where a Certificate of Classification was not provided before expiry date – where payment was to be made unconditionally to the defendant if Certificate of Classification was not provided before expiry – whether the Learned Magistrate properly interpreted the word “release” within the contract.

Justices Act 1886 (Qld)

Australian Broadcasting Commission v Australasian Performing Right Association Ltd (1973) 129 CLR 99

Craig Williamson Pty Ltd v Barrowcliff  [1915] VLR 450

COUNSEL:

P Travis for the appellant

J Griffin QC for the respondent

SOLICITORS:

Elliott May Lawyers for the appellant

McCullough Robertson Lawyers for the respondent 

  1. [1]
    This is an appeal from a decision of the Magistrates Court of Queensland dated 31 October 2016.
  1. [2]
    The matter involves the construction of a written contract for the sale and purchase of land. The factual background is uncontroversial. On or about 8 February 2013, the Appellant as vendor entered into a written contract with the Respondent as purchaser for the sale and purchase of property located at 936 Stanley Street, East Brisbane (“the property”).
  1. [3]
    Under the terms of the contract:

The purchase price was $2,400,000 which would be paid as follows:

  1. (a)
    A deposit in the sum of $120,000, and 
  1. (b)
    The balance of $2,280.000 to be paid at settlement.
  1. [4]
    Subsequent to the execution of the contract, due diligence showed that a certificate of clarification in respect of past fitout works (“the certificate”) was required.
  1. [5]
    On or about 25 March 2013, the appellant and the respondent agreed to terms varying the contract.
  1. [6]
    The terms of variation are contained in a letter from Holding Redlich to Lawrence & Associates dated 25 March 2013.
  1. [7]
    Amongst other things, the variation provided that the purchase price was to be reduced by $15,000 to $2,385,000. Further, the vendor would procure at its cost, the certificate. If the certificate was not provided at settlement, an amount of $50,000 would be withheld from the balance purchase price and paid into the trust account of Holding Redlich on certain conditions as to interest.
  1. [8]
    Parts of the variation specifically provided: “certificate of classification- in relation to the past tenancy fitout works undertaken by Medland, the parties agree as follows:

The vendor must procure to be obtained at the lender’s cost as soon as reasonably practicable and in any case by no later than one year after settlement, a certificate of classification in respect of the past fitout works and provide our client with a copy of it on receipt”.

  1. [9]
    The letter also contained the following sentence:

“Your client will appreciate our client cannot hold a retention amount indefinitely in our trust account. To this end, if the certificate of classification is not provided within one year after settlement, then Holding Redlich are irrevocably authorised and directed to release the retention amount to the YWCA. This does not release the vendor from its obligation to obtain the certificate”.

  1. [10]
    On or about 16 May 2014, the defendant’s solicitors sent a letter to the plaintiff which read in part: “in accordance with the irrevocable direction of the parties we have now released $50,000 and half of the interest on that amount being $50.03 to YWCA”.
  1. [11]
    The certificate was not provided to the YWCA until 20 July 2015 (about 15 months after settlement).

Magistrates Court

  1. [12]
    The Learned Magistrate accepted that pursuant to clause 26 of the contract, time was stipulated to be of the essence and that stipulation was reiterated in the variation.[1] He found that clause 2, paragraph D of the variation was “couched in mandatory terms”.[2]
  1. [13]
    The Learned Magistrate identified the issue as “one of construction of the relevant contractual terms”.[3]
  1. [14]
    He was of the view:

“That such construction must be one involving the application of common sense that achieves the goal of business efficacy and that most clearly supports the plain wording of the contract. In this case, no implication of terms of addition of words not contained in the contract is necessary. The starting point, in my view is the reiteration by the parties that time was of the essence. Given the fact that this was a contract of sale of an income- producing commercial property, that’s hardly unusual. Secondly, varied clause 2, paragraph D, subparagraph 1, exhibit 2 is couched in mandatory terms and provides for the latest date upon which the plaintiff was to provide a certificate of classification to the defendant. The wording of the clause and its meaning are unambiguous”.[4]

  1. [15]
    He accepted the defendant’s submission that the word ‘release’, when used in different clauses of the variation, should bear the same meaning to achieve certainty and consistent meaning and “must mean permanent release in each case”.[5]

Appellant’s Argument

  1. [16]
    The appellant argues that the construction of the word ‘release’ urged by the respondent requires leading additional words such as ‘unconditionally’ or ‘permanence’ into or alongside the word ‘release’.[6]
  1. [17]
    The appellant argues that another flaw in the respondent’s construction is that the object of the verb ‘release’ is ‘the retention money’ and that it does not operate to ‘release’ the respondent from any claim that the appellant has to pay the retained amount on delivery of the certificate.[7]
  1. [18]
    The appellant also took issue with the Magistrate’s concern that without adopting the respondent’s construction there would be “no substantive effect for the plaintiff” of its delay and would “have the effect of nullifying the purpose of clause 2(d)”. The appellant says the effect would be that the respondent would have access to civil remedies such as specific performance, damages or termination.[8]

Respondent’s Submissions

  1. [19]
    The respondent argues that to construe by the use of the word ‘release’ that the parties intended that the recipient was intended to keep it, required no implication of further terms.[9]
  1. [20]
    The respondent argues that the Learned Magistrate correctly held that where the parties used the word ‘release’ it was, having regard to the contract as a whole, to be construed as having a consistent meaning.[10]
  1. [21]
    The respondent argues that the appellant is incorrect in ignoring that time was of the essence, ignoring that the appellant had an obligation to procure the certificate “in any case by no later than a year after settlement” and in placing too much emphasis on the amount as a “retention amount”.[11]
  1. [22]
    The respondent argues that the crucial word for consideration is the word ‘release’ where that word appears in the amended contract and that the contract uses that word for the notional payment of the $50,000 to the appellant respondent.[12]
  1. [23]
    Further, if the transfer to the respondent was not intended to be an absolute transfer of the funds, one would have expected the terms upon which the money was to be held to be specified.[13]
  1. [24]
    In any event, such a construction would mean that the requirement to pay the $50,000 to the appellant could be triggered at any time “even in 100 years hence”.[14]
  1. [25]
    The respondent argues that the opening words of subclause 2(d)(v) of the variation letter, containing the explanation the money could not be held “indefinitely in our trust account” was not part of any term in the contract of the trust account authorities. The requirement that the appellant was required to provide the certificate within the settlement would have no effect if the appellant could obtain the $50,000 by providing the $50,000 at any time in the future.

Decision

  1. [26]
    In my view, the word ‘release’ should be construed consistently where it occurs in the variation document. See Craig Williamson Pty Ltd v Barrowcliff  [1915] VLR 450 at 452 per Hodges J: 

“I think it is a fundamental rule of construction that any document should be construed as far as possible so as to give the same meaning to the same words wherever those words occur in that document and that that applies especially to an Act of Parliament, and with special force to words contained in the same section of an Act. There ought to be very strong reasons present before the court holds that words in one part of a section have a different meaning from the same words appearing in another part of the same section”.

  1. [27]
    The finding that the term ‘release’ means a permanent release is, in my view, supported by other factors:
  1. Unlike the placing of the $50,000 in the Holding Redlich Trust Account, which was attended by signed trust account authorities with provisions relating to interest, the release to the respondent was not attended by such conditions.
  1. The variation provided that the release did not “release Vendor from the Vendor’s obligations” to provide the certificate.
  1. If the appellant is correct, the YWCA would be required to pay the $50,000 at any time the certificate was produced even if many years later.
  1. If the certificate was never obtained, the money would be held by the respondent for all time.
  1. If the release was permanent, it accords with common sense and commercial reality and practicality.
  1. The argument that the respondent had available to it, an array of civil remedies, is difficult to maintain if the release is to be open ended as to time because it would be impossible to nominate when a breach by the appellant is said to have occurred.
  1. [28]
    I adopt principles espoused in Australian Broadcasting Commission v Australasian Performing Right Association Ltd (1973) 129 CLR 99 at 109 per Gibbs J:

“It is trite law that the primary duty of a court in constructing a written contract is to endeavour to discover the intention of the parties from the words of the instrument in which the contract is embodied. Of course the whole of the instrument has to be considered, since the meaning of any one part of it may be revealed by other parts, and the words of every clause must if possible be construed so as to render them all harmonious one with another. If the words used are unambiguous the court must give effect to them, notwithstanding that the result may appear capricious or unreasonable, and notwithstanding that it may be guessed or suspected that the parties intended something different. The court has no power to remake or amend a contract for the purpose of avoiding a result which is considered to be inconvenient or unjust. On the other hand, if the language is open to two constructions, that will be preferred which will avoid consequences which appear to be capricious, unreasonable, inconvenient or unjust, ‘even though the construction adopted is not the most obvious, or the most grammatically accurate’”.

Conclusion

  1. [29]
    I have decided that the Learned Magistrate was correct in all his critical decisions.
  1. [30]
    The appeal is dismissed. The appellant is to pay the respondent’s costs of and incidental to the appeal.

Footnotes

[1]T2, 6-10.

[2]Ibid 13- 14

[3]Ibid 31- 32.

[4]Ibid 37- 47.

[5]T3, 1-7.

[6]Appellant’s submissions [18].

[7]Ibid [21].

[8]Ibid [23].

[9]Respondent’s submissions [1.1], [1.2].

[10]Ibid [1.3].

[11]Ibid [1.5].

[12]Ibid [3.3].

[13]Ibid [3.15].

[14]Ibid.

Close

Editorial Notes

  • Published Case Name:

    Medwill Pty Ltd v YWCA Queensland

  • Shortened Case Name:

    Medwill Pty Ltd v YWCA Queensland

  • MNC:

    [2017] QDC 233

  • Court:

    QDC

  • Judge(s):

    Dick DCJ

  • Date:

    15 Sep 2017

Appeal Status

Please note, appeal data is presently unavailable for this judgment. This judgment may have been the subject of an appeal.

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