Highmist Pty Ltd v Tricare Australia Ltd
[2005] QSC 115
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- Unreported Judgment
- Appeal Determined (QCA)
- Highmist Pty Ltd v Tricare Australia Ltd[2005] QSC 115
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Highmist Pty Ltd v Tricare Australia Ltd[2005] QSC 115
Highmist Pty Ltd v Tricare Australia Ltd[2005] QSC 115
SUPREME COURT OF QUEENSLAND
CITATION: | Highmist Pty Ltd v Tricare Australia Ltd [2005] QSC 115 |
PARTIES: | HIGHMIST PTY LTD ACN 073507481 v TRICARE AUSTRALIA LIMITED ACN 009657345 |
FILE NO: | S6456/01 |
DIVISION: | Trial Division |
PROCEEDING: | Trial |
DELIVERED ON: | 1 April 2005 |
DELIVERED AT: | Brisbane |
HEARING DATES: | 30 November, 1, 3 December 2004 |
JUDGE: | Wilson J |
ORDERS: | THE COURT DECLARES that:
THE COURT ORDERS that:
(“the reconfiguration”).
|
CATCHWORDS: | CONTRACTS – GENERAL CONTRACTUAL PRINCIPLES – CONSTRUCTION AND INTERPRETATION OF CONTRACTS – IMPLIED TERMS – GENERALLY – where the plaintiff entered a contract of sale to purchase land from the defendant – where the plan attached to the contract differed from the registered plan – where the registered plan did not give the plaintiff access to the adjacent thoroughfare – whether there is an implied term that the plaintiff would have access to the thoroughfare for the purposes of future development of the land CONTRACTS – GENERAL CONTRACTUAL PRINCIPLES – DISCHARGE, BREACH AND DEFENCES TO ACTION FOR BREACH – REPUDIATION AND NON-PERFORMANCE – ELECTION AND RECISSION – GENERALLY – where the plaintiff and defendant disagreed on the interpretation of the contract – whether the plaintiff’s assertion of its interpretation of the contract amounted to repudiation – whether the plaintiff is entitled to specific performance – whether the defendant is entitled to recision Mixed Use Development Act 1993, ss 14, 15, 66, 174, 177 Alcatel Australia Limited v Scarcella (1998) 44 NSWLR 349, cited BP Refinery (Westernport) Pty Ltd v Shire of Hastings (1977) 180 CLR 266, cited Codelfa Construction Pty Ltd v State Rail Authority of NSW (1982) 149 CLR 337, cited Dabbs v Seaman (1925) 36 CLR 538, discussed DTR Nominees Pty Ltd v Mona Homes Pty Ltd (1978) 138 CLR 423 at 431-432, applied Furness Railway Co v Cumberland Coop Building Society (1884) 52 LT 144 at 145, referred to Green v Sommerville (1979) 141 CLR 594 at 611, cited Hutchinson v Lemon [1983] 1 Qd R 369, referred to Lake Macquarie City Council v Luka [1999] NSWCA 447, referred to Lamos Pty Ltd v Hutchinson (1984) 3 BPR [97195] at 932-933, referred to Mellor v Walmesley [1905] 2 Ch 164, cited Roberts v Karr (1809) 1 Taunt 495; 127 ER 926, cited Rock v Todeschino [1983] 1 Qd R 356 at 364, referred to Royal Botanic Gardens and Domain Trust v South Sydney City Council (2002) 76 ALJR 436, noted Rudd v Bowles [1912] 2 Ch 60, cited Shevill v The Builders Licensing Board (1981 – 1982) 149 CLR 620 at 633, cited |
COUNSEL: | PJ Lyons QC and MK Conrick for the plaintiff AM Daubney SC and MD Martin for the defendant |
SOLICITORS: | Praeger Batt Solicitors for the plaintiff McCullough Robertson for the defendant |
- WILSON J: By this proceeding commenced on 13 July 2001 the plaintiff seeks specific performance of a contract for the sale of certain land on the Gold Coast and other relief. The defendant has counterclaimed for rescission on the basis of alleged wrongful repudiation by the plaintiff. The parties asked the Court to determine only the issues of the plaintiff's entitlement to specific performance and the defendant's claim of rescission. The Court was asked not to deal with the plaintiff's claim for damages.
Background
- About 20 years ago the defendant acquired freehold title to over 40 hectares of land west of Broadbeach on the Gold Coast. A road variously known as Mudgeeraba Broadbeach Road or Gold Coast Springbrook Road or Gooding Drive lay along its northern boundary. Another road, called Robina Parkway, lay along the western boundary. A drainage reserve ran along the boundary from the Mudgeeraba Broadbeach Road in an approximately south westerly direction to what was approximately the southern apex of the land. There were other properties on the other side of the boundary running from that apex west to Robina Parkway.
- In about 1986 that land was rezoned Special Facilities (Retirement Village and Nursing Home) under the relevant town planning scheme. The defendant appealed to the Local Government Court against some of the conditions attaching to the rezoning. The defendant and the Council reached a compromise, as a result of which that Court allowed the appeal and altered some of the conditions.
- The conditions attached to the rezoning (as varied on appeal by the Local Government Court) included -
"2(a) Design and construction of site entrances to the reasonable requirements of the Main Roads Department including intersection works and channelization as required on detail design PROVIDED THAT access to the site is to be limited to one entrance which entrance may be at such location along the Gold Coast/Springbrook Road as the [defendant] shall determine and PROVIDED FURTHER THAT the [defendant] shall first satisfy the [Council] that the location of the said entrance shall not result in the creation of a traffic hazard and shall be capable of satisfactory operation as a matter of traffic engineering."
- The compromise between the defendant and the Council was effected by a Deed of Settlement to which were attached plans for the development of the land. The deed was varied several times by the substitution of different plans. A variation effected in October 1994 substituted a Cypress Gardens Master Plan showing an internal thoroughfare, and providing access to the Gold Coast Springbrook Road at the mouth of that thoroughfare.
- In 1995 the Governor in Council approved a Mixed Use Development Scheme for the land, to be known as "Cypress Gardens Retirement Community". (See Mixed Use Development Act 1993.) Approval was given for the immediate development of about one-third of the land being (approximately) its eastern portion (lot 2 on RP 890439). Provisional approval was given for the future development of the western two-thirds (lot 1 on RP 890439).
- The approval for the immediate development of the eastern portion of the defendant's land as a Mixed Use Development Scheme included the mouth of the internal thoroughfare as the only point of access on to the Gold Coast Springbrook Road.
- In about April 1996 the defendant was approached by a real estate agent (Mr Curko) inquiring whether it was interested in selling 20 acres for $2 million. Those interested in purchasing were described as the Italian Soccer Club (of which Mr Tony Cecco was the president) and two people, Messrs Skehan and O'Malley. Discussions and negotiations proceeded apace; there was talk of the use of the land for an Italian soccer club and for an Italian retirement complex, Mr DP O'Shea on behalf of the defendant making it plain to Mr Cecco that the defendant would not grant access over its land for the soccer club. The negotiations eventuated in the execution of the subject contract with the plaintiff (of which Mr Skehan was a director) as purchaser.
The Contract
- The contract was dated 27 April 1996. The defendant agreed to sell to the plaintiff most of the area for which there had been provisional approval for future development for $4.2 million. The land was particularised as follows -
“Address:Springbrook Road, Cypress Gardens
Present Use (if any):Vacant land
Description:Part of lot 1 on RP 890439 as is approximately shown on the attached plan
County:WardParish: Gilston
Title Reference:50086052
Area:25.87 ha (approximately)(more or less)
Type of Holding:FreeholdLease No:
Local government:Gold Coast City Council”
- The plan annexed to the contract was not a registered plan, but a reproduction of a plan prepared by the defendant's surveyors in relation to the Mixed Use Development Scheme. The area to be sold (“the balance of lot 1 on RP 890439”) was marked out by a thick hand drawn line. In broad terms it was the western two-thirds of the defendant’s land to which I have already referred, minus an allotment in the south-east corner of 3.27 hectares (“CDL 20” – “the lake lot”) and minus another allotment of 0.34 hectares which included a road along the northern and western sides of the lake lot.
- The contract was silent about access to the land being sold. The internal thoroughfare was shown on the area to be retained by the defendant, contiguous with its western extremity: that thoroughfare was a community property lot under the Mixed Use Development Scheme on the area to be retained by the defendant. The hand drawn line delineating the area to be sold ran from the northern boundary immediately to the west of that thoroughfare for a distance equivalent to approximately 190 metres, then turned west for a distance equivalent to approximately 105 metres and then due south to the southern boundary of the defendant's land.
- At the time the contract was executed Mr Skehan knew that there was to be only one access to the whole development site. He knew that the internal thoroughfare was a “private road”; and although there were no discussions about the plaintiff’s having any right to use that thoroughfare, he seems to have blithely assumed or hoped that in one way or another the plaintiff would be able to use it.
- The following notations appeared in the top left hand corner of the plan -
“AREA OF LOT 1 ON RP890439 …. 29.48ha
AREA OF PROPOSED LOT 20 …. 3.27 ha
AREA OF PROPOSED CPL1 …. 0.34ha
BALANCE OF AREA OF LOT 1 ON RP890439 …. 25.87ha
AREAS ARE APPROXIMATE ONLY
AND ARE SUBJECT TO SURVEY”
- The contract was in the standard form REIQ/QLS Residential Land & Residential Units & Houses Contract form (2nd ed) together with some special conditions. The special conditions included -
“46DUE DILIGENCE
This contract is subject to and conditional upon the Purchaser satisfying itself within a period of 60 days from the date hereof as to the feasibility of the Purchaser’s proposed development of the subject property on terms to the complete satisfaction of the Purchaser in every respect. The Purchaser’s proposed development includes the possible future sale of part of the land to the Gold Coast Italo - Australian Club Limited for use as a Licensed Sporting Recreational Club. The Purchaser undertakes to notify the Vendor or the Vendor’s solicitors in writing prior to the expiration of the aforementioned 60 day period as to the satisfaction or otherwise of this clause. In the event that the Purchaser is unable to satisfy itself as to the feasibility of the development of the property and gives notice in writing to that effect to the Vendor or the Vendor’s solicitors then this contract shall be at an end. If the Purchaser fails to give notice in writing within the aforementioned period of the Purchaser’s satisfaction as to the feasibility of the Purchaser’s proposed development then at any time thereafter at the option of the Vendor this contract shall be at an end. This condition is solely for the benefit of the Purchaser and the Purchaser may at any time prior to 5.00pm on the last day of the relevant period waive the said condition by written notice to the Vendor and upon waiver in this manner the condition shall be deemed to have been satisfied.
47SUBDIVISION REGISTRATION
47.1This contract is subject to:
(a)approval by the Local Authority and registration in the appropriate office of a plan of subdivision substantially in the form attached; and
(b)the issue of an indefeasible title under the Land Title Act 1994 for the Land required to register the transfer to the Purchaser,
on or before the Completion Date.
47.2If the condition referred to in clause 47.1 has not been satisfied by the Completion Date the Purchaser may terminate this contract by notice in writing given to the Vendor. In such event all deposit and other moneys received by the Vendor or the Stakeholder on account of the purchase price (other than the First Deposit Instalment and the Second Deposit Instalment) shall be refunded to the Purchaser without deduction.
47.3The Vendor will diligently pursue the Local Authority and relevant government offices in relation to the subdivision plans and applications lodged by it under this clause.
47.4The plan of subdivision shall be taken to be substantially in the form attached notwithstanding that the boundaries differ, provided that:
(a)the boundaries do not vary from those on the attached plan by a distance of more than 20 metres at any point; and
(b)the area of the Land to be purchased does not reduce by more than 3%.
47.5Notwithstanding clause 47.4, the purchaser may at its sole discretion elect to complete this contract, if the boundaries do vary from those on the attached plan by a distance of more than 20 metres at any point, or the area of Land to be purchased does reduce by more than 3%.
47.6If the condition is satisfied the Vendor shall give notice in writing of such satisfaction to the Purchaser promptly and in any event not later than 2 business days after the date of satisfaction.
…
49COMPLETION
49.1The date of completion under this contract is the date falling 18 calendar months after the date of this contract or at the option of the Purchaser, the date being 5 days after registration of the plan of subdivision in accordance with clause 47.
49.2Despite clause 49.1, the Purchaser may at its sole discretion elect to complete this contract prior to the date falling 18 calendar months after the date of this contract, but after the date of satisfaction of the condition contained in clause 47.1. Should the Purchaser wish to complete this contract during that time, the Purchaser shall give the Vendor 5 business days prior notice in writing, which notice shall specify the date upon which the Purchaser requires completion to be effected.”
Post contract
- In July 1996 the defendant proposed effecting the subdivision of the land sold to the plaintiff by obtaining an extension of the Mixed Used Development Scheme over part of the land previously designated for future development (namely, the proposed CDL lot 20 – the lake lot), resulting in the balance of lot 1 which would be transferred to the plaintiff pursuant to the contract.
- Between August and October 1996 there were further negotiations between the defendant and the plaintiff, the defendant proposing that it would provide the plaintiff with access over the thoroughfare in return for excision of the north–east corner of the subject land for use by the defendant as a medical centre. On 15 November 1996 the defendant’s solicitors wrote to the plaintiff’s solicitors -
“In view of the delays our client does not wish to grant access rights to your client via our client’s property in return for retention of part of the property which is the subject of the contract.
Our client has asked the surveyor to prepare a new form of subdivision which does not exclude from the sale the ‘medical centre site’, and as soon as this has been prepared our client will lodge that for approval by the local authority.”
- On 5 December 1996 the defendant’s solicitors sent the plaintiff’s solicitors a plan showing the proposed lake lot differently configured from how it had been on the plan attached to the contract. On the new plan it was a battle axe shaped block, the handle of the battle axe proceeding in a northerly direction until it reached Mudgeeraba Broadbeach Road (Gold Coast Springbrook Road). The handle of the battle axe was approximately parallel with and immediately to the west of the internal thoroughfare: it physically isolated the balance of lot 1 (ie the land sold to the plaintiff) from that thoroughfare.
- In early 1997 the defendant applied for approval of the next stage of the Mixed Use Development Scheme. There was litigation between it and the Gold Coast City Council first about the Council’s failure to approve the application and then about the conditions it imposed. That litigation was finally concluded in the Court of Appeal in November 1999.
- Meanwhile in August 1997 the plaintiff entered into a “conditional purchase agreement” with JLF Corporation Pty Ltd (“JLF”) by which JLF might require the plaintiff to sell it the land it had contracted to purchase from the defendant. The plaintiff advised the defendant that it had appointed JLF to undertake negotiations directly with the defendant in respect of the purchase and authorised the defendant to deal directly with JLF.
- New solicitors for the plaintiff (instructed by JLF) took up issues of delay in registration of a plan of subdivision as contemplated in the contract, and the proper interpretation of relevant provisions of the contract. That resulted in their filing a construction summons in the Supreme Court on 17 October 1997. That litigation concluded in the Court of Appeal on 1 September 1998.
- Meanwhile on 16 October 1997 the solicitors for the plaintiff wrote to the solicitors for the defendant drawing attention to clause 47.4 of the contract and saying –
“The plan annexed to the Contract clearly provides for subdivision of the site along the common access road. A brief comparison of the proposed subdivisional plan and that attached to the Contract indicates:
(a) The subdivisional plan is inconsistent with both the Contract and previous drafts provided in October 1996;
(b) Clause 47.4 may have been breached;
(c) Access appears to be denied.
The subdivisional plan does not contain details of the Scheme and accordingly, the statements (b) and (c), above, are supposition only at this time.
Our client has no wish to pursue further unnecessary action, and accordingly requests that you confirm the plan:
(a)provides access; and
(b)does not vary the boundary by more than 20 metres or reduce the area by in excess of 3%.”
- The battle lines for the present dispute were drawn when the defendant’s solicitors replied on 23 October 1997 –
“Please find enclosed copy of an identical Community Plan to that lodged with the Application for Subsequent Stage Approval under the Mixed Use Development Act with the exception that the boundary variation has been designated. The attached plan demonstrates that there has been no breach of Clause 47.4 of the Contract of Sale. The boundaries do not vary from those on the Plan attached to the Contract by a distance of more than 20 metres at any point nor is the area of land to be purchased reduced by more than 3%.
In relation to the issue of ‘access’, it has never been a term of the Contract of Sale that your client was entitled to access to any road internal to our client’s development and we therefore do not understand your request that our client ‘confirm the Plan: (a) Provides access’.”
- There was further correspondence in which the plaintiff’s solicitors asserted that under the contract their client was entitled to access over the thoroughfare.
- In December 1999 representatives of the Department of Main Roads advised the defendant and others that their Department would resume land from the internal thoroughfare to provide access to the land being sold to the plaintiff. Formal Notices of Intention to Resume were issued in June 2001, and such a notice remains current over the thoroughfare.
- On 4 April 2001 the defendant made application to the Gold Coast City Council for the sealing of a plan of subdivision of lot 1 on RP 890439. This created lot 20 (4.395 hectares) and lot 21 (25.09 hectares). Lot 20 (the lake lot) was a battle axe block similar in shape to that shown on the plan produced by the defendant in December 1996. Ultimately the plan was approved and registered as SP 133252 on Friday 21 September 2001.
Commencement of this proceeding
- Meanwhile on 13 July 2001 the plaintiff commenced this proceeding for specific performance.
- In the statement of claim filed with claim, the plaintiff alleged (inter alia) -
"12.It was a [sic] implied condition of the Contract that the Plaintiff would have access to the main thoroughfare for the purposes of future development of the land.
- The Defendant has –
(a) sought the approval and registration of a plan of subdivision which excludes access to the main thoroughfare; ...
...........
- The Defendant seeks to register a plan of subdivision which is not in accordance with the contract of sale and in lieu proposes to grant access to the main access road by unspecified means."
The plaintiff claimed (inter alia) –
"specific performance of the Contract, in particular the subdivision of the land in accordance with the plan attached to the Contract."
Defendant’s Call for Completion
- On Tuesday 25 September 2001 the defendant called on the plaintiff to complete the next day. The plaintiff did not do so.
Defendant’s Claim for Rescission
- Although at one time the defendant sought to rely on the plaintiff’s refusal to complete on 26 September 2001 as repudiation, by the time this proceeding was heard at the end of 2005, it no longer sought to do so. Rather, as I shall explain in more detail shortly, it asserted that the plaintiff had repudiated the contract by evincing an intention not to perform it other than in accordance with its wrong interpretation of it, and that it (the defendant) had accepted that repudiation and elected to terminate the contract at the latest in its further amended defence and counterclaim delivered in February 2002.
Whether in Conformity with the Contract
- At the time the contract was executed, the lake lot and the proposed CPL 1 had not been surveyed. They were intended to encompass development which was an extension of the Mixed Use Community Development Scheme on the eastern third of the defendant’s land. In those circumstances the land being sold could not be identified with absolute precision. I accept the submission of counsel for the plaintiff that clause 47 contains machinery provisions intended to produce the parcel of land identified elsewhere in the contract (in the particulars of the land sold and on the plan). This is apparent from its role in the contract taken as a whole and confirmed by the general structure of clause 47 itself: clause 47.1 makes the contract conditional on the subdivision; clause 47.3 requires the defendant to pursue applications for subdivision; clause 47.4 deals with variations to the subdivision; clause 47.6 provides machinery to enable settlement to occur. I accept their submission that, in context, clause 47 was not intended to give the defendant the right to alter the boundaries of the parcel generally, but only to give effect to the proposed subdivision, identified and explained, on the contract plan.
- The most obvious difference between the contract plan and the registered plan of subdivision is that on the latter lot 21 (the land being sold) is not contiguous with the thoroughfare on the Mixed Use Development Scheme land (CPL 5). This is the result of change in the configuration of the lake lot (lot 20) so that it became a battle axe block. There was evidence led from a surveyor, Mr Pozzi, that lot 21 was 3.015% smaller than the lot shown on the contract plan. Further, the boundaries of lot 21 vary from those of the proposed lot on the contract plan: the point at which its eastern and southern boundaries intersect is about 26 metres south west of the point at which they intersected on the contract plan, and at one point the southern boundary of lot 21 is approximately 38 metres south of where it was on the contract plan. While it is correct, as counsel for the defendant observed, that the area specified of 25.87 hectares was an approximation, the contract expressly dealt with the tolerances intended in clause 47.4, and variations in area and position of the boundaries exceeded those allowed. The registered plan of subdivision was not substantially in the form attached to the contract.
- In its statement of claim the plaintiff alleged that it was an implied condition of the contract that it would have access to the main thoroughfare for the purposes of future development of the land it was purchasing. The defendant alleged that that was not so, and that by continuing to assert that it was the plaintiff repudiated the contract. The plaintiff contends that even if it were ultimately held to have been wrong in asserting such an implied term, the interpretation for which it contended was not untenable or known to be wrong, and so, it contends, the maintenance of that incorrect interpretation could not amount to repudiation: see Greig and Davis The Law of Contract (1987) 1221 and the cases cited there.
- By letter dated 25 July 2001 the plaintiff’s solicitors provided the following particulars of this allegation, namely that on the contract plan the line of subdivision followed the thoroughfare, that under clause 2(a) of the Development Deed between the defendant and the local authority access to the site was limited to one entrance, and that both parties were aware of the conditions of that deed when they entered the contract. Thus, it seemed, the plaintiff was contending that such a term should be implied as a matter of fact, as to which see BP Refinery (Westernport) Pty Ltd v Shire of Hastings (1977) 180 CLR 266 and Codelfa Construction Pty Ltd v State Rail Authority of NSW (1982) 149 CLR 337.
- However, in submissions at the end of the hearing counsel for the plaintiff argued not that such a term should be implied as a matter of fact, but rather that it should be implied as a matter of law. They submitted that such an implication arose from the land being sold having been shown contiguous with the thoroughfare on the contract plan. They referred to a common law principle that if, in a conveyance or a contract of sale, land is described as “bounded by” or “abutting on” a road or street the grantor will be regarded as having impliedly agreed to grant to the grantee a right of way over the land forming the road or street. See Bradbrook, MacCallum & Moore Australian Real Property Law 3rd ed (2002) at 709; Roberts v Karr (1809) 1 Taunt 495; 127 ER 926; Mellor v Walmesley [1905] 2 Ch 164. The principle applies where the land in the conveyance is described by reference to an attached plan: Halsbury’s Laws of Australia [355-12195]; Furness Railway Co v Cumberland Coop Building Society (1884) 52 LT 144 at 145; Rudd v Bowles [1912] 2 Ch 60.
- This principle was applied to Torrens title land in Dabbs v Seaman (1925) 36 CLR 538. There Seaman sold part of his land to Smith. In the transfer and in the certificate of title issued to Smith the land was described by reference to a plan on the certificate: it showed a 20 ft strip with the words “20 ft lane” contiguous with the land on its eastern side. There was no mention of an easement. Smith having died, his personal representative transferred the land to Dabbs: it was described in the transfer by reference to Smith’s certificate of title without any mention of an easement. At pages 541 – 542 Isaacs J said –
“Where A, a registered proprietor of land under the Real Property Act, transfers to B a part of his land described by a plan indicating that the transferred land is bounded on one side by a 20 ft. lane situated on the other part of the transferor’s land and the transfer is duly registered, then, in the absence of either a provision to the contrary on B’s certificate of title or some subsequent personal legal or equitable relation to the contrary between B and the owner of the adjoining land, B, as long as he remains registered proprietor of the land so transferred and described, is entitled (1) to have the land marked ‘twenty feet lane’ preserved as such, and (2) to a right of way over the lane.”
Starke J held that an easement of way had been created by estoppel. Higgins J dissented: in his view “lane” was a neutral word which did not demonstrate an intention to give any easement of way, and he declined to find that there had been any estoppel.
- Dabbs v Seaman was referred to with approval by Connolly J in Hutchinson v Lemon [1983] 1 Qd R 369 at 373 and by McPherson J in Rock v Todeschino [1983] 1 Qd R 356 at 364, but in neither case was the Court asked directly to apply it.
- As Bradbrook, MacCallum and Moore observe in Australian Real Property 3rd ed (2002) at [17.30] the interpretation of Dabbs v Seaman has long been a matter of controversy. See Bradbrook and Neave Easements and Restrictive Covenants in Australia (2000) paras [4.43] ff. Its application has been closely confined: Bellevue Crescent Pty Ltd v Marland Holdings Pty Ltd (1998) 43 NSWLR 364 at 372 per Young J. As Cohen J noted in Lamos Pty Ltd v Hutchison (1984) 3 BPR [97195] at 932 - 933, in Dabbs v Seaman the subsequent owner of the land was seeking to enforce the benefit of the right of way against the person who was the transferor of the land and accordingly the grantor of any rights which went with the transfer; it was a case where the benefit of the rights was to be inferred from the certificate of title. Cohen J declined to extend the principle to the case before him where the plaintiff sought to show that the burden of an agreement to grant an easement was to be inferred from the certificate of title and that that constituted an encumbrance by which each successive registered proprietor was bound.
- One of the critical facts in Dabbs v Seaman was that the street was owned by the transferor: Lake Macquarie City Council v Luka [1999] NSWCA 447 at [15]; see also MacDonald, McCrimmon, Wallace and Stephenson Real Property Law in Queensland (1998) at 626. Here both the plaintiff and the defendant always knew that the thoroughfare was to be a community property lot under the Mixed Use Development Scheme. The land sold to the plaintiff was not part of the approved scheme. Under the Mixed Use Development Act such a lot would be property common to owners of community development lots within the scheme, and would be transferred to the community body corporate: see ss 14, 15, and 66. The body corporate would be responsible for its maintenance and repair (s 177) and could impose levies on its members for that purpose (s 174). Thus the thoroughfare was not to be simply a street or laneway, and it was not to be owned by the defendant. For these reasons, this case is distinguishable from Dabbs v Seaman, and the plaintiff’s argument that there was a term implied by law that it have access over the thoroughfare must fail.
- Nevertheless, the argument in support of such an implied term was not an untenable one. While I am persuaded that the plaintiff, acting through Mr Fitzgerald of JLF, wanted to obtain title to the land in any event and that it was prepared to consider alternative development strategies if it were not entitled to access, I am not persuaded that it knew that the plaintiff’s claim to access over the thoroughfare was bound to fail but nevertheless persisted with it. I thought him a credible witness. Moreover, objectively there were factors which might have led someone in his position to think that the plaintiff was entitled to access over the thoroughfare: the rezoning conditions which specified that there should be only one access point; the negotiations with the defendant about excision of a site for a medical centre in return for access, and the activities of the Department of Main Roads towards resuming land to ensure access would be available to the subject land.
- As counsel for the plaintiff submitted, their client’s conduct after the registration of the plan of subdivision in September 2001 is to be assessed against the principle that –
“Repudiation of a contract is a serious matter not to be lightly found or inferred.”
See Shevill v The Builders Licensing Board (1981 - 1982) 149 CLR 620 at 633. See also Green v Sommerville (1979) 141 CLR 594 at 611. In DTR Nominees Pty Ltd v Mona Homes Pty Ltd (1978) 138 CLR 423 at 431 – 432 Stephen, Mason and Jacobs JJ observed –
“The relevant question therefore is whether the events which we have recounted evidence an intention on the part of the appellant to repudiate or renounce the contract or more precisely whether such an intention is to be inferred from those events.
For the respondents it was submitted that such an intention should be inferred from the appellant’s continued adherence to an incorrect interpretation of the contract. It was urged that the appellant, because it was acting on an erroneous view, was not willing to perform the contract according to its terms. No doubt there are cases in which a party, by insisting on an incorrect interpretation of a contract, evinces an intention that he will not perform the contract according to its terms. But there are other cases in which a party, though asserting a wrong view of a contract because he believes it to be correct, is willing to perform the contract according to its tenor. He may be willing to recognise his heresy once the true doctrine is enunciated or he may be willing to accept an authoritative exposition of the correct interpretation. In either event an intention to repudiate the contract could not be attributed to him. As Pearson L. J. observed in Sweet & Maxwell Ltd. v. Universal News Services Ltd. [1964] 2 Q.B. 699, at p 734:
‘In the last resort, if the parties cannot agree, the true construction will have to be determined by the court. A party should not too readily be found to have refused to perform the agreement by contentious observations in the course of discussions or arguments …’”
- The defendant purported to rescind the contract in February 2002, and at least since then the plaintiff has not been called upon to complete. Since July 2001 the plaintiff has maintained its claim to specific performance of the contract, seeking subdivision in accordance with the plan attached to the contract or such other order as the Court may deem fit. In November 2004 it was called upon to identify with greater particularity the orders it sought, and in those circumstances it identified as an alternative that it was prepared to accept a transfer of lot 21. Its nomination of that alternative should not, in the circumstances, be seen as evidence that it knew that the interpretation of the contract for which it contended was incorrect.
- I record that no point was taken about delay by the plaintiff in pursuing its claim for specific performance; nor was any other discretionary ground for refusing the relief advanced.
- I do not find it necessary to consider whether there was a term implied by law “that the Defendant make any application that varied the boundaries or area of the land in good faith for the performance of the agreement to obtain subdivision of the land in the form attached to the agreement and not in an arbitrary or capricious manner nor for an extraneous purpose”: consolidated further further amended statement of claim 26 November 2004 paragraph 12C(d). See Alcatel Australia Limited v Scarcella (1998) 44 NSWLR 349. The plaintiff’s counsel acknowledged that it was unnecessary to resolve this litigation in favour of their client to resort to a general principle of an obligation to act with good faith in the performance of contractual obligations, noting that the High Court had left the existence of such an obligation open in Royal Botanic Gardens and Domain Trust v South Sydney City Council (2002) 76 ALJR 436.
Conclusions
(1)The subdivision effected in September 2001 was not in accordance with that contemplated by the contract, and in particular lot 21 on SP 133252 is not the land the defendant sold to the plaintiff;
(2) The plaintiff is entitled to specific performance;
(3) The defendant is not entitled to rescission.
- I will ask the parties for further submissions on the form of the order and on costs.
ADDENDUM
- After further submissions, the Court made the following orders on 21 April 2005:
THE COURT DECLARES that:
- The plaintiff is entitled to have the contract for sale of land dated 27 April 1996 between the plaintiff as purchaser and the defendant as vendor specifically performed.
THE COURT ORDERS that:
- The defendant execute all such instruments and do all such things necessary in order to specifically perform the said contract.
- For the purposes of giving effect to order 2:-
- The defendant at its cost forthwith make, and promptly pursue all such applications as may be required to obtain the reconfiguration of the land formerly described as Lots 20 and 21 on SP 133252 and now described as Lots 20 and 21 on SP 144932 by:-
- subdividing from Lot 20 on SP 144932 the land shown hatched on the attached plan;
- amalgamating the land shown hatched on the attached plan with Lot 21 on SP 144932;
(“the reconfiguration”).
- The defendant use its best endeavours to secure the approval of the Gold Coast City Council and any other government or statutory authority required to obtain approval for the reconfiguration and for any plan approval of which is required to carry out the reconfiguration (“reconfiguration plan”); and the registration in the Department of Natural Resources and Mines of the lots resulting from the reconfiguration;
- The defendant upon obtaining Gold Coast City Council approval for the reconfiguration and for the reconfiguration plan forthwith: -
- lodge the necessary plan or plans for registration in the Department of Natural Resources and Mines;
- notify the plaintiff’s solicitors on the record of such lodgement.
- The defendant forthwith upon its receipt of notification by the Department of Natural Resources and Mines of the issue by the Department of Natural Resources and Mines of title to the lots resulting from the reconfiguration, notify the solicitors on the record for the plaintiff of the issue of title to the lots resulting from the reconfiguration.
- Settlement of the contract shall take place within (5) business days of the notification to the solicitors for the plaintiff as set out in (d) above.
- Any party be at liberty to apply as it may be advised, and that leave be reserved to all parties to apply for the making of any further orders for the purpose of specifically performing the agreement as circumstances may require.
- Further proceedings be adjourned to a date to be fixed.
- A directions hearing for the further conduct of the proceedings be held on a date agreed between the parties or on not less than seven days notice in writing.
- That the defendant pay the plaintiff’s costs of and incidental to the proceeding, save for those costs which relate to the matters which have been adjourned, including reserved costs and the costs of and incidental to the further hearing on 20 and 21 April 2005.
- Upon the plaintiff’s undertaking by its counsel that, in the event the defendant is ultimately successful in having the order for specific performance set aside, the plaintiff will meet the costs incurred by the defendant in performing the order up to the time of lodgement of plans to the Department of Natural Resources and Mines, the defendant’s application for a stay be adjourned to a date to be fixed, to be brought on (if the defendant so desires) immediately before plans for reconfiguration of the new lot are lodged at the Department of Natural Resources and Mines.
![Highmist Pty Ltd v Tricare Australia Ltd [2005] QSC 115](/judgmentview/image?name=55661.001.jpg&id=55661)