Parfitt v Burrell Avenue Development Pty Ltd
[2022] QSC 60
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- Unreported Judgment
- Parfitt v Burrell Avenue Development Pty Ltd[2022] QSC 60
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Parfitt v Burrell Avenue Development Pty Ltd[2022] QSC 60
Parfitt v Burrell Avenue Development Pty Ltd[2022] QSC 60
SUPREME COURT OF QUEENSLAND
CITATION: | Parfitt & Another v Burrell Avenue Development Pty Ltd [2022] QSC 60 |
PARTIES: | LISA MARIA PARFITT (First Plaintiff) AND ALEX KATE PARFITT (Second Plaintiff) v BURRELL AVENUE DEVELOPMENT PTY LTD ACN 604 989 228 (Defendant) |
FILE NO/S: | BS 14637 of 2021 |
DIVISION: | Trial Division |
PROCEEDING: | Application |
DELIVERED ON: | 21 April 2022 |
DELIVERED AT: | Brisbane |
HEARING DATE: | 16 March 2022 |
JUDGE: | Bowskill CJ |
ORDERS: | The application is dismissed. |
CATCHWORDS: | PROCEDURE – CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS – ENDING PROCEEDINGS EARLY – SUMMARY DISPOSAL – SUMMARY JUDGMENT FOR PLAINTIFF OR APPLICANT – IN ACTIONS FOR SPECIFIC PERFORMANCE – where the plaintiffs entered into a contract with the defendant to purchase a block of land in a proposed development to be created by registration of a plan of subdivision – where clause 22 of the contract enabled either party to terminate the contract, if the plan of subdivision was not registered within 18 months of the date of contract – where the plan of subdivision was not registered within 18 months, but neither party took any step to terminate the contract until a further 16 months had passed, at which time the defendant purported to terminate the contract – where the plaintiffs seek an order for summary judgment under r 292 of the Uniform Civil Procedure Rules 1999 (Qld) for specific performance of the contract, on the basis that the defendant had, by its conduct in failing to expressly reserve the right to terminate and delay in exercising the right for 16 months, unequivocally elected not to exercise the right to terminate the contract – where the defendant submits that there are contested issues of fact to be determined such that this is not an appropriate case for summary judgment – whether the defendant has reasonable prospects of successfully defending the claim for specific performance of the contract – whether there is a need for a trial of the claim Uniform Civil Procedure Rules 1999 (Qld), r 292 Deputy Commissioner of Taxation v Salcedo [2005] 2 Qd R 232 Donaldson v Bexton [2007] 1 Qd R 525 Immer (No 145) Pty Ltd v The Uniting Church in Australia Property Trust (NSW) (1993) 182 CLR 26 Queensland University of Technology v Project Constructions (Aust) Pty Ltd (in liq) [2003] 1 Qd R 259 Sargent v ASL Developments Ltd (1974) 131 CLR 634 |
COUNSEL: | R J Douglas QC and J Meredith, for the plaintiffs P J Roney QC and R Tooth, for the defendant |
SOLICITORS: | Klein Legal, for the plaintiffs Gadens Lawyers, for the defendant |
- [1]On 20 September 2018, the plaintiffs entered into a contract to purchase from the defendant a block of land in a proposed new estate at Eumundi. The block of land did not exist at the date of the contract; its creation required registration of a plan of subdivision.
- [2]The purchase price under the contract was $257,500. A deposit of $25,750 was payable, with $1,000 to be paid at the time the contract was signed and the balance payable “before or on the date of Finance Approval”. The date for finance approval was to be 14 days from registration of title.
- [3]Settlement of the contract was to occur 14 days after notice from the seller that the plan of subdivision had been registered, or 14 days from the date of finance approval, whichever was later (clause 3).
- [4]Clause 22 of the contract provided, relevantly, as follows:
“22. REGISTRATION OF PLAN
- (a)If the plan is not registered in the Department of Natural Resources at the date of this Contract the Seller shall take all reasonable steps to have the plan registered at the earliest possible date.
- (b)If the plan is not registered within (18) eighteen months of the date hereof, then:-
- (i)the Seller; and
- (ii)subject to clause 22(c), the Buyer may rescind this Contract by notice in writing to the other party. …”
- [5]The relevant date, for the purposes of clause 22(b), was 20 March 2020.
- [6]Registration of the plan did not occur by that date. Neither party took any steps to terminate the contract under clause 22(b) at that time.
- [7]The eighteen month period under clause 22(b) was not extended and neither party expressly reserved their rights in respect of that clause.
- [8]It was not until some 16 months later, on 16 July 2021, that the defendant, by its solicitor, purported to give notice under clause 22(b) terminating the contract.
- [9]The plan was registered five days later, on 21 July 2021. It is pleaded that, by this time, the value of the land had significantly increased, to $500,000.[1]
- [10]The plaintiffs dispute the validity of the defendant’s purported termination of the contract. They commenced these proceedings on 8 December 2021, seeking, inter alia, a declaration that the defendant’s purported termination was invalid and ineffective and an order for specific performance of the contract.
- [11]On 22 February 2022, the plaintiffs filed the present application, seeking summary judgment under r 292 of the Uniform Civil Procedure Rules 1999 (Qld) for specific performance of the contract.
- [12]The relevant principles under r 292 UCPR are not controversial. The Court may give judgment for the plaintiffs if satisfied that the defendant has no real prospect of successfully defending the claim and that there is no need for a trial of the claim. The first question has been formulated as whether the defendant has a real, as opposed to a fanciful, prospect of success.[2] The power under r 292 must be exercised with caution, with a proceeding to be summarily determined only in the clearest of cases.[3]
- [13]There is a factual dispute which arises on the pleadings, in relation to whether certain communications from a Mr Innes, providing an update as to the progress of the development, were sent by him on behalf of the defendant, as authorised agent of the defendant or with the encouragement or consent of the defendant, and whether they were sent to the plaintiffs (or only their parents). For the purposes of the present application, the plaintiffs expressly disavow reliance on this aspect of their pleading. They rely solely upon the facts outlined above, which are not in dispute.[4]
- [14]The plaintiffs’ case, in short, is that the defendant, by its conduct – not reserving the right of termination on or after 20 March 2020; not returning the plaintiffs’ initial deposit of $1,000; and delaying for 16 months before purporting to exercise the right to terminate – unequivocally elected not to exercise the right to terminate the contract. The plaintiffs submit that, after such a lengthy delay, if the defendant wished to exercise the right to terminate under clause 22(b), it was required to give notice of that intention, making time of the essence again.
- [15]The defendant submits that the right to terminate under clause 22(b) was a continuing right, capable of being exercised at any time after 20 March 2020. The defendant submits that the conduct relied upon by the plaintiffs is not such that it would be justifiable only if an election – not to terminate the contract – had been made; and that, having regard to the nature of the contract (for sale of a lot not yet in existence), the conduct is consistent with keeping the question open. The defendant submits there are contested issues of fact which go to the heart of the plaintiffs’ claim, such that this is not an appropriate case for summary judgment.
- [16]The relevant principles regarding election were articulated by Mason J in Sargent v ASL Developments Ltd (1974) 131 CLR 634 at 655-656, as follows:
“A person is said to have a right of election when events occur which enable him to exercise alternative and inconsistent rights, ie when he has the right to determine an estate or terminate a contract for breach of covenant or contract and the alternative right to insist on the continuation of the estate or the performance of the contract. It matters not whether the right to terminate the contract is conferred by the contract or arises at common law for fundamental breach – in each instance the alternative right to insist on performance creates a right of election.
Essential to the making of an election is communication to the party affected by words or conduct of the choice thereby made and it is accepted that once an election is made it cannot be retracted… No doubt this rule has been adopted in the interests of certainty and because it has been thought to be fair as between the parties that the person affected is entitled to know where he stands and that the person electing should not have the opportunity of changing his election and subjecting his adversary to different obligations.
A person confronted with a choice between the exercise of alternative and inconsistent rights is not bound to elect at once. He may keep the question open, so long as he does not affirm the contract or continuance of the estate and so long as the delay does not cause prejudice to the other side. An election takes place when the conduct of the party is such that it would be justifiable only if an election had been made one way or the other… So, words or conduct which do not constitute the exercise of a right conferred by or under a contract and merely involve a recognition of the contract may not amount to an election to affirm the contract.”[5]
- [17]In the same case, at 641, Stephen J said:
“The doctrine of election as between two inconsistent legal rights is well established but certain of its features are not without their obscurities. The doctrine only applies if the rights are inconsistent the one with the other and it is this concurrent existence of inconsistent sets of rights which explains the doctrine; because they are inconsistent neither one may be enjoyed with out the extinction of the other and that extinction confers upon the elector the benefit of enjoying the other, a benefit denied to him so long as both remained in existence.”[6]
- [18]An election may be communicated to the other party by words or conduct; but a party who elects not to exercise a right which has become available to them will only be held to have done so if they have communicated their election to the other party in clear and unequivocal terms.[7]
- [19]The plaintiffs seek to persuade the Court that there is no need for a trial, by focussing principally on the delay of 16 months, arguing that, after 16 months, it was too late to exercise the right to terminate. The plaintiffs submit that the delay of 16 months, with the growth in the property market which occurred during that time, has caused prejudice to the plaintiffs, because they stayed out of the market, waiting with the expectation of becoming the owners of the block of land they had contracted with the defendant to purchase.
- [20]Counsel for the defendant emphasises that, although for the purposes of this application the plaintiffs have sought to distance themselves from the factual dispute raised by the Innes communications, those communications, and the role which Mr Innes played, are central to the plaintiffs’ pleaded case. For example, in relation to the undisputed fact that the defendant did not expressly reserve its right of termination after 20 March 2020 came and went without registration occurring, the defendant poses the rhetorical question, what would have been the purpose of the defendant specifically reserving its rights, knowing (as it is said the parties did) that this development was going through all sorts of difficulties getting through Council. The defendant submits that is a matter that cannot properly be addressed without reference to evidence about what was happening during this time, what the parties knew about this, and the effect of the communications.
- [21]The defendant also submits that, in a contract such as the present, in respect of which the subject of it – the block of land to be transferred – did not exist until registration of the plan of subdivision, it is not apt to construe the defendant’s conduct as an election to affirm the contract (by corollary, to extinguish the right to terminate) because, until the plan is registered, the contract is impossible to complete. On the contrary, the defendant submits that what it did was consistent with not exercising any election one way or the other, but rather keeping the question open.
- [22]The defendant further submits that, whilst it may be that in a particular case an election might be found to have been made, where the delay by one party causes prejudice to the other party, in the present case that is not a matter capable of summary determination. The evidence of the second plaintiff in this regard is that:
“[43] In light of the communications we were frequently receiving from the defendant since entering into the contract and after the 18-month period expired under clause 22(b), I believed and expected that:
- (a)the defendant had every intention of continuing to be bound by the contract;
- (b)the defendant would not rely on contract clause 22(b) to purport to terminate the contract; and
- (c)the defendant would complete when registration of the plan when secured and that we would be legal owners of the property.
[44] As a result of my reliance on the above belief and expectation, Lisa and I:
- (a)were deprived of the benefit of return of the contract deposit;
- (b)continued to engage solicitors to act for us in respect of securing completion of the contract;
- (c)refrained from seeking out and purchasing other land, which I would have done back in 2020.”[8]
- [23]The defendant’s contention is borne out by this evidence, from which it is apparent that the communications are a central part of the plaintiffs’ case in so far as prejudice from the delay (and reliance) is concerned. Those communications are the subject of factual dispute acknowledged to give rise to a triable issue.
- [24]Whilst I consider there is force to the plaintiffs’ argument, in terms of the lengthy delay until the purported exercise of the right to terminate, on careful reflection I am not persuaded, having regard to the high degree of caution required, that the defendant has no reasonable prospects of successfully defending the claim for specific performance of the contract. Nor am I persuaded that there is no need for a trial. In that regard, I accept that the submissions on behalf of the defendant, referred to above, support the conclusion that there is a need for a trial. It may be that, upon a trial of the issues in the proceeding, the conclusion is reached that an election had been made, or that the defendant is estopped from exercising the right to terminate. However, in my view, the defendant ought not be deprived of the opportunity for a trial of the issues. This is not such a clear case that summary judgment is warranted.
- [25]For those reasons, the application is dismissed. I will hear the parties in relation to the costs of the application and also as to whether the matter ought properly be transferred to the District Court, given the evidence as to the value of the subject land.
Footnotes
[1] See also the affidavit of Ms Klein, filed 1 March 2022 at [14]-[16]; and the further affidavit of Ms Klein, filed 9 March 2022.
[2] Queensland University of Technology v Project Constructions (Aust) Pty Ltd (in liq) [2003] 1 Qd R 259 at 265 [7] (Holmes J (as her Honour then was), Davies JA and Mullins J agreeing).
[3] Deputy Commissioner of Taxation v Salcedo [2005] 2 Qd R 232 at 233 [3].
[4] For completeness, it should be noted that, in addition to those facts – which are pleaded – in the plaintiffs’ written submissions reference is also made to an allegation that the defendant did not re-market the subject property, as it would be entitled to do if (privately) it was reserving a right to terminate under clause 22. That matter is not pleaded, and it is appropriate on that basis to disregard it for present purposes.
[5] References omitted; underlining added. See also Donaldson v Bexton [2007] 1 Qd R 525 at [42].
[6] Underlining added.
[7] Immer (No 145) Pty Ltd v The Uniting Church in Australia Property Trust (NSW) (1993) 182 CLR 26 at 38-39, referring to The ‘Kanchenjunga’ [1990] 1 Lloyd’s Rep 391 at 398.
[8] Affidavit of Ms Alex Parfitt, filed 22 February 2022. Underlining added.