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Brightman v Royal Pines Projects Pty Ltd[2024] QSC 149

Brightman v Royal Pines Projects Pty Ltd[2024] QSC 149

SUPREME COURT OF QUEENSLAND

CITATION:

Brightman & Ors v Royal Pines Projects Pty Ltd [2024] QSC 149

PARTIES:

ADAM BRIGHTMAN

(first applicant)

AND

JODIE BRIGHTMAN

(second applicant)

AND

MARY MAGGIE MAE CRUZ

(third applicant)

AND

RAYMOND CAVITE CRUZ

(fourth applicant)

AND

CAMERON ROBERTS

(fifth applicant)

AND

REBECCA ANNING

(sixth applicant)

AND

ADRIANA EUGENIA HERNANDEZ SILVA

(seventh applicant)

AND

JARRAD GLENN BUNT

(eighth applicant)

AND

JESSICA LEE DEMCHENKO

(ninth applicant)

AND

DIANNE MARIA MASSEY

(tenth applicant)

AND

VISHENDRAN NAIDU

(eleventh applicant)

AND

B CORPORATION (QLD) PTY LTD

ACN 651 109 894

(twelfth applicant)

AND

GEORGE STANLEY NEWBOLD

(thirteenth applicant)

AND

BRENDA ZHOYA

(fourteenth applicant)

AND

MICHAELA ERIKA MORELAND

(fifteenth applicant)

AND

REMY ARRAN MORELAND

(sixteenth applicant)

AND

KRISTIE-LEE ANNING

(seventeenth applicant)

AND

DESMOND LAFFY

(eighteenth applicant)

AND

TRINA LAFFY

(nineteenth applicant)

AND

CORNELIA CHRISTINE DAY

(twentieth applicant)

AND

COLIN JAMES BURTON

(twenty-first applicant)

AND

PERRIE BURTON

(twenty-second applicant)

AND

SILVANA TRPESKA

(twenty-third applicant)

v

ROYAL PINES PROJECTS PTY LTD

ACN 118 164 999 ATF BRISBANE CREDITS TRUST

(respondent)

FILE NO/S:

BS 8832 of 2024

DIVISION:

Trial Division

PROCEEDING:

Application

ORIGINATING COURT:

Supreme Court of Queensland at Brisbane

DELIVERED ON:

12 July 2024

DELIVERED AT:

Brisbane

HEARING DATE:

11 July 2024

JUDGE:

Applegarth J

ORDER:

Declaratory and other orders in a form to be submitted by counsel.

CATCHWORDS:

CONTRACTS – GENERAL CONTRACTUAL PRINCIPLES – CONSTRUCTION AND INTERPRETATION OF CONTRACTS – IMPLIED TERMS – TERMS ESSENTIAL TO ENABLE PERFORMANCE – where there are contracts for the sale of apartments “off the plan” – where each contract contemplates the buyer having a financier and where the contract contemplated that finance would be required for the buyer to perform the contract – where the settlement date is set by the contract 14 days after a notice by the seller – where each buyer requests access to the relevant apartment to permit the buyer’s valuer to perform a valuation for finance purposes – where the seller gives notification of settlement – where the buyers’ requests for their valuers to inspect are not responded to for a week – where construction works prevent such an inspection occurring for the same period – where the contract does not include a “subject to finance” clause or an express term specifying an entitlement to access the property in the 14-day period – where there is an implied duty to co-operate – whether the seller, by failing to permit access to the buyer’s valuer, breached the implied duty to co-operate

Australis Media Holdings Pty Ltd v Telstra Corporation Ltd (1998) 43 NSWLR 104, cited

Butt v M’Donald (1896) 7 QLJ 68, cited

Commonwealth Bank of Australia v Barker (2014) 253 CLR 169, cited

Grieve v Enge [2006] QCA 213, applied

Jackson Nominees Pty Ltd v Hanson Building Products Pty Ltd [2006] QCA 126, cited

Mackay v Dick (1881) 6 App Cas 251, cited

Marshall v Colonial Bank of Australasia Ltd (1904) 1 CLR 632, cited

Mediratta v Clark [2019] VSC 685, cited

Secured Income Real Estate (Australia) Ltd v St Martins Investments Pty Ltd (1979) 144 CLR 596, cited

Simcevski v Dixon [2017] VSC 197, cited

Southern Foundries (1926) Ltd v Shirlaw [1940] AC 701, cited

Suttor v Gundowda Pty Ltd (1950) 81 CLR 418, cited

COUNSEL:

N Ferrett KC and A Choy for the applicants

B O'Donnell KC and J Sargent for the respondent

SOLICITORS:

Broadbeach Law Group for the applicants

Hickey Lawyers for the respondent

  1. [1]
    The applicants are buyers of building units in the respondent’s development at the Gold Coast.  The applicants agreed in their respective contracts to buy an apartment “off the plan”.  When they entered their contract, there was no opportunity for them or a valuer to inspect the property.  It had yet to be built.
  2. [2]
    The standard form of contract used by the respondent did not provide for the contract to be subject to finance.  The terms of the contract envisaged, however, that the buyer would have a “financier”.  Also, the use by an overwhelming majority of buyers in the property market of loans to finance their acquisitions is notorious.  The respondent could not have been in any doubt at the time it entered into the contracts that practically all, if not all, of the applicants would need to obtain finance to complete their contracts when the development was finished and before the contracts were due to settle. 
  3. [3]
    With construction of the development being nearly finished, the applicants requested that a valuer inspect the premises in order to obtain finance to complete their purchase.  The respondent failed to respond to the request so as to permit any valuer to do so.  Instead, on 1 July 2024 it fixed the period allowed under the contract for settlement.
  4. [4]
    A week after the request was first made to have a valuer inspect the now completed unit, and only after the request was repeated and these proceedings were commenced, the respondent, without admitting any obligation to permit access, proposed a protocol for each buyer’s valuer to obtain access.
  5. [5]
    The applicants say that this offer comes too late in circumstances in which on 1 July the respondent gave notice requiring settlement next Tuesday, 16 July 2024.
  6. [6]
    They say they have lost a week, and that by denying or delaying access, the respondent is in breach of its implied obligation to co-operate, and therefore cannot insist on a 16 July 2024 settlement.
  7. [7]
    The applicants seek a declaration that by reason of the implication in the contract of a term requiring that each party co-operate to allow the other the benefit of the contract, the respondent is required to permit access to the property that is the subject of the contract by a valuer appointed by the buyer in sufficient time to provide a valuation advice in advance of completion.
  8. [8]
    They seek other declarations and injunctive relief.

Facts

  1. [9]
    The fifteen contracts are in materially identical terms.  Each contract is for a lot in a new development called “Vantage View” at Benowa.  The contracts were entered into between 21 January 2021 and 2 November 2023.
  2. [10]
    The Body Corporate and Community Management Act 1997 (Qld) applies to the development.  Clause 10 of the Contract relevantly provides:

“10.1 We must give you written notice at any time (as reasonably determined by us) after we become aware of plan registration that a separate indefeasible title for the lot has been created.

10.2 Settlement of the contract is conditional upon plan registration and us giving you notice under clause 10.1.”

  1. [11]
    Clause 8.5 provides:

“8.5 Settlement must not take place earlier than 14 days after we give you notice of plan registration.  You agree that notice of plan registration is an advice to you that the scheme has been established or changed.”

  1. [12]
    Clause 2 relevantly provides:

“lot means the lot or proposed lot in the development described in item 8.

…

plan registration means the registration (not lodgement) of a building format plan of subdivision that creates the lot under the Land Title Act 1994 (Qld).

…

settlement date means subject to clause 8.6, the date that is 14 clear days after (but not including) the date on which we give you written notice under clause 10.1.” (emphasis in original)

  1. [13]
    On the morning of 1 July 2024, the applicants’ solicitors wrote to the respondent’s solicitors, requesting access to the relevant lot for the purposes of obtaining a valuation for finance purposes. 
  2. [14]
    That afternoon, the respondent gave notice in respect of each of the contracts requiring settlement on 16 July 2024.
  3. [15]
    On 2 and 3 July 2024, the applicants’ solicitors contacted the respondent’s solicitors by email asking for a response to their earlier correspondence, threatening to commence this proceeding and giving greater detail of the relief that would be sought.  On 4 July 2024, they again wrote to the respondent’s solicitors.  They also contacted the Registry seeking an urgent listing.
  4. [16]
    On 5 July 2024, having received no response from the respondent’s solicitors, the applicants’ solicitors wrote directly to the respondent and served that letter on the respondent’s registered office.
  5. [17]
    The matter was mentioned before me on the afternoon of Friday, 5 July 2024, at which time I made directions for the hearing of the matter on Thursday, 11 July 2024, so as to enable the parties to file material and submissions going principally to the legal issue of whether the respondent was under the implied duty contended for by the applicants.
  6. [18]
    On 8 July 2024, the respondent’s solicitors wrote to the applicants’ solicitors.  The relevant part of the letter stated:

“Despite the Seller having no obligation under the Contract or at law to allow access to the site or the Lot by third parties, the Seller has decided to consider the Buyer’s request for access by a valuer for inspection of the Lot, if the Buyer requires a valuer to inspect the Lot.

We are also instructed to record that our client has not previously refused access (again despite having no obligation to grant access) and that given the necessary ongoing works on site, it is now practically acceptable to allow others to access the site.

We note the Contract is not subject to finance and the Contract does not contain terms that allow the Buyer (or any third party) the right to access the building site or the Lot at any time.  Any decision about access is at the Seller’s discretion.  Any decision to allow access should not be interpreted as acceptance by the Seller that the Buyer (or any third party) has a right to access the site or that the Seller is contractually obliged to allow such access.”

  1. [19]
    The letter went on to set out a protocol for the buyer to obtain access for a valuer.
  2. [20]
    According to the respondent’s affidavit evidence, access could not be given before 8 July because the development remained under construction and it was not possible to provide safe and clear access.  Between 1 and 5 July 2024 (8 July being the next business day), there were multiple trades on site undertaking work to complete the development.  As part of those works, the entrance and passageways were obstructed, with open welding occurring throughout, as well as wet mortar on some of the hallway floors.
  3. [21]
    The applicants contend that it is now too late to get the valuation task done in time for a settlement on 16 July 2024.  The contract contemplated the buyer having 14 clear days after the clause 10.1 notice to prepare for settlement.  The applicants argue that by issuing the notices and then failing for a full business week to respond to their requests, the respondent denied each of them the benefit of the full notice period to be ready to settle the relevant contract.
  4. [22]
    Their case is that in failing to respond, much less permit access, until the seventh day of the notice period, the respondent “burned” half of the notice period contemplated by the contract.
  5. [23]
    By delaying in the way that it did, the respondent is said to have denied each of the applicants the time that (according to the contract) they needed to be ready for settlement after obtaining a valuation for the purpose of obtaining finance to settle.  In that way, the respondent is alleged to have breached the duty. 
  6. [24]
    The applicants rely on the respondent’s breach to engage the ‘prevention principle’.  In short, this principle is that a party cannot take advantage of a state of things that its breach or failure to perform its contractual duty has produced.  On this basis, the applicants seek a declaration that the respondent is not entitled to insist on a 16 July 2024 settlement date.

The applicants’ position

  1. [25]
    The applicants’ case is that the commercial purpose of the notice period under clause 8.5 was, at least, to allow the buyer sufficient time to prepare for settlement.  At that point, the single-most important obligation to be performed by the buyer was tendering the purchase price.  On any objective analysis, that must have been obvious to the parties at the time of contracting.
  2. [26]
    According to the applicants, because the parties provided for a certain period during which to prepare for settlement, including getting funds ready to tender at settlement, the respondent’s implied duty required it to respond quickly during the notice period to a request for access for the purpose of finalising finance.
  3. [27]
    The respondent’s breach of its duty is submitted to disentitle it from relying upon a failure to settle on 16 July 2024.  This breach is also argued to be inconsistent with maintenance of the stipulation in clause 18 that time be of the essence in respect of the nominated settlement date.
  4. [28]
    The applicants seek declaratory relief, including a declaration that, in the circumstances and because of the respondent’s breach, they are not required to settle on the date appointed by it.
  5. [29]
    They also seek injunctive relief to prevent the respondent from purporting to terminate the contracts and to re-sell each of the lots because of a failure to settle on 16 July 2024.  An injunction is said to be necessary because:
    1. clause 34 of the contract forbids the lodgement of a caveat; and
    2. the conduct of the respondent and the fact that the property market continues to appreciate clearly justifies the apprehension that the respondent will act to resell each of the lots in the event that such relief is not granted.

The respondent’s position

  1. [30]
    The respondent’s principal position disputes that its implied obligation to co-operate extends to permitting access to the property by a valuer appointed by the buyer.  It submits that while such an obligation may apply where the contract is subject to finance, here the contract does not require the buyer to have the opportunity to obtain finance.  The implied duty to co-operate is said to not extend to doing acts necessary for the buyer to utilise that opportunity.
  2. [31]
    Because the further declaratory and other relief sought by the applicants is dependent upon obtaining the declaration sought by them in paragraph 1(a) about the duty to co-operate, the respondent submits that if the declaration in 1(a) is refused, then the other relief should be refused as a consequence.
  3. [32]
    It denies that it is in breach.
  4. [33]
    In the alternative, it contests that the consequence of any breach of its obligation to co-operate means that time ceases to be of the essence.  Non-performance or breach by it of an obligation to do something within a reasonable time is submitted to not entail waiver of time being of the essence in respect of all contractual obligations.
  5. [34]
    Next, the respondent opposes injunctive relief being granted in the broad terms sought in the originating application that would prevent the respondent from dealing with the lot that is the subject of the relevant contract.  It contends that the effect of such an injunction would be to restrain it from exercising rights that are legally available to it, and that it should not be prevented from giving notice of termination if it has valid grounds to do so.  It also argues that the buyers would not suffer any harm by the court declining to grant an injunction at this stage, where it is unknown whether each of the buyers will be capable of completing the contracts on the settlement date.    

The duty issue

  1. [35]
    There is no dispute that the contract includes terms implied by law, including a duty to co-operate so as to give the other party the benefit of the contract.  This dispute concerns the content of that duty in this case.
  2. [36]
    The issue is whether the contract, which does not contain a “subject to finance” clause or any express provision about the requested access, obliges the respondent to co-operate in the buyer obtaining finance to perform at completion by permitting the requested access.  Is that part of the content of the implied duty, given the subject matter of the contract, its express terms and the circumstances that were known to the parties at the time the contract was entered into? 
  3. [37]
    The law of contract includes a general rule of construction that there is “an implied obligation on each party to do all that [is] reasonably necessary to secure performance of the contract”.[1]  Griffith CJ in Butt v M’Donald[2] referred to an implied duty to co-operate so as to give the other party “the benefit of the contract”.  The duty is implied by law as a matter of necessity. 
  4. [38]
    The issue is one of contractual interpretation.  Therefore, I must disregard the respondent’s alleged motivation in failing to permit and delaying the requested access, thereby frustrating the buyers’ completion of their contracts, placing the buyers at risk of being unable to complete on 16 July, having their deposits forfeited, and enabling the respondent to re-sell the properties in a market that has risen since the contracts were entered into.

The law

  1. [39]
    The implied duty to do all that is reasonably necessary to secure performance of a contract, like the “implied duty to co-operate”, is often said to be a term implied by law, rather than implied as a matter of fact so as to give business efficacy to the contract.  On one view, the implied term is not a rule of law but a general rule of construction.  On this view, the duty exists unless it is excluded because the proper construction of the contract requires it to be excluded. 
  2. [40]
    The leading case of Mackay v Dick[3] has been cited with approval in numerous authorities.[4]  In Mackay v Dick Lord Blackburn referred to the construction of the contract that “each agrees to do all that is necessary to be done on his part for the carrying out of that thing, though there may be no express words to that effect”.[5]  Mason J (as his Honour then was) in Secured Income referred to the general rule of construction and also to an implied duty to co-operate.[6]  The implied duty draws upon what was said by Griffith CJ in Butt v M’Donald:[7]

“It is a general rule applicable to every contract that each party agrees, by implication, to do all such things as are necessary on his part to enable the other party to have the benefit of the contract.”

  1. [41]
    That obligation may entail an obligation to do something or an obligation to refrain from conduct that will prevent, delay or hamper performance of the contract.  As the New South Wales Court of Appeal observed in Australis Media Holdings Pty Ltd v Telstra Corporation Ltd:[8]

“Duties to co-operate are found expressed in positive and negative terms.”

  1. [42]
    Griffith CJ in Marshall v Colonial Bank of Australasia Ltd stated:[9]

“All contractual relations impose upon the parties a mutual obligation that neither shall do anything which is calculated to hamper the other in the performance of the contract on his part.”

  1. [43]
    The Court in Australis referred to these positive and negative obligations as either legal duties created by construction, rules of law or implied terms.  It noted that an alternative analysis drawn from authorities such as Southern Foundries (1926) Ltd v Shirlaw[10] is to treat conduct that brings about the impossibility of performance as involving the breach of an express term.[11]  Lord Atkin in Southern Foundries (1926) Ltd v Shirlaw referred to conduct that can be said to amount to a party “of his own motion” bringing about the impossibility of performance being “in itself a breach”.
  2. [44]
    Necessity will support a term implied by law where, absent the implication, “the enjoyment of the rights conferred by the contract would or could be rendered nugatory, worthless, or, perhaps, be seriously undermined”.[12]  In Barker the court observed that implications “which might be thought reasonable are not, on that account only, necessary”.[13]
  3. [45]
    The duty to co-operate is not a duty to co-operate in bringing about something that is desirable but which the contract does not require.[14]  A contract may contemplate many benefits for the respective parties, but each “can only call on the other to provide, or co-operate in the providing of, benefits promised by that party”.[15]
  4. [46]
    These principles direct attention to the benefits promised by the contract and what is necessary to allow a party to perform its obligations and have those benefits.

The essence of the argument

  1. [47]
    It is possible to identify the relevant benefits that were promised by the respondent in two related respects:
    1. the benefit of being able to complete the contract and gain title after obtaining the finance necessary to complete and tendering it on a settlement date fixed in accordance with the contract; and
    2. having a full 14 clear days after the notice under clause 10.1 to arrange the things necessary to settle.
  2. [48]
    Another benefit was that the time at which the written notice under clause 10.1 was given be reasonably determined by the respondent.
  3. [49]
    The respondent does not contest the existence of an implied duty to do all that is reasonably necessary to secure performance of the contract, or an implied duty to co-operate.  Instead, the essence of its argument is that the contract is capable of performance without the buyer obtaining finance and that it does not have a duty to co-operate so as to allow the buyer to perform the contract by obtaining finance.
  4. [50]
    On this argument, because the contract was not made “subject to finance”, obtaining finance is not something that is necessary to secure performance by the buyer of its obligations under the contract.  Also, the opportunity to obtain finance is not something that the respondent says it promised because the contract was not made “subject to finance”.  However, the absence of a “subject to finance” clause is not, in my view, a complete answer to the applicants’ case. 
  5. [51]
    Had the contract been made subject to finance, then the matter would simply resolve in accordance with authorities where such an express provision was included in the contract. 
  6. [52]
    Instead, the issue arises in circumstances in which it is reasonable to conclude, as a matter of common experience and inherent probability, that the parties contemplated at the time they formed their contract that the buyer would need to obtain finance to complete it, and that, in accordance with ordinary lending practices, the lender would require a valuation of the completed unit before providing the finance needed to settle.  Such a valuation would require a valuer to access the property once it was finished and able to be safely accessed. 
  7. [53]
    That the contract contemplated the buyer would require finance is apparent from clause 34.1(b) which refers to “your financier” rather than “any financier”.
  8. [54]
    The contract provided for 14 days after notice for the buyer to obtain the finance that was needed to perform its obligation.
  9. [55]
    The absence of an express provision about permitted access for the purpose of obtaining a valuation for finance purposes means that the issue falls to be determined in circumstances where performance of the contract required the buyer to have the sum needed to settle, and the contract contemplated that finance would be sought by the buyer for that purpose.
  10. [56]
    The contract was not made subject to finance such that the buyer could terminate the contract in specified circumstances if finance was not available.   But this does not alter the fact that finance was necessary for the buyer to perform the contract.  In those circumstances, the issue is one of construing the contract so as to determine the practical content of the respondent’s duty to not hamper the buyer’s performance of the contract by obtaining finance and obtain the contractual benefits that I identified, including the benefit of a full 14 days after the notice to obtain the finance.
  11. [57]
    Should one interpret the contract, including the implied duty to co-operate, by concluding in the circumstances that the parties intended that the seller be at liberty to frustrate the buyer’s attempt to obtain finance by not allowing the buyer’s valuer to inspect the just-completed property or by not allowing sufficient time for the valuation to occur so as to allow finance to be provided?  
  12. [58]
    I am not persuaded that this is a proper interpretation of the contract, including its implied term.  The contract should be construed so that the buyer not be frustrated by conduct by the seller that would hamper the buyer in the performance of the contract on his or her part.  The implied term prevents the seller from frustrating performance of the buyer’s obligation at settlement by such conduct. 
  13. [59]
    To adopt the language in Barker and other authorities, absent the implication, “the enjoyment of the rights conferred by the contract would or could be rendered nugatory, worthless, or, perhaps, be seriously undermined”.[16] 
  14. [60]
    The issue of contractual construction and the content of the duty of co-operation are not determined by the presence or absence of a “subject to finance” clause any more than by the presence or absence of a clause that the buyers were to fund the settlement without recourse to finance from a third party.   It is resolved by the application of an implied term to not hamper each other’s performance of their contractual obligations, and to agree to do “all such things as are necessary … to enable the other party to have the benefit of the contract”.[17]  One benefit of the contract for the buyer was a conveyance at settlement of title upon the buyer being able, within the period notified for settlement, to obtain and tender the sum required to complete.  An associated benefit was to have at least 14 clear days after the date of the notice under clause 10.1 to prepare for settlement by, among other things but most importantly, obtaining the finance to complete.  As noted, the contract contemplated that the buyer would have a financier. 
  15. [61]
    In the commercial circumstances known to the parties at the time they contracted, procuring finance at settlement entailed, like practically every other buyer in the market, the opportunity to be extended finance upon a valuation that, in this case, could only be conducted once the unit was finished and able to be safely accessed by an appointed valuer. 
  1. [62]
    The applicants’ case derives support from the Court of Appeal’s decision in Grieve v Enge.[18]  As in this case, “obtaining finance was not necessary just to entitle [the buyer] to a ‘benefit’ under the contract”, it was “necessary to assume their very capacity to complete, and thereby obtain the fundamental benefit of the contract”.[19]  de Jersey CJ (with whom McMurdo P and Helman J agreed) stated:

“Obtaining finance was inextricably linked to the respondents’ performance of the central obligation, namely, payment of the purchase price.”

  1. [63]
    This engaged what was said by Mason J in Secured Income:[20]

“It is easy to imply a duty to co-operate in the doing of acts which are necessary to the performance by the parties or by one of the parties of fundamental obligations under the contract.”

  1. [64]
    The necessity to obtain finance in order for a buyer to perform its fundamental obligation under the contract gives content to the seller’s duty to co-operate, namely allowing access to facilitate the preparation of a valuation to found the requisite finance.  In Grieve such access was “essential to the [buyer’s] performance under the contract”, so it was something the seller was “by implication duty-bound to supply”.[21]
  2. [65]
    The reasoning in Grieve on this point did not depend on the presence of a “subject to finance” clause.  The reasoning applies with equal force to a contract like the current contract which expressly contemplates that the buyer has a financier, the buyer has an obligation to procure the finance necessary to complete, and has the benefit of a certain fixed period after registration and prior to settlement to obtain it.
  3. [66]
    The applicants’ case does not depend on the existence of an explicit contractual promise that the buyer have the opportunity to obtain finance from a third party.  It depends on identification of a contractual benefit and what the buyer necessarily must do to perform its fundamental obligation and obtain that benefit.  To perform its obligation under the contract the buyer had to tender the settlement amount by obtaining the necessary finance.  The contract and commercial reality contemplated that the finance would be obtained from a financier.  The contract implicitly promised that the buyer would have the opportunity to obtain that finance, particularly during the full 14 days following the notice during which the buyer had to procure the necessary finance.
  4. [67]
    Simply put, the contract required the buyer to obtain the finance to perform the buyer’s central obligation, namely payment of the purchase price.  The duty to co-operate by acting in a way to allow the buyer to obtain finance and complete the contract entailed the same practical content as the same implied duty in Grieve.  Expressed in negative terms it was to not hinder the buyer in obtaining the necessary finance.  Expressed in practical terms it was, as in Grieve, to allow access for a valuation to obtain that finance. 
  5. [68]
    The respondent’s written submissions cite Mediratta v Clark,[22] but only in support of a general rule.  As the applicants’ submissions explain, the implied term contended for in that case was rejected as being too wide and failing the test for a term implied in fact.  The judge in Mediratta was not assisted by reference to the Court of Appeal’s decision in Grieve.  Therefore, I derive little assistance from it.
  6. [69]
    I have focused on the promised benefit of gaining title by obtaining the finance necessary to complete and tendering it on a settlement date fixed in accordance with the contract.  This carried with it an implied duty, upon request, to permit access to a valuer to prepare a valuation for finance purposes.
  7. [70]
    The associated promise was that the buyer would have a clear 14 days after the notice under clause 10.1 to attend to these things so as to obtain the finance necessary to complete.
  8. [71]
    For these reasons, I am disposed to declare that the respondent’s duty to co-operate to allow the buyer the benefit of the contract required it to permit access to the property by a valuer appointed by the buyer in sufficient time to provide a valuation advice in advance of completion.

Summary of the duty issue

  1. [72]
    The fact that the respondent did not expressly promise each of the buyers that they would have the opportunity to have a valuer inspect and value the property once it was finished, and in sufficient time to obtain finance for settlement, does not supply an answer to the current problem.  It creates the problem.
  2. [73]
    The absence of an express provision directs attention to the practical content of the respondent’s undoubted implied duty to do all that is reasonably necessary to secure performance of the contract and its implied duty to co-operate in providing the benefits promised by it.  The content of those duties in this particular case turns on its circumstances.
  3. [74]
    That question of what the duty entails is answered in the commercial context of a buyer’s real world need to obtain finance to settle, that a valuation for finance purposes could not be undertaken in this case until the development was complete and in a condition to permit safe access by the valuer to the relevant property, and that the buyer had the contractual benefit of 14 days after the notice to arrange the finance in order to perform his or her obligations at settlement and thereby obtain the benefit of the promised title to the property.
  4. [75]
    The question of the duty’s practical content is also answered by considering whether the duty imposed by law in those circumstances would leave the respondent at liberty to hamper, frustrate, or render impossible the process of obtaining finance during that 14-day period.  The contract’s process for settlement allowed the buyer to obtain finance in sufficient time to complete a settlement that was fixed to occur 14 clear days after the respondent’s notice under clause 10.1.
  1. [76]
    In the circumstances, I decline to conclude that the implied duty of the respondent left the respondent at liberty to hamper, frustrate, or render impossible that process by not permitting access for finance purposes to the completed property during that 14-day period.
  2. [77]
    Absent the implication contended for by the applicants, their contractual right to enjoy the rights and benefits conferred by the contract would be seriously undermined, if not rendered worthless.  The implication is for that reason not simply reasonable, it is necessary for the buyer’s performance of the contract.
  3. [78]
    In addition, for the notice under clause 10.1 to be of practical benefit to a buyer, the period of 14 days had to be available to allow the completed premises to be valued by the buyer’s valuer so as to enable anticipated finance to be available on settlement day.
  4. [79]
    The contract should be construed so that the entire notice period under clause 10.1 be used by the buyer to arrange the things required of it to perform the contract, and the main thing required of it was to conclude arrangements for finance to be available on settlement date.
  5. [80]
    In this case, unlike the case of a long-established property that had been available for inspection for weeks and months, including the pre-contractual period, the benefit of clause 10.1 and the benefit of the contract more generally depended on a valuer accessing the property once it was completed and able to be inspected.
  6. [81]
    The practical content of the respondent’s implied duty in the circumstances required it to give notice at a time and to allow sufficient time for a request to value the property to be answered and a valuation to be undertaken.
  7. [82]
    Giving the clause 10.1 notice at a time when the building’s construction was still being completed and the valuer would not be allowed to inspect it, would be apt to seriously undermine or render worthless the benefit that clause 10.1 provided in allowing the buyer to complete finance arrangements during the 14 days prior to the nominated settlement date.  The implied duty exists to prevent such an undermining.
  8. [83]
    In the circumstances, the implied duty entailed the respondent permitting access by the buyers’ valuer in sufficient time to permit the valuer to advise the buyers as to the value of the property in advance of completion. 

Breach of the implied duty

  1. [84]
    In fixing a settlement date of 16 July 2024 on 1 July 2024 in circumstances where a valuer was not able to access the property sooner than 8 July 2024 at the earliest, the respondent did not allow sufficient time or a reasonable time for the valuation to be completed and finance provided in reliance upon it for the purpose of settlement.
  2. [85]
    The respondent’s conduct in not even responding to the buyer’s request for a week also did not permit access to be arranged in sufficient time prior to the date fixed by the respondent for settlement.
  1. [86]
    The respondent’s unreasonable delay in responding to the buyers’ 1 July 2024 requests for access by valuers and its conduct in allowing the premises to be in a physical state where it was unsafe or impossible for a valuer to access the premises until after 8 July deprived the buyers of the opportunity to have a valuer’s inspection in the week of 1 July.  It hindered them obtaining finance on the strength of a valuation of the completed property after access was granted and hindered their performance in being able to settle on 16 July.
  2. [87]
    The respondent failed to provide access within a reasonable time of the request being received on 1 July 2024.
  3. [88]
    The respondent contends that the situation is “a consequence of the applicants’ own fault in not taking steps to organise third party finance ahead of the need to settle”.  But one can organise finance approval that is conditional upon an inspection and valuation of the property against which the finance is to be secured.  No such inspection and valuation was made possible by the respondent until 8 July 2024.
  4. [89]
    I conclude that the respondent breached the implied duty that I have found.

Consequences of breach

  1. [90]
    The respondent’s breach has hindered or precluded the buyers from obtaining the finance required to complete on the appointed settlement date.  Therefore, the respondent should not be entitled to rely upon its breach in asserting a breach or failure to perform by the buyer in not completing the contract on 16 July 2024.
  2. [91]
    While some buyers were able to have valuers undertake inspections in the week commencing 8 July 2024, this is not to say that the delay in their doing so will not delay completion of the valuation reports, review of them by lenders, final approval of finance and the actual provision of finance for a settlement on Tuesday, 16 July 2024.  I infer that it will.
  3. [92]
    I accept the respondent’s submission that the breach does not mean that time ceases to be of the essence for all purposes.  It does not entail waiver of time being of the essence in respect of all contractual obligations.  It does, however, preclude the respondent from taking advantage of its breach by insisting upon performance of the buyer’s obligation at a settlement on 16 July 2024.
  4. [93]
    This doctrine has been described as “the prevention principle”.[23]
  5. [94]
    Applying that principle, the respondent should not be able to rely on any failure by a buyer to be in a position to settle on 16 July 2024.  The respondent’s conduct in breach of contract has produced that situation and the respondent cannot take advantage of it by purporting to terminate the contract for failure to settle on that day.
  6. [95]
    This is not to say that, once having allowed an appointed valuer a reasonable time to inspect the property to provide valuation advice for the purpose of the buyer’s completion of the contract, a new date for completion cannot be fixed by the seller, with time being of the essence. 
  7. [96]
    Therefore, I am not disposed to grant a declaration in the terms sought in paragraph 1(c) that would entitle the buyer to call for completion “on reasonable notice”.  I will, however, hear from the parties about a form of order that addresses the process and timing for a new date for completion.
  8. [97]
    For the moment I will make a declaration based upon my finding of breach and the prevention principle.  There will be a declaration to the effect that the respondent is not entitled to call for completion of the contract on 16 July 2024.

Injunctive relief

  1. [98]
    The respondent correctly submitted that the injunction sought to restrain the respondent from dealing with the property was too wide.  The applicants conceded this.
  2. [99]
    Consistent with the declaration I propose to make, the respondent might be restrained from purporting to terminate the contract of any buyer who fails to settle on 16 July 2024. 
  3. [100]
    The terms of any injunction should not prevent the respondent from settling on 16 July 2024 with any buyer who is able to settle on that day notwithstanding the respondent’s breach.
  4. [101]
    I will hear the parties about the necessity for and the terms of a suitable injunction to protect the rights that I have declared.

Summary and conclusion

  1. [102]
    The respondent contends that it did not promise that the buyer would have an opportunity to obtain finance.  This is said to distinguish this case from Grieve where the contract contained a “subject to finance” clause.  I do not agree.
  2. [103]
    The respondent promised a full 14-day period after the clause 10.1 notice for the buyer to obtain the finance necessary to complete the contract and to make other necessary arrangements to gain the benefit of title.  The contract explicitly contemplated the involvement of the buyer’s financier to enable the buyer to perform its central obligation under the contract.  This was something the parties must have intended.  It is commonplace.
  3. [104]
    By the terms of the contract and in its commercial context, the respondent implicitly promised the buyer the opportunity to obtain finance, and to have a full 14 days after the notice to finalise it.
  4. [105]
    An exceptional buyer who carried the settlement sum around in a knapsack might not have availed himself or herself of the opportunity to obtain finance.  Most individuals, including the buyers, would.
  5. [106]
    The respondent having promised the buyer a full 14-day period after notice to pursue the opportunity to obtain finance in order to perform the buyer’s fundamental obligation, the respondent’s duty to co-operate so as to give the buyer the benefits of the contract applied to the obtaining of finance during all of those 14 days.
  6. [107]
    The content of that duty included the matter determined in Grieve.  This is to allow access to a valuer to facilitate obtaining finance to enable the buyer to perform the buyer’s fundamental obligation.
  7. [108]
    The respondent breached its duty.
  8. [109]
    That breach prevented valuations being obtained in a timely fashion to allow finance to be available for a settlement on 16 July.  The respondent therefore is prevented from relying on a buyer’s failure to complete on that day.
  9. [110]
    I will make declarations and orders in a form to be submitted by counsel.

Footnotes

[1] Secured Income Real Estate (Australia) Ltd v St Martins Investments Pty Ltd (1979) 144 CLR 596 at 607 (“Secured Income”).

[2]  (1896) 7 QLJ 68 at 70-71.

[3]  (1881) 6 App Cas 251.

[4]  See the numerous authorities cited in Heydon on Contract 2019, Lawbook Co [21.370], footnote 115.

[5] Mackay v Dick at 263.

[6] Secured Income at 607.

[7]  (1896) 7 QLJ 68 at 70-71.

[8]  (1998) 43 NSWLR 104 at 123 (“Australis”).

[9]  (1904) 1 CLR 632 at 647.

[10]  [1940] AC 701 at 713.

[11]  At 123-124.

[12] Commonwealth Bank of Australia v Barker (2014) 253 CLR 169 at 189 [29] (“Barker”).

[13] Barker at 189.

[14] Australis at 124.

[15]  At 125.  See generally, Jackson Nominees Pty Ltd v Hanson Building Products Pty Ltd [2006] QCA 126 at [49]-[52]

[16] Barker at 189 [29].

[17] Butt v M’Donald at 70-71.

[18]  [2006] QCA 213 (“Grieve”).

[19]  At [34].

[20] Secured Income at 607-608.

[21] Grieve at [34].

[22]  [2019] VSC 685 (“Mediratta”).

[23] Simcevski v Dixon [2017] VSC 197 at [62]-[63] and the authorities cited them including Suttor v Gundowda Pty Ltd (1950) 81 CLR 418 at 441.

Close

Editorial Notes

  • Published Case Name:

    Brightman & Ors v Royal Pines Projects Pty Ltd

  • Shortened Case Name:

    Brightman v Royal Pines Projects Pty Ltd

  • MNC:

    [2024] QSC 149

  • Court:

    QSC

  • Judge(s):

    Applegarth J

  • Date:

    12 Jul 2024

  • Selected for Reporting:

    Editor's Note

Litigation History

EventCitation or FileDateNotes
Primary Judgment[2024] QSC 14912 Jul 2024Proceedings brought by purchasers of apartments sold off-the-plan against developer for breach of implied duty to cooperate in relation to permitting valuer access to property; declarations and orders in form to be submitted by counsel: Applegarth J.
Primary Judgment[2024] QSC 15015 Jul 2024Declaratory and final injunctive relief granted: Applegarth J.
Notice of Appeal FiledFile Number: CA9265/2416 Jul 2024Notice of appeal filed.
Appeal Determined (QCA)CA9265/24 (No citation)25 Jul 2024Orders made at conclusion of hearing; appeal dismissed: Dalton JA, Wilson and Crowley JJ.
Appeal Determined (QCA)[2024] QCA 14713 Aug 2024Reasons for orders of 25 Jul 2024: Dalton JA (Wilson and Crowley JJ agreeing).

Appeal Status

Appeal Determined (QCA)

Cases Cited

Case NameFull CitationFrequency
Australis Media Holdings Pty Ltd and Ors v Telstra Corporation Ltd and Ors (1998) 43 NSWLR 104
2 citations
Jump To
Cite 1 - (1998) 43 NSWLR 104
Cite 2 - (1998) 43 NSWLR 104
Butt v McDonald (1896) 7 QLJ 68
3 citations
Jump To
Cite 1 - (1896) 7 QLJ 68
Cite 2 - (1896) 7 QLJ 68
Cite 3 - (1896) 7 QLJ 68
Commonwealth Bank of Australia v Barker (2014) 253 CLR 169
2 citations
Jump To
Cite 1 - (2014) 253 CLR 169
Cite 2 - (2014) 253 CLR 169
Grieve v Enge [2006] QCA 213
2 citations
Jump To
Cite 1 - [2006] QCA 213
Cite 2 - [2006] QCA 213
Jackson Nominees Pty Ltd v Hanson Building Products Pty Ltd [2006] QCA 126
2 citations
Jump To
Cite 1 - [2006] QCA 126
Cite 2 - [2006] QCA 126
Mackay v Dick (1881) 6 App Cas 251
2 citations
Jump To
Cite 1 - (1881) 6 App Cas 251
Cite 2 - (1881) 6 App Cas 251
Marshall v The Colonial Bank of Australasia (1904) 1 CLR 632
1 citation
Jump To
Cite 1 - (1904) 1 CLR 632
Mediratta v Clark [2019] VSC 685
2 citations
Jump To
Cite 1 - [2019] VSC 685
Cite 2 - [2019] VSC 685
Secured Income Real Estate (Australia) Ltd v St Martins Investments Pty Ltd (1979) 144 CLR 596
2 citations
Jump To
Cite 1 - (1979) 144 CLR 596
Cite 2 - (1979) 144 CLR 596
Simcevski v Dixon [2017] VSC 197
2 citations
Jump To
Cite 1 - [2017] VSC 197
Cite 2 - [2017] VSC 197
Southern Foundries (1926) Ltd. v Shirlaw (1940) AC 701
2 citations
Jump To
Cite 1 - (1940) AC 701
Cite 2 - (1940) AC 701
Suttor v Gundowda Pty Ltd (1950) 81 C.L.R., 418
2 citations
Jump To
Cite 1 - (1950) 81 C.L.R., 418
Cite 2 - (1950) 81 C.L.R., 418

Cases Citing

Case NameFull CitationFrequency
Brightman v Royal Pines Projects Pty Ltd [No 2] [2024] QSC 1502 citations
Royal Pines Projects Pty Ltd v Brightman [2024] QCA 147 1 citation
Yates v Bluestone Servicing Pty Ltd [2024] QDC 1292 citations
1

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