Brachmanis & 1 Ors v Columbus Property Developments P/L & 1 Ors

INTRODUCTION 1 On 2 February 2001 Simos J dealt with a dispute concerning unit 13, 11 to 13 Pittwater Road, Manly in a written judgment. 2 Essentially the dispute concerned the reinstatement of the Plaintiffs as nominees of the purchaser under a contract of sale of the above unit. 3 The orders that Simos J made on an interlocutory basis varied during that day from the original paragraph 1(a) of his orders requiring the Defendants to be restrained from interfering with the Plaintiffs' possession until 5 February 2001 to the later discharge of that order. In his judgment, he explains his reasons, namely that an auction to be held next day should not be restrained, based upon conditions the subject of undertaking by the Defendants and in particular the vendor Columbus Property Developments Pty Limited. Those undertakings provided for payment of a sum to the purchasers based upon the price at which the property was sold and, if not sold, based upon the highest genuine bid at the auction, with in the latter case the option to the purchasers to purchase at a reduced price.

RESOLUTION OF APPLICATION 4 There is evidence before me which is essentially uncontradicted, that the "auction" which was to take place was neither advertised in advance nor genuinely carried out; see in particular the Plaintiffs' affidavit of Edgar Brachmanis of 6 February 2001 paras 29 to 35 and the affidavit of Dianne Hobbs of 28 February 2001. The latter affidavit leaves it fairly clear that the agent still treated unit 13 as available for sale, thus negating the Defendants' evidence that the sale had actually occurred in favour of an overseas purchaser from Italy, an issue to which I will return. 5 Relevantly, at paragraph 2 on page 3 of the affidavit the agent is quoted as saying "Oh the auction was called at the owner's request because of a legal issue. We didn't do any marketing for the auction so that's why it didn't sell." 6 At a final trial, there may well be dispute as to this. I simply note that there has been a subsequent exchange of correspondence dated 3 March 2001 from the agent to the Defendant which was not admitted into evidence as the agent was not available for examination. That exchange of correspondence may ultimately bear, when tested properly, upon final resolution of the matter. It suffices for present purposes that I simply state that I am satisfied that there is a prima facie case that the auction was a sham and was not what was contemplated by Simos J. 7 Evidence as to a supposed sale to a Mr Bob Miga and Mrs Noela Nna his wife was sought to be tendered in the form of two separate documents which were said to constitute one contract. These I identified as MFI 1 and MFI 2. For reasons elaborated in the transcript, I have excluded that evidence even for interlocutory purposes as unfairly prejudicial, within the parameters of s135 of the Evidence Act. These included that the document is a copy signed only by Mr Miga insofar as the apparent signature is concerned and the two parts comprising the one contract do not match. Moreover there has been a Notice to Produce which has not been answered seeking the original contract with nothing so far produced. 8 Given that the contract is so central in importance, it should not have been sought to be proved with the kind of informality here exhibited. 9 I turn now to the more difficult aspect. The Plaintiffs' case is that pending final determination of these proceedings they should be admitted back into possession in conformity with the contract noted as Exhibit A in accordance with special condition 1. The Defendant contended that the immediate access was contingent upon a Certificate of Occupancy for the development but conceded that it now existed though may not have at the time the Plaintiffs were excluded from possession. That factor does not to my mind preclude the orders the Plaintiffs seek. 10 The contract is somewhat unusual in that the deposit required to be paid is offset by payment of $220,000 by the vendor in special condition 2. 11 The more difficult aspect is that the Defendant gave a Notice to Complete on 12 December 2000 following the expiry of the completion date on 27 November 2000. That Notice to Complete could not be said to be other than in conformity with the contract so far as form and content is concerned. Nor is it controverted that on 27 December 2000 completion did not occur as required by the Notice to Complete. 12 The Plaintiffs rely in their Amended Statement of Claim on a number of grounds by way of particulars for contending that the Notice was not an effective notice in a legal sense as follows: "(a) At the time of giving the said Notice the first defendant had not completed the work to be performed under the Contract and the plaintiffs were not in default under the Contract. (b) The said Notice was not directed to the first plaintiffs as nominees of the second plaintiff. (c) The first defendant was not ready willing and able to complete the Contract. (d) The time given to complete the Contract was not reasonable in the light of the date of the purported service of the said Notice. (e) The said Notice was not in order as to form and content in that it did not state with particularity what was required to be done under the Contract and did not state the consequences of failure to perform what was so particularised. (f) Compliance with the said Notice was waived by the solicitors for the first defendant on a number of occasions."