Bradley James Hancock v Impresario Enterprise Pty Ltd

Notice of the Impresario - Horne Contract 9Whether the making of that sale contract and the giving of notice in relation to it was in conformity with orders (3) and (4) of the Court's 11 November 2011 orders is an issue for determination. But the uncontested facts seem to be: that about three weeks after the contract was made on 21 May 2012 the solicitors acting for Impresario, Messrs Milne Berry Berger & Freedman, gave notice to Mr Hancock of Impresario's entry into that contract. 10In their 21 May 2012 letter Milne Berry Berger & Freedman informed Mr Hancock that "A contract for sale was entered into by the company [Impresario] and exchanged on 27 April 2012 with settlement to take place on or before 8 October 2012". On the face of it, this does appear to be lengthy advance notice of the proposed completion of that sale contract. But the information provided to Mr Hancock with the letter was a copy of the front page of the contract, some information that a deposit had been paid and a statement that "We anticipate a shortfall of balance of sale proceeds after agent's commission and legal fees and the debt to the mortgagee. Please take advice from your solicitors. We need a prompt reply so that a withdrawal of caveat will be provided on completion. Please ensure to have such within 21 days of the date of this letter." The letter enclosed a form of withdrawal of the caveat. 11The author of this 21 May 2012 letter clearly contemplated that it was sent in performance of the terms of the November 2011 settlement. 12But Mr Hancock did not cooperate with the 21 May 2012 request. He did not return the form of withdrawal of caveat. This caused Impresario's solicitors to write another letter in similar terms on 28 June 2012, enclosing another form of withdrawal of caveat. This too was not returned. 13Messrs Milne Berry Berger & Freedman then threatened Court action. On 6 August 2012 they further corresponded with Mr Hancock indicating that if a signed withdrawal of caveat was not returned by 13 August 2012 they would have to consider involving the Court in the matter. They threatened an order for costs. Mr Hancock, who was legally unrepresented at this time, did not respond. 14There was further correspondence to and fro, from about Friday 7 September 2012 until 27 September 2012 about whether or not a withdrawal of caveat would be supplied. Mr Hancock was disputing the result which the Impresario - Horne contract was said to produce, namely, that there would be a shortfall on completion and thus no money for Mr Hancock. He was seeking the return of equity he claims to have invested in the property. He sought payment of an amount of $200,000 in exchange for his consent that his equity be extinguished. Impresario took the stance, in response, that Mr Hancock was raising past issues, that all matters between the parties had been concluded in the 11 November 2011 terms of settlement, and that they did not wish to further debate the question of the return of Mr Hancock's equity. 15The correspondence continued to the same effect into the last 3 days of last week, when Impresario's solicitors foreshadowed that the matter would be re-listed this week, commencing Tuesday 2 October 2012. The matter came before the registrar's list this morning and was referred to me as the duty judge. 16On the application Mr Berger, the solicitor for Impresario, sought to move on a motion dated today. Although this motion had not been served upon Mr Hancock before today, I am satisfied the substance of the orders claimed within it had previously been drawn to his attention. The orders sought are the following: "1.That the plaintiff be ordered to comply with Order 4 of the orders of this Court made on 11 November 2011 and sign such withdrawal of caveat in registrable form and deliver same to the defendant's solicitor on or before noon 5 October 2012. 2.The plaintiff pay the defendant's costs of and incidental to all communications and proceeding since 11 November 2011 to date in respect of bringing about withdrawal of the subject caveat up to and including delivery of such withdrawal to the defendant's solicitors." 17Mr Hancock had also not previously been provided with a copy of Mr Berger's affidavit also sworn today which has been handed up in Court. But I am satisfied the affidavit only contains correspondence between himself and Impresario or its legal representatives and that the filing of the motion and the affidavit do not prejudice his capacity to argue the case today, notwithstanding the fact that he is not legally represented. There is nothing particularly new in that material. 18The apparent urgency of the matter is that the 27 April 2012 contract for sale from Impresario to the Hornes is due for settlement next Monday, 8 October 2012. Impresario tendered the full terms of the contract for sale to the Hornes on this application. It became Exhibit A. 19The question for the Court is whether under the 11 November 2011 terms, the caveat should be withdrawn to allow completion of the sale to the Hornes. There is sufficient evidence before me that a sale is taking place in accordance with the Impresario - Horne contract. The question is whether the preconditions for withdrawal of the caveat have been made out on the evidence now before the Court.

Two Views of the 11 November 2011 Settlement Agreement 20The answer to this question depends upon an assessment of the 11 November 2011 settlement agreement and the quality of the evidence which has been adduced to show that an obligation to withdraw the caveat has arisen. The relevant part of the agreement are clauses 3 and 4. 21Two interpretations of the obligations created under clauses 3 and 4 of the 11 November 2011 agreement are possible. These two clauses are framed neither with great felicity nor with great precision. The general structure of the parties' agreement was that Impresario could sell the property and Mr Hancock's solicitor would be fully appraised of the details of the sale. But the settlement agreement was unclear as to whether Mr Hancock's solicitor should be appraised of the details of such a sale before or after the sale were to take place. Both seem to be possible under the agreement clause 3 could be performed in two ways. 22If the parties' settlement agreement means that the details of the sale of the Hall Street property should be communicated to Mr Hancock before the sale is entered into, then the words "In clause 3 in the event of a sale being to the reasonable satisfaction of the caveator" would be words contemplating Mr Hancock's approval of the sale itself. On the other hand, if the parties' agreement means that the details of the sale could be communicated after the sale occurs, then the "reasonable satisfaction of the caveator" might be able to be established subsequent to the sale. 23I am inclined to construe the parties' agreement in accordance with the former view: that what the parties had in mind was that the plaintiff's solicitor would be informed of the details before the sale took place. But I do not have to decide that question of construction, because it seems to me that on neither construction of the contract has Impresario established a basis for the withdrawal of the caveat. 24The former construction is the more attractive. There would seem to be little point in appraising Mr Hancock's solicitor of the details of the sale after the event. If the former construction is right, there is certainly no evidence that Impresario informed Mr Hancock before the Impresario - Horne sale that it was to take place. The only such communication in evidence is the correspondence of 21 May 2012, which was after the Impresario - Horne sale. But even if the second interpretation is adopted the communications which have taken place are not in accordance with the 11 November 2011 settlement terms, clauses 3 and 4.

Non-Compliance with the 11 November 2011 Contract 25Those communications have been described. They do not enliven an obligation on my view of the 11 November 2011 settlement terms to trigger a withdrawal of the caveat, for the following reasons. 26First, there was no compliance with the obligation that "the plaintiff's solicitor be fully appraised of the details of the sale". I accept that in circumstances where Mr Hancock no longer has a solicitor, substantial performance of that obligation may be achieved by communicating with him personally. But the content of that communication to him still requires a full appraisal of the details of the sale. What that means in my view is the provision of sufficient information for him to make a determination as to whether the sale is "to the reasonable satisfaction of the caveator [Mr Hancock] to a bona fide purchase of the value". 27The obligation requires Impresario to supply sufficient information to Mr Hancock for him to determine to his reasonable satisfaction whether the sale is to a bona fide purchaser for value. That has not been done. Mr Hancock saw for the first time today in Court the contract for the sale of land. He was only ever shown the opening pages of the contract before today. The opening pages of the Impresario - Horne contract do not alone contain sufficient information for a reader to decide whether the sale was bona fide or not. The full terms of the document would be required for that. 28Secondly, Mr Berger offered to adduce oral evidence about the fact that the purchasers were at arms length from the vendor. I declined to allow that application in circumstances where Mr Hancock was unrepresented. An unrepresented party, and indeed represented parties, should confidently expect to have advance notice of the material to be relied upon. The way that the material is proposed to be adduced would not allow Mr Hancock a reasonable opportunity to form a view about the quality of the sale. For instance he may wish to issue subpoenas or make other inquiries about the information to be provided. 29Thirdly, Mr Berger says Mr Hancock could have asked for more information in addition to that supplied on 21 May 2012. But that is to miss the point of the contractual obligation which requires Mr Hancock to be fully appraised of the details of the sale. That obligation to provide sufficient information lies on Impresario. It is not to be shifted by Impresario saying Mr Hancock could have asked more questions. The question is to be determined by reference to the obligations that the parties have agreed. 30Fourthly, the other way that the 11 November 2011 settlement obligations could be construed is for Impresario to establish objectively after the event that there was a sale to a bona fide purchaser for value and to show that any lack of satisfaction on the caveator's part was objectively not reasonable. The concept "Reasonable satisfaction of the caveator" [emphasis added] implies: (1) that the caveator's subjective expression of dissatisfaction is not a complete veto; but, (2) that an unreasonable expression of dissatisfaction, may be disregarded if it is not justified on objective criteria. But that still requires Impresario to prove that sufficient information has been given to the caveator, Mr Hancock, to form a view. For the reasons already explained, Impresario has not done that. 31Finally, Impresario seeks to argue that objectively speaking there is a bona fide purchaser for value in the Impresario - Horne contract. But it fails in this argument on the current evidence for several reasons. Exhibit A does not on its face prove that the property was sold to a bona fide purchaser. It is simply evidence of a sale. It is purely evidence on its face that a contract has been entered into. I cannot just assume by looking at the contract that Mr and Mrs Horne are not related to the vendor in some way. I can make no assumptions about the pre-sale marketing of the property or whether it was sold at market value. I can make no assumptions about what has or has not been said about these matters to the Stamp Duties Office. There is no affidavit or other evidence before me establishing those things. I am not prepared to infer on the basis of the existing evidence that the Hornes are bona fide purchasers for value. There is certainly some evidence through Exhibit A that the purchase is for value and may be at arms length. But it is their bona fides that have not been established; namely their bona fides in the relevant sense, that they are genuine third party purchasers from Impresario. 32For all those reasons, I decline to make the orders sought on the motion. Mr Berger has asked that the motion be adjourned. I decline to do that. I will dismiss the motion.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 08 October 2012