Cordon Investments Pty Ltd v Lesdor Properties Pty Ltd [2006] NSWSC 481 | Case summary

1 The plaintiff, Cordon Investments Pty Limited ("Cordon"), seeks by its notice of motion filed on 12 April 2006, an order compelling the defendant, Lesdor Properties Pty Limited ("Lesdor"), to execute particular strata plans in respect of a property which is the subject of a joint venture agreement between them. 2 The joint venture is effectively one under which Lesdor contributed land and Cordon undertook to carry out building works. A highly relevant provision of the parties' written contract is clause 15: "Cordon shall at its own expense use its best endeavours to have the Strata Plan approved by the Council and registered at LPINSW as expeditiously as possible following the completion of the Building Works and Lesdor shall do all such things as shall be reasonably required of it to give effect to this." 3 I should also refer to clause 13.3 which follows two provisions by which Lesdor purports to appoint Cordon as Lesdor's attorney and to confer certain powers on Cordon. Clause 13.3 is as follows: "Notwithstanding the preceding provisions of this clause, Lesdor shall execute any plan of subdivision, the Strata Plan any accompanying instruments and such Contract, Contracts, Transfer or Transfers for the conveyance of the title of the residual lots to such persons or corporation as Cordon shall nominate and shall deliver such plans, instruments and such Contract, Contracts, Transfer or Transfers to Cordon forthwith upon request." 4 Clause 13.3 is, in my view, a provision of a machinery or procedural kind. It appears in the power of attorney and authority conferring context. The obligation it purports to impose is not qualified as to time. 5 Clause 15, on the other hand, introduces a relevant timing element and is a substantive provision rather than a procedural one. Clause 15 says that Cordon is to use its best endeavours to have the strata plan approved and registered "as expeditiously as possible following completion of the building works". Lesdor's obligation under the same clause is to "do all such thing as shall be reasonably required of it to give effect to this". That is necessarily likewise qualified, so that it does not have to be performed until after the completion of the building works. 6 The parties' contract does not define completion of the building works, although it does define the building works by reference to the "plans and specifications". There is, in clause 11, a provision requiring Cordon to proceed with and complete the building works in accordance with the "approvals". 7 In clause 5.1 Cordon agrees to carry out the "building works" and undertakes that they will be "completed in accordance with the plans and specifications". It is clear, in my view, that compliance with both the "plans and specifications" and the "approvals" is a core component of Cordon's contractual obligations. Those obligations will not be seen to have been performed unless and until work conforming to both the plans and specifications and the approvals has been completed. 8 Evidence from building consultants led by both parties shows that the work that has been done does not, in all respects, conform with the plans and specifications or, more precisely, with what might be the plans and specifications, given that there is now also some dispute, it appears, as to whether those to which the parties worked accorded with the contract. The work that has been done may satisfy the "approvals" as distinct from the "plans and specifications" and it is clear, in that respect, that an occupation certificate has been issued by the local authority. 9 But the event with which clause 15 is concerned is "completion", not the issue of an occupation certificate or reaching of a stage where the building is suitable to be occupied. The event upon which clause 15 turns is completion in fact. Unless and until completion in fact has occurred, Lesdor's obligation now in contention - effectively to co-operate in obtaining registration of the strata plan - has not become due for performance. 10 It is relevant to note that this contract, unlike a standard building contract, does not create any internal mechanism for fixing the point at which the works are completed; nor does it envisage a sequence involving a concept of practical completion followed by defects rectification. There is a single and undefined concept of completion which can only entail due and entire accomplishment of each and every step appearing from the plans and specifications. There is acknowledgment in clause 21 that there may be defects, but that refers, in my opinion, to defects appearing after completion has been achieved. 11 I have not, to this point, mentioned the way in which these proceedings are constituted. The statement of claim was filed on 12 April 2006 together with the notice of motion. By the statement of claim, Cordon seeks declarations that Lesdor is bound by and has breached clause 13.3, an order "for specific performance of the joint venture agreement", an order directing Lesdor to execute any plan and accompanying instrument for obtaining strata subdivision, damages, interest and costs. 12 The notice of motion, which I mentioned at the start of these reasons, was filed at the same time as the statement of claim. The relief it claims is orders in the same terms as the statement of claim as to specific performance and execution of any plan and accompanying instrument for the purpose of obtaining strata subdivision. 13 The claims in the notice of motion are thus claims of a once and for all kind. But the plaintiff has approached them as if they were truly interlocutory, making submissions regarding a serious question to be tried and balance of convenience. The concept of an interlocutory order for specific performance is an odd one, unless perhaps it is seen as a claim for an interlocutory mandatory injunction. But even then, the concept involves what is described in Meagher, Gummow and Lehane's "Equity: Doctrines and Remedies" (fourth edition by Meagher, Heydon and Leeming) at page 788, as a rara avis or rare bird. It is there stated that an interlocutory mandatory injunction may be granted and the limited classes of cases for such relief are mentioned: "The interlocutory mandatory injunction is a particularly rara avis . This is partly because a mandatory injunction is usually more onerous for a defendant to comply with than a prohibitory one; moreover, the usual purpose of an interlocutory injunction is to preserve the status quo, a consideration inapplicable to mandatory injunctions. But there is nothing to prevent a court from issuing an interlocutory mandatory injunction. Typical, but not exhaustive, examples are cases where the plaintiff's property would otherwise be in danger (for example through risk of fire from the storage of combustible material on the defendant's premises), where the defendant's conduct has been contumelious or evasive, or where the defendant has attempted to forestall the court's order. Another illustration is provided by the decision of Goulding J in Comet Radiovision Services ltd v Farnell-Tanberg Ltd (1971) LR 7 RP 168; [1971] 3 All ER 231. There the final relief claimed by the plaintiff, a dealer in electrical goods, was an injunction restraining the defendant, a supplier of those goods, from refusing to sell to him. The action was based on the Resale Prices Act 1964 (UK) s.2. Interlocutory relief was sought in terms of the final relief. Objection was taken that the interlocutory relief sought, whilst couched in the negative, was mandatory in substance (as indeed it was). None the less, relief was granted because it was tolerably clear that, if an interlocutory injunction were to be refused solely because it was mandatory, the Act would have been completely incapable of interlocutory enforcement. Another illustration is Oggi Advertising Ltd v McKenzie [1999] 1 NZLR 631, where an interlocutory mandatory injunction was awarded to prevent the quick erosion of the plaintiff's goodwill." 14 The truth is that the circumstances in which the court will consider granting an interlocutory order of a compelling kind, as distinct from a restraining kind, are rare; and I do not see this case as within (or analogous to) any of the classes mentioned. 15 In this case I am, for reasons stated, not satisfied that there is a serious question to be tried as to breach by Lesdor of its contractual promise regarding signing of plans and related instruments. The reasons are, as I have said, connected with the absence of completion in accordance with the contract. That is enough to dispose of the interlocutory application and I do not need to consider the balance of convenience; but had it arisen for consideration, a powerful factor against the plaintiff would have been that the grant of interlocutory relief did not maintain any status quo but worked to the hardship of the defendant. 16 The application for the interlocutory orders maintained through the notice of motion is dismissed.

Cordon Investments Pty Ltd v Lesdor Properties Pty Ltd

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Judgment (12 paragraphs)

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