Monzer Tabbouch v Scott Devlin & Ors

Monzer Tabbouch v Scott Devlin & Ors - [2008] NSWSC 600 - NSWSC 2008 case summary — Zoe

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iii. alternatively MLG conveyancing contends that if Mr Tabbouch suffered loss and damage, such loss and damage was caused or contributed by his failure to mitigate his loss [the contention being that the failure to mitigate was constituted by his failing to complete the purchase; failing to recover the whole of the deposit from the Devlins and/or failing to bring and maintain these or other proceedings against the Devlins in circumstances where there were reasonable prospects of success against the Devlins]. The Marsden Group's first cross-claim 26 On 16 November 2007 the Marsden Group filed the first cross-claim against MLG Conveyancing seeking contribution pursuant to section 5 of the Law Reform (Miscellaneous Provisions) Act 1946 (NSW) and contribution at common law and in negligence. The principles 27 Close questions with respect to the issue of notices to produce have a particular longevity in terms of the authorities. Amongst the many authorities commonly referred to are Carr v JA Berriman Pty Ltd (1953) 89 CLR 327 and Michael Realty Pty Ltd v Carr [1977] 1 NSWLR 553. 28 There are many occasions when valid notices to complete may be given, and given either when provisions similar to special condition 6 are present in the contract or even when no such provision was made at all. The Court is always engaged in the question of assessing the reasonableness of whatever time be furnished for completion: cf Lohar v Dibu. The differences in relation to the circumstance where a provision such a special condition 6 is present and the situation where there is no such special condition is no more than that the parties in the former situation have consensually agreed to be bound by a 14 day notice to complete as being reasonable and sufficient. 29 It is trite that in a conveyancing context it is possible for a vendor, having first purported by notice to make time of the essence of a contract and thereafter purported to terminate the contract for failure to comply with the time so delimited, to then, without prejudice to the claimed validity of the termination, give a second notice purporting to make time of the essence of the contract. Such a second notice is properly construed as an " offer to start up again" [that is to say as an offer to re-instate the contract, being an offer capable of being accepted by the purchaser]: Lohar Corporation Pty Ltd v Dibu Pty Ltd (1976) 1 BPR 9177. 30 In Michael Realty Mahony JA observed as follows:

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"it is necessary to have regard to the precise language used in each case. It is significant that in the present case the subjects of time for completion, giving of notice to complete, and the time to be limited by such a notice, are dealt with in a single composite and prima facie comprehensive provision in each contract. The distinct impression one gains in reading this provision is, firstly, that the expression "within 14 days" was intended to be a shorthand way of saying "within a period of not less than 14 days" and, secondly, that it was intended to define the period to be fixed for completion in any notice to complete given by either party after the expiration of the initial period of 30 days. In other words I think that it is implicit in this provision that a notice to complete given in the circumstances postulated must allow a period for completion of not less than 14 days." 51 That analysis is indistinquishable from the present case and I agree with it. [cf Doyle v Howey (1990) 6 BPR 13,401] 52 Further, the matter inheres in fairness to the vendors, where, having received a notice to complete which was precise in its terms, they were entitled to assume that they could take the whole of the time which the notice to complete stipulated in readying themselves for completion by the date and time nominated. This is all about giving reasonable notice: cf Lohar. 53 In the circumstances of this case it is plain that had the special arrangement not been entered into, the Devlins were entitled to disregard the notice to complete, treating it as having no potency whatever [except as possibly justifying the giving of a later notice to complete with a shorter period of time being given, the giving of the original invalid notice to complete being one of the factors to be taken into account in terms of whether or not the later notice to complete delimited a reasonable period]. Conclusion 54 The issue of the notice to complete was ineffective to make time of the essence in the circumstances. It did not do so. 55 It is not impossible that, in some circumstances of a very unusual nature, a purchaser who gave such a notice to complete could be able to prove that the vendors had, after receiving the notice, been guilty of repudiatory behaviour entitling the purchaser to rescind the contract even before the date and time stipulated for completion in the notice to complete. However, this case does not exhibit any such circumstances. The potential for a claim under section 55 (2A) of the Conveyancing Act 56 The third defendant claims that, had the Devlins been pursued by Mr Tabbouch in terms of an application pursuant to section 55 (2A) of the Conveyancing Act, such an application would have been successful. 57 The history, scope and purpose of section 55(2A) of the Conveyancing Act were considered by Powell JA in Benyon v Wongala Holdings Pty Ltd (1999) 9 BPR 16,781 at 16,785 and it has been held that the jurisdiction pursuant to that section is wider than one to be exercised only if there is unconscionable conduct. The Court needs to consider generally the conduct of the parties: Schindler v Pigault (1975) 30 P & Cr 328 at 336-7.

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iii. then proceeding not even to honour the new arrangement but instead terminating out of hand before the time fixed for settlement under the new arrangement. 60 None of this suggests an entitlement in the contractor to obtain relief under section 55 (2A) of the Act. It has not been shown that in circumstances it would have been unjust or inequitable for the Devlins to retain the deposit. The claim that the loss was not caused by MLG conveyancing 61 This claim rests upon the proposition that MLG Conveyancing's conduct was not causative of any loss to Mr Tabbouch. MLG seeks to move the liability for the loss of recovery of the deposit to the new solicitors, the Marsden Group, who commenced to act for Mr Tabbouch when MLG Conveyancing cease to act for him. Whilst it is true that Mr Tabbouch was given various options by the new solicitors, the evidence given by Mr Searle was that he had not been able to advise Mr Tabbouch as to whether or not the notice to complete had been valid nor as to whether or not the purported determination of the contract by Mr Tabbouch was valid. All that Mr Searle appears to have been in a position to do, was to put various alternatives to an already bewildered Mr Tabbouch. Mr Seale himself was shortly required to indicate to Mr Tabbouch that he was unable to continue giving advice due to a conflict of interest, caused by the association between his firm and MLG Conveyancing. 62 The real cause of Mr Tabbouch's loss and damage had already taken place when Ms Winton had given incorrect advice to him: that is to say, had advised that the notice to complete had been valid and that the termination had been valid. Those were the matters which caused the loss of an entitlement to the return of the deposit. By the time that Mr Tabbouch was told that MLG Conveyancing could no longer act for him and that he had to go to a new firm, that damage/loss had already occurred and was irrecoverable. Failure to mitigate 63 Nor is there any substance in the proposition that the case exhibits a failure by Mr Tabbouch to mitigate any loss or damage. 64 It was put by the third defendant that the failure to mitigate was constituted by Mr Tabbouch having failed to pursue the claim against the Devlins in the circumstances. Much was made of the fact that at the commencement of these proceedings, Mr Tabbouch had abandoned his claim that the Devlins were liable to refund the deposit moneys and that the first occasion when the third and fourth defendants learned that this claim was to be abandoned was when the hearing began. 65 The proposition which was put was that no explanation had been offered as to why that claim had been discontinued. The submission was that the failure to pursue the Devlins was a calculated risk taken by Mr Tabbouch, in circumstances where he knew that the Devlins had filed no evidence in opposition to the claim brought. 66 The issue is arid in light of the findings that, even had the case against the Devlins been pursued, it would have failed. 67 During the hearing evidence was adduced by Mr Tabbouch to the effect that Mrs Devlin is an un-discharged bankrupt as from March 2006. Unsuccessful attempts had been made to serve the statement of claim on Mr Devlin, and in due course orders for substituted service were made and complied with. Mr Daly, the plaintiff's solicitor, had never been able to locate or speak to Mr Devlin. Furthermore, a purchaser's index search at the Land and Property Information Register, seeking to establish whether any property was currently owned by Mr Devlin and whether any property had previously been owned by him, disclosed that there was no current real properties owned and that there previously had been four properties owned. 68 To my mind this evidence in the light of the whole of the general circumstances permits of a proper inference that even had Mr Tabbouch had a viable case against Mr and Mrs Devlin, the further pursuit by the Mr Tabbouch of either Mr or Mrs Devlin in terms of these proceedings would have been unlikely to yield any success in terms of a monetary order which could be enforced. 69 As already observed, the matter is otiose in mind of the reasons already given. But to the extent that close argument took place in terms of the suggested failure to mitigate, the evidence which was adduced satisfied me that Mr Tabbouch had a proper basis for giving up any claims to relief against the vendors. Contributory negligence 70 There is no substance in the contention that Mr Tabbouch contributed to any loss he sustained. He was in the hands of MLG Conveyancing and took their advice. That advice was incorrect. It was given negligently and in breach of the duty of care owed to Mr Tabbouch. He suffered loss in the form of the deposit moneys now claimed. Conclusion 71 Mr Tabbouch has succeeded in his claims against the third defendant. 72 Mr Tabbouch has failed in his claims against the fourth defendant. Short minutes of order 73 The parties are to bring in short minutes of order on which occasion costs may be argued. ********************

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