_Robina Syndicate Pty Ltd v RPA Properties Pty Ltd_
[2011] QCA 151
Court of Appeal (Qld)|2011-06-24|Before: White JA and Margaret Wilson AJA and Martin, J, Separate reasons for judgment of each member of the court, each, concurring as to the order made
White JA and Margaret Wilson AJA and Martin, J, Separate reasons for judgment of each member of the court, each, concurring as to the order made
Catchwords
CONTRACTS – GENERAL CONTRACTUAL PRINCIPLES – CONSTRUCTION AND
INTERPRETATION OF CONTRACTS – where appellant agreed
to purchase a parcel
of land from the respondent – where respondent gave warranty in contract
Source
Original judgment source is linked above.
Catchwords
CONTRACTS – GENERAL CONTRACTUAL PRINCIPLES – CONSTRUCTION ANDINTERPRETATION OF CONTRACTS – where appellant agreedto purchase a parcelof land from the respondent – where respondent gave warranty in contractthat there is “no unsatisfiedjudgment, order or writ of execution whichaffects the land” – where easement registered in favour of the land–where order was made for the partial extinguishment of the easementbefore completion – where appellant purported to terminatethe contract– whether “unsatisfied” qualifies not only“judgment” but “order or writ of execution”–whether appellant was entitled to terminate the contractLand Title Act 1994 (Qld), s 92Property Law Act1974 (Qld), s 180, s 181Breskvar v Wall (1971) 126 CLR 376[1971] HCA 70,cited
Codelfa Construction Pty Ltd v State Rail Authority (NSW)
(1982) 149 CLR 337
[1982] HCA 24, cited
Liverpool Holdings Limited
v Gordon Lynton Car Sales Pty Ltd [1979] Qd R 103, cited
Moller
v Roy (1975) 132 CLR 622
[1975] HCA 31, considered
Pacific
Carriers Ltd v BNP Paribas (2004) 218 CLR 451
[2004] HCA 35,
cited
Re Southern Cross Airlines Holdings Ltd (in liq) [2000]
1 Qd R 84
[1998] QSC 97, cited
The Queen v Ireland
(1970) 126 CLR 321
[1970] HCA 21, cited
Thiess Services Pty Ltd v
Mirvac Queensland Pty Ltd [2005] QSC 364, cited
Toll (FGCT) Pty
Ltd v Alphapharm Pty Ltd (2004) 219 CLR 165
[2004] HCA 52,
cited
Judgment (65 paragraphs)
[1]
M R Savage appeared in his capacity as director of Robina Syndicate Pty Ltd, on behalf of the appellant
[2]
[1] WHITE JA: I agree with M Wilson AJA that the appeal should be dismissed for the reasons which she has given.
[3]
[2] M WILSON AJA: By a contract dated 18 August 2008 the appellant agreed to purchase a parcel of land on the Gold Coast from the respondent. When the contract was made, there was an easement registered in favour of the land. Between the date of the contract and the date for completion, an order was made for the partial extinguishment of the easement and the register was amended accordingly.
[4]
[3] The appellant purported to terminate the contract. The respondent treated this as a wrongful repudiation of the contract, and itself purported to terminate and forfeit the deposit.
[5]
[4] The primary judge determined that the appellant's termination was not justified. His Honour declared that the respondent had validly forfeited the deposit.
[6]
[5] This appeal against his Honour's decision turns on the proper construction of clause 6.3.2 of the contract.
[7]
[6] The contract provided for the sale of lot 718 on SP 106484 for $8,250,000. The land was at Robina - an area of 6,662 square metres bounded to the west and to the south by roads, to the east by a railway line and to the north by a railway station.
[8]
[7] The easement had been granted in 1916 at a time when lot 718 was part of a larger holding of land used for farming. The servient tenement was an area of about 24 hectares more than a kilometre to the north of lot 718. The easement subsisted over three areas of the servient tenement identified as "L", "M" and "X". It was for drainage purposes.
[9]
[8] In April 2008 the owners of the servient tenement filed an application for orders for the partial extinguishment of the easement under s 181 of the Property Law Act 1974. They notified the respondent of the application.
[10]
[9] Subdivisions and land developments since 1916 had resulted in the easement no longer being of any benefit to lot 718. Accordingly the respondent did not contest the application when it came before Douglas J on 24 November 2008. His Honour made orders for the partial extinguishment of the easement, in these terms-
(b) Easement Number 601113166 in respect of the areas described as easements M and X on Registered Plan 21884 on Lot 1 on SP 190865 be extinguished.
[13]
The Registrar of Titles (Department of Natural Resources and Water Land Title Registry):
[14]
(a) record the extinguishment of the easements referred to in paragraph (2) of this Order in the Freehold Land Register;
[15]
(b) remove the easements referred to in paragraph 2 of this Order from the titles of all lots upon which the easements are registered as encumbrances (whether benefiting or burdening);
[16]
(c) dispense with the production of certificates of title for each lot upon which the easements referred to in paragraph 2 of this Order are registered as encumbrances (whether benefiting or burdening); and
[17]
(d) dispense with the production of consents from the mortgagees or other interest holders of each lot upon which the easements referred to in paragraph 2 of this Order are registered as encumbrances (whether benefiting or burdening)."
[18]
[10] On 27 March 2009 the order was deposited with the Registrar of Titles and the partial extinguishment of the easement was registered.
[19]
[11] The date for completion of the contract was 3 April 2009. The appellant did not become aware of the partial extinguishment of the easement until its solicitors performed a check search of the title in preparation for settlement.
[20]
[12] The appellant purported to terminate the contract by written notice given on 3 April 2009.
[21]
[13] It was common ground that, apart from clause 6.3.2 upon which the appellant relied, the partial extinguishment of the easement would not have entitled the appellant to refuse to complete: because the easement was of no present or potential utility, the appellant would still have been obtaining essentially what it had agreed to purchase.[1]
[22]
[14] Clauses 6.3 and 6.4 of the contract provided -
[23]
"6.3 The Vendor states that, except as disclosed in this Contract, each of the following statements will be accurate at the Date for Completion:
[24]
6.3.1 there is no current litigation by any person claiming an estate or interest in the Land;
[25]
6.3.2 there is no unsatisfied judgment, order or writ of execution which affects the Land;
[26]
6.3.3 no order has been made under Part 11 of the Property Law Act 1974 which would operate as a charge on the Land;
[27]
6.3.4 there is no order of a Court or other competent authority affecting the ability of the Vendor to complete this Contract;
[28]
6.3.5 no notice has been issued by a competent authority or proceedings instituted in a Court pursuant to any statute whereby the interest of the Vendor in the Land may be rendered liable to forfeiture to the Crown;
[29]
6.3.6 the Vendor is the registered owner of the Land.
[30]
6.4 If a statement contained in either clause 6.2 or clause 6.3 is not accurate then the Purchaser may terminate this Contract by notice in writing to the Vendor."
[31]
[15] At the trial the appellant argued that upon the proper construction of clause 6.3.2 -
[32]
(a) the word "unsatisfied" qualified only "judgment", with the result that the clause was engaged by any order which affected the land, regardless of whether that order could be further described as "satisfied" or "unsatisfied"; and
[33]
(b) that the order of Douglas J was an order which affected the land.
[34]
[16] The trial judge rejected that argument. His Honour said -
[35]
"In my conclusion cl 6.3.2 was not engaged, essentially for two reasons. The first is that the ordinary meaning of the clause is that the word "unsatisfied" qualifies not only the word "judgment" but also "order or writ of execution". The second reason, which perhaps is simply a variant of the first, is that this order, which was satisfied by the registration of the partial extinguishment of the easement, thereafter ceased to "affect" the land. Rather, the land was affected by the state of the register, the title being, of course, the result of the register.[2]"
[36]
[17] The appellant submitted that his Honour erred in concluding that "unsatisfied" qualified not only "judgment" but also the words "order or writ of execution" and by deciding that the land was not affected by the order.
[37]
[18] Counsel for the respondent submitted that his Honour's conclusion was consonant with principle, ordinary grammatical usage and requisite common sense in the construction of the contract as a commercial instrument.
[38]
[19] The contract is to be interpreted in accordance with well established principles for the interpretation of commercial contracts. The warranty in cl 6.3.2 should not be considered in isolation from the other warranties in cl 6.3 or from the provisions of the contract as a whole. The parties' intention is to be ascertained objectively[3] from the words of the contract, considered in the context of the purpose and object of the transaction. The contract is to be construed with a view to making commercial sense of it, as a commercially sensible construction is more likely to give effect to their intention.[4]
[39]
[20] The land was at Robina, and subject to a planning instrument described as the Robina Central Planning Agreement, to which the respondent was a party. The appellant agreed to purchase the land and develop it as a medical centre or hospital and shops, and to use it for that purpose for 20 years.[5]
[40]
[21] Clause 6.3 was clearly intended to protect the purchaser. The respondent warranted the accuracy of certain statements about the land as at the date for completion, and, by cl 6.4, in the event of inaccuracy, the appellant was entitled to terminate the contract.
[41]
[22] Relevantly, the interpretation of cl 6.3.2 turned on two questions - first, whether "unsatisfied" qualified only " judgment" or whether it was to be read distributively as qualifying each of "judgment', "order" and "writ of execution", and second, the meaning of "affects the land".
[42]
[23] Clause 6.3 as a whole spoke as at the date for completion. The curial process which "unsatisfied" qualified had to bear that character as at the date for completion.
[43]
[24] The ordinary meaning of to "satisfy" is to "pay off or discharge fully; clear (a debt); adequately fulfil (an obligation) or comply with (a demand)".[6] A judgment or order is "unsatisfied" while the obligation imposed by it remains unperformed. A writ of execution is an order directed to the sheriff to enforce a judgment or order by seizing the judgment debtor's property and selling it. It is "unsatisfied" while the judgment or order remains unperformed.
[44]
[25] At first instance, counsel then representing the appellant drew a distinction between a judgment and an order. He submitted that an unsatisfied judgment which affected the land would be one which burdened the land with the payment of money or the performance of some other obligation, while there might be orders which affected the land without imposing a burden, such as an order under s 180 of the Property Law Act 1974 imposing a statutory right of user. A declaration about the lawfulness of a particular use of land would "affect" the land, but could not aptly be described as "unsatisfied".
[45]
[26] After considering relevant authorities,[7] the trial judge concluded, correctly in my opinion, that there is no demarcation between judgments and orders. In Moller v Roy[8] Mason J referred to the accepted legal meaning of "judgment" as "the formal order made by a court which disposes of, or deals with, the proceeding then before it." But, as the trial judge observed, only those judgments or orders which have coercive effect can be described as "satisfied" or "unsatisfied". In his Honour's view, in the context of this contract for the sale of land, there was no evident purpose for the parties to have intended to distinguish between satisfied and unsatisfied judgments, but not between satisfied and unsatisfied orders. The distinction would be unworkable. In this case the order was properly described as a judgment and had been satisfied.
[46]
[27] In my respectful view, what his Honour said was plainly correct. There being no distinction between a judgment and an order, unless "unsatisfied" in cl 6.3.2 were read distributively, it would be impossible to distinguish those unsatisfied coercive pronouncements of a court affecting the land that were within cl 6.3.2 from those that were not.
[47]
[28] Section 181 of the Property Law Act applies to a registered easement.[9] By subsection (1) of that section the court "may... by order modify or wholly or partially extinguish the easement...".
[48]
[29] Until registration, the order partially extinguishing the easement was binding only upon the parties to the proceeding in which it was made. Upon registration, it became binding on all persons then entitled or afterwards becoming entitled to the easement,[10] and title to the servient and dominant tenements was relevantly altered.[11] In that way the order was satisfied within the meaning of cl 6.2.3 of the contract upon registration.
[49]
[30] Clause 6.3.2 was a statement as to the absence of any "unsatisfied judgment, order or writ which affect[ed] the land" as at the date for completion (emphasis added).
[50]
[31] The appellant submitted that the order of Douglas J affected the land by removing part of the benefit of the easement. The submission continued -
[51]
"....That effect continued even after the order was registered, and subsisted at the date for completion under the Contract. The source of the removal of the rights that the Land had previously enjoyed was still the order; registration simply entrenched this effect by giving it the benefit of indefeasibility."
[52]
[32] "Affect" is a word of potentially wide import. In the context of cl 6.3 as a whole and cl 6.4 which gave the appellant a right to terminate, it is unlikely that the parties intended to refer to an order or judgment which beneficially affected the land. Nor is it likely that they intended to refer to a judgment or order the force of which had been overtaken by the indefeasibility which was the consequence of registration in the freehold land register.
[53]
[33] I am inclined to think that the trial judge was correct in his conclusion that after the partial extinguishment of the easement was registered, it was the state of the register rather than the order which affected the land. However, because the order partially extinguishing the easement was not "unsatisfied" within the meaning of cl 6.3.2. at the date for completion, it is not necessary finally to determine whether it "affected the land" at that date.
[54]
[34] I would make the following order: that the appeal be dismissed with costs.
[55]
[35] MARTIN J: I agree, for the reasons given by M Wilson AJA, with the order she proposes.
[4]Thiess Services Pty Ltd v Mirvac Queensland Pty Ltd (2006) 22 BCL 218, 174 [36]-[37], citing L Schuler AG v Wickman Machine Tool Sales Ltd[1973] UKHL 2; [1974] AC 235, 251 per Lord Reid.
[60]
[6] C T Onions (ed), Shorter Oxford English Dictionary (Clarendon Press, 3rd ed, 1973) 1889.