TC (Tallwoods) Pty Ltd v Mustapha

Judgment 1In these proceedings the plaintiff, TC (Tallwoods) Pty Ltd ("Tallwoods") seeks specific performance of a special condition in a contract for the sale of land between Tallwoods as vendor and the defendant, Ms Mustapha, as purchaser.

Background 2The primary relief claimed in Tallwoods' summons is: "1. An order that the defendant execute and provide to the plaintiff's solicitors the Transfer Granting Easement attached to the letter from Simpson & Partners Solicitors Pty Ltd to Mr Michael Birch dated 15 February 2013 within 3 business days of the making of this order. 2. An order that the defendant arrange for the production of the title for Lot 895 in Deposited Plan 1079140 to the Land and Property Information and take all other steps necessary to enable registration of the Transfer Granting Easement referred to in the preceding paragraph". 3By the contract of sale dated 2 October 2012 Tallwoods agreed to sell Lot 895 Grangewood Avenue, Tallwoods Village, NSW, being the whole of the land in Certificate of Title Folio Identifier 895/1079140, and being Lot 895 in DP 1079140 for a price of $450,000. 4Special Condition 19 of the contract of sale provided: "The Vendor proposes to create a Right of Carriageway over Lot 895 in DP1079140 in substantial accordance with the Draft Transfer Granting Easement and plan annexed hereto. The Purchaser shall make no objection, claim or demand of whatsoever nature in relation to the Right of Way and if required by the Vendor, shall do all things reasonable and necessary to assist the Vendor (sic) create such Right of Carriageway. This special condition shall not merge on completion." 5The draft transfer granting easement referred to in special condition 19 which is annexed to the contract of sale identifies Lot 895 in DP 1079140 as the servient tenement and Lot 896 in the same deposited plan as the dominant tenement. 6The draft transfer nominates Tallwoods as the transferor and Tallwoods International Golf Resort Pty Limited ("Tallwoods International") as the transferee. At the date of the contract Tallwoods and Tallwoods International had a common shareholding and directorship. At that time Tallwoods International was the registered proprietor of the proposed dominant tenement, Lot 896. 7The description of the easement stated in the draft transfer granting easement was: "Right of Access 10 m wide as shown on Annexure A provided there shall be no standing or parking on the Access at any time and the registered proprietor of Lot 896 shall bear the cost of maintaining the Access". 8Special condition 19 referred to Tallwoods' intention to create a right of carriageway, while the description of the easement in the draft transfer described it as a right of access. Section 181A (1) and (2) and Schedule 8 Parts 1 and 14 of the Conveyancing Act 1919 (NSW) have the effect that the rights attached to a right of carriageway differ in various respects from the rights attached to a right of access. Counsel for Ms Mustapha made it clear at the hearing that Ms Mustapha did not take any point based upon the reference to different types of easements in special condition 19 and the draft transfer, and Ms Mustapha accepted that if Tallwoods was entitled to the relief claimed, then it was entitled to the creation of a right of access. 9The plan which is annexed to the draft transfer granting easement in Annexure A to the contract of sale shows that Lot 895 is adjacent to Grangewood Avenue and that part of Lot 896 lies to the south of Lot 895. The eastern boundaries of Lots 896 and 895 form a straight line which is almost perpendicular to Grangewood Avenue. Lot 896 has no street frontage and is separated from Grangewood Avenue by the width of Lot 895. 10The proposed right of access is depicted on the plan as being 10 m wide and shown as two parallel broken lines which are each parallel to the western boundary of Lot 896 and the eastern boundaries of Lots 896 and 895. The western boundary of the proposed right of access forms a straight line with the western boundary of Lot 896. The location of the proposed right of access is such that it divides the bulk of Lot 895 from the remainder of that lot to the east of the right of access. 11The plan also depicts an existing right of carriageway of variable width (marked A on the plan). The line of the eastern boundary of the right of carriageway is the same as the eastern boundary of Lot 895. The right of carriageway runs from Grangewood Avenue with variable width southwards along the boundary of Lot 895 and then swings west across Lot 895 at its boundary with Lot 896, crosses the southern end of the proposed right of access, and then terminates on Lot 895 to the west of the proposed right of access. 12Mr Nolan, who is a director of Tallwoods, gave evidence, which was not challenged, that there is a clearly defined and sealed roadway constructed on the area of the proposed right of access, which provides direct and all weather access from Grangewood Avenue to Lot 896 and one of the machinery sheds located on that lot. The roadway has been in existence for approximately 12 or more years. The machinery shed located on Lot 896 houses, among other things, the plant and equipment necessary to maintain the adjacent 18 hole golf course. On the other hand the existing right of carriageway over Lot 895 has no defined road and is, in the main, heavily timbered. Mr Nolan expressed the view that the density of the timber prohibits vehicular access to Lot 896 along the existing right of carriageway. 13On 7 December 2012 Tallwoods International entered into a contract for the sale of Lot 896 to Timothy James Ford for a price of $75,000. This contract of sale contained a special condition 23 (vi) which was in the following terms: "The Vendor hereby warrants to and covenants with the Purchaser as follows:... (vi) To hereby undertake, warrant and guarantee to the Purchaser that the Vendor shall in its own right and in addition cause the registered proprietor of Lot 895 in Deposited Plan 1079140 (as Servient Tenement) to in a timely manner furnish to the Purchaser (as Dominant Tenement) of Lot 896 in Deposited Plan 1079140 a duly executed Transfer Granting Easement in registrable form for the benefit of the Purchaser and the aforesaid Lot 896 in Deposited Plan 1079140 in the form attached to this Contract granting the easement for right of carriageway of variable width as delineated in the Plan marked Annexure 'A' or such other appropriate instrument or dealing. This obligation shall not merge upon completion and the Vendor indemnifies the Purchaser against any losses, expenses or costs arising out of non-compliance with this obligation". 14The evidence establishes that there was no Annexure A actually annexed to the contract of sale. The reference in special condition 23(vi) to the right of carriageway being of "variable width" was unexplained. Ms Mustapha did not seek to make any issue of the absence of Annexure A or its terms. 15The contract for the sale of Lot 895 was completed on 26 November 2012. 16Completion of the contract for the sale of Lot 896 occurred on 7 December 2012, which was the date of the contract. 17On 15 February 2013 Tallwoods' solicitor sent a letter to Ms Mustapha's solicitor requesting that she sign as transferor a draft transfer granting easement which was enclosed with the letter. 18The draft transfer granting easement was in identical terms to that which was annexed to the contract for sale of Lot 895 except that Ms Mustapha was expressed to be the transferor and Mr Ford was expressed to be the transferee. 19Clearly the reason why Tallwoods' solicitor made these changes to the draft transfer was that in the intervening period Ms Mustapha had become the registered proprietor of Lot 895 following completion of the contract of sale of that lot, and Mr Ford had become registered proprietor of Lot 896 following the completion of the contract for the sale of that lot. 20Ms Mustapha's solicitor replied to the 15 February 2013 letter on 15 March 2013. He noted that the transferee in the draft transfer that had been submitted for execution was Timothy James Ford and not Tallwoods. The reference to Tallwoods was misconceived as the transferee stated in the draft transfer which was annexed to the contract of sale was Tallwoods International, which seems to be recognised by the writer of the letter who later notes that the transferee in the draft transfer attached to the contract was Tallwoods International. The letter states: "Our client does not understand how the vendor is now in a position to ...create such Right of Carriageway. Our client did not enter into any contractual relationship with Mr Ford nor Tallwoods International Golf Resort Pty Ltd and our client did not agree to execute the Transfer in favour of any successor in title. Our client can see no basis upon which she should be required to execute the Transfer in favour of any person or entity other than the vendor..." 21Ms Mustapha's objection to executing the transfer was founded on the change in the identity of the transferee. Ms Mustapha did not object to executing the transfer as transferor. The reasoning upon which this response was based is unclear. The contract for sale did not contemplate that any transfer granting easement would be executed in favour of Tallwoods, as Tallwoods was not the registered proprietor of the dominant tenement, Lot 896. 22Ms Mustapha's response, as elaborated in subsequent correspondence from her solicitor to the solicitor for Tallwoods and Mr Ford, eventually prompted Tallwoods to file a notice of motion seeking leave to amend the summons. That leave was granted at the trial. Tallwoods added the following additional alternative claims for relief to those which were contained in the original summons: "1A. In the alternative, an order that the defendant execute and provide to the plaintiff's solicitors the Transfer Granting Easement contained in the contract between the plaintiff and the defendant dated 2 October 2012, amended to refer to the defendant as transferor, within 3 business days of the date of making this order. 1B. In the further alternative, an order that the defendant execute and provide to the plaintiff's solicitors the Transfer Granting Easement contained in the contract between the plaintiff and the defendant dated 2 October 2012, amended to refer to the defendant as transferor and the plaintiff as transferee, within three business days of the date of making this order". 23Thus, in par 1 of the summons Tallwoods seeks an order that Ms Mustapha execute a transfer where she, the present registered proprietor of the servient tenement, creates a right of access in favour of Mr Ford, who is the registered proprietor of the dominant tenement. Order 1A would require Ms Mustapha to execute a transfer in favour of Tallwoods International. Order 1B would require Ms Mustapha to execute a transfer in favour of Tallwoods. 24Each alternative order recognises that, as Ms Mustapha is the registered proprietor of the servient tenement, she must be the transferor who creates the right of access. Order 1A would be ineffective so long as Mr Ford is the registered proprietor of the dominant tenement. Recognising this, Tallwoods tendered evidence at the hearing that Mr Ford has agreed to transfer Lot 896 to either Tallwoods International or Tallwoods if the court will only make an order that Ms Mustapha execute the transfer in favour of one of those companies, and not in favour of Mr Ford. Order 1B seems to have been prompted by the comment made in Ms Mustapha's solicitor's 15 March 2013 letter to the effect that there was no basis upon which Ms Mustapha should be required to execute a transfer in favour of any person other than "the vendor". Both the comment and the response seem to be misconceived, as Tallwoods was not the registered proprietor of the dominant tenement at the date of the contract of sale, and on no view did special condition 19 contemplate the creation of a right of access in favour of Tallwoods. 25In submissions both Tallwoods and Ms Mustapha put their respective cases solely upon the basis of the proper construction of special condition 19.