The Greek Orthodox Parish Community of St Marys and District Limited v Denis Stanley Merrick

Judgment 1This is a purchaser's suit for a declaration that it has validly terminated a contract for the sale of land or, alternatively, if that is not the case, that it should get relief against forfeiture of the deposit pursuant to s. 55(2)(A) of the Conveyancing Act 1919. 2The then registered proprietor of property at Orchard Hills, who has since died and is represented by the defendant, entered into a contract for sale in the 2005 addition of the standard form to sell that land to the plaintiff for $1,015,000. The contract provided that completion date was the 90th day after the date of this contract and clause 16.11 was as follows: Normally, the parties must complete at the completion address, which is - 16.11.3 In any other case - the vendor's solicitor's address stated in this contract. 3That address was 6 Macquarie Avenue, Penrith, at the offices of Reimer Winter Williamson. 4There was some early problems with payment of the deposit, but that five per cent deposit was eventually paid. 5The vendor issued a Notice to Complete on 6 February 2013, giving just over 14 days' notice, but that notice was subsequently acknowledged to have been nullified because a caveat had been placed on the title. It would seem, subsequently, that caveat was put on by someone who had claimed that he had lent money to the plaintiff in order to pay the deposit. That is of little moment, except to indicate that it was nothing in the defendant's camp which made the first Notice to Complete abort. 6On 12 April 2013, the defendant gave a further Notice to Complete. The completion was to take place on 29 April 2013. 7The way in which the plaintiff was to fund this purchase is a trifle unclear. It would seem, however, that, as a church body, it was dependant on members, or persons of goodwill towards the church providing the funds and it would seem that those funds were provided by banks, or other lending institutions. 8The purchaser's solicitor insisted that settlement take place at an office at 400 George Street, Sydney. He indicated that this was normal conveyancing practice and that the purchasers would pay the costs of taking the documents into Sydney. However, the vendor never agreed to this and the vendor's Notice to Complete specified that completion would take place at the vendor's solicitor's office. 9On 29 April, the vendor had the Certificate of Title and a transfer, apparently, in registrable form, which has been tendered as exhibit DX 101, in the vendor's solicitor's office at Penrith. The purchaser claims to have been at the George Street, Sydney, address. 10A Mr Elali gave evidence that he had in his pocket a series of cheques and it would seem from other evidence that those cheques totalled $1.233 million, which included some stamp duty, but a cheque in favour of the vendor for $1,039,414.98. Just why is rather hard to understand, as the amount which the vendor was asking to take on completion was only $986,127.48. 11However, the George Street premises were attended by Mr Elali, who had those cheques in his pocket and he was asked by the gentleman who appears to be the controlling director of the plaintiff to take those cheques to the settlement. There was also present a solicitor from another firm, who appears to be the solicitor of some ultimate purchaser. No-one was there on behalf of the defendants. So nothing happened by way of completion. 12One would think that if there was some mere lack of communication it would have been simple enough for Mr Elali and the solicitor to have driven, or got a train to Penrith and that afternoon completed the transaction. 13Material in the correspondence between the solicitors suggests that there were thoughts in the plaintiff's side that it might not wish to proceed and that became quite evident when, on 30 April, the next day, the purchaser purported to terminate. However, it is quite clear that, as a matter of contract law, the purchaser was in no position to terminate. 14The contract which it had entered into required, in the events that have happened that there be completion at the vendor's solicitor's office and the Notice to Complete clearly said that. Despite the fact that the plaintiff's solicitors kept saying that settlement had to be at 400 George Street, Sydney, there was never any agreement about that and the purchaser proceeded on the basis that the bluff would work; it did not and then when the bluff did not work, it made what is a cardinal error in seeking to terminate on the basis of a breach of contract, which the vendor was not guilty of breaching the contract. Accordingly, the purchaser's termination was not valid. Subsequently, the vendor terminated the contract on the basis of the purchaser's repudiation as well as not settling in accordance with the Notice to Complete and forfeited the deposit. The deposit was some $53,000. 15The property was subsequently resold for a $1,000,000. So there was, in fact, a deficiency of $15,000 apart, of course, from the costs and expenses of the sale, commission, extra legal fees and what have you. I am not told just how much they are, but the penalty interest that was claimed by the vendor because of non-completion was about $24,000, so it would seem that the loss suffered by the vendor is somewhere about $40,000, at least, and that the vendor does not propose to sue for anything else. So that the difference between $40,000 and $53,000 is not that great. 16The back up case, as I have indicated, is that section 55(2)(A) should be applied so that the purchaser would get back some, or all of the deposit. 17As Miss Young, who appeared for the plaintiff, has acknowledged in her helpful outline of submissions, there is a whole host of authority to show that the onus is on the purchaser to show that it is unjust and inequitable for the vendor to retain the deposit. Furthermore, the Court when considering applications under s. 55(2)(A) bears in mind that the function of a deposit is to give certainty to the vendor that the purchaser is proceeding. Accordingly, to succeed in an application under s. 55(2)(A), the purchaser must show some injustice, or something that was inequitable about the conduct of the vendors. To my mind, there is either no evidence of this, or very little. 18As I have said, there is no doubt that the vendor did suffer a loss because of the purchaser's conduct and that it is not suing for damages. It seems to me that there is insufficient material for me to find that it would be appropriate to make an order refunding the deposit. Accordingly, the plaintiff's claim must wholly fail. I should, however, complete these reasons by making a few general comments. 19First of all, once again, this case was one where the principal affidavit of the plaintiff was not properly sworn, although, because of section 56 of the Civil Procedure Act I read it and assumed it was an affidavit. Solicitors must be very careful to make sure that either the word "sworn", or the word "affirm", is crossed out and that the affidavits are presented to the Court in proper form. 20The second matter is that, for a while, Miss Young relied on a document which was called "Conveyancers' Rules", put out by the Australian Institute of Conveyancers, New South Wales division. This is not, it seems to me, a public document as defined by the Evidence Act 1995 and accordingly, cannot just be referred to in submissions but has to be proved. In other words, it must be tendered. If there is any doubt about the document, then it is usually prudent to give a notice to admit a document to the other side before the case comes on for trial. It is not a document that can be just referred to in submissions as Acts and Regulations and public documents can. 21In any event, the Conveyancers Rules cannot override the provisions of contract and there is great doubt as to whether they cover any solicitor's firm in the current transaction, in any event. 22Finally, there is the question of the evidentiary value of statements made by solicitors in their correspondence to each other. That correspondence is admissible. However, particularly, in a case where there is some contradiction between the solicitors, it is usually insufficient just to rely on the correspondence and the solicitor, or clerk who is actually involved should make an affidavit setting out what he, or she says are the facts. 23For instance, in the instant case, one solicitor says: I tried to ring your office several times and you never returned my call. 24The other solicitor says: According to my firm's records, there was only one call from you, there were not several. 25No judge can work out on the correspondence who is telling the truth and who is not. So a party who goes into a case of this nature relying merely on correspondence is always in danger. However, as things have worked out in this case, the decision is one purely on a question of contract law and the matters I just referred to are of no relevance. 26Accordingly, (1)The proceedings are dismissed. (2)The plaintiff is to pay the defendant's costs. (3)The exhibits can be returned. (4)I order that the plaintiff pay the defendant's costs on the indemnity basis on and after 20 December 2013.