B G Managed Investments P/L v Bassett [2001] QSC 398

' . ' (~ Queensland Governm.ent State Re po rt in g Bureau ~ 0ep3rtmentoijustlcund Attomcy-Gffleral [~ooQ Q5C. 3ct8 Transcript of Proceedings Copyright in this transcript is vested in the Crown. Copies thereof must not be made or so{d without the written authority of the Director, State Reporting Bureau. SUPREME COURT OF QUEENSLAND CIVIL JURISDICTION MULLINS J No 8814 of 2001 BG MANAGED INVESTMENTS PTY LTD and SUZANNE FRANCES BASSETT BRISBANE .. DATE 08/10/2001 JUDGMENT , th Floor, The Law Courts, George Street, Brisbane, a. 4000 1 REVISED COPIES ISSUED State Reporting Bureau Date/ft lo Io r Applicant Respondent Telephone: (07) 3247 4360 Fax: (07) ~247 5532 -- 1 of 6 -- 08102001 T19-20/SJ3 M/T 3/2001 (Mullins J) HER HONOUR: The basis on which the respondent seeks to sustain her Qaveat is that, as a matter of construction of the contract dated 18 June 2001 pursuant to which the respondent had agreed to purchase Lot 115 Paluma Road, Cannonvale from the applicant, the applicant was not entitled to rely on clause 13 of the Special Conditions of the contract to terminate the contract, as it purported to do by letter dated 25 July 2001. The applicant was selling to the respondent as mortgagee exercising power of sale. The applicant required special conditions to be inserted in the contract. It is necessary to set out clauses 12 and 13 of these Special Conditions which are: "12. SELLER'S RIGHT TO EXTEND SETTLEMENT DATE If: a) proceedings are commenced seeking to restrain or set aside the sale of the Property; or b) a caveat and/or writ of execution is lodged against the Property and the caveat and/or writ of execution would prevent registration of the Transfer Documents; or c) the Seller is unable to deliver vacant possession or to effect settlement; or d) any other impediment to settlement arises, the Seller may extend the Settlement Date for a period not exceeding one month by giving written notice to the Buyer ("the Extended Settlement Date"). Without limitation to the Seller's right to require settlement on the Extended Settlement Date the Seller may advance the Settlement Date from the Extended Settlement Date by two business days' notice in writing to the Buyer ("the Brought Forward Date"). If the Seller is not in a position to effect settlement on the Brought Forward 1 10 20 30 40 - 50 Date then the Seller may defer settlement back to the Extended Settlement Date. The Seller is able to bring 60 2 JUDGMENT -- 2 of 6 -- 08102001 T19-20/SJ3 M/T 3/2001 (Mullins J) forward and defer the settlement as many times as the Seller wishes prior to the Extended Settlement Date. Nothing in this clause affects the obligation on the Buyer to settle on the Brought Forward Date or the Extended Settlement Date (as the case may be). 13. SELLER'S RIGHT TO CANCEL If: a) an event referred to clause 12 occurs; or b) the Seller is unable to d.eliver vacant possession or to effect settlement by the Settlement Date as extended under clause 12, the Seller may terminate this Contract by giving written notice to the Buyer. If the Seller terminates the Contract under this clause 13., the Deposit shall be refunded to the Buyer by the Seller or the Deposit Holder and this Contract shall be at an end. The Buyer shall not have any claim for damages or compensation against the Seller in relation to the termination of this Contract under clause 13. The Seller does not waive the right to terminate under this clause, if the Seller does not exercise its right under this clause when it first accrues. Such right is· only capable of being waived by express written notice to the Buyer. 11 One of the reasons that the applicant gave for seeking to rely on clause 13 of the Special Conditions was that one Donald Michael Adams had commenced an action on 19 July 2001 against the applicant claiming a declaration that Adams was entitled to a first option to negotiate the purchase of the subject property and an injunction to restrain the applicant from selling the subject property to the respondent. An application seeking such relief was filed by Adams on 24 July 2001 and was returnable on 27 July 2001. It appears that the application did not actually proceed as the applicant purported to terminate its contract with the respondent on 25 July 2001. 3 JUDGMENT 1 10 20 30 40 . 50 60 -- 3 of 6 -- 08102001 T19-20/SJ3 M/T 3/2001 (Mullins J) The construction argument which is relied on by the respondent is that which was conveyed by her solicitors to the applicant's solicitors by facsimile on 25 July 2001. It is argued that clause 12(a) must be interpreted in accordance with the balance of the clause as paragraphs (b), (c) and (d) of clause 12 refer to matters which would prevent settlement. It is argued that paragraph (a) of clause 12 must be read as requiring proceedings of the kind referred to in paragraph (a) to have the effect of being an impediment to settlement. Mr Collins, of counsel, for the respondent, submits that the use of the word "other" before the words "impediment to 1 10 20 settle" in paragraph (d) of clause 12 means that each of the 30 preceding paragraphs of clause 12 including paragraph (a) refer to an event which is an impediment to settle and the literal words of paragraph (a) of clause 12 must be qualified to that extent. As the rights under clause 13 of the Special Conditions can be activated when one of the events in clause 12 of the Special Conditions occurs it is critical to the exercise by the applicant of its rights to cancel the contract as to 40 what is the true meaning of paragraph (a) of clause 12 of · 50 the Special Conditions. It is conceivable that a mortgagee exercising power of sale may choose not to wait until settlement or to actively litigate the proceedings that fall within clause 12(a) 4 JUDGMENT 60 -- 4 of 6 -- 08102001 T19-20/SJ3 M/T 3/2001 (Mullins J) before deciding to exercise the rights under either clause 12 or clause 13 which the occurrence of the event in clause 12(a) gives rise to. There is nothing in the context of clauses 12 and 13 of the Special Conditions which supports the qualification which the respondent seeks to read into clause 12(a). The fact that clauses 12 and 13 of the Special Conditions have been inserted for the benefit of the mortgagee exercising power of sale supports not constraining the literal meaning of clause 12(a) by the insertion of words which clauses 12 and 13 of the Special Conditions do not require in order to be effective. The construction argument of the respondent is unpersuasive. I do not consider that there is a serious question to be tried. The caveat therefore should be removed. 1 10 20 30 HER HONOUR: In relation to costs Mr Collins in his written 40 submissions has argued that the respondent may still be successful in her action and as a consequence the liability for the costs of the caveat should be determined by reference to success at the trial of the action which was commenced on 7 September 2001 in the Supreme Court in Cairns. Mr Amerena of counsel on behalf of the applicant submits that that is not an appropriate course to follow, as the basis on which the respondent has been unsuccessful in sustaining her caveat is that there is no serious question to be tried. 5 JUDGMENT . 50 60 -- 5 of 6 -- 08102001 T19-20/SJ3 M/T 3/2001 (Mullins J) The respondent still has her action on foot which seeks damages for breach of contract as an alternative remedy to specific performance. The issue that was before me on this application was whether the caveat should remain. In practical terms that disposes of the specific performance aspect of the respondent's existing action. Even if she were ultimately successful in her claim for damages for breach of contract, that does not vindicate the lodging of the caveat. I consider that as the applicant has been successful with its application to remove the caveat in these circumstances it follows that the applicant· is entitled to its costs. I therefore make an order in terms of the draft which has been initialled by me and placed with the file. That is the draft order which was submitted at the outset by the applicant and covers both the removal of the caveat and the order for costs. I will add the words "to be assessed" to the end of the costs order. 6 JUDGMENT 1 10 20 30 40 . 50 60 -- 6 of 6 --