Chiang v He & Ors [2000] QSC 247

State Reporting f Bureau 31?.B7 s ( o o / t24 l TRANSCRIPT OF PROCEEDiNGS Copyright in-th~s transcript is vested in the Crown. Copies thereof must not be made or sold without the written authority of the Director, State Reporting Bureau. I REVISED COf'fES ISSUED Staie Reporting Bureau SUPREME COURT OF QUEENSLAND CIVIL JURISDICTION WILLIAMS J No 5575 of 2000 CHIU HUA CHIANG and Date >I 71 00 Applicant ANDREW-PAO-HWA HE, TONY LEE, First Respondent SHI-CHANG NIAN TZU-LANG CHENG, DAVID HSIAO-TUNG CHEN AS TRUSTEES OF THE LOGOS CHINESE CHRISTIAN CHURCH TRUST and REGISTRAR OF TITLES Second Respondent BRISBANE .. DATE 03/07/2000 JUDGMENT Ir1 .. ,,,·, Tit<.: l,;1w C11111";S, C.:11q.:c· Str<.:<.:t, l!ri.~l,:111c·, (). -111111) T.:li:piifllll': (07) J2-17 -IJ(,(J F:n: (07) J2-17 5~.12 -- 1 of 7 -- 03072000 T5/PAF23 M/T 7659/.!000 (Williams J) HIS HONOUR: This is an applLcation by the vendor pursuant to a contract of sale of land to have a caveat lodged by the purchaser pursuant to that contract removed. Other relief is sought in the application but it can be regarded as subsidiary to the application for the removal of the caveat. 1o By contract dated 18 October 1999 the applicant as vendor agreed to sell to the respondent as purchaser a large area of undeveloped land situated on Mount Gravatt-Capalaba Road for the sum of $515,000. There were some special conditions 20 and the one which is at the heart of the present dispute was in these terms as amended prior to execution: "This contract is subject to and conditional upon the purchaser obtaining approval from the Brisbane City Council to establish a house of worship on the property under contract within 90 days from the date hereof on terms and conditions satisfactory to the purchaser. In the event of such application not being approved by the Brisbane City Council the contract may, at the election of the purchasers, be terminated and all deposit moneys will be refunded to the purchaser in full." The land was in an environmentally sensitive area and in consequence there was a deal of work to be done preparatory to formally making the application to the council. The material discloses that extensions of time for compliance with the quoted clause were made and were granted. On each occasion the extension was granted it was made clear that time remained of the essence. The final extension granted was until 16 June 2000. It would appear as a fact that the necessary consent had not been obtained on or by that date. 2 JUDGMENT 30 40 50 60 -- 2 of 7 -- 03072000 TS/PAF23 M/T 7659/]000 (Williams J) On 16 June there was a flurr" of communications between the solicitors for the parties. r will begin with a fax from the solicitors for the purchuser to the solicitor for the vendor which was sent at 3.53 p.m. that day. the letter was in these terms: Relevantly, "We refer to your fax dated S June 2000 advising that your client will not agree to any further extension. The Logos Church Trust is managed by six trustees who are now in a position where they must elect either to terminate the contract or confirm that the purchase is to proceed without Brisbane City Council approval for the construction of a church. The pastor of the church, David Chen, believes that the trustees would want to confirm the purchase of the property but at the present time three of the trustees are at work and one is in the United States and uncontactable. We ask for a five day extension for the purpose of allowing the trustees to confer and make a decision. Please note that this extension is for the purpose of allowing the trustees to decide whether or not to proceed immediately with an unconditional contract and not for the purpose of seeking an extension until Brisbane City Council approval is obtained. Unless this extension is granted we believe we will have no choice but to terminate the contract prior to 5 p.m. today." That brought a response from the solicitor for the vendor, again by fax; it is stated in the affidavit that it was sent at 4.11 p.m. on the 16th. rt was in these terms: "We are instructed to advise you that our client will not agree to grant your client a five day extension for the purpose of allowing the trustees to confer and made a decision with respect to the contract." Then there was another fax which, according to the affidavit by the solicitor for the vendor, was sent at 5.48 p.m. on 16 June. rt was in these terms: "The special condition of the contract relating to obtaining the Brisbane City Council approval has not been satisfied by the latest time for satisfaction being S p.m. today. The contract is at an end. We will authorise the_agent to release the deposit moneys." 3 JUDGMENT 10 20 30 40 50 60 -- 3 of 7 -- 03072000 TS/PAF23 M/T 7659/''.000 (Williams J) Then by fax, actually bearinq dated 16 June but in fact sent by fax at 10.09 a.m. on 21 J1ine 2000, the solicitors for the purchaser responded as follo1,s: "We refer to your fax dated 16 June 2000 advising the c9ntract is at an end. In our opinion the contract is stlll in force but is unconditional in relation to 1o Brisbane City Council development approval. We note that the special condition relating to council approval gives power to the purchaser only to terminate the contract on this ground. We did not advise whether or not Brisbane City Council approval had in fact been obtained. In our opinion you are not at liberty to make an assumption about such approval. It is therefore our contention that the contract remains in force and is unconditional. On 20 this basis we request that settlement take place on 27 June and we will provide transfer documents and settlement figures shortly." The only other fact that need be stated is that on 24 May 2000 the vendor executed a second contract with respect to the subject land. That second contract was conditional upon the contract with the present caveator not going ahead. In my view, the legal consequences of the facts which occurred particularly on 16 June are in large part determined by the decision of the High Court in Sandra Investments Pty Ltd v. Booth (1982) CLR 153. That case makes it clear that, with a clause such as that here, the vendor had no right to treat the contract as at an end because the requisite approval had not been obtained. There is however a question as to the effect of the last day passing without there being any formal communication of an election by the purchaser. 4 JUDGMENT 30 40 50 60 -- 4 of 7 -- 03072000 T6/JAP22 M/T 7659/2000 (Williams J) It will be noted from the co;·respondence I have quoted that much emphasis was placed on 1:he time 5.00 p.m. on 16 June. There was nothing in the con1:ract to say that that was the precise time at which the condition expired, and it may well - be that the purchaser had until midnight on that day to decide its response. But whether the time be 5.00 p.m. on the 16th or midnight on that day the fact is that the purchaser did not by either time communicate an election to terminate the contract. It seems to me to be arguable, in the light of the reasoning in Sandra Investments v. Booth, that on the elapsing of that time and without the necessity of any further communication to the vendor, the contract became unconditional. If that be so the purchaser was bound to settle within a reasonable time notwithstanding the fact that council approval had not been obtained. If some formal election was called for, counsel for the purchaser (and this was not seriously challenged by counsel for the vendor) contended that the reasoning of the High Court in Sargent v. ASL Developments Ltd (1974) 131 Commonwealth Law reports 634 necessitated the purchaser being allowed a reasonable time for the exercise of that option. If that be the correct analysis, the question would arise whether or not an election communicated on 21 June was a timely one. It seems to me that it is firstly arguable that s JUDGMENT 10 20 30 40 50 60 -- 5 of 7 -- 03072000 T6/JAP22 M/T 7659/2000 (Williams J) the consequence of the purchaser doing nothing upon the failure to obtain council approval by 16 June was that the contract became unconditional and it is bound to settle within a reasonable time. If that not be the correct analysis, it is arguable that it had a reasonable time from the time when the right to make an election arose within which to make that election and it is arguable that the letter of 21 June was within that time. In either event, it seems to me that there is a serious question to be tried with respect to the validity of the caveat. If either of those events were ultimately answered in favour of the purchaser then the purchaser would have a caveatable interest and a right to obtain a decree for specific performance unless some other issues were raised that action. In all of the circumstances, I have come to the conclusion that there is clearly a serious question to be tried. It in appears to me that prima facie the respondent purchaser has a good case and in those circumstances the caveat ought not be removed. In the circumstances, I would dismiss the application. I have been asked to consider reserving costs in that situation but it appears to me that given all that I have said the appropriate order is to dismiss the application with costs to be assessed on the standard basis. 6 JUDGMENT IO '20 30 .w 50 60 -- 6 of 7 -- 03072000 T6/JAP22 M/T 7659/2)00 (Williams J) MR KRONBERG: Your Honour, c, )Uld that be cos ts to be agreed and upon failure of agreement:? HIS HONOUR: Well, that is aJtomatic, Mr Kronberg. The only other thing, were costs resecved the other day? MR TRAVES: I think they were. HIS HONOUR: What day was it it came before me? MR TRAVES: On the Thursday, your Honour. HIS HONOUR: The 29th. MR TRAVES: The 28th. The 29th, I'm sorry. I'm getting conflicting instructions. I'll have to work it out myself. HIS HONOUR: Yes, costs were reserved. The order should be: dismiss application with costs, including reserved costs, to be assessed on the standard basis. 7 JUDGMENT 10 20 30 40 50 60 -- 7 of 7 --