AGC (Advances) Ltd, Re; Re Keiwa Pty Ltd [1991] QSC 395

TRANSCRIPT OF PROCEEDINGS State Reporting Bureau, 4th F1oor, Tne Law Courts, George Street, BRISBANE, 0. 4000 Tel. (O;f 227.4360 (Copyright in this transcript is vested . in the Cmwn. Copies thereof must not· be made or sold without the written authority of the Director, State Reporting Bureau.) SUPREME COURT OF QUEENSLAND CIVIL JURISDICTION MACKENZIE J No 869 of 1991-. IN THE MATTER OF ORDER 64 RULE 1Eu OF THE RULES OF THE SUPREME COURT and IN THE MATTER OF SECTION 70 OF THE PROPERTY LAW ACT 1974, AS AMENDED and IN THE MATTER OF AN APPLICATION BY AGC (ADVANCES) LTD AND AUSTRALIAN GUARANTEE CORPORATION LIMITED AND KEIWA PTY LTD FOR DECLARATIONS CONCERNING A CONTRACT FOR SALE BRISBANE .. DATE 25/11/91 JUDGMENT 1 l. REVISED COPIES -ISS-UED l Court ~epcrting Bureau ! ! Dnte)J //~ /'7 / __ j -- 1 of 5 -- 10 20 30 40 50 251191 JUDGMENT HIS HONOUR: The respondent entered into a contract to purchase restaurant premises f~:.orrr the applicant mortgagee in possession. The contract was not subject to finance and the balance was to become due in accordance with cl 2 of the conditions of sale. That required the balance of the purchase price to be paid on the ~date for completion. The date for completion was defined elsewhere as the date 60 days from the date of the contract, but by reason of cl 35(a) the date for completion was extended until a date two days from the date on which the Licensing Commission granted its consent to the transfer. The contract was subject to such consent. Clause 35(c) is critical to the resolution of the matter. It required both vendor and purchaser to "forthwith do all such acts, matters and things and execute all documents,- forms and paper i t:ems necessary to make application for consent to the transfer of the restaurant licence." The applicant seeks a declaration that the contract has been validly determined and that the applicants are entitled to forfeit the deposit. The contention for the respondent was twofold. It submitted that under cl 2 its only obligation was to pay the balance of the purchase price on the ·date for completion. As the Licensing Commission had not given its consent, because the respondent had failed to nominate a date for settlement of the contract which was a prerequ{site under the 10 20 30 40 50 ---' 6 = 0 '---./---a-dm--i-n_i_s_t_r_a_t_i_v_e_p_r_o_c_e_d_u_r_e_s_o_f_t_h_e_1_,i_·c_e_n_s_I_n_g_C_o_mm __ ·_i_s_s_i_o_n_t_· o __ t_li_e __ lo Govt. Printer, Old. 2 -- 2 of 5 -- 0 (: C, :251191 JUDGMENT Licensing Commission hearing the matter, the date for completion had not become due and might not become due for an indefinite period. It followed from those two propositions, it was submitted, that the respondent was not .L.Ll default under the contract, and that the purported termination of the contract by the applicants was of no effect. The reason why the proceedings before the Licensing Commission had not concluded was due to the failure by the respondent to nominate a settlement date and that had occurred because, despite its best endeavours, the respondent could not get finance to complete the transaction. There was no dispute that best endeavours had been used to obtain finance,·.but without success. I should also mention that the construction of cl 35 was the subject of a decision of Skoien AJ on 20 September 1991. An appeal has been lodged against that decision but not entered for argument. In the circumstances, I gave consideration to whether I should express my own views on the matter, but it was submitted by Mr Fraser for the applicants, and not suggested otherwise by Mr Carrigan for the respondent, that I should make the declaration if I were satisfied that the applicants were so entitled. In my opinion, the respondent's submissions cannot be sustained. The contract is not subject to finance. The respondent undertook to do everything to facilitate the application for consent to transfer by the Licensing Commission. While it was accepted that the respondent has used its best endeavours to obtain finance, the fact that it Govt_ Printj:l,,. QI~ 3 10 20 30 40 50 60 -- 3 of 5 -- 10 20 30 -10 so 60 251191 JUDGMENT has not been able to nominate a date .for settlement is of its own making .in the sense that it,by entering into a ! contract that was not conditional on finance,placed itself in the situation of .risk that has led to the current C 0«, ":r;,, situatiun. In a case where a contract is not conditional upon availability of finance, in my opinion it is not compliance with an obligation of the kind in cl 35(c) to fail to nominate a time for settlement forthwith once that becomes the last remaining step in practical terms to trigger the Licensing Commission's granting of the application for transfer. The fact that best endeavours have been used without success shows the good faith of the respondent but in legal terms is not a factor that relieved it of the obligation to take forthwith the step that would have led to the coming into force of the obligation to pay the balance of the purchase price. Mr Carrigan relied on passages from Perri v. Coolangatta Investments Pty Ltd (1982) 149 CLR 537 in support of his argument. Without intending to cast doubt upon Skoien AJ's use of the case for the purpose of interpreting the word with "forthwith", in my opinion the circumstances of that case are distinguishable on the wider issue from the present case and do not provide a guide to its resolution. In my opinion, the applicants are entitled to a declaration in terms of para 3 of the originating summons with costs to be taxed. I grant the abridgement of time sought in para 5 of the originating summons. Govt. Printer, Old. 4 10 20 30 40 50 60 -- 4 of 5 -- 0 0 0 0 J 251191 JUDGMENT I grant the amendment that the last words of the declaration in para 3 should read, "and have validly forfeited the deposit. 11 ·, rather than, "and are entitled to forfeit the deposit." The order will be in terms of the ame:n:led para 3. Govt. Prmter. Q!d. 5 I-, 10 20 30 50 GO -- 5 of 5 --