Coralgull Pty Ltd v Meiklejohn [1990] QSC 338 [1992] 1 Qd R 503

10 20 30 IN THE SUPREME COURT OF QUEENSLAND CIVIL JURISDICTION BEFORE MR. JUSTICE McPHERSON: S, P .. J .•. · ' BRISBANE, 4 OCTOBER 1990 No. 1185 of 1990 c,a.:;;c;;.::..,__.. •. ,..,...,r>. _,.,., ...,... REVISED COPIES ,ISSUED . Court Reporting Bureau • Dat8, )'2.J /ol 9o -- ..... ., ........ -.....£_._.. __ ~ .... ,.,~~ ... ,,,.._...,... .. ,. (Copyright in this transcript is vested in the Crown. Copies thereof must not be made or sold without the written authority of the Chief Court Reporter,Court Reporting Bureau.) BETWEEN: CORALGULL PTY. LTD. -and- CRAIG WALLACE MEIKLEJOHN JUDGMENT Plaintiff Defendant HIS HONOUR: In this matter I will give judgment for the plaintiff in terms of paragraph (a) of the summons for T-$8Cission of tJ1e_ contract and return of the deposit of $300,000. I will also make an order for costs in terms of the application as sought in paragraph (b) of the summons. I publish my reasons. 10 20 30 40 40 HIS HONOUR: Order that within 21 days the plaintiff deliver its statement of. claim. HIS HONOUR: Thereupon the action be remitted to the 50 50 District Court at Brisbane. 60 60 1 -- 1 of 11 -- IN THE SUPREME COURT QUEENSLAND No. 1885 of 1990 Mr. Justice McPherson S.P.J. BETWEEN: CORALGULL PTY. LTD. Plaintiff CRAIG WALLACE MEIKLEJOHN Defendant JUDGMENT - McPHERSON S.P.J. Delivered the Fourth day of October, 1990 CATCHWORDS Practice and procedure - Judgment without trial - Writ indorsed with claims for rescission, return of deposit, and damages - Whether summary judgment available for rescission and deposit - Rules of the Supreme Court, O.18A, r.1. Counsel: Gibson Q.C., Quinn, for the applicant plaintiff Moon for the respondent defendant Solicitors: Messrs Thynne & McCartney t/a for Primrose Couper Cronin Rudkin, Southport, for the applicant plaintiff Messrs Connolly Suthers, Brisbane, for the respondent defendant. Hearing Date: 14 September, 1990. -- 2 of 11 -- IN THE SUPREME COURT QUEENSLAND BETWEEN: CORALGULL PTY. LTD. AND: CRAIG WALLACE MEIKLEJOHN JUDGMENT - McPHERSON S.P.J. No. 1885 of 1990 Plaintiff Defendant Delivered the Fourth day of October, 1990 Stripped of inessential detail, the question for determination is, I think, not difficult. By written contract dated 26 February 1990 the defendant as vendor agreed to sell and transfer to the plaintiff as purchaser vacant land at the corner of Sheridan, McLeod and Smith Streets, Cairns, for a price of $3,000,000. Under the contract a deposit totalling $300,000 was payable in two amounts, and it was duly paid. By cl.34 the contract was to be completed 60 days after satisfaction of special condition 1 . By cl. 23 time was deemed to be of the essence of the contract in every respect. In the event, the contract was by deed dated 4 April 1990 varied by reducing the price to $2,650,000 and fixing the date for completion at 18 July 1990. Completion has not taken place because of disputes, following which both plaintiff and defendant claim to have rescinded the contract owing to default by the other. The dispute concerns the property to be transferred. The first two pages of the written contract are in standard printed REIQ form (1982 ed.). Under the heading H : "Particulars of land sold", -- 3 of 11 -- 2 the site address of the land is given as above; its present use (if any) is shown as "vacant land"; the description is "as per first and second schedule". There is also a parish description of the land, but it is 9f no assistance here. The printed page of the contract is followed by typed terms and conditions of sale. They are couched in language apposite to a sale by auction. That is explained by the fact that, al though the sale here was by private treaty, the terms and conditions of sale were adopted from an earlier but unsuccessful attempt to auction the subject property. Clause 1 of those typed terms and conditions provides:- "1. The whole of the property shall be offered for sale in two lots, Lot 1 and Lot 2. Lot 1 shall comprise all of the lands and license referred to in the First Schedule hereto ... ". The first schedule lists a series of Titles Office descriptions of land. ~rt concludes with:- "License. The Licensed Victualler's License held or to be held by the Vendor and presently attached to part of the land hereby agreed to be sbld and purchased being the dormant license formerly utilised by the Royal Hotel, Cairns (herein called 'the license')." It is necessary to say something about the licence referred to in the conditions of sale and the first schedule. A copy of it is annexed to the contract. It is licensed victualler's licence no. 2235 whi~h was issued under the Liquor Act 1912 by the Licensing Commission on 1 August 1957 replacing an earlier such licence dated 15 July 1914, which had been mutilated or destroyed. It was issued for premises known as the Royal Hotel situated at the corner of Wharf and Lake Streets, Cairns, and refers to the location of a public bar in the building on that land. The premises known as the Royal Hotel no longer stand on -- 4 of 11 -- 3 that site. The Hotel was demolished some years ago. That did not put an end to the licence but caused it to become "dormant", as it is described in the material before me and in the first schedule to the contract. The licence is now vested in the defendant vendor. It has in the past been the subject of litigation both in the Licensing Court and in this Court. Some of the history of the litigation is recounted in a decision of Judge Broad given in the Licensing Court on 20 August 1990 in the matter of an application to remove the licence from its present site at the corner of Wharf and Lake Streets, Cairns, to the land that is described as Lot 1 ("the contract site") in the subject contract. That, as will be seen from the address given in the contract, is a different site on different land in the same city. In his decision Judge Broad records that on a previous occasion in 1977 he had heard an application for removal of the licence to the proposed site, which is the contract site, and that he had "expressed satisfaction that the licence should be removed to the proposed site and adjourned the hearing to a date to be fixed". Objections to the application were called for, but none was received. The application was adjourned to allow submission of working plans and specifications for approval of the Licensing Commission. In his decision dated 20 August 1990, Judge Broad says that· he was asked by the Licensing Commission to further consider the matter. He concludes by saying that on the evidence previously before him he was satisfied that the contract site would best meet the needs of the public in that area. He again ordered that the licence be removed to that site on completion of the -- 5 of 11 -- 4 premises to the satisfaction of the Licensing Commission and in accordance with plans prepared by the Licensing Commission. Provision for removal· of a licensed victualler's licence from one site to another in the neighbourhood is contained in s.49A of the Liquor Act 1912-1989. The effect of the decision of the Licensing Court given by Judge Broad on 20 August 1990 is, under that section, to remove, or authorise removal of, the licence from the former Royal Hotel site at the corner of Wharf and take Streets to the contract site at the corner of Sheridan, McLeod and Smith Streets; but to do so subject to a condition that premises be constructed on that site to the satisfaction of the Licensing Commission and in accordance with plans prepared by it. No such premises have been constructed on that site, which as I have said is vacant land, and no plans have, so far as the material shows, yet been prepared by the Commission. The licence therefore remains attached to the site formerly occupied by the Royal Hotel and has not been removed to the contract site. The licence is not and, at the time fixed for completion of the contract on 18 July 1990, was not, attached to the land agreed to be sold that is described in the contract. Indeed, there was never any licence at all "attached to" that land or any part of it. The defendant was therefore not able to fulfil or perform the requirements of cl.1 of the terms and conditions of contract. Since it is plain that he was not at the date for completion in a position to sell and transfer the whole of the property Lot 1 comprising the lands and licence referred to in the first schedule, he was in breach of the contract in an essential respect. Having regard to the time it would have taken to construct premises on the contract site in accordance -- 6 of 11 -- 5 with Licensing Commission plans, the vendor was probably never in a position to perform his obligations under the contract; but, at all events, he was not in a position to do so at any time before completion that is relevant to these proceedings. In those circumstances, the plaintiff purchaser was throughout entitled to treat that originally anticipatory but continuing breach by the defendant as entitling it to rescind or determine the contract either at or before the time for completion arrived see Rawson v. Hobbs (1961) 107 C.L.R. 466, at 481-482. The defendant's response to these propositions is that the deed dated 4 April 1990 provided, as regards the licence, for a different state of things. It contained in cl.3 a replacement for the original cl.32 of the conditions of contract. The new clause provided that the plaintiff purchaser should apply for a transfer of the licence, and should use its best endeavours to obtain such transfer from the defendant. That, as the replacement clause recognises, would involve it in complying with all reasonable requirements of the Licensing Commission. The clause concluded by conferring an option exercisable by the plaintiff as purchaser of avoiding the contract if transfer of the licence was not obtained by 5 p.m. on 26 June 1990. The plaintiff did not exercise that option. It may be assumed that it made no attempt to obtain transfer of the licence. The defendant therefore submits that it is the plaintiff that is in breach of contract and responsible for its non-completion. The defendant's submission in this respect tended to equate a transfer of the licence with its removal, an~ to ascribe to the plaintiff responsibility for failure to ensure that the licence was not at completion date attached to the premises at the contract site. But this is to confuse two quite -- 7 of 11 -- 6 distinct matters. Under the Liquor Act a victualler's licence is held by a person or his or its nominee; and it is issued in respect of or "for" particular premises. A licence may be transferred from one person to another. That is catered for in s.29 of the Act, which speaks of "transfer" of a licence. It may, however, be detached from one site or geographical location and attached to another in the neighbourhood only by the process described in s. 49A, which is spoken of in that section as "removal" of the licence. Transfer under s.25 is the act of the Licensing Commission. Removal under s.49A is the act of the Licensing Court. There is no reason to suppose that in cl~3 of the deed of 4 April 1990, which introduced the new cl.32, the parties did not use those two expressions in the same sense as they are used respectively in ss.29 and 49A of the Act. Transfer of the licence from the defendant to the plaintiff or its nominee could doubtless have been achieved in the time available before contract completion date; but it would not have brought about removal of the licence from the old Royal Hotel site to the contract site at the corner of Sheridan, McLeod and Smith Streets. Any failure on the part of the plaintiff to procure transfer of the license from the defendant is therefore not relevant to the question in this case if, as I have already decided, the defendant was not in a position at or before completion to perform its obligation by transferring the land with the licence "attached". Because the deposit under the contract was payable in two amounts, the defendant considered it to be an instalment contract within s.72 of the Property Law Act. He therefore gave the 30-day notice preparatory to termination of the contract, and did so on 19 July 1990, which was the day after the date for -- 8 of 11 -- 7 completion. By doing so the defendant to that extent affirmed the contract as continuing. On 24 August 1990 he gave a further notice, by which he purported to terminate the contract for failure to pay the balance of purchase moneys. In my opinion the defendant was, for reasons I have explained, not entitled to give either of those two notices. He never was at or before the date of either notice in a position to complete the contract according to its terms. That being so, the plaintiff was entitled to treat the defendant's anticipatory and continuing inability to complete as a breach of contract entitling it to terminate the contract and recover its deposit. This was done by letter from plaintiff's solicitors dated 28 June 1990. Plaintiff's writ in this action issued on 1 August 1990. It is indorsed with various claims including, so far as relevant, a claim for a declaration that the contract has been rescinded, a decree for rescission of the contract, return of the deposit, and damages for misrepresentation or under the Trade Practices Act, as well as other relief. On 4 September 1990 the plaintiff, after entry of appearance by the defendant, issued a summons under O.18A for summary judgment for rescission of the contract and return of the deposit. It was said that under that Rule summary judgment was not available on a writ so indorsed, the more so because the writ was indorsed with a claim for rescission and damages, whereas O.18A, r.1(b) contemplates a writ indorsed with a claim for rescission only, and not, as in O. 18A, r. 1 (a), with a claim for specific performance "with or without a claim for damages". For this reliance was placed by the defendant on the decision of Andrews C. J. in Apple tree Nominees Pty. Ltd. v. Jodanto Nominees Pty. Ltd. [1984] 1 Qd.R. -- 9 of 11 -- 8 286, at 287, where Andrews C.J. r.egarded the distinction as "significant". If that was a critical defect, it could be rectified by the simple expedient of amending the writ to omit the claim for damages, which, if sought, I would be disposed to allow. But, with respect, I am unable to see the distinction as decisive. The provisions of O.18A, r.1 simply identify the indorsements that must appear on the writ before the relevant procedure can be invoked. They do not by implication or otherwise proscribe the inclusion or indorsement of other claims even if in respect of them summary judgment cannot be obtained by the use of the procedure prescribed by or under O.18A. Other matters of objection to procedure were also advanced. In Appletree Nominees Pty. Ltd. v. Jodanto Pty. Ltd., Andrews C.J. thought that in the case of a writ claiming rescission of a contract the procedures provided under O.18A were, "in the circumstances" as his Honour said, "not appropriate". It is not clear why that should be so, nor whether his Honour was referred to my earlier decision in Bassingthwaite v. Butt [1982] Qd.R. 670, at 675-676. The same result could, it may be remarked, have been achieved in this case by applying for summary judgment for the amount of the deposit viewed as a liquidated sum. Order 18A, r.1(c) expressly contemplates judgment for return of a deposit, which would seldom be possible unless rescission had taken place. In the absence of a clearer impression (which counsel before me were not able to offer) of the underlying ratio of the Appletree decision, I propose to follow the decision in the earlier case. It may be added that no identifiable reason, beyond a blind adherence to procedural form, was suggested to justify sending this action to trial. The essential facts are not in dispute, and, in reaching a -- 10 of 11 -- 9 result, all that is involved is the application to those facts of settled principles of law or interpretation. I will therefore give judgment for the plaintiff in terms of para (a) of the summons for rescission of the contract and return of the deposit of $300,000, together with the costs of the application as sought in para (b). If further directions in the action are required, they can no doubt be sought on some future occasion. -- 11 of 11 --