Judgment (ex tempore - revised 27 October 2014)

1HIS HONOUR: The plaintiff company carries on business as a builder and small property developer. It is the proprietor of land at Revesby. On 23 December 2013, the plaintiff as vendor and the first defendant as purchaser, made a written contract for the sale of that land. The second defendant (who has filed or is about to file a submitting appearance) was the selling agent. The purchase price was $790,000. The contract called for a deposit of 10%. However, by agreement, only $20,000 was paid by way of deposit. That is held by the agent.

2Further, and again by consent, the first defendant and his family were allowed into possession of the property from or shortly after the date the contract was made. They were to pay what was called "rental", but I think must properly be regarded as an occupation fee, of $500 per week until settlement.

3The contract provided a 42 day period for settlement. That expired on 3 February 2014. The first defendant and his family remained in possession at that time.

4There was a conversation between the plaintiff and a representative of the second defendant on 2 February 2014. It was indicated that the first defendant had said to the agent that he was not in a position to settle. The plaintiff's evidence shows that, on 3 February 2014, it was in a position to settle if necessary.

5The certificate of title, a signed transfer and the home warranty insurance certificate had been provided to the plaintiff's then solicitors for the purposes of settlement.

6On 6 February 2014, an oral arrangement was made for settlement to be adjourned for a week. Settlement did not occur in accordance with that arrangement. Accordingly, on 13 February 2014, the plaintiff gave the first defendant notice to complete. The notice to complete required settlement by 28 February 2014. That was in accordance with special condition (2) of the contract, which authorised the giving of a notice to complete allowing 14 days from its date, and acknowledging that this was sufficient time.

7Settlement did not occur in accordance with the notice to complete, although before then there had been a conversation between the plaintiff and the first defendant in relation to outstanding occupation fees.

8On 28 February 2014, a letter from the plaintiff's solicitors to the first defendant's solicitors noted an amount of outstanding rent. The first defendant's solicitors wrote on the letter, and faxed back, comments to the effect that the first defendant proposed to pay the settlement sum "today prior to settlement". A cheque was indeed handed over, but it was returned unpaid.

9The plaintiff's then solicitors gave the first defendant's solicitors notice of termination on 6 March 2014. That notice required, among other things, that the deposit be released to the plaintiff and that the first defendant and his family move out of the property. Neither of those things has happened.

10There was some argument as to whether the first notice to complete was valid. That argument was apparently not raised until after proceedings had been commenced. As a result of matters put at a directions hearing, the plaintiff took further steps, including the service (without prejudice) of a second notice to complete and service, after completion did not occur, of a second notice of termination.

11Since there has been no evidence or submission put to suggest that the first notice to complete was in any way invalid, it is not necessary to go into the detail of the second notice to complete and subsequent events.

12The first defendant had filed a defence. The effect of that defence was to admit to payment of the deposit, admit occupation of the property and the condition as to occupation fee, and admit that on 13 February 2014 the plaintiff was ready willing and able to complete the contract but that the first defendant did not then complete it in accordance with the requirements of the first notice.

13The defence denied that the contract was as alleged by the plaintiff. It alleged, as I understand it, some deed, the effect of which was said to be to amend or vary the contract for sale. There is no evidence of that deed.

14As I have suggested, it was intended by the first defendant that he would defend the proceedings. Directions were given by consent on 1 July 2014. Those directions required, among other things, that the first defendant serve his affidavits by 15 July 2014 and that the plaintiff serve affidavits in reply by 22 July 2014.

15The first defendant has not served any affidavits, either in accordance with the Court's directions or otherwise. There is absolutely no explanation for that prolonged failure to comply with the Court's directions.

16The matter was listed for directions last week. The plaintiff wished to amend to join the selling agent as a second defendant. It also wished to amend to plead, in the event that it was required to do so, the second notice to complete and subsequent events. Leave to amend was granted without any objection on the basis (as to the second defendant) that it had indicated it had no objection to being joined and would file a submitting appearance.

17At the directions hearing, the first defendant's solicitor made an application for adjournment on the basis that the first defendant was in Lebanon and had some health problems that rendered him unfit to travel for three days. Since that did not explain why he could not travel to Australia for the hearing, I refused the application for adjournment.

18When the matter was called for hearing this morning, a further application for adjournment was made on behalf of the first defendant. That was supported by a medical certificate of Dr Walid Alameddine dated 26 October 2014. Dr Alameddine certified that the first defendant (or a person bearing his name) was suffering from an acute pulmonary infection with high fever, dyspnoea and other conditions which required antibiotic treatment and strict bed rest.

19The certificate satisfied me (it having been tendered without objection) that the first defendant did indeed suffer from the conditions described by Dr Alameddine, with the consequences also described. However, in circumstances where the first defendant had not put on any evidence, there was nothing to be achieved by adjourning the hearing. Conspicuously, the certificate did not explain why the first defendant had not put on evidence either in accordance with the Court's directions or within a reasonable time thereafter. Nor did the evidence explain when the first defendant had travelled to Lebanon, or why he chose to do so rather than devote his attention to the preparation of his case.

20In those circumstances, I refused the application for adjournment. The first defendant's solicitor, Mr Williams, then sought and was granted leave to withdraw. The consequence in terms of UCPR r 36.8 is that the proceedings have been heard in the absence of the first defendant.

21I am satisfied, on the basis of the evidence to which I have referred, that a contract was made in accordance with the document identified as such in the plaintiff's affidavit evidence. I am satisfied that it contained the terms, including as to completion and the giving of a notice to complete, to which I have referred. I am satisfied that the first defendant failed to complete the contract in accordance with its terms. Thus, I am satisfied that the plaintiff was entitled to do as it did, and give a notice to complete when it did.

22There is no doubt that the first defendant did not complete within the time required by the notice to complete. The notice to complete complied with the terms of the contract as to the time to be allowed. The first defendant's defence (to the statement of claim before it was amended) admits that, when the notice to complete was given, the plaintiff was ready, willing and able to complete.

23In the circumstances, the first defendant has failed to complete the contract in accordance with a valid notice that warned the first defendant of the consequences should he fail to complete. The plaintiff was entitled to do as it did, and give notice of the termination of the contract. That notice was effective.

24It follows that the plaintiff has made good the claim to the declaration that it sought as to termination of the contract on 6 March 2014. There is no reason why the deposit (which I repeat was approximately one quarter of the deposit nominally required by the contract) should not be forfeited to the plaintiff. The remaining relief sought is judgment for possession, and leave to issue a writ of possession.

25Since the proceedings have been heard in the absence of the first defendant, compliance with r 36.8 is required unless the Court orders otherwise. The plaintiff is not in a position to comply with r 36.8. That is hardly surprising, given the procedural history that I have outlined.

26It is clear that the first defendant resided in the subject property with his family. It is equally clear that the first defendant was served with process relating to the property, claiming among other things, judgment for possession. I have no doubt that the first defendant advised his family, or at least those of a sufficient age to understand the advice, of the proceedings and of the relief sought against him.

27In circumstances where, on the evidence, the only people who might be in occupation of the land, are the first defendant (who has been served) and members of his family (who must have been aware of the proceedings), and bearing in mind the late and totally unexplained decision by the first defendant not to defend the proceedings, I think it appropriate to grant leave, or more accurately to order otherwise, for the purposes of r 36.8.

28I have said that the first defendant's decision not to defend the proceedings was totally unexplained. I accept that his non-attendance today was explained. I do not however, accept that his failure to put on any evidence which would give rise to any factual or legal issue by way of defence has been explained.

29In the circumstances, I dispense with compliance with r 36.8 and I make the following further orders:

1) Declaration in accordance with prayer 1 of the amended statement of claim filed on 23 October 2014.

2) Declaration in accordance with prayer 3.

3) Orders in accordance with prayers 4 and 5.

4) Leave to the plaintiff to issue a writ of possession on or after 30 November 2014.

5) First defendant to pay the plaintiff's costs.

30It does not need to be made the subject of an order, but the exhibit, the medical certificate, should remain with the papers.

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Decision last updated: 29 October 2014