Gorgas v Soon Ok Hwang [2010] NSWSC 1121

Gorgas v Soon Ok Hwang [2010] NSWSC 1121

Risk of damage to the fee simple interest in the unit did not pass to Mr Gorgas merely because he remained in possession as tenant after exchange of contracts. There was no unambiguous giving and taking of possession for the purposes of clauses 18.1 and 18.4 of the contract, so s 66M Conveyancing Act 1919 (NSW) continued to apply. Because the property had been damaged and Ms Hwang served a Notice to Complete requiring payment of the full purchase price without allowing for the reduction required by s 66M, the Notice to Complete was invalid and the purported termination based on non-compliance with that Notice was invalid.

Jurisdiction
Australia
Judgment Date
01 October 2010
Procedural Posture
Vendor and Purchaser Suit Concerning a Contract for Sale of Land / Principal Judgment on the Validity of Termination and Issues Raised by the Cross Claim
Outcome
Vendor's termination of the contract was invalid; further directions were to be given on the remaining issues, and judgment for outstanding rent was to be entered when the matter returned for directions.
Legal Topics
['contract for Sale of Land' 'notice to Complete' 'passing of Risk' 'reduction of Purchase Price for Damage to Land' 'specific Performance' 'termination for Breach' 'residential Tenancy Rent']
['contract Law' 'conveyancing' 'property Law' 'equity'] ['contract for Sale of Land' 'notice to Complete' 'passing of Risk' 'reduction of Purchase Price for Damage to Land' 'specific Performance' 'termination for Breach' 'residential Tenancy Rent']

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Procedural Posture

Vendor and Purchaser Suit Concerning a Contract for Sale of Land / Principal Judgment on the Validity of Termination and Issues Raised by the Cross Claim

Legal Issues

  1. 1 ['Whether the vendor validly terminated the contract for sale for non-compliance with the Notice to Complete.' 'Whether the Notice to Complete was valid where it required payment of the full purchase price despite claimed damage to the property.' 'Whether risk in respect of damage to the property had passed to the purchaser who was already in occupation as a tenant before the contract was entered into.' 'Whether s 66M Conveyancing Act 1919 (NSW) required a reduction of the purchase price on completion.' 'Whether the vendor could recover amounts claimed on the Cross Claim, including the balance of the 10% deposit, interest and rent.']

Ratio Decidendi

Risk of damage to the fee simple interest in the unit did not pass to Mr Gorgas merely because he remained in possession as tenant after exchange of contracts. There was no unambiguous giving and taking of possession for the purposes of clauses 18.1 and 18.4 of the contract, so s 66M Conveyancing Act 1919 (NSW) continued to apply. Because the property had been damaged and Ms Hwang served a Notice to Complete requiring payment of the full purchase price without allowing for the reduction required by s 66M, the Notice to Complete was invalid and the purported termination based on non-compliance with that Notice was invalid.

Court Disposition

Vendor's termination of the contract was invalid; further directions were to be given on the remaining issues, and judgment for outstanding rent was to be entered when the matter returned for directions.

Orders

  • ['The Court concluded that the risk of loss to the fee simple in the property never passed to Mr Gorgas after exchange of contracts, so s 66M remained applicable at all times.' "The Court concluded that Ms Hwang's termination of the contract in reliance on the Notice to Complete was invalid." 'The Court stated it...