Abourjaily v Parkview Estate Pty Ltd

The terms of the contracts

1. It is first necessary to construe the contracts in order to ascertain the nature of the rights of rescission conferred by Additional Clause 3.1(b).
2. The contracts employed the 2005 edition of the Law Society/Real Estate Institute standard form, supplemented by Additional Clauses. On the front page of the contract the Completion Date is described as "See special condition 2.1". That is plainly a reference to Additional Clause 2.1 which provides: The parties must complete this contract on the later of: (a) the day which is the 42nd day after the date of this contract; or (b) the 21st day after notification of registration of the Plan of Subdivision has been given to the Purchaser.
3. Other Additional Clauses include: 1.1 (a) The Vendor intends (but is not obliged) to do the following in connection with the Development Site: (i) subdivide the Development Site; and (ii) procure the registration of Covenants in connection with the subdivision of the Development Site which the Vendor considers necessary or which is required by an Authority. (b) The Vendor intends (but is not obliged) to register the following Documents with the Plan of Subdivision annexed hereto: (i) the 88B Instrument; and (ii) any other Document the Vendor considers necessary or appropriate or which is required by an Authority. (c) The Vendor discloses the following: (i) the Plan of Subdivision attached to this contract is in draft form only. All lot numbers, boundary positions, measurements and dimensions shown on the Plan of Subdivision are provisional and are subject to the measurements and dimensions to be shown on the Plan of Subdivision when approved by the Authority and registered. … 3.1 (a) The Vendor must use all reasonable endeavours to have the Plan of Subdivision registered by the Registration Date. (b) If this has not occurred by the Registration Date either party can rescind this contract pursuant to clause 19 of the contract. The right ceases once the Plan of Subdivision is registered. 3.2 (a) Before Registration, the Vendor can make changes to the Plan of Subdivision which the Vendor considers necessary or desirable or which is required by an Authority including: (i) the total number of lots from those shown on the Plan of Subdivision; (ii) the numbering of lots from those shown on the Plan of Subdivision; (iii) the dimensions or areas of lots from those shown on the Plan of Subdivision; (iv) the location of lots from those shown on the Plan of Subdivision; (v) INTENTIONALLY DELETED; (vi) in respect of any matters disclosed or noted in clause 1. (b) Subject to clause 3.2(c), the Purchaser cannot make any Objection or rescind or terminate or attempt to rescind or terminate or refuse to complete or threaten not to complete this contract in respect of any of the following: (i) any matter disclosed in clause 3.2(a); (ii) any changes to the Plan of Subdivision. (c) If there is any change to the Plan of Subdivision on Registration: (i) relating to the area of a Lot which results in a reduction of more than 5% and which would have a Substantial Detrimental Affect on the Property; or (ii) to the location of the Lot which would have a Substantial Detrimental Affect on the Property, the Purchaser can rescind by following the procedures in clause 3.2(d). (d) The right of rescission conferred by clause 3.2(c) in respect of any change to the Plan of Subdivision referred to in that clause may only be exercised by the Purchaser serving written notice on the Vendor: (i) if the Vendor has not given the Purchaser a notice under clause 3.2(e), within fourteen (14) days of the Vendor giving to the Purchaser notice of Registration of the Plan of Subdivision and this time is essential; or (ii) if the Vendor has given the Purchaser a notice under clause 3.2(e), within fourteen (14) days of that notice and this time is essential. (e) The Vendor may give the Purchaser a notice at any time advising of changes to the Plan of Subdivision. (f) The right of rescission conferred by clause 3.2(c) cannot be exercised in relation to a change to the Plan of Subdivision to meet, or as a consequence of meeting, the requirements of an Authority. … 3.4 (a) By written notice or notices served on the Purchaser, the Vendor may extend the Registration Date if the Vendor or the Vendor's contractors are delayed by an Event of Delay provided always that the Vendor may not extend the Registration Date to a date later than 30th June 2014 [or, in the case of two of the contracts, a later specified date]. (b) The Registration Date will be automatically extended in accordance with the notice given. (c) The Purchaser may not make any Objection or rescind or terminate or attempt to rescind or terminate or refuse to complete or threaten not to complete this contract as a result of anything arising out of this clause. … 22 Notwithstanding anything herein, completion of this contract is conditional upon the Vendor being the registered proprietor of the Lot. In this regard, on settlement the purchaser agrees to accept a duly executed and stamped transfer from the current registered proprietor to the Vendor herein and an executed transfer from the Vendor to the Purchaser.
4. By Additional Clause 19.1 numerous variations to the standard form clauses are made, including the deletion of clauses 28 and 29 (which concern unregistered plans, and conditional completion, respectively).
5. The Definitions section of the Additional Clauses includes the following: Date for Completion: The date on which the parties are required to complete this contract as provided by clause 2.1. Development Site: The land in folio identifier 3/217374 together with any land which may be the subject of the Subdivision and known as 45 Barry Road, Kellyville NSW 2155. Event of Delay: Any matter of [sic] thing which affects, delays or hinders the registration of the Plan of Subdivision including (but not limited to): (a) any delay caused by an Authority; (b) any delay in the issue of an approval or consent; (c) inclement weather or conditions resulting from inclement weather; (d) any civil commotion, strikes or lock outs or any combination of these matters; and (e) any matter or thing beyond the control of the Vendor. Plan of Subdivision: The proposed plan of subdivision is the plan described as the Plan of Proposed Subdivision annexed hereto and marked "B".
6. Registration Date was defined as a particular date, as extended by clause 3.4. As noted earlier, the Registration Date (which in most but not all cases was initially 31 December 2013) ultimately became 30 April 2015 for each contract.
7. The contract entered into by Mr and Mrs Benjamin not only differed from the other contracts in relation to Additional Clause 3.1; Additional Clause 1.1 was also different in that the words "(but is not obliged)" were deleted.
8. The plaintiffs, for whom Mr Pesman SC and Ms Power appeared, submitted that compliance by the defendant with the obligation under Additional Clause 3.1(a) to use all reasonable (or best) endeavours to have the Plan of Subdivision registered by the Registration Date was a condition that had to be satisfied before the defendant had a right to rescind under Additional Clause 3.1(b). It followed, so it was submitted, that the defendant had the onus of proving that it had complied with Additional Clause 3.1(a) (see Al Achrafi v Topic (2016) 18 BPR 36,517; [2016] NSWSC 1807 at [62] and the authorities discussed and analysed by Robb J at [63]-[89] and [112]-[138]). The plaintiffs accepted that the right of rescission in Additional Clause 3.1(b) does not in terms refer to Additional Clause 3.1(a), but submit that it is obvious as a matter of construction (including from the placement of the clauses) that the right is dependent upon satisfaction of what is required by Additional Clause 3.1(a). It was put that if it were otherwise, Additional Clause 3.1(a) would be rendered meaningless. The plaintiffs submitted that this construction was not undermined by the provisions relied upon by the defendant, notably Additional Clause 1.1 and Additional Clause 3.2.
9. The defendant, for whom Mr DeBuse of counsel appeared, submitted that Additional Clause 3.1(b) confers a right of rescission on either party, which depends only upon registration of the Plan of Subdivision not occurring by the Registration Date. It was further submitted that the obligation under Additional Clause 3.1(a) was to be read as subject to the defendant having the right, recognised by Additional Clause 1.1, not to complete a subdivision of the Development Site, and the right to make changes to the Plan of Subdivision (see Additional Clause 3.2). Mr DeBuse took issue with the contention that compliance by the defendant with Additional Clause 3.1(a) was a condition of the existence of its right of rescission. He submitted that there was an onus upon the plaintiffs to show breach of Additional Clause 3.1(a) and that the breach caused the event that gives rise to the right of rescission (see Al Achrafi v Topic (supra) at [62]).
10. The rights of rescission under Additional Clause 3.1(b), which are given to either party, are not expressed to be conditional upon anything other than that "this" has not occurred by the Registration Date. Mr DeBuse submitted, in effect, that "this" referred only to registration of the Plan of Subdivision. Mr Pesman, in his submissions in reply, seemed to accept that "this" was concerned only with registration by the Registration Date, and stated that it would make no sense to read it any other way. I agree that "this" should be read as referring only to registration of the Plan of Subdivision. Accordingly, if the Plan of Subdivision is not registered by the Registration Date, "this has not occurred by the Registration Date" and Additional Clause 3.1(b) is engaged. I do not think that "this" should be read so as to include the use of all reasonable (or best) endeavours by the vendor. If it was read that way, Additional Clause 3.1(b) would not be engaged, and the purchaser would have no right of rescission, if the vendor failed to use all reasonable (or best) endeavours to have the Plan of Subdivision registered by the Registration Date. The parties should not be taken to have intended that result. I appreciate that this view differs from the observations made by Gzell J, in obiter dictum, in Mei v West Apartments Pty Ltd [2011] NSWSC 662 at [27]. That decision, which was not cited by counsel, concerned a clause very similar to Additional Clause 3.1. However, I respectfully differ from his Honour concerning the construction of "this".
11. The contracts do not expressly provide that compliance by the vendor with its obligations under Additional Clause 3.1(a) is a condition precedent to the exercise by the vendor of a right of rescission under Additional Clause 3.1(b). In this respect, the provisions may be contrasted with those of printed clauses 28.2 and 28.3 of the 2005 edition of the standard form (and predecessor clauses to similar effect) which clearly state that if the plan of subdivision is not registered within the stipulated time the vendor may rescind but only if the vendor has complied with its obligation to do everything reasonable to have the plan registered within that time. Printed clause 28 was deleted from the contracts in the present case.
12. In my opinion, the existence of the vendor's right of rescission under Additional Clause 3.1(b) is not conditional upon performance by the vendor of its reasonable (or best) endeavours obligations under Additional Clause 3.1(a). There is no express condition to that effect, and no such condition would be implied (see Mitchell v Pattern Holdings Pty Ltd (2002) 11 BPR 20,241; [2002] NSWCA 212 at [54]-[56]; Plumor Pty Ltd v Handley (1996) 41 NSWLR 30 at 34C-D). That is to say, compliance with Additional Clause 3.1(a) is not a condition precedent to the exercise by the vendor of a right of rescission under Additional Clause 3.1(b).
13. However, the exercise by the vendor of a right of rescission under Additional Clause 3.1(b), which right arises if the Plan of Subdivision is not registered by the Registration Date, may be challenged on the ground that a party to a contract is not entitled, as against the other party, to rely on an event that results from its own default (see Suttor v Gundowda Pty Ltd (1950) 81 CLR 418 at 441; Plumor Pty Ltd v Handley (supra) at 34F-G). In these circumstances, the onus lies upon the party challenging the validity of the rescission to establish that the rescinding party is guilty of default (see Plumor Pty Ltd v Handley (supra) at 35A-G; Al Achrafi v Topic (supra) at [62] and [88]-[89]). It is thus necessary for the challenging party to show that the event which enlivens the right of rescission was relevantly caused by the default of the rescinding party.
14. In Sanctuary Investments Pty Ltd v St Gregory's Armenian School Incorporated (1998) 9 BPR 16,823 Young J (as his Honour then was) stated (at 16,826) that it was necessary to "look at whether the person seeking to rescind the contract materially contributed to the non-performance of the condition on which it now bases its rescission".
15. In Masters v Belpate Pty Ltd (2001) 10 BPR 18,527; [2001] NSWSC 169 Hodgson CJ in Eq. referred at [66] to the above statement of Young J and continued: In my opinion, this means that if the time would plainly have expired, even if the breach had not occurred, the breach will not preclude the vendor relying on the condition. However, in my opinion, if one could say that, if the breach had not occurred, there was a substantial chance that the condition could have been fulfilled, that would be enough to deprive the vendor of the right to rescind. If the vendor's breach has deprived the purchaser of such a substantial chance of this kind, in my opinion, that is enough to enable one to say that the breach has materially contributed to the non-fulfilment of the condition, so that the vendor is precluded from rescinding. That statement of Hodgson J was followed by Hall J in Pelley v Tebran Pty Ltd [2006] NSWSC 1072 at [170].
16. In Mitchell v Pattern Holdings Pty Ltd (supra) Powell JA (with whom Stein JA and Rolfe AJA agreed) expressed the view, in obiter dictum, at [56], that: …in order for a party to be held disentitled to exercise a right of rescission, it must appear that it was his default which brought about, or at least materially contributed to, the occurrence of the relevant event.
17. The abovementioned cases were cited by Brereton J in Mordue v Kroone (2009) 14 BPR 26,771; [2009] NSWSC 255 at [16] where his Honour stated that: …where a vendor's default has deprived the purchaser of a substantial chance that the condition would have been fulfilled, the vendor cannot exercise the right of rescission… This statement was cited with approval by the Court of Appeal in Victoria in Joseph Street Pty Ltd v Tan (2012) 38 VR 241; [2012] VSCA 113 at [47] where the Court stated: It is well established that a party wishing to rescind cannot take advantage of its own ineffective or inefficient measures to comply with its contractual obligations, and that where a vendor's default has deprived the purchaser of a "substantial chance" that the condition would have been fulfilled, the vendor cannot exercise the right of rescission.
18. More recently, in Wang v Kaymet Corporation Pty Ltd [2015] NSWSC 1459 Stevenson J stated in this context at [72] that: To show that such a breach is material, the plaintiffs must also show that, had the defendants used their reasonable endeavours, the project would have reached the stage where the Strata Documents could have been registered by the Date for Completion relevant to each plaintiff's contract…
19. Statements can be found in other cases which suggest that it may be necessary to prove on the balance of probabilities that the breach of the obligation caused the non-fulfilment of the condition. Nina's Bar Bistro Pty Ltd v MBE Corporation (Sydney) Pty Ltd [1984] 3 NSWLR 613 at 614 and 620-1, and Italo-Australian Club Ltd v National Australia Bank Ltd (1989) Conv. R 55-461, both decisions of the Court of Appeal, are examples (although in the latter case the approach to the question seems to have been influenced by the manner in which the case was conducted). Another example is Egan v Geraghty [1994] QCA 8.
20. The issue does not appear to have been considered by the High Court. For what it is worth, I think that the approach taken in the cases cited at [22]-[25] above is preferable. The question is whether a defaulting party can exercise a contractual right of rescission, not whether the innocent party can recover damages for the breach. It seems to me that a defaulting party should not be able to exercise a right of rescission if it has materially contributed to the occurrence of the event that gives rise to the right. This approach is consistent with the statements made in the joint judgment in Gange v Sullivan (1966) 116 CLR 418 at 441-2. Those statements provide support for the view that it is sufficient to show that the breach contributed to the relevant event.
21. Additional Clause 3.1(a) stipulates (in all contracts other than Mr and Mrs Benjamin's) that the defendant must use all reasonable endeavours to have the Plan of Subdivision registered by the Registration Date. The provision must be read in the context of the contract as a whole, including Additional Clause 1.1 and Additional Clause 3.2. In my opinion, Additional Clause 1.1 is capable of operating in some circumstances so as to qualify the vendor's obligations under Additional Clause 3.1(a). However, in the circumstances of this case, where the vendor has at all relevant times intended to proceed to subdivide the Development Site, and achieve registration of the Plan of Subdivision (as altered from the draft plan attached to the contracts), there is no such qualification. As for Additional Clause 3.2, it seems to me that whilst it gives the vendor rights to make certain changes to the Plan of Subdivision, if changes are made, the Plan of Subdivision henceforth incorporates those changes, including for the purposes of Additional Clause 3.1(a). The vendor's obligation under Additional Clause 3.1(a) thereby becomes referable to the plan as altered. There is thus no good reason to read down the terms of the vendor's obligations under Additional Clause 3.1(a). The position is a fortiori in relation to Mr and Mrs Benjamin's contract, due to the amendment made to Additional Clause 1.1.
22. A reasonable endeavours obligation, arising in the context of a commercial contract, was the subject of the dispute in Electricity Generation Corporation v Woodside Energy Ltd (2014) 251 CLR 640; [2014] HCA 7. The argument in the High Court in that case proceeded on the basis that substantially similar obligations are imposed by a best endeavours obligation (see at [40]; see also, in the context of distributorship agreements, Transfield Pty Ltd v Arlo International Ltd (1980) 144 CLR 83 at 100-101 and 107, and Hospital Products Ltd v United States Surgical Corporation (1984) 156 CLR 41 at 64-5, 91-2 and 143-4). A similar approach was taken in the present case, albeit that it was suggested that the best endeavours obligation might call for a slightly higher standard than the all reasonable endeavours obligation.
23. I note that in Waters Lane Pty Ltd v Sweeney (2008) Aust Contract R 90-287; [2007] NSWCA 200 Tobias JA (with whom Santow and Giles JJA agreed) construed (at [106]) an "all reasonable endeavours" obligation as requiring the promisor to do all it reasonably could in the circumstances to satisfy certain conditions by a particular date. At [107], his Honour did not express a final conclusion on the question whether that meant there was no relevant difference between the standard constituted by "all reasonable endeavours" and that constituted by "best endeavours".
24. In Foster v Hall [2012] NSWCA 122 Macfarlan JA (with whom Meagher JA and Tobias AJA agreed) said at [33]-[34]: The addition of the word "best" to the expression "reasonable endeavours" raises the required standard to a level somewhat higher than that imposed by a simple "reasonable endeavours" obligation. However I do not consider that there is any significant difference, at least for present purposes, between the content of an obligation to use "best reasonable endeavours" and one to use "best endeavours". In Hospital Products Ltd v United States Surgical Corporation [1984] HCA 64; 156 CLR 41 Gibbs J explained the meaning of the latter expression as follows: "[A]n obligation to use 'best endeavours' does not require the person who undertakes the obligation to go beyond the bounds of reason; he is required to do all he reasonably can in the circumstances to achieve the contractual object, but no more" (at 64). In the same case Mason J referred to the extent of the obligation of best efforts (or endeavours) as "governed by what is reasonable in the circumstances" (at 91 - 2). Dawson J noted that the obligation does not impose a duty upon a party to disregard his or her own interests (at 143 - 4). To those statements may be added the proposition that a party subject to the obligation is bound to take "steps which a prudent, determined and reasonable [party], acting in his own interests and desiring to achieve [the results specified in the contract] would take" (Hawkins v Pender Bros Pty Ltd [1990] 1 Qd R 135 at 151 quoting Buckley LJ in IBM United Kingdom Ltd v Rockware Glass Ltd [1980] FSR 335 at 343).
25. In Electricity Generation Corporation v Woodside Energy Ltd (supra) the High Court went on to observe at [41] that a reasonable endeavours obligation is not an absolute or unconditional obligation, and its nature and extent is necessarily conditioned by what is reasonable in the circumstances, including circumstances that may affect the obligor's business.

The proposed development

1. The property at 43-45 Barry Road was the subject of a development consent issued by the Council on 23 August 2011 (1514/2011/ZB). The consent provided for a subdivision creating 57 lots over two stages. Stage 1 concerned the land at 43 Barry Road, and Stage 2 concerned the land at 45 Barry Road.
2. A modified consent (1514/2011/ZB/A) was issued on 4 December 2012. It contained conditions which effectively superseded those of the original consent. In addition, the staging was reversed so that the land at 45 Barry Road was to be Stage 1, and provision was made for the addition of a temporary access road to Barry Road.
3. The consent was further modified in August 2013 and again in September 2013 (1514/2011/ZB/B and 1514/2011/ZB/C). These modifications included revised plans of subdivision prepared by North Western Surveys Pty Ltd, the most recent being drawing 14880/209 dated 28 June 2013.
4. On 10 September 2013 a separate development consent (118/2014/ZB) was issued for a subdivision creating four lots in areas surrounding the boundary between the 43 and 45 Barry Road properties. One such lot was lot 319 which became the subject of the contract between the defendant and Mr and Mrs Timewell.
5. In the meantime, on 9 April 2013, a Construction Certificate (43/2013/EC) was issued by the Council in relation to the proposed development. The defendant had by that time entered into a contract to purchase the 45 Barry Road property. The purchase was completed in September 2013.

The progress of the development

1. An analysis of the progress of the development was undertaken by Mr Patrick McNamara. Mr McNamara is a registered surveyor and consultant project manager who possesses extensive experience in land development in Sydney, including residential subdivisions. The analysis he undertook was based upon material that included the relevant consents, affidavits served by the parties in 2015, documents discovered by the defendant, and documents produced on subpoena by various contractors (including North Western Surveys Pty Ltd, the project managers retained by the defendant) and the National Australia Bank, which provided finance to the defendant in relation to the project.
2. Mr McNamara expressed the opinion that there was sufficient time from the dates of the various planning approvals (including the Construction Certificate issued on 9 April 2013) for the subdivision works to be designed, approved, constructed and certified in order for the plan of subdivision to be registered by 30 April 2015. The defendant did not take issue with that opinion. The defendant's position was that registration did not take place by the Registration Date due to various events that it said were beyond its control.
3. The plaintiffs' case that the defendant failed to discharge its obligations under Additional Clause 3.1(a) of the contracts is largely based upon Mr McNamara's analysis, and the opinions he expressed concerning certain delays that occurred during the course of the project.
4. Mr McNamara produced a Target Programme for the development, and an Actual Programme for the development. The Target Programme incorporated Mr McNamara's estimate of the reasonable time required to complete the project. In brief, the Target Programme allowed a period of about 20 months for completion of all construction certification, construction, and registration to occur. A period of five months was allowed for the assessment and remediation (including validation) of the land in relation to certain asbestos which was discovered upon the site in September 2013. The Target Programme allowed a period of almost four months after completion of the last of the construction tasks.
5. The Actual Programme indicates the progress of the development that actually took place (up to October 2015). Mr McNamara identified numerous delays that occurred in the course of the development.
6. In relation to some of these delays, Mr McNamara expressed the opinion that the delay nonetheless left sufficient time for the relevant item to be completed as required to meet the Registration Date of 30 April 2015 (see, for example, paragraphs 77 and 81 of his report).
7. Significant delays were experienced in relation to the road and drainage works. The contractor chosen for these works was ABAX Contracting Pty Ltd ("ABAX"). ABAX was retained in August 2013 and commenced work almost straight away. It submitted its first progress claim on 27 August 2013. As noted by Mr McNamara, these works commenced before "downstream drainage rights" had been resolved with Mr Kozor, the owner (with Mrs Kozor) of the property known as 3 White Gum Place, Kellyville. (It appears that by August 2014 ownership of the property had been transferred to Chesterfield Developments Pty Ltd, a company of which Mr Kozor was the sole director). The reference to "downstream drainage rights" seems to be directed to the requirements of the development consent, notably Condition 32(xiii) of the modified consent issued on 4 December 2012, which provided for tail out drains over adjoining properties to deal with stormwater flows, and Condition 64(e) of the modified consent issued on 4 December 2012, which required (prior to the issue of a Subdivision Certificate), the creation of suitable temporary drainage easements from the outlet of any culverts located within the property or on adjoining land. The defendant did not construct any drainage works over adjoining properties, or obtain any such easements, prior to the Registration Date of 30 April 2015. It will be necessary to return to the downstream drainage issue later in these reasons. The defendant's handling of the issue is of central significance. Another key issue concerns delays in the payment of contractors.
8. Asbestos fragments were discovered at the site in late September 2013. Work had to stop. North Western Surveys Pty Ltd (hereafter referred to as "NWS"), on behalf of the defendant, engaged Geotest Services Pty Ltd ("Geotest") to prepare a detailed site investigation report and a remedial action plan (referred to as a "RAP"). Geotest completed those reports on 8 October 2013 and 14 October 2013 respectively. The RAP provided for various remediation measures to be carried out, and for validation sampling to be carried out by an environmental consultant prior to civil works resuming in the remediated areas.
9. Geotest had issued an invoice in relation to the first of the two reports by 11 October 2013. An email sent on that day to Ms Stojcevski, a director of the defendant, indicated that the report would be forwarded once the invoice was paid. A further email sent by NWS to Ms Stojcevski on 14 October 2013 noted that the invoice "requires payment as soon as possible". The invoice had been incorrectly addressed to Propertylink Group rather than the defendant. On 25 October 2013 a correctly addressed invoice, and an invoice in relation to the RAP, were sent to NWS. The invoices were forwarded later that day (Friday) to Ms Stojcevski, who stated in her reply to NWS that the invoices would be paid on Monday.
10. That did not occur. On 30 October 2013 NWS sent a further email to Ms Stojcevski, stating that it was understood that payment had not been made, and that Geotest would not issue their report until payment was received.
11. It appears that the invoices were eventually paid on 4 December 2013. On that day, Ms Stojcevski sent an email to Geotest requesting that the reports be released "as a matter of urgency". It is likely that the reports were released shortly thereafter.
12. Mr McNamara stated that it would have been prudent for the defendant to pay the invoices soon after they were issued, and it was his opinion that this delay in payment resulted in remediation works being delayed for about six weeks.
13. The remediation works were not in fact commenced until April 2014.
14. Mr McNamara referred to some emails which passed between the defendant and NWS on 17 March 2014 which, he said, showed that this delay was "due to a lack of instruction from the defendant to the remediation contractor". The emails suggest that in about mid-March 2014 Ms Stojcevski informed Ms Larrain of NWS that she was "speaking to EMS regarding the remediation". Ms Larrain offered to take over those discussions. The emails reveal the existence of some tension in the relationship, particularly concerning who may be responsible for delays to the project. Ms Larrain said that NWS was not responsible for the delay caused by Geotest not being paid until December 2013. Ms Stojcevski's response pointed to the time that had passed since the payment was made, to which Ms Larrain stated that there was no clear instruction as to who was meant to be looking after the issue. In my view, insufficient attention was given by the defendant, in consultation with NWS, to the need for the remediation works to be promptly commenced and completed so as not to delay the progress of the development.
15. According to Mr McNamara's Actual Programme, the remediation work was eventually carried out by EnviroManaged Systems Pty Ltd from about 2 April 2014 to 8 July 2014. Geotest was engaged to undertake remediation supervision.
16. Mr McNamara expressed the opinion that the delay of about four months (from early December 2013 to early April 2014) was excessive "considering how critical it was to have the remediation completed so that work could continue on the project". That may be accepted.
17. However, it seems that the next component of the works to be undertaken was the construction of the sewer system. These works could not commence until Sydney Water gave its approval to the design and the funding arrangements. The relevant approvals were not forthcoming until 19 May 2014 and 20 May 2014 (see Mr McNamara's report at paragraph 76). It further appears from Mr McNamara's Actual Programme that sewer construction commenced on the site (by McHale Excavations Pty Ltd) on about 3 June 2014. Presumably, this work was confined to areas unaffected by the asbestos (see Mr McNamara's report at paragraph 129). The progress of the sewer works is likely to have been impeded by the concurrent remediation works, but it does not seem to be the case that the delay in commencement of the remediation work brought about a commensurate delay to the project as a whole.
18. Geotest prepared a number of further reports once the remediation work was underway. One such report was an Asbestos Quantification and Remediation Outcome Report dated 11 June 2014. Geotest concluded in that report that of the 32 stockpiles of material tested, three (consisting of approximately 70 tonnes) required further remediation or, preferably, immediate off-site disposal to a licensed landfill. It was stated that the other stockpiles were suitable for residential land uses if placed at a depth greater than 100mm below the final site surface.
19. Geotest issued an invoice to the defendant on about 15 August 2014 for $16,581.40. It appears that this invoice was not paid until 17 December 2014, and the failure to pay was holding up the release of a Validation Report concerning the remediation works. Mr McNamara stated that without a Validation Report the land is still considered contaminated, and "no construction" can occur upon it. He expressed the opinion that the four month delay in paying Geotest directly delayed the project.
20. I note, however, that sewer construction work was able to continue, and was completed by about 14 November 2014. Some water main and power construction works were also undertaken in the period from August to November 2014. Nevertheless, the civil works, which had been commenced by ABAX in 2013 but could not continue due to the asbestos discovery, did not recommence until approximately mid-January 2015, shortly after the issue of the Validation Report on about 12 January 2015. ABAX had made it clear that it would not return to the site until the remediation work had been completed. I infer that ABAX required the Validation Report as proof that the work was complete. The Validation Report concluded that the stockpiled material assessed at the site could be classified as "virgin excavated natural material", suitable for re-use at all land use types.
21. The defendant called evidence from Ms Stojcevski. Her credit was strongly attacked. For the reasons set out below I have concluded that Ms Stojcevski's evidence should be treated with caution, and unless corroborated by contemporaneous documents or other reliable testimony, or against the defendant's interests, should not be accepted.
22. On numerous occasions Ms Stojcevski was accused of giving false evidence. Not all of those accusations were made good. However, there were instances where Ms Stojcevski gave clearly incorrect answers in the course of cross-examination. She denied, for example, that she and Mr Murabito (who were at all relevant times the two directors of the defendant) received substantial payments from the defendant's bank account. That was plainly incorrect, even if, as later asserted by Ms Stojcevski, the payments were in the nature of repayments to the directors in respect of monies advanced by them for the defendant's purposes. Ms Stojcevski flatly denied that she had ever told anybody that the defendant had run out of money, when she had made that statement in an email to a Council officer in April 2015. Further, Ms Stojcevski denied that ABAX was the only contractor ever paid directly by Westpac, even though she had sworn that was the case in an affidavit prepared shortly prior to the hearing. Ms Stojcevski then confirmed that the statement in the affidavit was true.
23. These examples, viewed in isolation, may not be sufficient to call Ms Stojcevski's general credibility into question, but considered together and in conjunction with some other aspects of her evidence, lead me to doubt the reliability of her testimony.
24. One such aspect concerned the funding of the project. Paragraph 17(b) of the Defence (filed shortly prior to the hearing and verified by Ms Stojcevski) includes the assertion that the defendant was prevented from registering the subdivision by an "inability to fund the works as a result of matters that arose beyond its control". However, in an affidavit sworn by Ms Stojcevski in July 2015 in opposition to an application for discovery of financial documents, she deposed that "the project has never been delayed as a result of insufficient cash flow". In cross-examination, Ms Stojcevski maintained the truth of that statement (and resisted the suggestion that the defendant had a cash flow problem), whilst also suggesting that some payments to contractors were delayed due to the actions of the financier (Westpac). I found her evidence on these matters to be unconvincing. I do not accept the evidence she gave in cross-examination that the defendant was unable to fund the works as a result of "things that were over-budget". The alleged inability to fund the works was not made out.
25. Another aspect of Ms Stojcevski's evidence which I found troubling concerned her reporting of progress in reaching an agreement with the adjoining owner, Mr Kozor. It appears that she told Westpac's quantity surveyor in June 2014 that the signing of a deed of agreement was imminent. It further appears that she informed Westpac in early September 2014 that the defendant was awaiting an amendment to a deed, after which the deed would be signed. As explained later, those statements (which Ms Stojcevski maintained in cross-examination to be true) cannot be accepted as truthful.
26. I formed the overall impression that Ms Stojcevski was prepared to make statements to suit her (or the defendant's) own economic interests, even if those statements were not true. In the witness box, Ms Stojcevski did not strike me as a witness who was always trying to give accurate answers to the questions asked of her, regardless of the effect the answers may have on the defendant's case. The inaccuracy of many of her answers further diminished the credibility and reliability of her testimony.
27. Ms Stojcevski swore two affidavits which were read in the defendant's case at the hearing. The first, sworn on 19 November 2015, is an extensive account of the history of the project. It pre-dates Mr McNamara's report and thus does not directly respond to it. Ms Stojcevski's second affidavit, sworn on 31 July 2017, is largely a response to an affidavit sworn by Mr Kozor and thus deals primarily with the lengthy negotiations with him.
28. Ms Stojcevski was cross-examined in relation to the delays identified by Mr McNamara including those concerning the asbestos issue.
29. In relation to the payment of the Geotest invoices in late 2013, Ms Stojcevski said that in the two month period leading up to early December 2013 there were negotiations with Geotest, whose report was "in draft". She said that there were negotiations with Mr David Spasojevic of Geotest "about the remediation claim and its outcome" while he finalised the report. Neither the existence of any negotiations of the type described, nor that the Geotest report was in draft, is borne out by the contemporaneous documents including the emails concerning payment of the Geotest invoices. These matters were not referred to in either of Ms Stojcevski's affidavits. In these circumstances, I am unable to accept her explanation of the reason for this delay in paying Geotest.
30. As for the delay in commencement of remediation works, I am prepared to accept Ms Stojcevski's evidence to the effect that the remaining civil works to be undertaken by ABAX could not (at least in very substantial part) be resumed until the sewer works had been completed. An email sent by Ms Larrain of NWS to Ms Stojcevski on 17 March 2014 contains the following: Brent Annis-Brown was not advised that Sydney Water approvals were still outstanding and that your electrical design required re-certification. He NOW understands why no-one is out on site. I refer to ABAX Contracting's email dated 13/3/14. ABAX will NOT return to site until the following have been completed: Remediation works Internal Sewer and Dual Water reticulation Access approval for stormwater outlet I have advised you on many occasions that sewer and dual water reticulation CANNOT start until Sydney Water approves the funding for the sewer lead-in and the dual water upsizing. I have advised that Dave Filmer, the Water Servicing Coordinator at NWS, is currently chasing Sydney Water for the funding approval and to ask IF we can start the internal sewer and dual water reticulation. Dave Filmer will undertake any design and construction issues regarding sewer and dual water.
31. There is evidence that in late 2013 the sewer design (including its location) was subject to some revision, but by early February 2014 the defendant had obtained the necessary permissions to enter neighbouring land (including from Mr Kozor). However, as noted already, Sydney Water did not provide its approvals until about 20 May 2014. Sewer construction works could not have been commenced until then, even if some of those works were otherwise capable of being carried out before the asbestos remediation works were finished. The four month delay in commencement of the remediation works between December 2013 and April 2014 meant that the remediation works were not complete when the sewer construction works commenced. This would have restricted the works that could be done on the site (see Mr McNamara's report at paragraph 129 and Ms Stojcevski's affidavit of 19 November 2015 at paragraph 110). The sewer works are likely to have taken longer than would otherwise have been the case.
32. In relation to the late payment of the Geotest invoice of August 2014, Ms Stojcevski said that the Validation Report was required in order to register the subdivision but "was not required at that time". She said that she paid for it when she needed it. I infer that Ms Stojcevski appreciated that the Validation Report was required in order for ABAX to return to the site to complete the remaining civil works. That understanding would be consistent with the advice she received from NWS that ABAX would not return to the site until the remediation works had been completed.
33. Given that the sewer construction works had finished by mid-November 2014, there is no apparent reason why ABAX could not have returned to the site at that time, if the Validation Report had then been made available to demonstrate that the remediation works had been satisfactorily completed. It is not clear why efforts were not made to have ABAX return at that time, or why Ms Stojcevski considered that the Validation Report was not required until December 2014. She accepted in cross-examination that she could have paid Geotest before December 2014, but chose not to as the report was not required. She further suggested that she "had a discussion with Geotest about that report". Again, this is not a matter that is corroborated by any contemporaneous documents; and it is not referred to in her affidavits. I do not accept that any discussion with Geotest occurred which may have provided a good reason to delay the payment of their invoice of August 2014.
34. Mr McNamara referred in his report to a number of other instances of late payment by the defendant of invoices issued by contractors, including Lindsay Civil Pty Ltd and Communication Excavations Pty Ltd.
35. Lindsay Civil Pty Ltd, the power and electrical contractors, completed their works by about the end of September 2014. Invoices that were issued in September 2014 were not paid until about 18 March 2015 despite numerous reminders (including to Ms Stojcevski on 5 November 2014 and 11 November 2014). This delay held up the release of the Letter of Acceptance which was required in order for Endeavour Energy to give an approval to the works (known as a Notification of Arrangement for Distribution of Electricity). The approval, which was required to be submitted to the Council prior to the issue of a Subdivision Certificate (see Condition 68 of the 4 December 2012 modified consent and Condition 30 of the 10 September 2013 consent), was not in fact issued until 3 August 2015. No explanation for the delay in payment was put forward by the defendant.
36. Communication Excavations Pty Ltd, the telecommunications contractors, also completed their works in September 2014. An invoice was issued on 18 September 2014. Again, despite numerous reminders (including to Ms Stojcevski on 10 December 2014 and 2 February 2015) payment had not been made by 9 March 2015. On that day, Mr McAnulty of Communication Excavation Pty Ltd sent an email to Ms Stojcevski in the following terms: As per previous correspondence and the 4 times you told me you had transferred and cleared the invoice, I am emailing you to advise I have a truck roll booked for Wednesday morning to attend site and remove Communication Excavations asset that was installed and not paid for. I will also be seeking payment for the time the trucks and machines are onsite removing the asset. This should only take about 2 hours. I will try and remove it as neatly as possible but as you are aware 20 tonne excavators are very unforgiving when it comes to digging around other services.
37. In cross-examination, Ms Stojcevski stated that there was more work for the contractor to do. I do not accept that evidence, which was seemingly advanced as a reason for not paying Communication Excavations Pty Ltd. There is no suggestion of any outstanding work in any of the emails that passed between Mr McAnulty and Ms Stojcevski on 2 February 2015 and in early March 2015. Later in her cross-examination Ms Stojcevski seemed to accept that the invoice had been issued after the work had been done, and she said on several occasions that she had no recollection of the matter, other than of a conversation with Mr McAnulty on 9 March 2015 when she was "just trying to get to the bottom of how we missed that invoice".
38. It is not clear on the evidence when the payment was finally made. However, Communication Excavations Pty Ltd did not in fact issue Compliance Certificates until 8 May 2015 (in respect of lots 201-221 and 223) and 15 June 2015 (in respect of lots 316-319). Compliance Certificates were required to be submitted to the Council prior to the issue of a Subdivision Certificate (see Condition 69 of the 4 December 2012 modified consent and Condition 31 of the 10 September 2013 consent).
39. Mr McNamara agreed in cross-examination that the failure to resolve the downstream drainage issue was the matter that was critical to the prevention of registration of the subdivision. As noted earlier, Condition 64(e) of the 4 December 2012 modified consent called for the creation of temporary drainage easements prior to the issue of a Subdivision Certificate. In his report, Mr McNamara stated that "the stormwater agreement" was a crucial part of the development, and that it was not reasonable for the defendant to fail to reach an agreement with Mr Kozor in the period from about September 2013 to January 2015 whilst the civil works had been halted.
40. It is necessary to deal with the downstream drainage issue in some detail.
41. Discussions between the defendant and the Kozors concerning a "land swap" had commenced by December 2012. By that time, the defendant had retained Mr Costa of LCI Partners, and the Kozors had retained Mr Stratford of Low Doherty and Stratford, as their solicitors.
42. In early 2013 NWS was taking steps towards obtaining a Construction Certificate for the development the subject of the modified consent. Condition 35 of the modified consent provided that where engineering works necessitate the discharge of stormwater onto adjoining land, written consent from affected adjoining owners had to be submitted to Council before a Construction Certificate is issued. It appears that a form of consent given by Mr and Mrs Kozor on 22 November 2011 was submitted for this purpose. This consent was given before the defendant had agreed to purchase 45 Barry Road. The consent, which is addressed to the Council, is in the following terms: Proprietors of Lot 8 in DP 220102, give consent to allow the discharge of stormwater from the development at 43-45 Barry Road, Kellyville being lots 3 & 4 in DP 217374. Construction of all drainage to the standards of The Hills Shire Council.
43. The Construction Certificate was issued on 9 April 2013. The approved Plan of Civil Works (prepared by NWS for the defendant) provides for some drainage works to extend upon the Kozor land. That is consistent with Condition 32(xiii) of the modified consent, which provides that tail out drains over adjoining properties are required where necessary to dissipate stormwater flows to an acceptable level from the end of stormwater outlets. One of the notes on the Plan of Civil Works provided: 15. Written permission shall be obtained from adjoining owners prior to commencement of any relevant construction on adjoining lands.
44. In the meantime, Ms Stojcevski had met with Mr and Mrs Kozor in about early March 2013. There is a dispute about what was said at the meeting, in particular as to whether Mr Kozor said, in effect, that in order to get a favourable outcome from the Council concerning a joint development application with the defendant he would be prepared to pretend to the Council to be overseas for 12 months. However, the dispute is of little significance to the resolution of the issues in this case. Were it necessary to do so, I would accept Mr Kozor's denial that he spoke in that fashion, in preference to Ms Stojcevski's assertion to the contrary.
45. On 17 March 2013 Ms Stojcevski sent a letter to the Kozors which included a proposal for the purchase of some 1,333m2 of the Kozor land for $240,000. Mr Kozor responded on 20 March 2013. He stated that two portions of land, together amounting to 1,333m2 in area, would be worth a total of about $570,000 to $600,000. Mr Kozor suggested, as an alternative to an outright purchase, that the 512m2 portion could be the subject of a swap with an equivalent block. Also on 20 March 2013, a letter was sent to the defendant by Mr Stratford on behalf of the Kozors. This letter contained a proposal that was broadly consistent with that conveyed by Mr Kozor. The defendant responded to Mr Kozor's letter on 26 March 2013.
46. On 5 April 2013 Ms Stojcevski sent an email to Mr Kozor in which she suggested that they and their solicitors meet to discuss the matter. On the following day, Mr Kozor sent an email stating that for various reasons he would not have time to deal with the issue until the end of July. However, letters sent by Ms Stojcevski to the Kozors on 16 May 2013 and by Mr Kozor to the defendant on 23 May 2013 indicate that there were some further negotiations between the parties during that month.
47. There seems to have been a lull until November 2013. On 1 November 2013 Mr Costa sent a letter to Mr Stratford which contained an offer by the defendant to purchase 1,333m2 of the Kozor land for almost $330,000 and pay for certain road works. An email sent on 1 November 2013 by Ms Stojcevski to Mr Kozor indicates that they had a meeting on that day. Ms Stojcevski expressed interest in purchasing all of the Kozor land, but Mr Kozor, in an email sent on 4 November 2013, stated that he had no intention of selling.
48. At about that time there was also communication between Ms Stojcevski and Mr Kozor concerning the design of the sewer (which would pass under both properties) and the cost of installing larger stormwater pipes under the Kozor land (as a "tail out" for 45 Barry Road). Ms Stojcevski obtained a quotation from ABAX for the additional cost of installation of 600mm diameter pipes instead of 375mm diameter pipes. The difference was assessed by ABAX as $36,659.15 (including GST). Ms Stojcevski sent the quotation to Mr Kozor on 12 November 2013. It was evidently contemplated that the defendant would pay that additional cost.
49. On 25 November 2013 Mr Stratford sent a letter to Mr Costa in which a request was made for the defendant to submit a written proposal for a land swap as soon as possible. No written proposal was forthcoming at that time.
50. However, on 16 January 2014, Mr Costa sent a letter to Mr Stratford which contained the following: We are instructed that ongoing negotiations between our respective clients have now reached a conclusion and there is agreement. Our client would like to proceed to approve and execute the agreement as soon as possible. In this regard we understand your client will be instructing you on the agreement reached and we request you make available to our office the documentation that reflects the agreement for our client's approval as soon as possible.
51. The evidence is unclear as to what, if any, negotiations had taken place in the period leading up to 16 January 2014, and as to what, if any, agreements were in fact reached.
52. On 21 January 2014 Ms Stojcevski sent an email to Mr Costa which included the following: The letter regarding the correspondence to John Kozor should include the following: Storm Water: Proposal for drainage upsizing of lines 30 & 21 on No. 3 White Gum Place, Kellyville to accommodate for the catchment over No. 45 Barry Rd and Supply all materials and or to construct 600mm dia…We have a current cost assessment and need you to confirm what your cost assessment is so we can agree to move forward and make funds available for the upgrade and sing [sic] agreement to follow. We need you to confirm and give access immediately. We have attached our cost assessment for your perousal [sic]. … Please note that Parkview Estate is unable to wait for Mr Kozor to complete his subdivision and needs access for sewer and stormwater and must take costly alternative measures should this not be agreed ASAP.
53. On 24 January 2014 Ms Larrain of NWS (which was also retained by Mr Kozor) sent an email to Ms Stojcevski which included the following: North Western Services P/L have been instructed by the developer, John Kozor of 3 White Gum Place to reiterate the following: if negotiations have not been finalised regarding the stormwater and sewer works benefiting your land by COB 30/1/14, he intends to advise Council that he will not accept stormwater from your site and will amend all plans accordingly. Further to the land swap plan sent to you on Wednesday, could you please advise when a meeting can be held with John to resolve the issues.
54. Ms Stojcevski and Mr Kozor attended a meeting at the NWS office in late January 2014 at which the possibility of a land swap was further discussed. It is common ground that Mr Kozor said at the meeting that he was waiting for a final proposal and deed from the defendant's solicitor.
55. On 5 February 2014 Ms Larrain of NWS sent an email to Mr Kozor in which it was stated, amongst other things, that the ABAX costing for the amplification of drainage to 600mm diameter pipes was "acceptable".
56. On 20 February 2014 Mr Costa sent a letter to Mr Stratford which contained a proposal thought to be in accordance with the defendant's instructions. The proposal included what may be described as a "land swap" involving: 1. a development application for the creation of five new lots (lots 401-405) out of part of lot 128 of the Kozor land and residue lot 222 of the 45 Barry Road property; 2. lots 401 and 402 to become owned by the Kozors, and lots 403, 404 and 405 to become owned by the defendant; and 3. the defendant making payments to the Kozors of $40,000 (for the difference in areas "swapped"), $10,000 (to compensate for the presence of an easement under lot 401), and $39,799.89 plus GST (for contribution to road construction costs).
57. The proposal also included: 7. We are instructed that Mr Kazor [sic] has agreed to grant permission to our client and its contractors and service providers to enter upon his land for the purposes of sewer construction once these arrangements have been documented and signed by our respective clients. Please confirm. 8. We are instructed that there is an impact on the size of the stormwater pipes that your client would otherwise have been able to utilise for the purposes of his subdivision (300mm diameter). Because our client's stormwater and perhaps some stormwater from an adjoining division will flow downstream, your client is now required to install 600mm diameter pipes. Our client has agreed to contribute to your client's costs the amount of $33,326.50 plus GST as a result of him having to increasing [sic] the diameter of his pipes. Our client is prepared to pay this amount into your Trust account upon signing of the documents and to be accounted for once the work has been completed. 9. We are instructed that there appears to be a need for the installation of temporary stormwater pipes on part of Lot 128. We understand that these will only be required until the subdivision is complete. Your client has requested and our client has agreed to pay to your client an amount of $11,500 plus GST towards the costs of removing that temporary connection. Our client is prepared to pay this amount into your Trust account upon signing of the documents and to be accounted for once the work has been completed.
58. The letter concluded with a statement the defendant was anxious to proceed to documentation urgently.
59. On 21 February 2014 Mr Stratford sent an email to Mr Costa in the following terms: Our clients agree in principal [sic] with the proposition as set out in your letter but require - 1. Lots 402 & 403 to be transferred to them - not lot 401 which will be affected by the easement. There will not be an easement over the land that they are providing. Your client will not be required to contribute the amount of $10,000.00 referred to in point 5 of your letter; 2. The right to lodge a caveat over your client's property to secure repayment of monies payable by your client; 3. A copy of a plan showing the position of a sewer main referred to in point 7 of your letter.
60. Mr Costa responded by email later that day. He stated that "the agreement has always been that your client take Lots 401 and 402". Issue was also taken with the idea that a caveat would be lodged.
61. I note in passing that the reference to "sewer construction" in paragraph 7 of the letter of 20 February 2014 is likely to be an error. It seems that the paragraph should have referred to "stormwater drainage construction", which is the subject of paragraph 8 of the letter. By that time, Mr Kozor had already signed a Sydney Water Permission to Enter form which granted permission to the defendant to go onto the Kozor land to undertake sewer works.
62. Further emails and letters passed between the respective solicitors in relation to the proposed transaction on 25 and 26 February 2014, and 14 and 20 March 2014. Mr Stratford's letter of 20 March 2014 included a statement that the Kozors were only prepared to proceed on the basis set out in his email of 26 February 2014. That would involve the Kozors becoming owners of proposed lots 402 and 403. On 26 March 2014 Mr Costa sent an email to Mr Stratford that referred to problems developing proposed lot 401, and continued: On the basis of the comments made by the surveyors in that email, our client advises that it is unable to secure funding to purchase the portion of land, to service that lot, to construct that portion of road in front of the lot. Our client submits that the proposed lot 401 cannot be developed and sold. Our client has already committed to paying for the acquisition of the road from Mr Kozor and for all the sewer that will service the lots that Mr Kozor is developing. Our client has provided the attached amended plan which in their mind provides a fair land swap. Our client is happy to negotiate a position where Mr Kozor retains one or two of the 4 lots to be created. If your client advises what his position is, then our client can complete some calculations depending on which option he prefers and we can proceed with this matter quickly. The current position would obviously involve leaving the land which would eventually be lot 401 as it stands as it is of no interest to either party at this point. Our client is prepared to attend a meeting with you and your client and myself to try and sort this out if it means a quick resolution.
63. On 31 March 2014 Mr Stratford sent a letter to Mr Costa in which he stated that the Kozors would be travelling overseas in early May for quite some time, so if the matter was not finalised before then the terms would have to be renegotiated later in the year.
64. It seems that the negotiations were not further advanced for some months. Curiously, Mepstead and Associates, the quantity surveyors retained by the project financiers (Westpac) sent a letter to Westpac on 20 June 2014 which included the following: The developer has been negotiating with the adjoining owner to gain access to construct a tail out drain for the stormwater. The developer has advised that a signing [sic] a deed of agreement with the adjoining owner this week.
65. On 23 June 2014 Mr Gething of Westpac sent an email to Ms Stojcevski concerning a site meeting to discuss progress. The email stated that Westpac need to understand "strict timeframes from here" particularly in relation to the issue of "access for the tail out of drain for stormwater or alternative if this can't be achieved".
66. Mr Gething sent a letter to the defendant on 4 July 2014 in which it was asserted that the finance agreement had been breached. The letter also included the following: The Bank requires a written proposal for [sic] you, to be provided by no later than 9th July 2014, to address, as a minimum, the following issues detailing their causes & providing time bound actions to rectify: Status of right of entry for stormwater with 3 White Gum Pl Kellyville and the alternative strategy if required, including any impacts on time & cost … Strategy on statutory sign offs & lodgement of subdivision plan to achieve registration pre sunset date of 30th November 2014.
67. On 8 July 2014 the defendant sent a letter to Westpac in which breach of the finance agreement was denied. The letter also included the following: We address the points in your letter below regarding significant time delays: … The right of entry is required in late August 2014. Parkview can and will exercise its right under 88K of the Conveyancing Act and force entry if required. Parkview has attempted all avenues to obtain access and has file of correct approach with the neighbour. The neighbour's solicitor has mentioned he is on holidays with his wife and returns on the 14th of July. It was a recommendation to wait until this date by the legal representatives. I have attached the agreement for stormwater with the neighbour. Furthermore the costs are outlined below for retention pit construction and timeframe: 1. 2 weeks to finalize drawings at a cost of $5,000. 2. 2-3 weeks to obtain amended approval via Hills Shire to current CC to construct retention pit on Parkview residue lot 221. 3. Construction to commence in line with current works in progress, total cost $50,000. … Parkview will however make available funds to cover stormwater retention pit and any legal costs required should it pursue its rights legally. These funds will be made available via refinance of investment property which has already commenced.
68. Mr Costa had sent a letter to Mr Stratford on 1 July 2014 concerning the proposed agreement between the parties. Mr Stratford replied on 28 July 2014. It appears that the Kozors were now wanting to become the owners of proposed lots 403 and 404.
69. On 14 August 2014 Mr Costa sent an email to Mr Stratford in the following terms: We refer to our letter of the 1st August 2014 and believe that our clients have reached agreement with your client on all matters. We note that you are in the process of drafting documents for our respective clients to approve and sign that reflect that agreement. We have repeatedly informed your client through our correspondence to you that one of the most urgent things that requires attention, is that our client requires from your client an Authority for Parkview and its contractors to enter on to the land of Mr Kozor for the purpose of completing the tail out stormwater works. We enclose an Authority for your client to sign and return as a matter of urgency. Your clients delay in providing this authority is causing unnecessary cost and delay to our client completing the civil works for their subdivision. The works must be completed in the next 2 weeks so that they are not in breach of contractual arrangements. We request Mr Kozor sign and return this authority to enable our client to continue with its works pending the approval and signing of the agreements reached between our clients in relation to the other matters. We would appreciate your client's co-operation in relation to this matter.
70. Mr Stratford replied by email on 15 August 2014 as follows: I have been instructed that my client will not grant permission for access to its land until the agreement re the land swap has been signed. We will get a draft to you ASAP. In the meantime would you please provide a copy of the proposed plan of subdivision. Please note that the plan must quantify the areas being provided by our respective clients so that amount of compensation payable can be determined.
71. Mr Costa sent the requested plans to Mr Stratford later that day.
72. Mr Stratford sent a draft Deed to Mr Costa on 21 August 2014. The draft Deed provided for Chesterfield Developments Pty Ltd (which was now the owner of the Kozor land) to become the owner of new lots 403 and 404. The costs of the development application were to be shared, but the actual shares were not included in the draft. The draft further provided for the defendant to pay $35,250 plus GST as compensation for it receiving under the arrangement more land than it was giving, $39,799.89 plus GST as a contribution to the cost of road construction, and $44,826.50 plus GST as a contribution towards the cost of increasing the site of the stormwater pipes on the Kozor land together with the cost of later removing those temporary stormwater pipes. Clauses 8.1 and 8.2 of the draft Deed provided: 8.1 Upon the signing of this Deed, Chesterfield agrees to allow Parkview and or its contractors, employees and service providers access to the Chesterfield Land for the purpose of installing sewer pipes and other services required to complete the subdivision of the Parkview Land. 8.2 Chesterfield agrees to sign any documents required to give effect to the provision contained in 8.1 above.
73. Ms Stojcevski deposed that the draft Deed did not address the issue of access for stormwater "which was crucial for the continuation of the project". Clause 8.1 seems to have continued the apparent error in referring to permission to undertake sewer works. Nevertheless, the inclusion within clause 8.1 of the words "and other services" is broad enough to encompass stormwater pipes.
74. In any case, it does not appear that this particular issue was taken up with Mr Stratford or Mr Kozor. On 12 September 2014 Mr Stratford sent an email to Mr Costa which included the following: I have been contacted by my client and instructed by my client that it is extremely disappointed that we have not had a response since the submission of the draft Deed on 21 August 2014. I have further been instructed that - 1. It is no longer prepared to proceed on the basis as previously discussed; 2. It will only proceed on the following basis: a. it will acquire that part of your client's land to facilitate the land swap as contemplated; b. North Western Surveys have advised my client that it will require 2060sq. metres (including 22sq. metres of side road); c. it will purchase the land at an agreed rate of $1,000,000.00 per acre - $506,760.00; d. deducted from the before mentioned amount will be the sum of $49,500.00 being the current required contribution towards the cost of having to increase the size of temporary stormwater pipes and eventually removing same - a net figure of $457,260.00; e. it will pay the required amount to your client upon registration of the proposed plan of subdivision and the provision of executed transfer(s) by your client; f. as required in the draft Deed previously provided, your client must contribute towards the cost of the preparation of that Deed and also any new Deed; g. upon the signing of the contemplated Deed, you [sic] client will be allowed access to our client's property for the purposes of installing sewer pipes on the terms and conditions contained in the Deed. Please seek instructions re the above. Please note that no binding legal obligations will arise between our respective clients until formal documentation has been entered into.
75. I note that on 5 September 2014 Ms Stojcevski, in response to a query of Mr Gething of Westpac, had sent an email to him in the following terms: We received his draft deed and we have asked for some amendments and are waiting. Point 8 relates to the storm water entry however their solicitor has made an error and refers to the sewer and the laying of the pipes instead of construction of tail out. We have had to point out that the sewer is now completed and that the lead in is almost complete. It is the stormwater that needs to be made reference to and the map attached of works to be done. We are awaiting for this amendment. Our solicitor has indicated we should have it on Monday and therefore proceed to sign. We know that your conditions are to have this signed in order to pay funds or release funds. McHale's need to be paid. I have had a discussion with them only today. If this is not signed Monday will the bank consider drawdown Monday?
76. I do not accept that as at 5 September 2014 the defendant had requested any amendments to the draft deed and were waiting. Quite apart from the tenor of Mr Stratford's email of 12 September 2014, Mr Costa's itemised bill provides no support for the proposition that any amendments had been requested by 5 September 2014. It seems that Mr Costa was then waiting for Ms Stojcevski to provide comments on the draft Deed to enable a response to be made to Mr Stratford in the following week. It further seems, from an email sent to Ms Stojcevski on 9 October 2014, that Mr Costa told the defendant's new solicitor that he had not received instructions from Ms Stojcevski.
77. Ms Stojcevski continued to represent to Westpac that the agreement was close to being finalised. On 11 September 2014 she sent an email to Mr Gething in which she agreed with the contents of an email he had earlier sent to her. Mr Gething's email included the following: In regards to the agreement with 3 White Gum, to confirm my understanding, this will be signed (including consent to stormwater tail out) when you settle ANZ & have the money available for payments required relating to the deed.
78. On about 24 September 2014 the defendant terminated the retainer of Mr Costa. By the end of September the defendant had retained Mr Magagnino of Kells Lawyers.
79. On 29 September 2014 Ms Larrain of NWS provided information to Mr Magagnino concerning relevant conditions of consent (including Condition 64(e) of the modified consent about temporary drainage easements) and outstanding matters. Ms Larrain advised that registration of the subdivision was dependent upon various matters including that "a stormwater discharge solution is in place".
80. By that time, the Registration Date under all bar one of the contracts had been extended to 30 April 2015.
81. On 2 October 2014 Mr Magagnino made contact with Mr Stratford. He stated in his email that he was having difficulty getting clear instructions and he requested Mr Stratford to provide information as the "status" of the proposed Deed and "your client's denial of access to the property for the relevant works".
82. On 3 October 2014 Mr Stratford sent an email to Mr Magagnino which included Mr Stratford's email of 12 September 2014 which he said set out his client's "current position". In his response on 3 October 2014 Mr Magagnino again mentioned his difficulty in obtaining instructions and clarity on several matters.
83. On 9 October 2014 Mr Magagnino sent an email to Ms Stojcevski which included the following: I have spoken to Phillip Stratford. He says (amongst other things): … 4. The deed Stratford produced apparently recites the deal done and was submitted to Pat Costa on 21 August but has received no response. Pat Costa reports that he has not received instructions from you… Your options are still as follows: a. Speak with Kevin Chivers at Council as I previously recommended to see if consent to access already existed when the CC was issued on 9 April 2013; b. Press on with court action under the Access to Neighbouring Land Act 2000 as previously advised; or c. Conclude terms with Chesterfield Developments Pty Ltd on the deed. I note that terms may now have been varied by Kozor due to delay? (see email below) Subject to the result in (a) my recommendation is to conclude the deed terms as it not only solves the access issues but also concludes the land swap subdivision. Further, on balance any court action may be both costly and partly risky if Chesterfield Developments Pty Ltd can demonstrate that there is an alternative that has not been resolved several months after submission of the deed.
84. On 5 November 2014 Ms Stojcevski sent an email to Mr Gething in which she stated: We have decided not to hold any land swap agreements with Mr Kozor as he refuses to amend his land swap agreement to say "stormwater access".
85. On 17 November 2014 Mr Magagnino sent a letter to Mr Stratford which included the following: Council could only issue the CC with the prior consent of Kozor. … The proposed land swap is a distinct and separate matter to the works contemplated by the CC and we respectively submit that Kozor cannot withdraw consent to the proposed works. Please inform Kozor: 1. Parkview intend to carry out works approved by Council in accordance with the CC and 2. Should Kozor object or attempt to withdraw consent to access the land described in the attached search our client will seek appropriate orders pursuant to the Access to Neighbouring Land Act 2000 (NSW) and hold Kozor liable for costs on an indemnity basis. Parkview needs to press on with works rapidly. Should Kozor delay or continue to use the proposed land swap as a means to intimidate or as a reason to purport to withdraw consent all rights to damages are reserved.
86. On 18 November 2014 Mr Stratford responded by email which included the following: I have been instructed by Mr & Mrs Kozor that they have not provided either written or verbal consent for Parkview P/L to have access to the land for the purposes of carrying out any works. I am instructed to advise that neither Parkview P/L nor its contractors must [sic] enter my client's land without its consent.
87. Later on 18 November 2014 NWS provided to Mr Magagnino a copy of the consent that Mr and Mrs Kozor had signed in 2011 concerning the discharge of stormwater. Ms Larrain informed Mr Magagnino that the consent had been obtained by "the previous developer" and that Mr Kozor had "recanted" and was no longer providing access. Mr Magagnino then advised the defendant that it was entitled to carry out the works approved by the Construction Certificate, and if Kozor tried to stop the works the defendant was "now well placed to get an order of the court to access his land". Mr Magagnino also sent a copy of the 2011 consent to Mr Stratford.
88. On 19 November 2014 Mr Magagnino sent an email to Ms Stojcevski which included the following: In light of Ann Larrain's response it would appear that it has always been a condition of your subdivision consent that you do require temporary drainage easements quite distinct apparently from the proposed drainage works being a 60m grassed tail out drain. … Subject to establishing definitively the temporary easement requirements it occurs to me: 1. That by virtue of Kozor's 2011 consent and the CC you may attempt to do the authorised works through your contractors and 2. If Kozor attempts to stop you, then you may have valid standing to force access but subject to the relationship with temporary easements and the relevant requirements and 3. If you need the temporary easements over Kozor's land you will need to negotiate compensation and costs to be paid to Kozor for the temporary easement. I recommend you get a valuation by a registered valuer to determine compensation for those easements either way. If Kozor flatly denies you the easement we can seek for the court to make 88K orders to allow the easement if it becomes necessary. Please note these are different proceedings to the access orders that may be pursued.
89. On 20 November 2014 Mr Stratford sent a letter to Mr Magagnino in the following terms: We refer to recent correspondence and wish to advise that we are instructed by Mr & Mrs Kozor that they had no recollection of having signed the Consent that you provided. Notwithstanding same, our client will agree to your client and/or its contractors gaining access to our client's property for the purposes of connecting to temporary stormwater pipes constructed within our client's property upon the following conditions: 1. Your client must provide a Bank Cheque in favour of our client in the sum of $44,826.50 (plus GST) as a contribution towards the cost of our client having to increase the size of the temporary stormwater pipes to accommodate your client and for the cost of removing same in due course. Please note that this sum had previously been agreed to between our respective clients and has been confirmed by way of correspondence between your client's solicitors and our office. 2. Your client must indemnify our client in respect of any injury to person, loss of life of person or damage to property caused as a result of your client's right of access to our client's property. 3. Your client must agree to restore our client's property to as close as possible to its original condition upon completion of the works. 4. Your client must provide evidence of have [sic] effected Public Risk Insurance in the sum of $20,000,000 prior to gaining access to our client's property. We look forward to hearing from you as regards to the above.
90. There does not appear to have been any response to this letter. (In that regard I also note that on 8 January 2015 Mr Magagnino sent an email to Ms Stojcevski in which he noted that he "never did receive instructions in response to the letter from Low Doherty Stratford dated 20 November 2014".)
91. In early December 2014 ABAX informed the defendant that they were in a position to look at completing construction works. A quotation submitted by ABAX included the statement that ABAX anticipated a recommencement date of mid-January 2015, with completion approximately 2 months after that date.
92. As noted earlier, ABAX in fact returned to the site in about mid-January 2015. On about 13 January 2015 Mr Kozor spoke to Mr Henning of ABAX and told him that they were not to connect into the drainage network on the Kozor land until a formal written agreement had been made, and money paid for "upsizing his drainage network". Mr Kozor later told ABAX that if it entered the land without permission and laid any pipes he would rip them up. These statements seem to have caused ABAX to abandon the works.
93. Mr Magagnino sent a letter to ABAX on 28 January 2015 stating that ABAX was thus in breach of its contract with the defendant. It was stated that ABAX was able to carry out works on the Kozor land due to the 2011 consent. It appears that ABAX agreed to return to the site shortly thereafter. It seems, however, that no works were thereafter carried out by ABAX on the Kozor land. ABAX completed the other works on about 26 March 2015.
94. In the meantime, Mr Kozor was maintaining that no agreement had been reached concerning the creation of temporary drainage easements to the Kozor land for the benefit of the 45 Barry Road land.
95. Ms Stojcevski sent an email to Mr Hawkins of the Council on 12 March 2015. The email included the following: Parkview relies on the consent given as the CC of April 2013. Whilst we tried to please the "neighbours" we have not been able to form any agreements of land swap. For this reason we ceased our communication and continued the works to rely on especially the stormwater.
96. Later on 12 March 2015 Mr Magagnino sent an email to Ms Stojcevski which included the following: A couple of observations: 1. If Kozor does retract his consent ABAX will simply not enter his land. 2. If you need a temporary easement to enter Kozor's land you are able to negotiate one and pay compensation which can be determined by a valuer. You can force it under section 88K (please refer to previous advices). It likely that compensation would be in the order of $2,000 to $5,000. The problem is that the process will take 3-6 months. You do not have the luxury of time. 3. The cost of going to court to get the orders might be $20,000. 4. I see no evidence of any claim against Council at this stage nor ABAX if they are directed by Kozor not to enter. 5. As alluded to in previous advices, as much as you want to pursue a number of parties the reality is that it is actually cheaper to negotiate a temporary easement with Kozor. The alternative downside is of significant risk that cannot be underscored.
97. There were some negotiations about the grant of an easement in late April 2015. Correspondence passed between the respective solicitors at that time. On 27 April 2015 the defendant proposed (based on a valuation) that compensation of $5,000 plus professional costs be paid for the imposition of the easement. The Kozors objected to that figure and said that they would obtain their own valuation. Negotiations continued thereafter.
98. On 26 May 2015 Mr Magagnino conveyed to Mr Stratford a "final offer of compensation in the sum of $15,000" plus reasonable professional costs. On 27 May 2015 Mr Stratford sent a letter to Mr Magagnino in which it was proposed that the Kozors would accept "the amount previously agreed" being $44,826.50 plus GST.
99. The Kozors' valuation, obtained on about 1 June 2015, assessed compensation at $53,884. A component of that figure was $36,452 for the additional cost of drainage pipes of 600mm diameter. $5,897.50 was included as half the cost of removal of the pipes and soil reinstatement. In response, the defendant repeated its offer of 27 April 2015. It was stated that if the offer was not accepted, proceedings would be commenced.
100. No proceedings were commenced. However, the parties eventually entered into an agreement on 26 October 2015 which provided for the required easement to be granted upon payment of compensation of $54,576.50.
101. Mr McNamara stated in his report that reaching agreement concerning a land swap was not necessary in order for the defendant to complete its subdivision. He expressed the opinion that the defendant did not act reasonably in allowing that issue to delay reaching an agreement as to the discharge of stormwater. Mr McNamara stated that obtaining agreement from an adjoining owner for downstream or other essential works is a fundamental requirement that must be pursued diligently. He further stated that the failure to resolve the issue until October 2015 meant that ABAX could not enter the Kozor land to complete the works (that is, the construction of the drainage outlet connection).
102. Mr Kozor deposed that at all times he was willing to allow the defendant to use his "upsized" stormwater pipes, provided it pay the costs of the "upsizing". He further deposed that he expected the defendant to pay those costs because the larger pipes were for its benefit, and were not required as part of his own subdivision. Mr Kozor stated that the defendant never agreed to pay those costs, and if it had offered to do so, he would have immediately accepted.
103. Ms Stojcevski, in her affidavit in response to Mr Kozor's affidavit, deposed that increasing the size of stormwater pipes was not a requirement placed upon the defendant. She further deposed that whilst the land swap was not needed in order to register the subdivision, Mr Kozor continued to refuse access to the Kozor land to undertake stormwater works unless and until a land swap agreement was reached. Ms Stojcevski also complained that this was a matter about which Mr Kozor repeatedly changed his mind. Ms Stojcevski further stated that "inaccuracies" in the draft Deed submitted on 21 August 2014 suggested to her that the negotiation process had failed, and she accordingly instructed Mr Magagnino to take over the matter and prepare an application under s 88K of the Conveyancing Act for an easement over the Kozor land. Ms Stojcevski further stated that the compensation for the easement which was eventually agreed was "a new consideration", not something that had previously been agreed.
104. Mr Kozor accepted in cross-examination that in February 2014 the defendant offered, as part of the agreement then proposed, to pay the extra costs of the larger stormwater pipes. He stated, however, that this "didn't materialise". He accepted that in 2014 he changed his mind for various reasons about the lots he wanted to obtain as part of a land swap. Mr Kozor maintained that as far as stormwater drainage was concerned, the only issue was compensation for the increased cost of the larger pipes.
105. Ms Stojcevski agreed in cross-examination that she knew by January 2013 that registration of the subdivision could be prevented if agreements were not reached with one or more of the neighbours for the discharge of stormwater. She stated that not long after January 2014 she became aware of s 88K of the Conveyancing Act. Ms Stojcevski said that she was "offended" by the draft Deed submitted on 21 August 2014 because it talked about the sewer, not stormwater. She said that Westpac suggested that she "do something different", and referred her to Kells Lawyers. Ms Stojcevski accepted that the agreement eventually reached in October 2015 essentially involved payment of what Mr Kozor had asked for in relation to the larger stormwater pipes.

Determination

1. It is first necessary to consider whether the plaintiffs have established that the defendant failed to discharge its obligations under the various contracts for sale to use all reasonable (or in one case, best) endeavours to have the Plan of Subdivision registered by the Registration Date. That date was ultimately extended in each case to 30 April 2015.
2. The contracts were entered into in the period from 8 February 2013 to 5 December 2013. In each contract the relevant obligation was expressed in imperative and wide terms. The defendant "must" use "all" reasonable (or best) endeavours to achieve the goal of registration by the Registration Date. It is inherent in the obligation that the defendant would undertake a degree of planning and preparation sufficient to enable it to identify the steps that would need to be taken, and the times when those steps would need to be taken, in order to achieve the goal (see Al Achrafi v Topic (supra) at [303]). The obvious starting point of such planning and preparation is an examination of the applicable planning consents which contain the conditions upon which the subdivision development is to be carried out.
3. Once the necessary steps and the times when they need to be taken have been identified, the defendant was then required to do all it reasonably could, in the circumstances as they presented themselves from time to time, to achieve the goal. Discharge of the obligation may, depending upon the circumstances, require the making of adjustments to methods or strategies in order to cater for difficulties that arise along the way.
4. I am satisfied on the evidence that the defendant failed to discharge its obligations in at least two respects. The first concerns the making of arrangements in relation to the stormwater works.
5. In this regard, the following conditions of the modified consent of 4 December 2012 should be noted: 1. Condition 32(xiii), concerning the engineering works to be carried out, provides that tail-out drains over adjoining properties are required to be provided, where necessary, to dissipate stormwater flows to an acceptable level from the end of all stormwater outlets; and 2. Condition 64(e), concerning the final plan and s 88B instrument, requires the instrument to provide for the creation of suitable temporary drainage easements, minimum 5m wide and 30m long, from the outlet of any culverts located within the property or on adjoining land.
6. As noted earlier, the approved Plan of Civil Works provided for some drainage works to extend upon the Kozor land.
7. The defendant, which at all relevant times was seeking to carry out construction in accordance with the Construction Certificate issued on 9 April 2013, must have been aware, or ought reasonably to have been aware, of these conditions. Ms Stojcevski, one of the directors of the defendant, had some previous development experience, and the company had access to professional advice throughout, including from NWS and Mr Costa. Ms Stojcevski accepted that she was aware as early as January 2013 that registration of the subdivision could be prevented if agreements were not reached with one or more of the neighbouring property owners for the discharge of stormwater.
8. Further, it must have been (or ought reasonably to have been) clear to the defendant that the civil works, which had been interrupted by the discovery of the asbestos in September 2013, would need to be completed sufficiently in advance of the Registration Date in order to allow for a subdivision certificate to issue from the Council, and the registration process to be concluded at the office of Land & Property Information.
9. Ms Stojcevski's email to Mr Costa of 21 January 2014 indicates that she then appreciated that gaining access to Mr Kozor's property in order to carry out sewer and stormwater works was needed, and needed soon. The required permission to enter to enable sewer works was given soon thereafter, but the question of access for stormwater works remained unresolved.
10. The "costly alternative measures" referred to by Ms Stojcevski in her email included an on-site stormwater detention pit, and the possibility of taking stormwater to a different property (47 Barry Road) owned by a Dr Dalton. Ms Stojcevski gave evidence that the on-site detention pit was investigated by NWS, but they concluded that it was not a viable option. She also gave evidence that her attempts to initiate contact with Dr Dalton were not successful. Neither alternative was pursued further.
11. By about late January/early February 2014 Ms Stojcevski became aware, through a discussion with Mr Annis Brown (of Mepstead and Associates), of s 88K of the Conveyancing Act. Mr McNamara gave evidence in cross-examination that the making of an application under s 88K is an alternative that in his experience is considered. It is not known whether the defendant proceeded at that time to obtain legal advice about making an application under s 88K in order to obtain easements for the carrying out of works or for drainage of stormwater over the Kozor land. (I note, however, that the defendant's letter to Westpac of 8 July 2014 included a statement to the effect that the defendant was prepared to exercise its "rights" under s 88K "to force entry if required". This suggests that by that time the defendant had received some advice about the operation of s 88K.)
12. In any event, the approach taken by the defendant from February 2014 was essentially to continue its negotiations with Mr Kozor, including in relation to a possible land swap. No proceedings under s 88K (or the Access to Neighbouring Land Act 2000 (NSW) in respect of the carrying out of works) were foreshadowed, much less instituted. By that stage the negotiations had been on foot for over twelve months. A successful conclusion to the negotiations from the point of view of the defendant was a most uncertain prospect.
13. The proposal put forward by the defendant on 20 February 2014 was met with a counter-proposal on the following day which involved a different swapping of lots. Some further negotiations took place later in February and throughout March 2014, but were then not further advanced for some months. The Kozors' suggestion that matters be finalised in April before they departed overseas does not appear to have been taken up. The situation was allowed to drift. The defendant's letter to Westpac of 8 July 2014 indicates that the defendant had been prepared to wait until after the Kozors returned in about mid-July 2014.
14. After the negotiations resumed, a draft Deed was submitted by Mr Kozor's solicitor to the defendant's solicitor on 21 August 2014. Ms Stojcevski claims that she was "offended" by the draft Deed. For whatever reason, the defendant seems not to have responded to the draft (despite making representations to the contrary to Westpac), or even to have given instructions to Mr Costa about it. As Mr DeBuse put it in closing submissions, the defendant then "gave up" on the negotiations.
15. The defendant engaged a new solicitor, Mr Magagnino, in late September 2014. By that time the Registration Date for each of the contracts (other than the contract with Mr and Mrs Timewell) had been extended to 30 April 2015. (The Registration Date in the Timewell contract was not extended to 30 April 2015 until November 2014). Plainly, the stormwater issues, which had been pressing for a considerable time, would need to be dealt with very quickly if registration was to be achieved by the Registration Date.
16. Still the defendant failed to take any proceedings against Mr Kozor in an attempt to bring matters to a head. Proceedings under the Access to Neighbouring Land Act were threatened on 17 November 2014, and at about that time consideration appears to have been given to making an application under s 88K of the Conveyancing Act. In my opinion, these are matters which the defendant, acting reasonably, ought to have considered and pursued by no later than early 2014.
17. Although very late in the piece, the proposal advanced by Mr Kozor through his solicitor on 20 November 2014 might have been a basis upon which to achieve a quick resolution of the issues. However, the defendant failed to respond to the proposal. It seems that the defendant did not even provide instructions to Mr Magagnino about it.
18. In my opinion, the defendant failed to use all reasonable endeavours (or all best endeavours) to achieve a resolution of the stormwater issues with Mr Kozor. I do not think that the defendant's approach to these issues throughout 2014, particularly in the period from about February to August 2014, amounted to doing all it reasonably could in the circumstances to achieve a resolution. In my view it was not adequate to merely continue with intermittent negotiations with Mr Kozor throughout that period without also threatening and then bringing proceedings to force the issue. The approach taken by the defendant had the consequence that its ability to complete the civil works and obtain the required drainage easements was allowed to become dependent upon the very uncertain prospect of reaching an agreement with Mr Kozor. I am unable to accept that the defendant did all it reasonably could in the circumstances to resolve these issues, which had to be resolved in order that registration of the Plan of Subdivision could occur.
19. I am further of the opinion that had the defendant instituted proceedings against Mr Kozor in the early months of 2014 for the imposition of easements, it is likely that either a satisfactory agreement would have been reached or easements would have been imposed in sufficient time to allow the civil works to be completed by the end of the year, and the subdivision to be registered by 30 April 2015. Access to the Kozor land to carry out works, and stormwater drainage easements, were necessary for the carrying out of the defendant's approved subdivision development. There was a strong basis for the imposition of easements. Mr Kozor ultimately agreed to a stormwater drainage easement in the face of foreshadowed Court proceedings, upon the basis of compensation which was largely made up of amounts referable to the extra costs incurred by Mr Kozor associated with the installation of larger diameter pipes. The defendant had indicated by early 2014 that it was prepared to pay those costs in an amount which NWS had regarded as acceptable. That position does not seem to have changed throughout the negotiations which followed. The negotiations were instead focused upon the terms of a possible land swap.
20. It is no answer to the above to say that Mr Kozor would not agree to access or easements other than as part of a broader land swap agreement, and that his conditions in that regard were unacceptable. Neither is it an answer to say that the defendant effectively became a hostage to Mr Kozor in the negotiations. It was always open to the defendant to choose to engage Mr Kozor on only the access and easement issues that required resolution to allow the development to be completed. Ms Stojcevski accepted that a land swap agreement was not necessary in order to register the subdivision. It was always open to the defendant to pursue the access and easement issues in conjunction with the assertion of the legal rights it had at its disposal. In truth, the defendant allowed the progress of the development to become hostage to achieving a successful outcome from the broader negotiations with Mr Kozor.
21. I should add that I do not accept the defendant's submission that the particulars supplied by the plaintiff do not encompass a failure of the type found above. The first particular of breach identities a failure to resolve downstream drainage approval from Mr Kozor in a reasonable time. The particular is broadly drawn and, unlike particular (n), is not to be read as confined to a resolution by agreement (see also particular (j)).
22. The second respect in which the defendant failed to discharge its reasonable (or best) endeavours obligations concerns the defendant's dealings with some of its contractors.
23. I have already referred to the defendant's delays in paying Geotest between mid-October and early December 2013, and again between mid-August and mid-December 2014. I do not think that it was reasonable for the defendant to delay those payments as it did. I have not accepted the explanations advanced by Ms Stojcevski in that regard. Further, it was not shown that these delays (or the later delays in paying Lindsay Civil Pty Ltd and Communication Excavations Pty Ltd) were the result of any dilatoriness on the part of Westpac.
24. The first delay in payment prevented the release of the Remediation Action Plan, without which the remediation works could not commence. The delay caused the issue of the RAP to be delayed by about six weeks (to early December 2013). This was followed by a further delay of about three months in the engaging of the remediation contractor. The remediation work was eventually carried out from about 2 April 2014 to 8 July 2014. These works would have restricted the carrying out of other works on the site, notably the sewer construction works.
25. If the defendant had acted with reasonable dispatch in the payment of the Geotest invoice and the engagement of the remediation contractor, the remediation works would likely have been able to start in early 2014 and be finished by no later than about April 2014.
26. The second delay in payment prevented the release of the Validation Report until January 2015. It seems that ABAX was, understandably, not willing to return to the site until this report was available. If the Geotest invoice had been paid promptly in August 2014 so as to obtain the release of the report, efforts could have been made to have ABAX (or another contractor if ABAX was not available) complete the remaining civil works in the latter months of 2014.
27. In my view, these delays effectively precluded completion of the civil works by the end of 2014. If the remediation works had been completed earlier, the sewer construction works would likely have taken less time. If the Validation Report had been released by about the end of August 2014, there would likely have been time to engage ABAX or another contractor to complete the civil works by the end of the year.
28. The discovery of asbestos was undoubtedly an event beyond the control of the defendant that caused delay to the project. It was an Event of Delay that could justify an extension of the Registration Date in accordance with clause 3.4 of the contracts. However, the conduct of the defendant described above exacerbated the delays that arose from the discovery of asbestos.
29. It was also not reasonable of the defendant to fail to pay Lindsay Civil Pty Ltd between September 2014 and March 2015, and Communication Excavations Pty Ltd over a similar period. In each case the delay held up the release of documents that were required in order for a subdivision certificate to be issued. In practical terms, the delayed payments meant that it was not possible for the required documents to be available in time for the issue of a subdivision certificate and then registration of the Plan of Subdivision by 30 April 2015.
30. The plaintiffs have established that the defendant, in acting as described above, both in the making of arrangements in relation to the stormwater works, and in its dealings with its contractors, failed to do all it reasonably could in the circumstances to have the Plan of Subdivision registered by the Registration Date. It was in breach of its obligations under Additional Clause 3.1(a) of its contracts with the plaintiffs.
31. Moreover, I am comfortably satisfied that the defendant's failures to discharge its obligations to use all reasonable (or in one case, best) endeavours, as described above, materially contributed to the Plan of Subdivision not being registered by the Registration Date. That is to say, there was a substantial chance that if those breaches had not occurred registration would have occurred by 30 April 2015. In accordance with the principles I have earlier set out, I think that is sufficient to disentitle the defendant from relying upon the non-registration of the Plan of Subdivision by 30 April 2015 in order to rescind the contracts pursuant to Additional Clause 3.1(b). I am in any case satisfied on the evidence that had the defendant's breaches not occurred, it is more likely than not that registration of the Plan of Subdivision would have occurred by 30 April 2015.
32. It follows from the above that the defendant was not entitled to rescind the contracts pursuant to Additional Clause 3.1(b). The purported rescissions were ineffective. The contracts remain on foot.
33. It is not necessary to determine the plaintiffs' alternative challenges to the validity of the rescissions. These challenges were based upon the defendant's alleged involvement in certain improper dealings with the deposits that were paid under the contracts. Nonetheless, it is appropriate that I make some brief observations concerning these alternative arguments.
34. It may be accepted, based on the report of the receiver appointed by the Court in April 2016 (Mr Hosking) and the evidence of the plaintiffs' solicitor (Mr Marshall), that certain deposits were not retained by Propertylink Group Pty Ltd as required under the contracts.
35. Rather, some of the deposits were in whole or in part deployed for various purposes, including the payment of the defendant's development expenses such as advertising costs, sales commission, and fees charged by NWS. At all relevant times Mr Steven Murabito was a director of Propertylink Group Pty Ltd, and he appears to have held the requisite real estate agent's licence under the Property, Stock and Business Agents Act 2002 (NSW). Mr Murabito was, together with Ms Stojcevski, at all material times a director of the defendant. The plaintiffs submitted that the defendant had knowledge of (and likely procured) the breaches of trust committed by Propertylink Group, and received at least some of the funds that had been held on trust.
36. The plaintiffs submitted that in circumstances where the defendant had made use of trust funds for the purposes of its development, and the land the subject of the contracts had since increased in value (as shown by the evidence of Mr Gregory, valuer), equity would not permit the defendant to rescind the contracts because to do so would allow the defendant to profit from its wrongful conduct. The plaintiffs cited Warman International Pty Ltd v Dwyer (1995) 182 CLR 544 for the principle that a fiduciary must not profit from a breach of fiduciary duty.
37. The plaintiffs further submitted that to the extent that deposit monies were misused after the dates of the purported rescissions, such misuse amounted to the defendant "spending the purchase price", and this was an affirmation of the relevant contracts.
38. Finally, the plaintiffs submitted that the contracts included an implied term to the effect that if the defendant applied deposit monies towards the development, it was precluded from rescinding the contracts.
39. Even assuming that the defendant had the requisite knowledge of, or involvement in, the breaches of trust committed by Propertylink Group Pty Ltd, so as to itself become liable as a constructive trustee, I would not have upheld those submissions.
40. In relation to the first argument, the statements of principle made in Warman International Pty Ltd v Dwyer (supra) to the effect that a fiduciary must not profit from a breach of fiduciary duty must be understood to have been made in the context of a discussion of the remedy of an account of profits, which can be sought against a defaulting fiduciary. That remedy is not sought here. The plaintiffs were unable to point to any authority that would support a wider application of the principle which would afford a basis for restricting the circumstances in which a contractual right of rescission may be exercised. Further, I note that the plaintiffs did not seek to develop any argument to the effect that it would be unconscientious of the defendant to rescind the contracts pursuant to Additional Clause 3.1(b) (compare Godfrey Constructions Pty Ltd v Kanangra Park Pty Ltd (1972) 128 CLR 529 especially at 552-3 concerning rescission by a vendor faced with a purchaser's requisition).
41. As for the argument that the defendant's involvement in the misuse of the deposit monies after the dates of rescission amounted to an affirmation of the contracts, it seems to me that any wrongful conduct of that nature, not being authorised by the terms of the contracts, could not be treated as affirmatory conduct. Engaging in conduct of that type could not be regarded as the performance of an unequivocal act indicating that the defendant is electing to continue performance rather than exercise a right of rescission.
42. Finally, I would not have found that the contracts contained the alleged implied term. The suggested term is in my view neither necessary to give business efficacy to the contracts, nor so obvious that it "goes without saying".

Conclusion

1. Declarations should be made that the purported rescissions of the various contracts by the defendant were ineffective. Further, orders should be made for the specific performance of the contracts. The defendant raised in its Defence the existence of a mortgage held by Westpac over the relevant land as a potential barrier to completion of the contracts, but did not show that specific performance should be withheld on the ground of impossibility (whether due to the mortgage or difficulties in conveying title to lot 319). I accept the essentially unchallenged evidence given by the plaintiffs that they are ready, willing and able to complete their contracts. The plaintiffs did not address on damages in closing submissions, and may be taken not to have maintained any claim for damages in addition to specific performance.
2. The defendant should pay the plaintiffs' costs of the proceedings.
3. I direct the parties to bring in Short Minutes of Orders, within 14 days, to give effect to these reasons.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 19 September 2017