Amaya v Everest Property Holdings Pty Ltd; Firmstone v Everest Property... [2010] NSWCA 315 | Case summary

(b) The vendor must serve at least fourteen (14) days before completion the original or a copy of an occupation certificate within the meaning of the Environmental Planning and Assessment Act 1979 (being an interim occupation certificate or a final occupation certificate) in relation to the Building or part of the Building, of which the Property and access to the Property form part. (c) For the purposes of this clause, the part of a building comprising access to a lot is any part of the building reasonably necessary for access to the lot. (d) The purchaser does not have to complete earlier than 14 days after service of the original or copy certificate." 15 Special condition 7(b) reflected clause 2 of schedule 2 to the Conveyancing (Sale of Land) Regulation 2005 which prescribed in respect of sales of strata units off the plan that the vendor must serve an occupation certificate "within the meaning of the Environmental Planning and Assessment Act 1979" at least 14 days before completion. 16 Regulation 155 of the Environmental Planning and Assessment Regulation 2000 as in force in the first half of 2007 prescribed the form of an occupation certificate. Sub-regulation (2) provided that "the certificate must be accompanied by a fire safety certificate and fire safety schedule for the building". 17 In the conveyancing procedures, Mr and Mrs Amaya were represented by Mr Herat, solicitor. Mr Firmstone was also represented by a solicitor. By the time for completion his solicitor was Mr Wehbe of Robert Wehbe & Partners. Mr Sarkar and Mr Islam acted for themselves. 18 On 12 April 2007, Church & Grace, the solicitors for the vendor, advised each purchaser that the strata plan had been registered and that completion was to take place in accordance with special condition 7. 19 On 27 April 2007, Mr Steve Watson, an accredited certifier authorised to issue an occupation certificate under Pt 4A of the Environmental Planning and Assessment Act 1979 issued an interim occupation certificate for the building. Attached to the interim occupation certificate was an interim fire safety certificate and 42 other certificates. On the same day he sent the interim occupation certificate and its attachments to the Parramatta City Council as required by reg 151 of the Environmental Planning and Assessment Regulation. The purchasers do not dispute that the interim occupation certificate was validly issued. 20 On 27 April 2007, Church & Grace wrote to the purchasers or their solicitors enclosing what they called "interim occupation certificate No 02/275/01 issued by Steve Watson & Partners dated 27 April 2007". Church & Grace asked each purchaser to make an appointment to complete within 14 days. They said that once an appointment was made they would send draft settlement figures and cheque directions. 21 The interim occupation certificate enclosed with Church & Grace's letter of 27 April 2007 did not include the attachments. None of the purchasers queried this. None asked to be provided with a copy of the attachments. It was of no moment to the purchasers whether the attachments were included or not. 22 In the events which occurred, the contract required completion by 11 May 2007. When the purchasers did not complete by that date, the solicitors for the vendor issued notices to complete requiring completion on 13 June 2007. 23 Subsequently, the notice to Mr Firmstone was extended to 27 June 2007. It was contended by the vendor and accepted by the primary judge that this had the effect of making the completion date 27 June and not a date with reference to the occupation certificate. 24 An administrator had been appointed to the vendor on 28 May 2007. The vendor's solicitors did not notify the purchasers of this event. However, the primary judge found that the Amayas' solicitor was aware of the appointment of the administrator prior to 13 June 2007. 25 The Amaya contract, but not the other two, contained a clause, 15(b) which entitled them to rescind if an administrator were appointed to the vendor. The Amayas did not purport to rescind on this ground. 26 On 13 June 2007 Mr Amaya informed his solicitor that he could not complete the contract. There was no attendance at the offices of Church & Grace of representatives of the Amayas nor of Messrs Sarkar and Islam. 27 The solicitor then handling the vendor's matter at Church & Grace did not give evidence and the judge noted that he had refused to give an affidavit or statement to Everest's current solicitors. 28 However, Church & Grace's file for both the Amaya purchase and the Sarkar and Islam purchase contained a sheet headed "Settlement Instructions" setting out the documents to be received from the discharging mortgagee, the Commonwealth Bank of Australia ("Commonwealth Bank"), the cheques to be received from the purchaser and other documents to be received from the purchaser. 29 The sheet also set out the documents Church & Grace were to give to the purchaser, and the cheque to be provided to the discharging mortgagee and a draft letter authorising the purchaser to pay the balance of the settlement moneys. 30 The primary judge concluded that this "Settlement Instructions" appeared to be an internal document for the guidance of the solicitor or clerk acting on the settlement. It was not sent to the purchasers or their solicitors. The draft authority and direction for payment were likewise not sent. 31 On 13 June 2007 at 4.11pm Church & Grace served by facsimile on Mr Herat, a notice of termination of the Amaya contract. 32 At 5.45pm on that day Mr and Mrs Amaya wrote to the vendor stating, in effect, that they were unable to complete the purchase due to family death and sickness which impoverished them. That notice, which might have constituted a repudiation of the contract if the contract had remained on foot, was not sent until after the service by Church & Grace of the notice of termination. 33 On 15 June 2007 Church & Grace also served notice of termination of the contract with Mr Sarkar and Mr Islam. 34 Notwithstanding the extension of time he had been granted, Mr Firmstone was unable to secure finance. 35 On 27 June 2007 at 10.55am, his solicitor, Mr Wehbe sent a facsimile to Church & Grace asking them to seek their client's instructions for a 21-day extension for settlement. Church & Grace replied that day advising that the vendor would not agree to the requested, or any, extension. 36 On 28 June 2007 Church & Grace served notice of termination of the contract with Mr Firmstone. 37 Like the other two matters, Church & Grace's file for Mr Firmstone's purchase included a file note headed "Settlement Instructions" and ancillary documents. 38 It was common ground that Church & Grace did not hold a transfer executed by the vendor, nor all required discharges of mortgage. 39 It was also common ground that the Commonwealth Bank did not attend at the offices of Church & Grace on 13 June 2007 or 27 June 2007 with executed discharges of mortgage and the certificates of title to be handed over had settlement proceeded. There were other mortgages on the title in favour of Australian Capital Reserve Limited. Church & Grace held executed discharges of those mortgages signed by a Mr Creech, a partner of Church & Grace, under power of attorney. 40 Further, it was common ground that the vendor and the vendor's solicitors could have procured the handing over of the discharge of mortgage by the Commonwealth Bank and the certificate of title and could have arranged for the execution of the transfer had they sought to do so. There was no agreement and no evidence as to the period of notice the Commonwealth Bank and the administrator would have required for that to be done. 41 On 21 June 2007 Mr Herat wrote to Church & Grace referring to its notice of termination dated 13 June 2007. He said that the purchasers (Mr and Mrs Amaya) regarded that notice of termination as a repudiation by the vendor of its obligations under the contract. He stated that the purchasers accepted the repudiation and themselves terminated the contract. He purportedly required the return of any moneys called upon under the deposit bond. 42 Mr Herat later obtained instructions to act for Mr Sarkar and Mr Islam and for Mr Firmstone. On 13 August and 17 September 2007 he wrote to Church & Grace on behalf of those purchasers stating that the vendor's notice of termination of the contract was a repudiation and purportedly accepting the repudiation. 43 The vendor called upon the deposit bonds. Lumley General Insurance duly paid the bonds. It sued each of the purchasers, seeking to be indemnified in respect of the moneys paid out. It was agreed that if the purchasers are not successful in their claims against the vendor, judgment should be entered in favour of Lumley General Insurance against each of the purchasers for the amounts of the bonds which it paid out. It was agreed that if the purchasers succeed in their claims against the vendor, they will authorise and direct the vendor to pay to Lumley General Insurance the amounts paid by Lumley General Insurance under each deposit bond. 44 In the court below and on appeal, the several purchasers dispute the validity of the vendor's termination of each contract on the following grounds. First, the plaintiffs contend that the vendor did not serve an occupation certificate within the meaning of the Environmental Planning and Assessment Act as required by special condition 7 and by the term implied by cl 2 of Schedule 2 of the Conveyancing (Sale of Land) Regulation 2005. Counsel for the purchasers contended that this meant that the time for completion had not arrived when the notices to complete were served. 45 Counsel submitted that in the case of the Firmstone contract there was no variation of the contract dispensing with the requirement for service of the required occupation certificate. Counsel submitted that the reason the document served was not an occupation certificate within the meaning of the Environmental Planning and Assessment Act was that it did not include a fire safety certificate and fire safety schedule for the building as required by reg 155(2). 46 Secondly, counsel for the purchasers submitted that the vendor was required to provide the purchasers with the necessary particulars for the preparation of the form of transfer. After 28 May 2007 this required notice of the fact that an administrator had been appointed to the vendor. 47 Thirdly, counsel for the purchasers submitted that the vendor's termination of the contract was ineffective because at the time of termination the vendor was not ready, willing and able to complete. The reason for this, it was said, was that the vendor's solicitor had not obtained an executed transfer and had not arranged with the mortgagee for it to attend on settlement with an executed discharge of mortgage and the certificate of title. Counsel for the vendor submitted that the purchasers had impliedly intimated to the vendor that it was useless for it to do so and that the vendor's solicitor acted on that intimation. 48 The primary judge found that whilst Regulation 155(2) requires an occupation certificate to be accompanied by a fire safety certificate and fire safety schedule for the building, it does not provide that the fire safety certificate and fire safety schedule are part of the occupation certificate. 49 His Honour said at [53] that the interim occupation certificate served under cover of Church & Grace's letter of 27 April 2007 specified that there were attachments, namely the interim fire safety certificate and other certificates outlined in a table. The table containing the list of those certificates was included in the form of the certificate served on the purchasers. The fact that the certificate referred to and described the attachments did not make the attachments part of the certificate within the meaning of the Environmental Planning and Assessment Act. It was the certificate in the form in which it was served on the purchasers which authorised the occupation and use of the building. 50 The primary judge further held that neither special condition 7 nor the term prescribed by cl 2 of Schedule 2 to the Conveyancing (Sale of Land) Regulation requires the service of documents which might be necessary for a purchaser to conduct an audit of the validity of the certificate. Nor would the validity of the certificate be established by a vendor's serving on the purchaser the certificate with the required accompanying documents. If the accompanying documents were required for the certificate to be valid the question would be whether such documents accompanied the certificate when it was issued, and perhaps when it was provided to the Council. That fact would not be established by the attachment of the documents to the certificate served on the purchaser. In other words, the construction of the prescribed term contended for by the purchasers would not advance any purpose of the conveyancing transaction. 51 The primary judge noted that the purchasers' argument had previously been rejected by Hammerschlag J in McQueen v Leduva Pty Ltd [2008] NSWSC 284; 14 BPR 27,227, 27,240 at [109]-[112]. His Honour remarked that, although it was unnecessary for him to decide the point, he was inclined to agree with Hammerschlag J's conclusion that the absence of an attached fire safety certificate would not make an occupation certificate a nullity in any event. 52 As to Mr Firmstone's contract, the parties agreed on a new date for completion, with time to be of the essence. They did so after service of the certificate. The primary judge did not accept the submission for Mr Firmstone that notwithstanding the agreed new date for completion, the vendor was required to serve additional documents. He held that there was no such stipulation, nor would such a stipulation be implied. To the contrary, the parties had acted on the basis that everything had been done for completion to be due. 53 Therefore, the primary judge held that even if his construction of special condition 7 and the prescribed term was wrong, in Mr Firmstone's case, there was in any event a contractual variation requiring completion on 27 July 2007 with time to be of the essence. 54 The primary judge acknowledged that a vendor was not entitled to terminate the contracts unless it itself was ready, willing and able to complete at the time fixed for completion. 55 However, his Honour held that the purchasers impliedly intimated that it would be useless for the vendor to tender performance. He noted that such intimation need not be express: it may be conveyed by conduct. He cited Peter Turnbull & Co Pty Ltd v Mundus Trading Co (Australasia) Pty Ltd [1954] HCA 25; 90 CLR 235 per Dixon CJ at 246-247and Blacktown City Council v Fitzgerald (1990) 6 BPR 13,409 at 13,414-13,415 per Cohen J. 56 The primary judge held that the intimation is most clear in the case of Mr Firmstone's contract, but was also sufficiently apparent in the other contracts. 57 The primary judge thus dismissed the purchasers' claims and seems to have made orders for forfeiture of the deposit and damages on the cross claims. 58 The appeals were heard on 9 September 2010. Mr Bret Walker SC and Mr Darryl Warren of counsel appeared for Mr and Mrs Amaya; Mr Warren also appeared for the other appellants. Mr Michael Elliott of counsel appeared for the first respondent (the vendor, Everest) and Mr McArthur, solicitor appeared for Lumley General Insurance. 59 The arguments before this Court were an elaboration of those presented below and detailed in my resume of what occurred at first instance. 60 The first issue is thus whether what was served on each purchaser on 27 May 2007 was an occupation certificate within the meaning of the Environmental Planning and Assessment Act. 61 The appellants put their emphasis on the words which I have italicised in the preceding paragraph. They say that a certificate which does not have the fire certificate physically attached does not come within the meaning of the Act. 62 This is because on the true construction of Regulation 155(2), the requirement that the occupation certificate "must be accompanied" by the fire safety certificate does not point only to an accompanying at the time of issue of the occupation certificate. The word "accompanied" is used in a continuing sense and indicates that whenever there is a reference to an occupation certificate, the reference is to such a certificate accompanied by the fire safety certificate. 63 Hence it is put, whilst the primary judge's conclusion that the attachments to the certificate are not part of the certificate may be correct, that conclusion does not decide the question as to whether it is within the meaning of the Act. This submission makes the respondents' answer that Regulation 155(2) itself distinguishes between the occupation certificate and what has to accompany it, possibly true, but certainly irrelevant. 64 This is a subtle argument, but it should be rejected. 65 It must be remembered that what is being construed is special condition 7(b) of the contracts which relevantly provide that: "(b) The vendor must serve at least fourteen (14) days before completion the original or a copy of an occupation certificate within the meaning of the Environmental Planning and Assessment Act 1979." 66 When one is considering whether a document is a certain certificate within the meaning of a particular Act, to my mind one looks at the certificate itself, not something that is separate from it though may be associated with it. 67 One asks, "What did the parties mean by an 'occupation certificate' within the meaning of the Environmental Planning and Assessment Act 1979"? 68 If one goes to that Act, one can see that "occupation certificate" is defined in s 4, the definition section, that "occupation certificate means a certificate referred to in section 109C(1)(c)". Reference to the latter section tells one, so far as the present case is concerned, that it is "a certificate that authorises…the occupation and use of a new building". 69 The appellants referred to what at the relevant time was s 109H(1D)(c) (now s 109H(3)(d)) which indicates that the requirements of the regulations must be complied with before an occupation certificate is issued. That provision is irrelevant as it only deals with matters occurring before issue of the certificate. 70 The regulations may, of course, validly prescribe a form of occupation certificate. Regulation 155(1) does so. Paragraph (e)(v) requires a statement that a fire safety certificate has been issued for the building. Regulation 155(2) merely states that "the certificate is to be accompanied by a fire safety certificate". 71 The reference to the fire safety certificate in sub-regulation (1) and the word "accompany" in sub-regulation (2) make it clear that the fire safety certificate is not a part of the occupation certificate. 72 There are only a few reported cases where courts have had to consider the word "accompany" and those were in different circumstances than the present. The approach generally favoured is that a paper accompanying a document is not considered part of the document and need not be attached to it but must have some close temporal and other connection with it; see eg Todhunter v United States of America (1995) 57 FCR 70, 84 (FC). 73 I cannot see any warrant for reading the words "accompanied" as having some ambulatory meaning. Rather, as the regulation is dealing with the form of an occupation certificate which is to be issued by a certifying authority, the natural construction is that the regulation is dealing with the form of the certificate and associated documents at the time of its issue. 74 This view is reinforced when one traces through the purposes of the legislation and the social impact of the legislation. The regulations provide for annual fire safety statements to be made by certain building owners and for fire safety certificates to be issued based on fire safety schedules from time to time. Each new fire safety certificate supersedes the previous one. Only the current certificate need be displayed in the building. It would not make sense for the fire safety certificate or a copy of it valid when the occupation certificate issued, had to be continually handed over whenever the occupation certificate had to be perused notwithstanding that it had been superseded. 75 I note that Hammerschlag J in McQueen v Leduva Pty Ltd [2008] NSWSC 284; 14 BPR 27,227, 27,240 at [112] in obiter dicta came to the same view for much the same reasons. 76 Thus, the appellants' first proposition fails. 77 As to the second proposition, Mr Walker made it quite clear that no argument was put below as to deficiencies in form of the notice to complete and urged us not to stray into areas which were not germane to the dispute between the parties. 78 Because of this, I will content myself with a remark for the guidance of future conveyancers (a course to which Mr Walker makes no objection) that there may be considerable problems for a vendor who issues a notice to complete requiring completion "not later than" a specified date as it may be that the purchaser can attend for completion at an early date without notice and wrong foot the vendor who has not arranged for discharges of mortgage etc for the earlier time. 79 It was accepted that, ordinarily, both vendor and purchaser are bound by the notice to complete and that it is a condition precedent to a vendor intending to terminate for the purchaser's breach that it itself is ready willing and able to complete at the time and place fixed by the notice; see eg Frankcombe v Foster Investments Pty Ltd [1978] 2 NSWLR 41. 80 The vital point on this aspect of the appeals is whether the vendor was dispensed from compliance with that condition precedent by the circumstances that it might be reasonable for it to infer that the purchasers did not intend to attend its solicitors' offices to settle. 81 The finding that attendance by the vendor at settlement was dispensed with is supported by the authorities cited by the learned primary judge, provided that this is a case where it may be inferred that the vendor properly took the view that it was futile for its representatives to attend at the time fixed for completion and acted upon that view. 82 Mr Walker's primary submission on this part of the case is that there was no or perhaps insufficient evidence to show that the vendor was justified in assuming that the purchasers had dispensed it from attendance at the time fixed for settlement. 83 The primary judge correctly noted at [62] that the vendor was not entitled to terminate the contracts unless it was ready, willing and able to complete. In order to be able to complete the vendor needed to be in a position to tender a duly executed transfer, to procure the mortgagee to produce the certificate of title, and to provide duly executed discharges of all mortgages. It was clear that the vendor was not in a position to do so at the time and place which it had fixed for completion. 84 The primary judge noted that counsel for the purchasers argued that the vendor was not ready, willing and able to complete. Because the purchasers' obligation to complete was concurrent and dependent upon the vendor's doing so, it was argued that the purchasers did not breach their contracts and the vendor's purported termination of the contract was a repudiation. 85 His Honour then correctly said at [63] that the real question was whether the purchasers impliedly intimated that it would be useless for the vendor to tender performance. 86 The primary judge then quoted from what Dixon CJ had said in Peter Turnbull & Co Pty Ltd v Mundus Trading Co (Australasia) Pty Ltd [1954] HCA 25; 90 CLR 235, 246-247: "... it was always the law that, if a contracting party prevented the fulfilment by the opposite party to the contract of a condition precedent therein expressed or implied, it was equal to performance thereof. But a plaintiff may be dispensed from performing a condition by the defendant expressly or impliedly intimating that it is useless for him to perform it and requesting him not to do so. If the plaintiff acts upon the intimation it is just as effectual as actual prevention." 87 The primary judge continued at [64], again correctly, that the intimation need not be express. It may be conveyed by conduct. 88 However, at this point, the appellants say that the primary judge fell into error on the facts. I will flesh out this submission when I deal with the individual contracts. 89 The primary judge considered that this case was closely similar to Blacktown City Council v Fitzgerald (1990) 6 BPR 13,409 at 13,414-13,415 where Cohen J said: "The solicitors for the [vendors] were entitled to consider not only positive statements of intention but a failure to carry out usual conveyancing procedures in order to gauge if there was an intimation by the [purchaser] that it would not be attending on settlement. The assessment was that in the absence of the usual practices having been carried out the [vendors'] solicitors would not be attending on settlement. That assessment proved to be true. The failure by the [purchaser's] solicitors to give figures in the usual way was in fact as well as in theory an indication that they would not be in attendance. ... In my opinion the failure to carry out usual conveyancing steps was an indication that the [purchaser] would not be represented at the proposed settlement. The [vendors] did not attend that settlement, not because they were unwilling or not ready to complete but because the failure of the [purchaser's] solicitors to carry out usual steps was a clear intimation that they would not be attending. In my opinion the [vendors] by their solicitors were entitled to accept that intimation and to avoid the additional expense and trouble of travelling to Sydney for a settlement which they rightly anticipated would not take place. They were in my view ready, willing and able to complete on the day in question and, upon breach by the [purchaser] they were entitled to give a notice terminating the contract." 90 Although in his written submissions, Mr Warren submitted that we should overrule that decision, he later repented of that thought and withdrew that submission. 91 However, it must be observed that Cohen J in the Blacktown case acted on the evidence of Ms Gow, the conveyancing clerk in the vendors' solicitors' office that it had been her intention to attend the proposed settlement, but took the view that, in the light of non-response of the purchaser's solicitors and her experience in conveyancing matters, it was useless to go from Blacktown to the City for settlement. Her evidence was reinforced by the evidence of an experienced conveyancing solicitor who confirmed that vendors' solicitors generally would have taken that approach. 92 There is no equivalent evidence in the instant case. Furthermore, the case is not authority for the proposition that in every case, at least if there are no special features, the vendor's solicitors are entitled to assume that they are dispensed from attendance at settlement and must be presumed to have made that assumption on the basis of a purchaser's intimation that he or she would probably not be ready to settle. 93 Mr Walker points out that, at the relevant time, Messrs Sarkar and Islam were acting for themselves so that no inference could be drawn from the courtesy that vendors' solicitors customarily rightly expect from solicitors for purchasers. 94 As to the implied contractual duty of co-operation, it is put that it has no relevance to the current question. There may well be a duty to seek out the vendor and complete, but there is no legal obligation to keep the vendor informed as to whether the purchaser intends to attend for settlement at the time and place fixed by the vendor in its notice to complete. 95 In my view, this submission is correct. 96 The primary judge noted at [69] that because the purchasers impliedly intimated that they would not settle and the vendor's solicitor acted on that intimation, the purchasers dispensed with the requirement that the vendor be ready, willing and able to complete. It is the same as if the vendor had taken all necessary steps to complete. The period of notice which the vendor's solicitor would have needed to give to the mortgagee and administrator in order to put the vendor in that position is not relevant. 97 Mr Walker says that the principal question is whether there were the facts for the judge to find not just that there was no settlement after the correspondence or conduct relied upon, but whether the vendor did not attend settlement because of that correspondence and conduct. He alluded to the famous maxim of falsity "post hoc ergo propter hoc" (after this therefore because of this). He put that the "propter hoc" part was the vendor's downfall in the instant case. 98 Mr Walker submitted that the primary judge at [69] correctly advanced two preconditions before the purchaser could be said to have dispensed the vendor from taking all necessary steps to complete: (A) that the purchasers had intimated that they would not settle; and (B) that the vendor's solicitor acted on that intimation. There was little evidence of (A), but perhaps the finding that there was such an intimation should stand. However, there was no evidence to support (B). 99 Of course, one must be a little careful with submissions based on the submission that "post hoc ergo propter hoc" is a logical fallacy. Whilst just because event P happens after event Q does not necessarily mean that Q caused P, in many cases the proper inference is that it did. Thus if X punches Y in the nose and shortly afterwards Y's nose bleeds, the proper inference may well be that X caused the nose bleed. I acknowledge that this may not be the best example of the point as the common experience of human kind is that most punches to the nose cause bleeding to occur, but it suffices for present purposes. 100 A difficulty for this Court is that the primary judge did not seem to direct his mind at all to point (B). He appears to have assumed that so long as the purchaser's conduct could reasonably be assumed to give an indication that the purchaser would not attend the settlement, there was a dispensation of performance by the vendor and nothing more need be said. 101 However, even if there was an oversight by the primary judge in failing to make this finding, his decision may be upheld unless there is no evidence to support the necessary finding: Huntsman Chemical Company Australia Ltd v International Pools Australia Ltd (1995) 36 NSWLR 242, 244. 102 What Dixon CJ said in the Peter Turnbull case has been universally accepted as the law. However, the basis for the rule and the exact scope of it has been the subject of debate. 103 One problem is that the cases relied on to support it such as Jones v Buckley (1781) 2 Dougl 684; 99 ER 434, per Lord Mansfield and Ripley v McClure (1849) 4 Ex 345; 145 ER 1245 (as explained by Lord Campbell CJ in Cort v The Ambergate, Nottingham, Boston and Eastern Junction Railway Co (1851) 17 QB 127, 147-8; 117 ER 1229, 1237) came about before the rules as to anticipatory breach had become settled or the law of estoppel had developed to its current width. 104 It might be noted that in none of 19th century cases cited cases was there anything more than a communicated refusal by the defendant to proceed with the contract and the court considered that the defendant had dispensed with performance by the plaintiff of the condition precedent to tender the goods being sold had been dispensed. There is no mention of a requirement that the seller prove that that refusal had induced it not to perform the condition. However, modern cases make it clear that that is necessary. 105 The High Court re-examined the principle in Foran v Wight [1989] HCA 51; 168 CLR 385. 106 The judgments are not entirely consistent with each other. The majority considered that the rule was part of the law of estoppel. Brennan J considered that there was an equitable principle at work. Gaudron J thought that, exceptionally in conveyancing cases, estoppel might not be the right categorisation. However, in Austral Standard Cables Pty Ltd v Walker Nominees Pty Ltd (1992) 26 NSWLR 524, this Court held that at least in commercial cases Foran v Wight proceeded on the basis that a person who has intimated that it will not perform the contract creates an estoppel preventing it from alleging that the other party has not performed a condition precedent if that other party has acted on that statement to its detriment. 107 Foran v Wight's application to conveyancing cases was explained by Giles JA (with whom Fitzgerald and Heydon JJA agreed) in Lacey v Haydon [2000] NSWCA 182; 10 BPR 18,199, 18,203. 108 This Court again examined Foran v Wight in Sharjade Pty Ltd v Commonwealth of Australia [2009] NSWCA 373 though on an allied, but different, point. That case does not assist resolution of the present problem. The point was further examined in K & K Real Estate Pty Ltd v Adellos Pty Ltd [2010] NSWCA 302, a case argued after the present appeal but because of urgency, decided before it. 109 It is sufficient to say that, either because of estoppel, a purchaser who intimates that it would be a waste of time for the vendor to get ready for settlement is not allowed to say that the vendor was not ready, willing and able to complete or else (on Brennan J's view) equity would, despite time being of essence, restrain the purchaser from terminating the contract for a reasonable time to permit the vendor to get ready for completion, its failure to do so in due time being the fault of the purchaser. 110 However, the vendor must show that it was the purchaser's intimation that it acted on to its detriment that was the reason for its non-performance of the condition precedent. The vendor must show that it acted on the purchasers' intimation that it was useless to arrange for performance to its detriment. 111 The implementation of the three contracts must be viewed separately, but there are some matters which are common to all three which should first be considered. 112 The first of these matters is that the vendor did not call its solicitor to give any evidence as to what was its understanding as to whether or not the purchasers' representatives would attend the proposed settlement at the time and place stated in the notice to complete as the latest time for completion. 113 The evidence was that the solicitor who was in charge of the matter with the firm acting for the vendor had left that firm and, when approached, declined to make an affidavit or give a statement to the lawyers conducting the case for the vendor. 114 The reason for not calling the solicitor is not completely clear. There would not seem to have been any reason why the solicitor could not have been subpoenaed. The appellants say that the vendor's lawyers did not wish to take the risk of calling a witness whom they did not know what he would say and took a forensic decision not to call the solicitor. 115 On the other hand, counsel for the vendor pointed out that the matter only became relevant when, near the end of the hearing, the purchasers amended their pleadings to raise the matter that the vendor was not itself ready willing and able to complete at the time and place fixed by the notice to complete. 116 It is unnecessary to resolve this difference. However, it would seem that there was no formal pleading in answer to the purchasers' amended pleading: probably the denial in the unamended defence continued. There was certainly no explicit pleading of a dispensation or waiver. 117 The net effect was that the vendor had to rely on inferences drawn from the correspondence its solicitors' own paperwork prepared at the time and the normal course of conveyancing transactions. 118 Mr Elliott reminded us that it was common ground that the vendor would have been able to obtain the relevant transfers and discharges of mortgage required for settlement had it sought to do so. 119 Mr Elliott also put that questions of readiness, willingness and ability to perform should be resolved with due regard to common sense and to the practicalities of ordinary conveyancing transactions and cites Halkidis v Bugeia [1974] 1 NSWLR 423. 120 Mr Elliottt puts that, particularly in a case where it is necessary for a vendor to obtain payout figures from mortgages, it is ridiculous for any party, whether represented by a solicitor or not, to expect that a vendor will need to attend a settlement conference with figures and documents when there has been no response to recent correspondence pointing out the time and place designated for completion. 121 Indeed, there is a clear policy in conveyancing cases that there is no universal rule that performance in conveyancing transactions must be measured out in coffee spoons (per Glass JA [after TS Elliot] in Lohar Corporation Pty Ltd v Dibu Pty Ltd (1976) 1 BPR 9177, 9186). Australian courts have generally taken a very practical approach to questions such as the present. 122 Mr Elliott submitted that the present case was covered by the principle stated by the High Court in Newbon v City Mutual Life Assurance Society Ltd [1935] HCA 33; 52 CLR 723, 735 that "When inaction is the natural consequence of the assumption, the prima facie inference may be drawn in favour of the causal connection." 123 Of course, a necessary precondition to this principle is that there is a "natural consequence" of the assumption. This will be the case where the common course of affairs makes the assumption "natural". One situation where this will be so is where the conveyancing practice amongst solicitors is present in the minds of the agents (solicitors) of both parties to a conveyancing transaction. 124 A similar principle applies in Trade Practices cases: one applies a "common law practical or common-sense concept" (Wardley Australia Ltd v Western Australia [1992] HCA 55; 175 CLR 514, 525) and courts often have little difficulty from inferring reliance from the facts and circumstances. 125 The fact that so few conveyancing cases actually refer to the "innocent party" having established reliance to the court's satisfaction indicates that this same view has been taken with respect to the principle in focus in the present case. 126 Mr Elliott also relies on what Campbell JA said (with the agreement of Allsop P and Barr J) in Zaccardi v Caunt [2008] NSWCA 202 [109]. There an inference was drawn of readiness to perform from the ordinary course of a conveyancing transaction. 127 Turning now to the actual evidence on this point, the vendor's paperwork basically consisted of a settlement statement clearly prepared for the guidance of the clerk in the vendor's solicitors' office who would attend the settlement. It contained calculations of the adjustments to the purchase price that would have to be made to account for payment or non payment of rates etc between contract and completion as well as noting the documents that would need to be handed over by purchaser to vendor and vice versa and the cheques that the clerk would need to receive. 128 There is no indication that a copy of any such statement was transmitted to any of the purchasers except Messrs Sarkar and Islam. 129 I now turn to the three individual contracts. 130 The earliest in point of time was the contract with Mr Firmstone. At all material times he was represented by a solicitor. 131 The primary judge held at [64] that the intimation of futility was most clear in the case of Mr Firmstone's contract. His solicitor told the vendor's solicitors that they would be contacted to arrange a settlement date as soon as the purchaser's solicitor was in a position to do that. However, no such contact to arrange a settlement date was made. Instead the solicitor asked for more time. 132 It might be argued that the information from Mr Firmstone's solicitor was that he was willing to settle, but would not be ready for settlement on the date of the expiry of the notice to complete. Even if this argument were accepted, it would still make it clear that Mr Firmstone was not intending to complete within the time fixed for completion and time was of the essence. 133 The primary judge held that the clear inference was that Mr Firmstone was not in a position to settle at that time and was entitled so to find. 134 The primary judge correctly stated at [65] that usual conveyancing procedures and the implied duty of co-operation to bring about completion of the contract required a purchaser to contact the vendor to make arrangements for settlement: further, a purchaser should seek out the vendor and tender the purchase money (Wilson v Kingsgate Mining Industries Pty Ltd [1973] 2 NSWLR 713 at 726). 135 It is true that in the Firmstone case, the vendor might have inferred that the purchaser was unable to settle. However, the question is whether it actually did so. Indeed, the only hard facts from which such a finding could be made are the facts that there is a conveyancing custom that purchasers' solicitors make contact with the vendor's solicitors concerning settlement and an omission to do so generally means that there is not to be any settlement, that the vendor represented by solicitors did not get itself ready for settlement and purported to rescind immediately after the expiry of the notice to complete. 136 There is little doubt that the primary judge appreciated the present point. The Black Book shows the following dialogue with counsel then appearing for the purchasers:

Amaya v Everest Property Holdings Pty Ltd; Firmstone v Everest Property Holdings Pty Ltd; Sarkar and Islam v Everest Property Holdings Pty Ltd

At a glance

Court

Decision date

Before

Source

Judgment (36 paragraphs)

Cases Cited (13)

Cited By (11)