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[2025] NSWSC 873
General information, not legal advice.
Supreme Court of NSW
2025-08-06
McGrath J
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Source: NSW Caselaw (www.caselaw.nsw.gov.au). Converted to plain text by ZoeLaw. Not the official version.
Medium Neutral Citation: Baeg v Wink Singh Pty Ltd (No 2) [2025] NSWSC 873
Hearing dates: 14 July 2025
Date of orders: 6 August 2025
Decision date: 06 August 2025
Jurisdiction: Equity - Real Property List
Before: McGrath J
Decision: See [188]–[190]
Catchwords: EQUITY — equitable remedies — specific performance — whether vendor required to seek order vacating uncompleted order for specific performance before terminating contract — where purchaser has repeatedly failed to perform and has repudiated the contract — legal effect of purported termination by the vendor in the face of an order for specific performance — purported termination invalid — where errant purchaser asserts that vendor’s purported termination was accepted as a repudiation of contract
EQUITY — equitable remedies — specific performance — vacating an uncompleted order for specific performance — where innocent party elects for damages in lieu of performance
CONTRACTS — remedies — damages — after repudiation — loss of bargain — other expenses
Legislation Cited: Local Government Act 1993 (NSW), ss 560(1), 561(a)
Sydney Water Act 1994 (NSW), s 55(1)
Cases Cited: Aarons v Advance Commercial Finance Ltd (1995) 6 BPR 13,911
Baeg v Wink Singh Pty Ltd [2024] NSWSC 589
Carr v JA Berriman Pty Ltd (1953) 89 CLR 327; [1953] HCA 31
Clark v Macourt (2013) 253 CLR 1; [2013] HCA 56
Commonwealth v Amann Aviation Pty Ltd (1991) 174 CLR 64; [1991] HCA 54
Construction Technologies Australia Pty Ltd v Doueihi (No 5) [2018] NSWSC 294
Co-operative Insurance Society Ltd v Argyll Stores (Holdings) Ltd [1998] AC 1
Despot v Registrar General of NSW [2014] NSWSC 1002
Dyco Hotels Pty Ltd v Laundy Hotels (Quarry) Pty Ltd [2021] NSWSC 504
El Ali v Tritton [2019] NSWCA 111
Facey v Rawsthorne (1925) 35 CLR 566; [1925] HCA 10
Fu v Bucasia Pty Ltd [2014] NSWSC 325
Galafassi v Kelly (2014) 87 NSWLR 119; [2014] NSWCA 190
Georges v Wieland [2010] NSWSC 1378
Hamdan v Widodo (No 2) [2010] WASC 6
Hong v Gui [2022] NSWCA 245
JAG Investment Pty Ltd v Strati [1981] 2 NSWLR 600
JC Williamson Ltd v Lukey (1931) 45 CLR 282; [1931] HCA 15
Johnson v Agnew [1980] AC 367
Johnson v Perez (1988) 166 CLR 351; [1988] HCA 64
McDonald v Dennys Lascelles Ltd (1933) 48 CLR 457; [1933] HCA 25
McLeary v Swift [2014] NSWSC 1414
Morrow v Tucker (No 2) [2006] NSWSC 1358
Ng v Filmlock Pty Ltd (2014) 88 NSWLR 146; [2014] NSWCA 389
Ogle v Comboyuro Investments Pty Ltd (1976) 136 CLR 444; [1976] HCA 21
Patrick Stevedores Operations No 2 Pty Ltd v Maritime Union of Australia (No 3) (1998) 195 CLR 1; [1998] HCA 30
Pratt v Hawkins (1991) 32 NSWLR 319
Riltang Pty Ltd v L Pty Ltd [2004] NSWSC 977
Robinson v Harman (1848) 154 ER 363
Ryan v UPG 322 Pty Ltd [2023] NSWSC 1293
Shevill v Builders Licensing Board (1982) 149 CLR 620; [1982] HCA 47
Sunbird Plaza Pty Ltd v Maloney (1988) 166 CLR 245; [1988] HCA 11
Tabcorp Holdings Ltd v Bowen Investments Pty Ltd (2009) 236 CLR 272; [2009] HCA 8
Toma v Taylor TT Pty Ltd [2024] NSWCA 304
Vieira v O’Shea [2012] NSWCA 21
Wenham v Ella (1972) 127 CLR 454; [1972] HCA 43
Zorbas v Titan Properties (Aust) Pty Ltd [2005] NSWSC 440
Texts Cited: J D Heydon, M J Leeming and P G Turner in Meagher, Gummow and Lehane’s Equity: Doctrines and Remedies, (5th ed, 2014, LexisNexis Butterworths)
Category: Principal judgment
Parties: Seung Taeg Baeg (Plaintiff)
Wink Singh Pty Ltd (ACN 643 078 835) (First Defendant)
Harkanwar Singh Chhabra (Second Defendant)
Representation: Counsel:
C Robinson (Plaintiff)
A Byrne (First and Second Defendant)
Solicitors:
Yazbeck Law (Plaintiff)
Aquinas More Lawyers (First and Second Defendant)
File Number(s): 2024/00061460
Publication restriction: Nil
This case raises the interesting issue of the extent to which a contract is under the “control of the court” after an order for specific performance is made in favour of one party, the other party fails to comply with that order and the first party then seeks vacation of the order and leave of the court to obtain damages for breach of contract. Specifically in question is whether, in the circumstances of this case, the first party’s attempted termination of the contract after the other party’s non-compliance with the order for specific performance has any impact on the first party’s entitlement to claim damages.
These proceedings concern a contract for the sale and purchase of land dated 4 September 2021 (Contract) entered in respect of a property bearing Land Title Reference XX/XXXXXXX and situated at XXX Pennant Hills Road, West Pennant Hills, New South Wales (Property).
The parties to the Contract are the parties to these proceedings, being:
the plaintiff, Seung Taeg Baeg, as vendor;
the first defendant, Wink Singh Pty Ltd (ACN 643 078 835), as purchaser; and
the second defendant, Harkanwar Singh Chhabra, as guarantor of Wink Singh’s obligations under the Contract.
For convenience, within this judgment I will refer to the first defendant and the second defendant collectively as the defendants.
In essence, the time for completion under the Contract was twice extended by formal addenda agreed between the parties. Wink Singh failed to complete the Contract on several occasions both before and after these extensions.
It was on this basis that Mr Baeg sought, and was granted, an order for specific performance of the Contract, with judgment delivered ex tempore by Parker J on 9 May 2024: Baeg v Wink Singh Pty Ltd [2024] NSWSC 589 (First Judgment). Amongst the orders made in the First Judgment was an order for specific performance of the Contract against both defendants and an order that Wink Singh complete the purchase of the Property by not later than 3:30pm on Thursday, 23 May 2024 in accordance with the Contract.
Wink Singh did not complete the purchase of the Property by that time or any time subsequently.
On 16 July 2024, the solicitors acting for Mr Baeg served a Notice of Termination on Wink Singh purporting to accept Wink Singh’s repudiation of the Contract and terminating it on that basis.
The Notice of Termination concluded by foreshadowing an “action for recovery of damages”. Before me for determination is Mr Baeg’s application pursuing that foreshadowed course of action, seeking orders including to:
On 4 September 2021, the Contract was exchanged, having been signed by Mr Baeg as vendor and by Mr Chhabra in his capacity as director of the purchaser, Wink Singh, as well as on his own behalf as guarantor.
The C****ontract D****ate under the Contract is 4 September 2021.
The Purchase Price under the Contract is $3,500,000.
The Deposit payable under the Contract was $87,500. It was payable by way of instalments.
The Completion Date under the Contract was 4 September 2022, being the “365th day after the contract date”.
The Contract utilises the Law Society of New South Wales standard form (2019 edition) and consists of thirty-two standard clauses which relevantly include:
Clause 9 of the Contract, which provides as follows (italics in original):
9 Purchaser’s default
If the purchaser does not comply with this contract (or a notice under or relating to it) in an essential respect, the vendor can terminate by serving a notice. After the termination the vendor can –
9.1 keep or recover the deposit (to a maximum of 10% of the price);
9.2 hold any other money paid by the purchaser under this contract as security for anything recoverable under this clause –
9.2.1 for 12 months after the termination; or
9.2.2 if the vendor commences proceedings under this clause within 12 months, until those proceedings are concluded; and
9.3 sue the purchaser either –
9.3.1 where the vendor has resold the property under a contract made within 12 months after the termination, to recover –
● the deficiency on resale (with credit for any of the deposit kept or recovered and after allowance for any capital gains tax or goods and services tax payable on anything recovered under this clause); and
● the reasonable costs and expenses arising out of the purchaser’s non-compliance with this contract or the notice and of resale and any attempted resale; or
9.3.2 to recover damages for breach of contract.
15 Date for completion
The parties must complete by the date for completion and, if they do not, a party can serve a notice to complete if that party is otherwise entitled to do so.
21 Time limits in these provisions
21.1 If the time for something to be done or to happen is not stated in these provisions, it is a reasonable time.
21.2 If there are conflicting times for something to be done or to happen, the latest of those times applies.
21.3 The time for one thing to done or to happen does not extend the time for another thing to be done or to happen.
21.4 If the time for something to be done or to happen is the 29th, 30th or 31st day of a month, and the day does not exist, the time is instead the last day of the month.
21.5 If the time for something to be done or to happen is a day that is not a business day, the time is extended to the next business day except in the case of clauses 2 and 3.2.
21.6 Normally, the time by which something must be done is fixed but not essential.
There are 24 special conditions in the Contract, which are additional to the standard clauses. The special conditions are numbered 1 to 23, with an error resulting in there being two special conditions numbered 21. Those special conditions relevantly include:
Special Condition 1, which provides as follows:
Completion of this matter shall take place on or before 3:30 pm on the due date for completion. Should completion not take place within that time, then either party shall be at liberty to issue a Notice of Complete calling for the other party to complete the matter making the time for completion essential. Such notice shall give not less than 14 days’ notice after the day immediately following the day on which that notice is received by the recipient of the notice. A Notice to Complete of such duration is considered by the parties as being deemed reasonable and sufficient to render the time for completion essential. The party that issues the Notice to Complete shall also be at liberty to withdraw such Notice of Complete and re-issue another one at any time.
The service of any Notice or Document under or relating to this Contract may, in addition to the provisions of Clause 20, be effected and shall be sufficient service on a party and that party’s solicitor if the Notice or Document is sent by facsimile transmission to the facsimile number noted on the Contract or on their letterhead and in any such case shall be deemed to be duly given or made except where: -
(a) The time of dispatch is not before 5:00 pm (Sydney time) on a day on which business is generally carried on in the place to which such notice is sent, in which case the Notice shall be deemed to have been received at the commencement of business on the next such business day in the place; or
(b) The sender’s machine indicates a malfunction in transmission and the recipient’s transmission shall be deemed not to have been given or made.
If the Purchaser shall not complete this purchase by the agreed completion date, at a time when the Vendor is ready, willing and able to complete on or after that completion date, then the Purchaser shall pay to the Vendor on completion, in addition to the balance of purchase money, an amount calculated as Ten percent (10% per annum) interest on the balance of purchase money, computed at a daily rate from the day immediately after the agreed completion date up to and including the actual date on which this sale shall be completed. It is further agreed that this amount is a genuine pre-estimate of the Vendor’s loss of interest for the purchase money and liability for rates and outgoings. The Vendor shall not be obliged to complete this Contract unless the amount payable under this clause is tendered.
In the event settlement does not take place at the scheduled time, or does not take place at a re-arranged time on that same day, due to default of the Purchaser or their mortgagee and through no fault of the Vendor, in addition to any other monies payable by the Purchaser on completion of this Contract, the Purchaser must pay an additions $330.00 (GST inclusive) on settlement, to cover the legal costs and other expenses incurred as a consequence of the delay.
Each party agrees that if on completion any apportionment of outgoings required to be made under this Contract is overlooked or incorrectly calculated they will forthwith upon being so required by that party make the correct calculation and pay such amount to the other party as is shown by such calculation to be payable. This clause shall not merge on completion.
Deposit
The purchaser agrees to pay the deposit in the following ways: -
a. 0.25% paid on exchange with 10 day cooling off period for due diligence and council;
b. 1.5% deposit ($52,500) paid on unconditional exchange of contracts after 10 days cooling off period; and
c. 1% deposit ($35,000) to be paid after 6 months after the contract date
Guarantee & Indemnity – Special Condition 23
1.1 In consideration of the vendor entering into this contract at the request of the guarantor, the guarantor:
(a) guarantees to the vendor:
(i) payment of all moneys payable by the purchaser; and
(ii) the performance by the purchaser of all other obligations
under this contract; and
(b) indemnifies the vendor against any liability, loss, damage, expense or claim incurred by the vendor arising directly or indirectly from any breach of this contract by the purchaser.
1.2 This guarantee and indemnity is a principal obligation of the guarantor and is not collateral to any other obligation.
1.3 The liabilities of a guarantor are not affected by:
(a) the granting to the purchaser or to any other person of any time, waiver, indulgence, consideration or concession or the discharge or release of the purchaser;
(b) the death, bankruptcy or liquidation of the purchaser, the guarantor or any one of them;
(c) reason of the vendor becoming a party to or bound by any compromise, assignment of property or scheme of arrangement or composition of debts or scheme or reconstruction by or relating to the purchaser, the guarantor or any other person;
(d) the vendor exercising or refraining from exercising any of the rights, powers or remedies conferred on the vendor by law or by any contract or arrangement with the purchaser, the guarantor or any other person or any guarantee, bond, covenant, mortgage or other security; or
(e) the vendor obtaining a judgment against the purchaser, the guarantor or any other person for the payment of the moneys payable under this contract.
1.4 This guarantee and indemnity will continue notwithstanding:
(a) the vendor has exercised any of the vendor’s rights under this contract including any right of termination;
(b) the purchaser is wound up; or
(c) this guarantee and indemnity is for any reason unenforceable either in whole or in part.
1.5 This guarantee and indemnity:
(a) is of a continuing nature and will remain in effect until final discharge of the guarantee or indemnity is given by the vendor to the guarantor;
(b) may not be considered wholly or partially discharged by the payment of the whole or any part of the amount owed by the purchaser to the vendor; and
(c) extends to the entire amount that it is now owed or that may become owing at any time in the future to the vendor by the purchaser pursuant to or contemplated by this contract including any interest, costs, or charges payable to the vendor under this contract.
1.6 If any payment made to the vendor by or on behalf of the purchaser or the guarantor is subsequently avoided by any statutory provision or otherwise:
(a) that payment is to be treated as not discharging the guarantor’s liability for the amount of that payment; and
(b) the vendor and the guarantor will be restored to the position in which each would have been and will be entitled to exercise all rights which each would have had if that payment had not been made.
1.7 The vendor can proceed to recover the amount claimed as a debt or damages from the guarantor without having instituted legal proceedings against the purchaser and without first exhausting the vendor’s remedies against the purchaser.
…
On 6 September 2021, Wink Singh paid the first instalment of the Deposit in the amount of $8,750, constituting 0.25% of the Purchase Price payable on exchange in accordance with Special Condition 21(a) of the Contract.
On 17 September 2021, Wink Singh paid the second instalment of the Deposit in the amount of $43,750. This amount is not the $52,500 (being 1.5% of the Purchase Price) as contemplated by Special Condition 21(b) of the Contract which, while a correct calculation of that percentage, appears to be the product of a miscalculation with regard to the total amount of the Deposit payable.
On 4 March 2022, Wink Singh failed to pay the third and final instalment of the Deposit in the amount of $35,000, constituting 1% of the Purchase Price which was then due and payable under Special Condition 21(c) of the Contract.
On 7 March 2022, Wink Singh paid the third and final instalment of the Deposit so that Mr Baeg received the Deposit in the total agreed amount of $87,500.
Settlement did not occur by the Completion Date of 4 September 2022.
On or about 7 September 2022, Mr Baeg and the defendants commenced negotiations regarding a possible extension to the Completion Date.
On 17 October 2022, in accordance with his right under Special Condition 1 of the Contract, Mr Baeg served a Notice to Complete on the defendants (First Notice to Complete).
Later on 17 October 2022, Mr Baeg and the defendants executed an Addendum to the Contract (First Addendum).
The First Addendum was executed as a Deed and is replete with grammatical errors. Ignoring those errors, in its essence the First Addendum extended the Completion Date for a period of nine months, until 4 June 2023 (Extended Completion Date) on the following terms (all errors left in place):
The Contract is added and amended as follows:
- The vendor consents and agrees that the completion is extended by 9 months up to 4 June 2023;
- The vendor agrees the purchaser to pay penalty interest with reduced rate of 5% per annum only for the period of 6 September 2022 to 4 June 2023 regardless of clause 3 of special conditions of the contract and the purchaser agrees to pay the vendor the sum of $123,934.25 on settlement that is calculated as below subject to the purchase’s on-time payment of additional deposits set out clause 3:
a. For the period 6/9/22-15/10/22 (40 days) for balance $3,412,500: $18,698.63;
b. For the period 16/10/22-31/10/22 (16 days) for balance $3,362,500: $7,369.86;
c. For the period 1/11/22-4/6/23 (216 days) for balance $3,307,500: $97,865.75
If settlement takes place before 4 June 2023, the vendor agrees to reduce the penalty interest for the period of the day after the settlement date to 4 June 2023.
If settlement takes place on or after 5 June 2023, the purchaser agrees to pay the penalty interest as per clause 3 of special conditions of the contract.
- The purchaser agrees to pay the vendor the sum of $50,000 on and before 15th of October 2022 and $55,000 on or before 31st of October 2022 which shall be interpreted as an increase of deposit and shall be released to the vendor upon the purchaser’s deposit into the agent’s trust account;
…
- If the purchaser fails to comply with any of the above terms and conditions by each specified time, the vendor is entitled to issue Notice to Complete with 2 week notice.
…
- Except as set forth in this Addendum, the Contract is unaffected and shall continue in full force and effect in accordance with its terms. If there is conflict between this addendum and the Contract or any earlier addendum, the terms of this addendum will prevail.
On 20 October 2022, Mr Baeg belatedly received payment of the first tranche of the Increased Deposit provided by cl 3 of the First Addendum, being $50,000, (it curiously being due “on and before” 15 October 2022).
On or about 31 October 2022, Mr Baeg granted Wink Singh an extension until 10 November 2022 to pay the second tranche of the Increased Deposit provided by cl 3 of the First Addendum, being $55,000 (it being due on or before 31 October 2022).
Wink Singh failed to pay Mr Baeg the second tranche of the Increased Deposit by 10 November 2022.
On 24 November 2022, Wink Singh paid the second tranche of the Increased Deposit to Mr Baeg, together with an additional $500 as agreed consideration for the further delay and extension.
Putting the additional $500 for delay aside, Mr Baeg received a total of $192,500 under the Contract in the form of both the Deposit and Increased Deposit.
Settlement did not occur by the Extended Completion Date of 4 June 2023.
On 6 June 2023, in accordance with his right under cl 5 of the First Addendum, Mr Baeg served a Notice to Complete on the defendants (Second Notice to Complete).
On 7 June 2023, the Second Notice to Complete was re-served on the defendants.
On 21 June 2023, Mr Baeg and the defendants commenced negotiations regarding a possible further extension to the Extended Completion Date.
On 7 July 2023, Mr Baeg and the defendants executed a further Addendum to the Contract (Second Addendum).
Like its predecessor, the Second Addendum was executed as a Deed and is also replete with grammatical errors. Putting those errors aside, the Second Addendum had the effect of extending the Completion Date until 15 September 2023 (Further Extended Completion Date). That further extension was granted on the following terms (leaving all errors in place):
The Contract is added and amended as follows:
- The vendor consents and agrees that the completion is extended by 15 September 2023 (Friday) additionally.
- The purchaser agrees to pay the vendor $123,934.25 as penalty interest for the period of 6 September 2022 to 4 June 2023 on completion as per clause 2 of 1st Addendum.
- The purchaser agrees to pay the vendor additional penalty interest for the period of 5 June 2023 up to extended completion date as per clause 3 of special condition of the contract.
- The purchaser agrees to pay the vendor the sum of $10,000 on and before 14th of July 2023 and $10,000 on or before 25 July 2023, which shall be interpreted as an increase of deposit and shall be paid directly to the following vendor’ account:
…
- The purchaser and its guarantor agree and acknowledge that if the purchaser fails to pay the above penalty interests on clause 2 &3 and additional deposit on clause 4 or fails to complete this matter, the vendor is entitled to make claim to the purchaser and/or its guarantor as a liquidated damage and the purchaser and its guarantor are jointly and severally liable for the damage.
- The purchaser agrees to complete registration of easement on or before extended completion date of 15 September 2023 for drain water from XXX Pennant Hills Road West pennant Hills over XXX Pennant Hills Road West pennant Hills and any other required lands at the purchaser’s costs and expenses. The purchaser makes the vendor free of any expenses and costs in relation to this easement. The vendor will sign any necessary documents for this easement. This clause is essential for completion and will not merge on completion.
- If the purchaser fails to comply with any of the above terms and conditions by each specified time, the vendor is entitled to issue Notice to Complete with 2 weeks’ notice.
- The purchaser agrees to provide a 90-day rent free period to the vendor after settlement if the vendor does not find a suitable property to move out.
- Except as set forth in this Addendum, the Contract is unaffected and shall continue in full force and effect in accordance with its terms. If there is conflict between this addendum and the Contract or any earlier addendum, the terms of this addendum will prevail.
Wink Singh did not pay either of the amounts contemplated by way of the Increased Deposit in cl 4 of the Second Addendum as and when they fell due, or any time subsequently.
Settlement did not occur on or before the Further Extended Completion Date of 15 September 2023.
On 15 September 2023, in accordance with his right under cl 7 of the Second Addendum, Mr Baeg served a Notice to Complete on the defendants which required settlement to occur within two weeks, on or before 4:00pm on 29 September 2023 (Third Notice to Complete).
Settlement did not occur on or before 4:00pm on 29 September 2023.
(1) Declare that the Contract dated 4 September 2021 for sale of land at XXX Pennant Hills Road, Pennant Hills in the State of New South Wales, being the land comprised in Folio Identifier XX/XXXXXXX (the Property) between the Plaintiff as vendor, the First Defendant as purchaser and the Second Defendant as Guarantor (the Contract) is valid and enforceable.
(2) Order that the Contract be specifically performed by the Defendants and carried into execution.
(3) Direct the Plaintiff to create a PEXA workspace and invite the Defendants to join that workspace (“the PEXA Workspace”) by 5pm on Friday 10 May 2024.
(4) Direct the Defendants, by a solicitor or other member of PEXA, to accept the Plaintiff’s invitation to the PEXA Workspace.
(5) Direct the First Defendant to complete the purchase of the Property in the PEXA Workspace by not later than 3:30 PM on Thursday, 23 May 2024 (Settlement Date) in accordance with clause 30.11.2 of the Contract.
(6) Direct the First Defendant through its solicitor prior to the Settlement Date to attend to verifying its Stamp Duty in the PEXA Workspace.
(7) Direct the First Defendant to submit a Settlement Statement to the Plaintiff’s Solicitor (which must account for interest required to be paid by the First Defendant pursuant to clause 3 in the Special/Additional Conditions in Annexure “A” to the Contract, and the cost of the Plaintiff issuing the Notices to Complete on the First Defendant pursuant to clause 13 in the Special/Additional Conditions in Annexure “A” to the Contract), two business days prior to the Settlement Date.
(8) Direct the Plaintiff to confirm the Settlement Statement one business day prior to the Settlement Date.
(9) Direct the First Defendant prior to the Settlement Date to do all things necessary in the PEXA Workspace to ensure completion can occur on the Settlement Date, including but not limited to:
(a) Accepting the time and date for completion in the PEXA Workspace;
(b) Completing and or create all documents in the PEXA Workspace necessary for completion to occur;
(c) Input of all source funds into the PEXA Workspace to ensure completion can occur, and populating any necessary destination line items for the First Defendant;
(d) Once source funds and payment directions are input, and the documents have successfully passed lodgement verification with the land registry, attending to signing off on the documents, completing the financial settlement schedule and signing the financial settlement statement.
(10) Direct the Defendants to pay the balance of the monies due under the Contract at the Settlement Date, inclusive of the balance of the purchase price, interest, and any adjustment for Council rates, to the Plaintiff or as the Plaintiff directs, in return for the Plaintiff conveying title to the Property to the First Defendant through PEXA.
(11) Order the First and Second Defendants to pay the Plaintiff’s costs of the proceedings up to, and including, the date of the making of these orders.
(12) Direct the Plaintiff to serve a sealed copy of these Orders by 5pm on Friday 10 May 2024, by email to the First Defendant’s solicitor to the email address XXXX and to the Second Defendant to the email address XXXX.
On 9 May 2024, in accordance with the orders of Parker J in the First Judgment, Mr Baeg through his solicitors (Yazbeck Law) served the defendants with a copy of those orders, created the PEXA workspace with a settlement date of 23 May 2024, and invited the defendants (through their then solicitors, Destination Lawyers) to join that workspace.
That invitation was not accepted by the defendants personally, nor by Destination Lawyers, who subsequently ceased acting for the defendants. Except for the communication of Destination Lawyers’ cessation in acting for the defendants on 13 May 2024, neither Mr Baeg nor his solicitors received any communication by or on behalf of either of the defendants between 9 and 23 May 2024.
The defendants did not comply with any of the orders made by Parker J in the First Judgment so far as they applied to each of them. Pertinently, contrary to order 5, Wink Singh did not complete the purchase of the Property by 3:30pm on 23 May 2024 and so, contrary to order 2, the Contract was not specifically performed by the defendants.
On 16 July 2024, Mr Baeg through his solicitors issued the Notice of Termination to Wink Singh reciting the numerous failures by Wink Singh to complete the Contract in accordance with the First Notice to Complete, the Second Notice to Complete, the Third Notice to Complete and the orders made by Parker J in the First Judgment, giving notice that Mr Baeg accepted Wink Singh’s repudiation of the Contract and purported to terminate the Contract on that basis. Wink Singh and Mr Chhabra were served with the Notice of Termination by email and by post. A copy was also provided to Wink Singh’s former solicitors, Destination Lawyers.
Prior to the issuance of the Notice of Termination, Mr Baeg maintains that at all material times he was ready, willing and able to complete the Contract. The defendants made no submission to the contrary.
Initially, the parties were not in agreement as to the relevant value of the Property for the purpose of any damages calculation.
On 10 March 2025, Mr Baeg filed an expert report dated 14 August 2024 (being the date of inspection) prepared by Joseph Jakovich of Valuations NSW (Valuations NSW Report). The Valuations NSW Report valued the Property as at 16 July 2024 (being the date of the Notice of Termination) at $2.2 million.
On 17 March 2025, Wink Singh filed an expert report dated 12 March 2025 prepared by Paul Waterhouse of Waterhouse Valuation (Waterhouse Valuation Report). The Waterhouse Valuation Report valued the Property as at 16 July 2024 and 12 March 2025 at $2,639,010, and as at 4 September 2021 (being the Contract Date) at $1,834,221.
The respective expert valuers who prepared the Valuations NSW Report and the Waterhouse Valuation Report then prepared a Joint Report dated 29 May 2025. The Joint Report concluded that as at all of the relevant dates posed to them (being 23 May 2024, 16 July 2024 and 29 May 2025), the Property had a value of $2.4 million.
At the hearing before me on 14 July 2025, the parties agreed to proceed on the basis that the Property had a value of $2.4 million (Agreed Value).
It was also agreed that at all relevant times Mr Baeg has had, and continues to have, the benefit of occupying the Property.
We refer to your email dated 16 July 2024 enclosing a Notice of Termination of Contract (Notice of Termination) dated 16 July 2024 addressed to our client Wink Singh Pty Ltd (Wink Singh).
The final paragraph of that notice states:
As a result of your default on 23 May 2024, we give you notice that the Vendor accepts your repudiation of the Contract and now terminates the Contract and it is entirely at an end.
At no time since 16 July 2024 has your client withdrawn the Notice of Termination.
By reason of your clients having obtained orders for specific performance from the Supreme Court of New South Wales on 9 May 2024, he is not (and, since 9 May 2024, has not been) lawfully permitted to terminate the contract for the sale and purchase of land dated 4 September 2021 (Contract) without leave of the Court.
Accordingly, your client’s purported termination of the Contract by the Notice of Termination was unlawful and amounted (and amounts) to a repudiation of the Contract. Our clients, Wink Singh and Harkenwar (sic) Singh Chhabra, hereby immediately accept that repudiation.
As such, the Contract is now terminated by reason that [our] clients have accepted your client’s repudiation of the Contract.
The first issue for me to determine is the legal effect of the Notice of Termination. This issue has two aspects:
whether the Notice of Termination had the effect of validly terminating the Contract; and
if it did not validly terminate the Contract, whether the service of the Notice of Termination was repudiatory conduct by Mr Baeg as contended by the defendants so as to disentitle him from claiming damages.
In relation to these two aspects, I will state the relevant legal principles, briefly outline the parties’ respective submissions and then set out my consideration of them.
The relevant legal principles as to the legal effect of the Notice of Termination are those which relate to orders of specific performance generally, the consequence of such an order and its application as alternative relief.
In light of the defendants’ submissions (which are outlined below), it will also be necessary to set out basic contract law principles regarding unlawful termination amounting to repudiation. I will do so briefly, in a manner that is reflective of the merits of that argument given the circumstances of this case.
A decree of specific performance is an order of the court directing a party to a contract to perform their obligations under it. What the order involves in any particular case depends on the terms of the contract, the circumstances that exist at the time of the order and what acts of performance required by the contract have not yet occurred: Despot v Registrar General of NSW [2014] NSWSC 1002, Ball J at [43], citing JAG Investment Pty Ltd v Strati [1981] 2 NSWLR 600, Mahoney JA at 607. The order takes as its starting point the existence of an enforceable contract and requires the parties to act in accordance with its terms: Despot, Ball J at [44] and the authorities cited there.
Specific performance in the primary or proper sense “presupposes an executory as distinct from an executed agreement”, where something definite is remaining in law to be done before the transaction is complete, such as the execution of a deed or a conveyance, to put the parties in the position contemplated by their contract: JC Williamson Ltd v Lukey (1931) 45 CLR 282, McTiernan J at 313 and Dixon J (with whom Gavan Duffy CJ agreed) at 297; [1931] HCA 15.
It is also helpful to understand that in issuing a decree of specific performance for a legally enforceable contract, equity is operating in its auxiliary jurisdiction to assist in the enforcement of the contract, not adjudicating its enforceability. In this way, equity acts as a supplement to common law rights and obligations, offering an equitable remedy where common law damages are or would be inadequate*:* Co*-*operative Insurance Society Ltd v Argyll Stores (Holdings) Ltd [1998] AC 1, Hoffmann LJ at 11; Patrick Stevedores Operations No 2 Pty Ltd v Maritime Union of Australia (No 3) (1998) 195 CLR 1; [1998] HCA 30, Brennan CJ, McHugh, Gummow, Kirby and Hayne JJ at [78]–[79].
In seeking and obtaining an order for specific performance, a party elects for a continuance of the contract under the control of the court and that control involves the power, in certain events, to terminate it. Seeking an order for specific performance is a course of action that encourages performance, but which may or may not lead to implementation of the contract: Johnson v Agnew [1980] AC 367, Wilberforce LJ at 398; JAG Investment, Hope JA (with whom Glass and Mahoney JJA agreed) at 604.
Once an order for specific performance has been made, the contractual rights and obligations of the parties are not superseded, but the future exercise of rights and performance of obligations fall under the control of the court. That is the very nature of the remedy. So much was observed by Campbell J in [2005] NSWSC 440 at [12]:
It is a general principle concerning orders for specific performance that once an order for specific performance has been made the contractual rights of the parties are not superseded but the future exercise of rights and performance of obligations under the contract is under the control of the Court - or, looking at it from the other side of the coin, the working out of the order for specific performance is under the control of the Court: Singh v Nazeer [1979] Ch 474 at 481-2; Buckman v Rose (1980) 1 BPR 97059; Sunbird Plaza Pty Ltd v Maloney (1988) 166 CLR 245 at 259-260.
Importantly, contractual rights do not merge in an order for specific performance: Despot, Ball J at [44]. Rights and obligations under the subject contract subsist and run parallel to the order and the order is not final until the order is discharged by performance or, in the case of a contract for the sale and purchase of land, the contractual rights merge upon completion: Despot, Ball J at [45], citing Fu v Bucasia Pty Ltd [2014] NSWSC 325, Stevenson J at [52]. See also Johnson v Agnew, Wilberforce LJ at 393–4 and JAG Investment, Hope JA (with whom Glass and Mahoney JJA agreed) at 603.
An order for specific performance is binding on the parties who will be in contempt if they do not comply with it: Despot, Ball J at [48]. Any relevant delay in compliance with an order for specific performance will be delay in performing the contract, which gives rise to contractual rights: Despot, Ball J at [48].
The court may vacate an order for specific performance but whether it should do so will depend on the terms of the contract, not on the exercise of a discretion to refuse to give effect to an order that the court has already made: Despot, Ball J at [48].
One circumstance in which it may be necessary for the court to reconsider an order for specific performance is where some act has occurred (or not occurred) which gives rise to new contractual rights, usually being a failure by one party to perform the contract, and the contractual right is a right to terminate the contract because of that failure: Despot, Ball J at [49].
This precise circumstance invites consideration of the issue of doctrine as to whether, once an order for specific performance has been made, a contractual right of termination can only be exercised with leave of the court or, more accurately, an order vacating the order for specific performance. That position has been heavily criticised, perhaps most notably by J D Heydon, M J Leeming and P G Turner in Meagher, Gummow and Lehane*’*s Equity: Doctrines and Remedies, (5th ed, 2014, LexisNexis Butterworths) at, for example, [20-265]–[20-270]. Those criticisms and the uncertain origin of the “rule”, while fascinating and in some respects compelling, are not reflective of the state of Australian authority on the issue. The “accepted rule” – whatever may be its doctrinal origin or jurisdictional basis – requires some further order of the court before the subject contract can be determined: Despot, Ball J at [50]–[53]; JAG Investment, Hope JA (with whom Glass and Mahoney JJA agreed) at 603. The state of the law in this regard was succinctly summarised by the High Court in Sunbird Plaza (1988) 166 CLR 245, by Mason CJ (with whom Deane, Dawson and Toohey JJ agreed) at 260; [1988] HCA 11, as follows (footnotes omitted):
… In more recent decisions in New South Wales it has been accepted that the leave of the court is necessary for rescission after an order for specific performance: JAG Investment Pty. Ltd. v. Strati; Stevter Holdings Pty. Ltd. v. Katra Constructions Pty. Ltd. In the light of the existing authorities, particularly Facey v. Rawsthorne, there being no argument challenging their correctness, we should continue to apply the proposition that rescission after an order for specific performance requires the leave of the court or, more appropriately, the vacation of the order. These authorities proceed on the footing that once a plaintiff has obtained an order for specific performance of a contract, he cannot be permitted to act inconsistently by rescinding it so long as the defendant is required by order of the court to complete the contract.
It is equally clear – contrary to early English authority which has since been abandoned in that jurisdiction – that a party in whose favour an order for specific performance has been made retains their right to pursue other rights they may have had absent the order for specific performance, including the right to claim damages for breach of contract: Despot, Ball J at [54], citing McDonald v Dennys Lascelles Ltd (1933) 48 CLR 457, Dixon J at 476–7; [1933] HCA 25, and Johnson v Agnew, Wilberforce LJ at 396.
While the requirement for leave of the court or vacation of the order for specific performance may be contentious when expressed as a pre-condition for the exercise of axiomatic common law rights, in circumstances where it is well-established that there is no merger of those rights into the order, it is hardly surprising that an otherwise innocent party cannot unilaterally determine the very contract which – at that party’s instigation – the other party is by order of this court required to complete. Whatever its basis as a matter of doctrine, that position reflects the longstanding principle of mutuality of obligation under contract and preserves the integrity of this court and of orders for specific performance, generally.
In Aarons v Advance Commercial Finance Ltd (1995) 6 BPR 13,911, the Court of Appeal considered, without deciding, the issue of whether a party who has obtained an uncompleted order for specific performance of a contract is disentitled thereafter from terminating the contract without leave the court or vacation of the order.
In Aarons, the plaintiff vendor had sought and obtained leave of the court to issue a notice of termination following an uncompleted order for specific performance. Instead, the vendor “misguidedly” served a notice to complete and the errant purchaser argued to the effect that by serving a notice to complete, the vendor had elected to affirm the contract “although in an illicit and impermissible way”, rather than terminate it pursuant to the leave granted. Both the trial judge and the Court of Appeal rejected this argument. Both courts held that as the purchaser had demonstrated an inability to complete the contract on several occasions, including after the order for specific performance, they had repudiated the contract so it was open to the vendor to terminate it. The trial judge vacated the order for specific performance and allowed the vendor a second chance to terminate the contract. On appeal, it was held that this was “clearly the correct resolution of the dispute between the parties according to its merits” and there could be no technical impediment because the orders for specific performance were eventually discharged: Aarons, Kirby P at 13,914 (with whom Priestley JA agreed on this point at 13,914). Meagher JA agreed at 13,915 that the purchaser had repudiated the contract entitling the vendor to terminate but expressed serious doubt as to the utility and necessity of what I have referred to above as the “accepted rule”.
… It is not necessary for present purposes to resolve this question for it is clear that the contract cannot be determined until the approval or order of the court has been obtained, and that it is the order, or something done by authority of the order, that operates to terminate the contract. Possibly the correct view of the basis of the rule is that suggested by Helsham J, in Stevter Holdings Ltd v Katra Constructions Pty Ltd [1975] 1 NSWLR 459, at p 469 that the order of the court for specific performance is binding until the court making it orders that it shall, in effect, be no longer binding, by discharging the contract in respect of which it was made. Another way of saying what, I think, comes to the same thing, is that the rights which a party has under a decree for specific performance (and both parties have such rights) cannot be taken from him by some extra-judicial act: cf Facey v Rawsthorne (1925) 35 CLR 566, at p 585.
In summary, the accepted position in Australia is now that:
By electing to bring an action for specific performance of a contract, a party has not irrevocably abandoned their common law rights in respect of damages for breaches of that contract, both past and future.
While those proceedings are maintained, or after an order for specific performance has been made, that contract can be terminated by one party by accepting the repudiation of the other but only with the court’s leave or vacation of the order of specific performance. It is the order of the court, or something by authority of the order, that operates to terminate the contract: Facey v Rawsthorne (1925) 35 CLR 566, Higgins J (with whom Isaacs J agreed on this point) at 588; [1925] HCA 10; as approved in Sunbird Plaza, Mason CJ (with whom Deane, Dawson and Toohey JJ agreed) at 260. See also JAG Investment, Hope JA (with whom Glass and Mahoney JJA agreed) at 603–4; Johnson v Agnew, Wilberforce LJ at 398.
Repudiation of a contract is a serious matter and is not to be lightly found or inferred: Shevill v Builders Licensing Board (1982) 149 CLR 620, Wilson J at 633; [1982] HCA 47.
For the conduct of a party to constitute a renunciation of its contractual obligations it must be shown that the party is either unwilling or unable to perform its contractual obligations, that is, it has evinced by words or conduct an intention to no longer be bound by the contract or stated that it intends to fulfil the contract only in a manner substantially inconsistent with its obligations and in no other way: Galafassi v Kelly (2014) 87 NSWLR 119; [2014] NSWCA 190, Gleeson JA (with whom Bathurst CJ and Ward JA agreed) at [62]–[63].
To determine whether impugned conduct amounts to a repudiation of a contract, it is necessary to characterise such conduct in the context in which it occurred. This includes the prior conduct of the parties and any misapprehension of fact or law under which they were operating: see, for example, Hong v Gui [2022] NSWCA 245, Basten AJA (with whom Macfarlan JA and Simpson AJA agreed) at [25], [31] and [58] and the authorities cited there.
It is well established that an unwarranted termination of a contract, based on an erroneous assertion of repudiation, may itself constitute repudiation by the party purporting to terminate the contract. That is the situation if no right to terminate the contract had arisen in favour of the party issuing the notice prior to its issue: Carr v JA Berriman Pty Ltd (1953) 89 CLR 327, Fullagar J (with whom Dixon CJ, Williams, Webb and Kitto JJ agreed) at 343; [1953] HCA 31.
That position can be contrasted with the issue of a notice of termination of a contract by a vendor in the face of multiple failures to complete in circumstances that make the giving of the notice justified. In that situation, no question of a repudiation of the contract arises because the termination is lawful: Ogle v Comboyuro Investments Pty Ltd (1976) 136 CLR 444, Barwick CJ at 453–4, Gibbs, Mason and Jacobs JJ at 458–9; [1976] HCA 21.
Mr Baeg submits that the issuance of the Notice of Termination in the face of an extant order for specific performance, absent a grant of leave or further order vacating the order for specific performance, renders the notice a “nullity”, “not competent” or in any case “invalid”. These characterisations adopt language used to describe both notices to complete and notices of termination in similar but not identical contexts in Hamdan v Widodo (No 2) [2010] WASC 6, Johnson J at [128]; Morrow v Tucker (No 2) [2006] NSWSC 1358, Biscoe AJ at [21], quoting Pratt v Hawkins (1991) 32 NSWLR 319, Young J at 325; and Despot, Ball J at [62], respectively.
Ultimately, Mr Baeg submitted that while the Notice of Termination was “a mistake”, it was not “unlawful” in the repudiatory sense, nor did it alter the parties’ rights and obligations under the Contract, including the “new contractual rights” which arose following the defendants’ latest failure to complete and non-compliance with the order for specific performance (T26–7).
The crux of the defendants’ argument is that the extant order for specific performance prevented Mr Baeg from unilaterally terminating the Contract without approaching the court. The defendants say that Mr Baeg’s attempt to do so was “unlawful” and “wrongful” in the repudiatory sense (T17). The defendants also say that they accepted this repudiation on 27 March 2025, causing the Contract to be terminated. The defendants submit that the Contract is now at an end and Mr Baeg is not entitled to claim any damages (T23).
The defendants submit that the Notice of Termination was unlawfully given at a time when an order for specific performance was extant and was therefore a repudiation of the Contract capable of their acceptance some eight months later. In support of this contention, the defendants principally rely on the line of authority stated above which holds that once a party has obtained an order for specific performance, the subject contract comes within the control of the court and that termination after an order for specific performance requires leave of the court or, more appropriately, vacation of the order, citing Sunbird Plaza, Mason CJ (with whom Deane, Dawson and Toohey JJ agreed) at 260 (quoted above).
As stated above, Mr Baeg refers principally to three cases to support his contention that the Notice of Termination should simply be treated as a “nullity”, “not competent” or in any case “invalid” for the purposes of terminating the contract. These cases are Hamdan, Johnson J at [128], Morrow, Biscoe AJ at [21] quoting Pratt, Young J at 325, and Despot, Ball J at [62].
I will briefly address each of these cases in turn.
Hamdan is a decision of the Supreme Court of Western Australia. The relevant facts are as follows. There was an extant order of specific performance in favour of the plaintiff purchaser in respect of a contract for the sale and purchase of land. The defendant vendor appealed that order. In light of the appeal, neither party took any action in furtherance of the order. The subject contract provided for settlement some 60 days following finance approval. Before the vendor’s appeal was determined, the vendor issued a notice to complete requiring completion within 25 business days. It was said to be issued based on the vendor’s view of the futility of their own appeal. The purchaser declined to complete unless the vendor either discontinued their appeal or secured the purchaser’s costs of the same. The vendor did not agree and issued a default notice requiring completion in 10 business days. The purchaser did not complete within that time and the vendor then served a notice of termination. The vendor’s appeal was subsequently dismissed with costs following which the purchaser enquired as to completion. The vendor insisted that the contract was at an end and filed a summons seeking a declaration to that effect. The purchaser brought a motion seeking implementation of (or further directions in respect to) the order for specific performance. Johnson J considered the authorities and determined at [126] and [128]:
[126] It can also be seen from the above analysis of the authorities that they support the plaintiff’s argument that the defendant should have come before the court seeking orders implementing the order for specific performance if it wished to settle at the time nominated in its notice. The plaintiff would then have been able to raise its concerns about being required to settle before disposal of the appeal, concerns which in my view are completely reasonable, and the court would have made orders for effecting settlement which occasioned no detriment to either party, such as an order that the defendant discontinue the appeal. The authorities also support the plaintiff’s position that the defendant’s completion notice served under the contract is neither valid nor effective and hence the notice terminating the contract is invalid and of no effect.
…
[128] The issue of the notice to complete and purporting to rescind the contract was conduct undertaken without leave of the court and occurred in the face of an order for specific performance. In my view, the notice of completion was a nullity and the purported rescission of no effect. Therefore, the order for specific performance stands as an operative order of this court to be implemented by appropriate directions.
[21] … In principle, where an order for specific performance has been made, whatever its precise form, the rights and obligations of the parties come under the control of the Court, or, looking at the other side of the coin, the working out of the order of specific performance comes under the control of the Court. In principle, I see no justification for a different procedure depending on the precise form of the order. This is supported by the authority of Pratt v Hawkins (1991) 32 NSWLR 319 where an order was made by consent that a contract for the sale of land “be specifically performed according to its terms”. This was similar in form to the order made in the present case. Subsequently a further order was made by consent that the contract “be rescinded”. An application was made for the return of the deposit under the Conveyancing Act 1919 s 55(2A). Young J (as his Honour then was) held at 324: “When an order for specific performance of a contract is made, the contractual rights of the parties under the contract continue in existence but there is superadded the requirement to defer to the court’s direction and control in respect of any matter which the parties cannot themselves solve by agreement”. After referring to Singh, Buckman and Jag (above), his Honour continued at 325:
It is not competent, in my view, for vendors who have obtained an order for specific performance to give a notice to complete without the leave of the court … As after a decree of specific performance there can be no termination without the leave of the court, the only appropriate method of procedure is to write a letter to the party allegedly in default indicating that a notice of motion seeking termination will be filed if there is no action by the opponent. Indeed, the preferable course is to apply for directions for the implementation of the decree of specific performance which fixes times and places for various steps to be performed and contains a default order for termination if those times are not complied with.
…
In Despot, among the five motions before Ball J was a motion filed by Mr Despot seeking a declaration that he had validly terminated a contract for the sale and purchase of land which was the subject of an extant order for specific performance in favour of the third defendant. That termination was said to be achieved by notice served against the third defendant in the face of the order. One of the many “insuperable difficulties” with Mr Despot’s claim as identified by Ball J was that Mr Despot could not terminate the contract “without first seeking an order that the order for specific performance be vacated”. Consequently, his Honour determined the notice of termination he gave was “invalid”: Despot, Ball J at [62]. His Honour went on to determine that Mr Despot was not entitled to terminate the contract in any event for several reasons which are of no moment in these proceedings.
In this case, Mr Baeg issued the Notice of Termination absent an order of this court vacating the order for specific performance.
In light of the applicable principles outlined above, to the extent it is necessary for me to do so, I have determined that the Notice of Termination was invalid for the purpose of terminating the contract: Despot, Ball J [62].
Perhaps more importantly, I have also determined that the defendants had clearly and repeatedly demonstrated an unwillingness or inability to complete the Contract, including after the order for specific performance was made and had thereby repudiated the contract. At the time the Notice of Termination was issued, Mr Baeg undoubtedly had a common law right to accept that repudiation and terminate the Contract: Aarons, Kirby P at 13,914.
Having determined the Notice of Termination was invalid for the purposes of terminating the Contract, I must now consider whether service of the Notice of Termination was repudiatory in the sense contended by the defendants.
The essence of the defendants’ argument is that Mr Baeg “wrongfully terminated” the Contract and by doing so, repudiated it. It is said by the defendants that Mr Baeg’s attempted termination was “unlawful because it was inconsistent with the decree of specific performance” and because it was not open to Mr Baeg to seek to terminate the Contract without first seeking leave of the court to do so (T18).
Upon my enquiry, counsel for the defendants properly accepted that, given that Wink Singh had failed to complete the Contract on several occasions in breach of the Contract and orders of this court, there was repudiatory conduct on their part or, at the very least, there was non-compliance with the order for specific performance. On this footing, it was accepted that prior to issuing the Notice of Termination, Mr Baeg undoubtedly had a “right to approach the court” to withdraw his election for specific performance and to seek damages in the alternative. The defendants say Mr Baeg’s failure to approach the court should not be forgiven but also seem to accept that, if their argument is correct, their own unilateral termination (in supposed acceptance of Mr Baeg’s purported repudiation) would be faced with the same issue (T25–26).
Once an order for specific performance has been made in respect of a contract, that contract comes under the control of the court and cannot be validly determined inter partes. However, Mr Baeg’s attempt to exercise his common law right to terminate the Contract without leave of the court – while invalid and of no legal effect – is not an “unlawful termination” in the repudiatory sense contended by the defendants in the circumstances of this case: see, for example, Hong, Basten AJA (with whom Macfarlan JA and Simpson AJA agreed) at [25], [31] and [58]; Carr, Fullagar J (with whom Dixon CJ, Williams, Webb and Kitto JJ agreed) at 343; Ogle, Barwick CJ at 453–4, Gibbs, Mason and Jacobs JJ at 458–9.
The defendants’ argument, if successful, would make a mockery of this court’s supervisory jurisdiction and, in its essence, seeks to do the very thing the authorities weigh heavily against, which is to merge the rights and obligations arising under a contract with those arising pursuant to an order for specific performance: Fu, Stevenson J at [52]; Johnson v Agnew, Wilberforce LJ at 393–4; JAG Investment [1981] 2 NSWLR 600, Hope JA (with whom Glass and Mahoney JJA agreed) at 603; Ogle, Gibbs, Mason and Jacobs JJ at 461, as quoted in Sunbird Plaza, by Mason CJ (with whom Deane, Dawson and Toohey JJ agreed) at 259–60; see also Gaudron J at 273.
The key principles regarding specific performance have been outlined above and I do not intend to repeat them here. I will outline the scope of the court’s jurisdiction to supervise and, where appropriate, vary or dissolve an order for specific performance in light of continued non-compliance.
In Riltang Pty Ltd v L Pty Ltd [2004] NSWSC 977, White J considered the width of this court’s jurisdiction to superintend the enforcement or working out of an order for specific performance at [51]:
It is well established that where a plaintiff obtains an order for specific performance the Court may substitute other forms of relief where a decree of specific performance is not complied with. (Fry on Specific Performance (6 ed paras 1170–1181)) ... Where either plaintiff or defendant wishes to rescind a contract pursuant to a contractual right to do so, or terminate it for breach, he must obtain leave, or more appropriately, vacation of the order for specific performance. (Sunbird Plaza Pty Ltd v Maloney [1988] HCA 11; (1988) 166 CLR 245 at 260; JAG Investment Pty Limited v Strati at 603–604). Whilst not directly in point these cases illustrate the width of the Court’s jurisdiction to superintend the enforcement or working out of an order for specific performance.
First, when a decree for specific performance is made, the court may grant further relief, including — where, despite the decree, the defendant fails or refuses to complete the contract — by rescinding the order and substituting alternative relief [see Edward Fry, Fry on Specific Performance, 6th ed (1921) Stevens & Sons at 546-7, [1170]–[1173]; Gareth Jones and William Goodhart, Specific Performance, 2nd ed (1996) Butterworths at 258-9; Morrow v Tucker (No 2), [8]–[9]]. So in Johnson v Agnew [1980] AC 367, Lord Wilberforce explained (at 393–4) that where an order for specific performance is not complied with by a purchaser, the vendor may either apply to the court for enforcement of the order, or apply to dissolve the order and ask the court to put an end to the contract. And as Campbell J (as his Honour then was) said in Zorbas v Titan Properties (Aust) Pty Ltd [2005] NSWSC 440, (at [12]), it is a general principle concerning orders for specific performance that once such an order has been made, the contractual rights of the parties are not superseded but their future exercise is under the control of the court, so that the working out of the order for specific performance is under the court’s control [see Singh (Sudagar) v Nazeer [1979] Ch 474 at 481–2; Buckman v Rose (1980) 1 BPR 9558; Sunbird Plaza Pty Ltd v Maloney (1988) 166 CLR 245 at 259–60]. Similarly, in Morrow v Tucker, Biscoe AJ said (at 21) that where an order for specific performance has been made, the rights and obligations of the parties come under the control of the court, and the working out of the order of specific performance is under the control of the court; reference was made to Pratt v Hawkins (1991) 32 NSWLR 319. Counsel for the defendants accepted that if, on such an application, the court allowed the contract to be discharged, it could substitute an award of damages; although I have not found a case that goes so far, the concession appears in principle to be necessarily correct. Thus, in the case of a decree for specific performance, it remains open to the court, in the event of continued non-performance, to substitute different relief.
It is clear that this court may, upon application, vacate an unfulfilled order for specific performance, determine the subject contract and substitute alternative relief: Riltang, White J at [51]; Construction Technologies Australia Pty Ltd v Doueihi (No 5) [2018] NSWSC 294, Kunc J at [74]; Georges, Brereton J at [25]; McLeary v Swift [2014] NSWSC 1414, Hallen J at [50].
Their technical argument having failed, the defendants have not complied with the extant order for specific performance and have repeatedly demonstrated their unwillingness or inability to perform the Contract. Mr Baeg is entitled to bring the Contract to an end and seek alternate relief: Despot, Ball J at [48]–[49].
In the circumstances, I am satisfied that the Contract ought to be terminated. I have determined that the order for specific performance of the Contract as made by Parker J on 9 May 2024 is to be vacated and, to the extent it is necessary for me to do so, I will grant leave to Mr Baeg to terminate the Contract and seek damages in lieu of performance.
Where a party sustains a loss by reason of a breach of contract, he [or she] is, so far as money can do it, to be placed in the same situation, with respect to damages, as if the contract had been performed.
The High Court has described this as the “ruling principle” with respect to damages at common law for breach of contract, as approved by that court on many occasions: see, for example, Tabcorp Holdings Ltd v Bowen Investments Pty Ltd (2009) 236 CLR 272; [2009] HCA 8, French CJ, Gummow, Heydon, Crennan and Kiefel JJ at [13]; Commonwealth v Amann Aviation Pty Ltd (1991) 174 CLR 64, Mason CJ and Dawson J at 80; [1991] HCA 54; Wenham v Ella (1972) 127 CLR 454, Gibbs J at 471; [1972] HCA 43.
Where a contract for the sale and purchase of land is terminated due to the purchaser’s breach, the vendor is entitled to seek damages for loss of bargain: Dyco Hotels Pty Ltd v Laundy Hotels (Quarry) Pty Ltd [2021] NSWSC 504, Darke J at [118], citing Tabcorp Holdings*,* French CJ, Gummow, Heydon, Crennan and Kiefel JJ at [13].
The measure of damages for the loss of a contractual bargain in respect of an uncompleted contract for the sale and purchase of land calls for a comparison between the contract price that would have been received if the contract had been completed and the value of the assets retained by the vendor due to the fact that it was not completed: Dyco Hotels, Darke J at [119] and [129].
Damages for breach of contract are generally assessed as at the date of breach: Clark v Macourt (2013) 253 CLR 1; [2013] HCA 56, Keane J (with whom Crennan and Bell JJ agreed, with Hayne J agreeing “generally”) at [109]. However, this rule will yield if the particular circumstances of the case require some later date to provide adequate compensation: Johnson v Perez (1988) 166 CLR 351, Wilson, Toohey and Gaudron JJ at 367; [1988] HCA 64; Vieira v O*’*Shea [2012] NSWCA 21, Basten and Meagher JJA (with whom Handley AJA agreed) at [45], as cited in Ng v Filmlock Pty Ltd (2014) 88 NSWLR 146; [2014] NSWCA 389, Gleeson JA (with whom Tobias AJA agreed) at [51]–[53].
In the context of a claim for loss of bargain damages upon termination for breach, the date of breach should be understood as the date of termination for breach: Ng v Filmlock, Emmett JA (with whom Tobias AJA agreed) at [26] and Gleeson JA (with whom Tobias AJA also agreed) at [44].
The right to loss of bargain damages only arises at the time the bargain is lost: Sunbird Plaza, Mason CJ (with whom Deane, Dawson, and Toohey JJ agreed) at 260–1 and Gaudron J at 273.
Where a party has sought and obtained an order for specific performance in the face of earlier breaches of contract, damages should be assessed as at the date the remedy of specific performance is no longer available and the contract is lost: [2019] NSWCA 111, Payne JA (with whom Macfarlan and Leeming JJA agreed) at [50]–[54].
Mr Baeg seeks damages for loss of bargain, including $1,100,000, which is said to constitute the difference between the Contract Price of $3,500,000 and the Agreed Value of the Property he retains, being $2,400,000.
Mr Baeg also seeks interest in the amount of $822,583.61 pursuant to the Contract as amended by the First Addendum, as well as certain holding costs incurred in respect of the Property in the amount of $14,049.58.
As dealt with above, the defendants’ primary position is that Mr Baeg’s misguided attempt to terminate the Contract was a repudiation which they accepted some eight months later, and so Mr Baeg is not entitled to damages at all.
Alternatively, the defendants submit that Mr Baeg should not be entitled to any of the holding costs, save for those incurred by way of legal fees in respect of the contemplated conveyance of the Property to Wink Singh, including the cost of drafting the Contract and the addenda.
The defendants made no submissions as to Mr Baeg’s calculations in respect of the value of the loss of bargain (at least those on the footing of the agreed value), nor the interest calculations provided at the hearing.
In the circumstances of this case, the relevant date for the assessment of damages is the date of my orders vacating the order for specific performance and granting leave to Mr Baeg to terminate the Contract and seek damages in lieu of performance, which is the date on which the remedy of specific performance is no longer available and the Contract is lost: El Ali, Payne JA (with whom Macfarlan and Leeming JJA agreed) at [50]–[54].
Mr Baeg has provided proof of loss up until various dates, with loss of bargain damages including interest calculated up until 14 July 2025 (the date of the hearing) and holding costs calculated up until 1 April 2025. The defendants made no submissions on this so I will proceed with my assessment on the evidence before me.
The Contract price is $3,500,000. The Agreed Value is $2,400,000. It is on this basis that Mr Baeg claims $1,100,000 for loss of the bargain.
Curiously, while Mr Baeg accounted for the $192,500 received by him by way of both the Deposit and Increased Deposit in his calculation of interest, it was not accounted for in his loss of bargain calculation. In his written submissions, there was suggestion that an allowance should be made for the Deposit (incorrectly stated to be $86,000), but not the Increased Deposit. No explanation was provided by counsel for Mr Baeg and the discrepancy was not raised by the defendants.
To make no allowance for either the Deposit or Increased Deposit would amount to the “double dipping” that the defendants colloquially complained about at the hearing, though that complaint was directed toward the holding costs in circumstances where it was agreed that Mr Baeg has continued to have the benefit of occupying the Property (T15).
Had the contract been performed, Mr Baeg would have received $3,500,000 including the Deposit and Increased Deposit in consideration for the Property. With the Contract not performed, Mr Baeg received $192,500 and retains the Property having an Agreed Value of $2,400,000.
I have determined that Mr Baeg is entitled to $907,500 for loss of bargain damages.
Mr Baeg claims interest pursuant to Special Condition 3 of the Contract as amended by the First Addendum.
The interest calculations provided at the hearing are as follows:
$123,934.25 for the period from 6 September 2022 to 4 June 2023 pursuant to cl 2 of the First Addendum, which provided for a reduced rate of interest during that period relative to that provided for under Special Condition 3 of the Contract; and
$698,649.36 for the period from 5 June 2023 to 14 July 2025 (being the date of the hearing). That amount has been calculated by reference to the balance due on completion (being $3,500,000 – $192,500 = $3,307,500). That amount has then been subject to interest at a rate of 10% per annum as provided for under Special Condition 3 of the Contract for a period of 771 days. That results in an amount of $698,652.74 with the slight discrepancy in the amount claimed simply reflective of a rounding down to the closest decimal point when calculating the interest due per annum.
The defendants made no submissions on interest.
Both amounts are due under the Contract as amended and would have been received by Mr Baeg had the Contract been performed on 14 July 2025 or at the date of my orders.
I have determined that Mr Baeg is entitled to interest in the amount as claimed, being $822,583.61.
By affidavit sworn 18 March 2025, Mr Baeg set out other various expenses he has incurred in relation to the Property between 29 September 2023 (being the date upon which the Third Notice to Complete required completion) and 1 April 2025.
These expenses have been characterised by Mr Baeg as “holding costs” associated with the Property and form part of his claim for damages. Each of them will be addressed in turn.
Mr Baeg retained Sojong Lawyers & Attorneys to act for him in relation to the contemplated sale and conveyance of the Property.
In the period from 29 September 2023 to 1 April 2025, Mr Baeg incurred legal fees and disbursements associated with that envisaged transaction, including those charged by Sojong in relation to:
preparation of the contract of sale;
negotiations in relation to extensions of time for completion following Wink Singh’s several failures to complete within time; and
the drafting of the two addenda following those negotiations.
The three invoices rendered by Sojong in relation to those costs, dated 28 May 2021, 28 September 2022 and 17 October 2022 are in evidence before me and total $5,550.12.
Mr Baeg seeks to recover these costs from the defendants by way of damages.
The defendants concede that, should their argument in relation to the Notice of Termination prove unsuccessful (which it has), these legals costs are recoverable (T16).
I have determined that the legal costs incurred by Mr Baeg in the amount of $5,550.12 are recoverable.
The Property is situated in Hornsby Shire Council. The Council issues annual rates and charges.
Two notices issued to Mr Baeg by the Council are in evidence before me, being those relating to the periods 1 July 2023 to 30 June 2024 and 1 July 2024 to 30 June 2025. The full amount payable under each notice is $2,230.22 and $2,401.45, respectively.
In the period from 29 September 2023 to 1 April 2025, Mr Baeg incurred Council rates and charges in the amount $3,481.46.
Mr Baeg seeks to recover that amount from the defendants by way of damages.
The defendants do not accept that the Council rates and charges should be recoverable. The defendants argued that the Council rates and charges were payable “by reason of living at the property”, that Mr Baeg “is not paying council rates elsewhere” and that because he continues to reside at the Property, he obtains (or retains) the benefit of it (T16). I reject each of those arguments.
The Council rates and charges have been incurred by Mr Baeg in the period from 29 September 2023 to 1 April 2025 by virtue of him being the “owner for the time being of land” on which those rates and charges were levied: ss 560(1) and 561(a) of the Local Government Act 1993 (NSW).
The Council rates and charges are not attributable to Mr Baeg’s continued occupation of the Property; they are attributable to the fact that he has been forced to continue to hold title to the Property contrary to both the terms of the Contract and orders of this court that required the Contract to be performed.
I have determined that the Council rates and charges claimed by Mr Baeg in the amount of $3,481.46 are recoverable.
In the period from 29 September 2023 to 1 April 2025, Mr Baeg has incurred fixed service charges and usage charges from Sydney Water on a quarterly basis.
As the labels suggest, fixed service charges are a fixed charge levied in relation to the Property’s connection to water and wastewater services and usage charges relate to the water actually supplied to the Property during the relevant period.
Six notices issued to Mr Baeg by Sydney Water are in evidence before me, being those relating to the periods:
1 October 2023 to 31 December 2023;
1 January 2024 to 31 March 2024;
1 April 2024 to 30 June 2024;
1 July 2024 to 30 September 2024;
1 October 2024 to 31 December 2024; and
1 January 2025 to 31 March 2025.
All six notices fall within the period of time identified by Mr Baeg as relevant to his calculation of holding costs, being from 29 September 2023 to 1 April 2025.
The total amount of fixed service charges incurred within that period are $1,030.72. The total amount of usage charges incurred within that period are $1,035.96.
Mr Baeg only seeks to recover the amount of $1,030.22 from the defendants by way of damages in respect of the fixed service charges. No claim in respect of usage charges is pressed.
The defendants do not accept that the Sydney Water fixed service charges should be recoverable (T16).
The Sydney Water fixed service charges have been incurred by Mr Baeg in the period from 29 September 2023 to 1 April 2025 by virtue of him being the “owner of land that is connected to a water main or sewer main” owned by Sydney Water: see, for example, s 55(1) of the Sydney Water Act 1994 (NSW).
The Sydney Water fixed service charges are not attributable to Mr Baeg’s occupation of the Property; they are attributable to the fact that he has been forced to continue to hold title to the Property contrary to both the terms of the Contract and orders of this court that required the Contract to be performed.
I have determined that the Sydney Water fixed service charges claimed by Mr Baeg in the amount of $1,030.22 are recoverable.
From 29 September 2023 to 1 April 2025, Mr Baeg has maintained insurance in respect of the Property with Auto & General Insurance Company Limited, trading as Budget Direct.
Two certificates of insurance are in evidence before me, being those which concern the periods 3 June 2023 to 2 June 2024 and 3 June 2024 to 2 June 2025. The insurance obtained covers the home, contents and legal liability.
Mr Baeg claims the amount of $1,360.80 in respect of property insurance and says he has “made the appropriate adjustments” to accurately reflect the insurance premiums incurred from 29 September 2023 to 1 April 2025. No evidence was provided as to his method of calculation.
The defendants do not accept that Mr Baeg’s cost of maintaining insurance in respect of the Property should be recoverable (T16).
The insurance premiums for the period of 3 June 2023 to 2 June 2024 total $946.30 (a period of 366 days). Of that amount, $801.67 is attributed to the premium in respect of the Property and $144.63 is attributable to the premium in respect of its contents. If 29 September 2023 (the date the Contract was required to complete in accordance with the Third Notice to Complete) is included, insurance premiums for 248 days were required to be incurred by Mr Baeg during that period.
The insurance premiums for the period of 3 June 2024 to 2 June 2025 total $864.60 (a period of 365 days). Of that amount, $678.07 is attributed to the premium in respect of the Property and $186.53 is attributable to the premium in respect of its contents. If 1 April 2025 is included, insurance premiums for 303 days were required to be incurred by Mr Baeg during that period.
I consider that it was necessary for Mr Baeg as the owner of the Property to maintain insurance on the building/s situated there and for any legal liability arising from his ownership of the Property. Mr Baeg has been required to insure the Property because the defendants have failed to complete the Contract, contrary to both the terms of the Contract and orders of this court that required the Contract to be performed.
The same cannot be said of the premiums incurred in respect of the contents of the Property. Those items are personal property, unconnected to the realty and in respect of which Mr Baeg has enjoyed the benefit of insurance during the relevant periods. For that reason, in my calculation below, I have not accounted for the costs of that insurance.
I will allow for 248 days of coverage with respect to the Property within the period of 3 June 2023 to 2 June 2024 ($801.67 ÷ 366 x 248 = $543.21) and 303 days of coverage within the period of 3 June 2024 to 1 April 2025 ($678.07 ÷ 365 x 303 = $562.89). This amounts to a total of $1,106.10.
I have determined that insurance premiums claimed by Mr Baeg in the amount of $1,106.10 are recoverable.
From 29 September 2023 to 1 April 2025, Mr Baeg has once arranged for pest control services to be completed at the Property.
The invoice dated 1 April 2024 in the amount of $165 is in evidence before me.
That invoice was rendered by BugZoff Termite & Pest Management for termite treatment of the multi-level house situated at the Property.
Mr Baeg claims the full amount of that invoice.
The defendants do not accept that the pest control service charge should be recoverable (T17).
Pest control for termites is protective of the building/s situated on the Property. Mr Baeg has been required to prevent termites damaging the Property because the defendants have failed to complete the Contract, contrary to both the terms of the Contract and orders of this court that required the Contract to be performed.
I have determined that the pest control charges claimed by Mr Baeg in the amount of $165 are recoverable.
From 29 September 2023 to 1 April 2025, Mr Baeg has arranged for gardening and maintenance works to take place at the Property on several occasions.
There are 15 invoices in evidence before me, four of which were rendered by The Grass Muncherz for basic lawn care with the balance rendered by Benji’s Gardens for both lawn mowing and leaf blowing. The dates and amounts of those invoices are as follows:
7 December 2023 in the amount of $200;
29 February 2024 in the amount of $200;
1 April 2024 in the amount of $200;
9 May 2024 in the amount of $200;
14 June 2024 in the amount of $80;
21 June 2024 in the amount of $120;
26 July 2024 in the amount of $160;
11 October 2024 in the amount of $160;
1 November 2024 in the amount of $163.24;
22 November 2024 in the amount of $163.24;
13 December 2024 in the amount of $163.24;
4 January 2025 in the amount of $163.24;
31 January 2025 in the amount of $163;
21 February 2025 in the amount of $163; and
15 March 2025 in the amount of $163.24.
Mr Baeg claims the total of those 15 invoices, being $2,462.20.
The defendants do not accept that the gardening and maintenance works charges should be recoverable (T17).
Mr Baeg has been required to maintain the gardens on the Property because the defendants have failed to complete the Contract, contrary to both the terms of the Contract and orders of this court that required the Contract to be performed.
I have determined that the gardening and maintenance charges claimed by Mr Baeg in the amount of $2,462.20 are recoverable.
For the reasons set out above, I have concluded Mr Baeg should be awarded damages in the total amount of $1,743,878.71.
In light of Mr Baeg’s success in respect of his motion, costs should follow the event.
The orders I proposed to make are as follows:
Order that the order for specific performance, being Order 2 of 9 May 2024, be vacated.
Declare that the first defendant failed to perform and repudiated the Contract dated 4 September 2021 for sale and purchase of land situated at XXX Pennant Hills Road, West Pennant Hills in the State of New South Wales, being the land comprised in Folio Identifier XX/XXXXXXX, as between the plaintiff as vendor, the first defendant as purchaser and the second defendant as guarantor (Contract).
Grant leave to the plaintiff to accept the first defendant’s repudiation and terminate the Contract.
Order the defendants to pay damages to the plaintiff in the amount of $1,743,878.71.
Order the defendants to pay the costs of the plaintiff of the proceedings, as agreed or assessed.
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Baeg
Wink Singh Pty Ltd
(1953) 89 CLR 327
(2013) 253 CLR 1
(1991) 174 CLR 64
(1925) 35 CLR 566
(2014) 87 NSWLR 119
(1931) 45 CLR 282
(1988) 166 CLR 351
(1933) 48 CLR 457
(2014) 88 NSWLR 146
(1976) 136 CLR 444
(1998) 195 CLR 1
(1991) 32 NSWLR 319
(1982) 149 CLR 620
(1988) 166 CLR 245
(2009) 236 CLR 272
(1972) 127 CLR 454
vacate the decree of specific performance made by Parker J on 9 May 2024;
declare that Wink Singh, by failing or refusing to complete the Contract, has thereby repudiated it;
grant leave to Mr Baeg to accept the repudiation of, and terminate, the Contract; and
award damages and costs.
At the hearing before me, the defendants’ principal complaint in opposition to Mr Baeg’s application is that having obtained an order for specific performance of the Contract, Mr Baeg could not terminate it without leave or further order of this court. The defendants say Mr Baeg’s purported termination on 16 July 2024 amounted to a repudiation, which they belatedly accepted on 27 March 2025. On that somewhat ironic basis, the defendants (as parties who have been in continual default of their obligations under the Contract and the orders made in accordance with the First Judgment) say that the Contract has been terminated by the defendants and so Mr Baeg is not entitled to damages.
For the reasons that follow, I have determined to vacate the order for specific performance of the Contract, grant leave to Mr Baeg to terminate the Contract and seek damages in lieu of specific performance and award those damages to Mr Baeg against the defendants, as assessed below, plus costs.
The doctrinal and jurisdictional debates surrounding the “accepted rule” are not determinative of the issue before me and it is thankfully not necessary for me to unravel them. In this respect, I adopt the remarks of Hope JA in JAG Investment at 603–4:
Mr Baeg’s purported termination of the Contract by serving the Notice of Termination on 16 July 2024 was exactly that and nothing more – purported. It was not an unlawful termination amounting to a repudiation. However, it was invalid and ineffective because, having sought and obtained an order for specific performance of the Contract, Mr Baeg had no ability to determine the Contract without leave or further order of this court. That order still stands subject to Mr Baeg’s motion to have it vacated.