Carter v Mehmet

Scott (1922) 30 CLR 387; [1922] HCA 13 Carydis v Merrag Pty Ltd [2007] NSWSC 1220 CIC Insurance Ltd v Bankstown Football Club Ltd (1997) 187 CLR 384; [1997] HCA 2 Country Energy v Williams (2005) 63 NSWLR 699; [2005] NSWCA 318 Crowe v Rindock [2005] NSWSC 375; (2005) 12 BPR 22,823 DTR Nominees Pty Ltd v Mona Homes Pty Ltd (1978) 138 CLR 423; [1978] HCA 12 Federal Commissioner of Taxation v Consolidated Media Holdings Ltd (2012) 250 CLR 503; [2012] HCA 55 Festa Holdings Pty Ltd v Adderton [2004] NSWCA 228 Flight v Booth [1834] Eng R 1087; (1834) 131 ER 1160 Frankel v Paterson [2015] NSWSC 1307 Godfrey Constructions Pty Ltd v Kanangra Park Pty Ltd (1972) 128 CLR 529; [1972] HCA 36 Gogard Pty Ltd v Satnaq Pty Ltd [1999] NSWSC 1283; (1999) 9 BPR 17,171 Greek Orthodox Parish Community of St Marys and District Ltd v Denis Stanley Merrick [2014] NSWSC 1196 Green v Sommerville (1979) 141 CLR 594; [1979] HCA 60 Gupta v Fordham Laboratories Pty Ltd [2018] NSWSC 551 Liberty Grove (Concord) Pty Ltd v Yeo [2006] NSWSC 1373 Mehmet v Carter [2017] NSWSC 1067 Mehmet v Carter (2018) 98 NSWLR 977; [2018] NSWCA 305 Mehmet v Carter [2020] NSWSC 413 Micos v Diamond [1970] 3 NSWR 407; (1970) SR (NSW) 392 Re Ford & Hill (1879) 10 Ch D 365 Re Stone and Saville's Contract [1962] 1 WLR 460 Reysson Pty Ltd v Minister Administering the Environmental Planning and Assessment Act 1979 [2020] NSWCA 281 Shevill v Builders Licensing Board (1982) 149 CLR 620; [1982] HCA 47 Travinto Nominees Pty Ltd v Vlattas (1973) 129 CLR 1; [1973] HCA 14 Votraint No 1088 Pty Ltd v Commonwealth [2004] NSWSC 1003 Walton v Stocks & Parkes Investments Pty Ltd (1975) 1 BPR 9660 William Sindall PLC v Cambridgeshire County Council [1994] 1 WLR 1016 Winchcombe Carson Trustee Co Ltd v Ball-Rand Pty Ltd [1974] 1 NSWLR 477 Yanner v Eaton (1999) 201 CLR 351; [1999] HCA 53 Texts Cited: FE Moss, Sale of Land in New South Wales (5th ed, 1973, Butterworths) L Voumard, The Sale of Land (5th ed, 1995, Law Book Co) P Butt, The Standard Contract for Sale of Land in New South Wales (2nd ed, 1998, Law Book Co) Patricia Lane, Sale of Land in New South Wales (6th ed, 2018, Law Book Co) Roy Milner Stonham, The Law of Vendor and Purchaser (1964, Law Book Co) T Williams, A Treatise on the Law of Vendor and Purchaser of Real Estate and Chattels Real (3rd ed, 1922, Sweet and Maxwell) Category: Principal judgment Parties: Murray John Carter (First Appellant) The Wheel Resort Pty Ltd (Second Appellant) Cathscompany Pty Ltd (Third Appellant) Ian Mehmet t/as ATF Ian G Mehmet Testamentary Trust (First Respondent) Cameron Mehmet t/as ATF Cameron Mehmet Testamentary Trust (Second Respondent) Errol Mehmet t/as ATF Errol J Mehmet Testamentary Trust (Third Respondent) Cheers Aviation Pty Ltd t/as ATF KMCG Investment Trust (Fourth Respondent) Matthew Timothy Cheers (Fifth Respondent) Representation: Counsel: T Alexis SC, M Southwick (Appellants) DA Smallbone (Respondents)

Solicitors: Australian Law Group Heydons (Appellants) Beswick Lynch Lawyers (Respondents) File Number(s): 2020/140939 Publication restriction: Nil Decision under appeal Court or tribunal: Supreme Court of New South Wales Jurisdiction: Equity Citation: [2020] NSWSC 413 Date of Decision: 17 April 2020 Before: Ward CJ in Eq File Number(s): 2015/360420

[Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.]

HEADNOTE [This headnote is not to be read as part of the judgment] The appellants, Mr Murray Carter, The Wheel Resort Pty Ltd and Cathscompany Pty Ltd (the vendors), and the first to fourth respondents, Messrs Ian, Cameron and Errol Mehmet and Cheers Aviation Pty Ltd (the purchasers), entered into a contract dated 6 July 2015 for the sale of land in Byron Bay. The fifth respondent, Mr Matthew Cheers, guaranteed the performance of the purchasers under the contract. The subject land comprised two lots. Lot 1, approximately 7 acres in size, was partly zoned for commercial tourism use; Lot 10, approximately 23 acres in size, was zoned for environmental protection. Due to a number of zoning constraints affecting the subject land, the potential commercial development of the land was largely, if not wholly, limited to Lot 1. The cover page of the contract fixed the completion date for the "30th day after the contract date", being 5 August 2015. By special condition 21 of the contract, completion was conditional on Mr Carter becoming registered proprietor of Lot 1, and was to take place within 14 days after the vendors' solicitor had given written notice of registration of a Transmission Application by which Mr Carter would acquire the interest of his late wife in Lot 1. By special condition 8, the purchasers were liable to pay default interest in the event that completion did not occur "by the completion date, without default by the vendor". Situated on Lot 1 was a memorial stone and plaque referring to a nearby burial site of Harry and Clara Bray, tribal elders of the Bundjalung tribe. The memorial stone and plaque were placed on the land in 1988 by the NSW Government with the then proprietor's consent to commemorate the Australian Bicentenary. Although it was reputed in the local Arakwal community that Harry and Clara Bray (and perhaps other Aboriginal persons) were buried in the land, the existence or location of their remains was not known. On 28 July 2015, the purchasers raised an objection on the basis that the remains of Harry and Clara Bray and other Aboriginal persons were reputed to be located on the land, and that, being "Aboriginal objects" within the meaning of the National Parks and Wildlife Act 1974 (NSW), they constituted a defect in the vendors' title. The vendors denied knowledge of the Aboriginal objects, or that their reputed presence on the land constituted a defect in title. Between August and September 2015, the purchasers raised further objections and requisitions in relation to the presence of Aboriginal objects on the land, and their effect on the vendors' title; the vendors continued to contest the presence of any Aboriginal objects on the land and sought further information from the purchasers about their contention to the contrary. Meanwhile, on 17 July 2015, the vendors lodged the Transmission Application. On 3 August 2015, although written notice of lodgement of the Transmission Application had not been given in accordance with special condition 21, the vendors' solicitor nominated 5 August 2015 as the date for completion. On 4 August 2015, the vendors supplied the purchasers with executed transfer forms which relevantly identified Mr Carter as registered proprietor of Lot 1. Settlement did not take place on 5 August 2015. On 27 August 2015, the vendors' solicitor issued a notice to complete, appointing 10 September 2015 as the settlement date. The settlement figures provided with the notice required payment of default interest calculated from 5 August 2015. The notice was withdrawn on 11 September 2015 and replaced by a second notice to complete appointing 28 September as the date for completion. Updated settlement figures provided with the notice also required payment of default interest calculated from 5 August 2015. On 23 September 2015, the purchasers' solicitor issued a notice to perform requiring the vendors to withdraw their notice to complete and demand for default interest and to submit corrected settlement figures, and making time of the essence. The vendors did not comply with the notice to perform and insisted on completion by the purchasers. On 25 September 2015, the purchasers gave notice purporting to terminate the contract for repudiation. On 6 October 2015, the vendors in turn purported to terminate the contract on the basis that the purchasers' notice of termination amounted to repudiation of the contract. The issues in the appeal were:

Judgment

1. THE COURT: This appeal involves a dispute between parties to a contract for the sale of land in Byron Bay made in 2015. On 3 December 2015, the purchasers commenced proceedings seeking the return of their deposit and damages for breach of contract. The vendors cross‑claimed for damages for loss of the contract for sale. In a judgment delivered on 17 April 2020, the primary judge, Ward CJ in Eq, granted the relief sought by the purchasers and dismissed the vendors' cross‑claim: Mehmet v Carter [2020] NSWSC 413. The vendors appeal against the whole of the decision below.

The parties

1. The appellants in this appeal were the owners of certain land located on Broken Head Road, Byron Bay. The second appellant, The Wheel Resort Pty Ltd, and the third appellant, Cathscompany Pty Ltd, are controlled by the first appellant, Mr Murray Carter. The second appellant operated an ecological tourist resort known as the Rainforest Resort (formerly The Wheel Resort) on the land. Except where it is necessary to distinguish between them, the appellants will be referred to in this judgment as the vendors.
2. The first to third respondents in this appeal (the first to third plaintiffs and cross‑defendants in the primary proceedings), Messrs Ian, Cameron and Errol Mehmet, are brothers acting in their respective capacities as trustee for a named testamentary trust or partnership. The fourth respondent (fourth plaintiff and cross-defendant), Cheers Aviation Pty Ltd, is a corporate trustee of another investment trust. It is controlled by the fifth respondent (fifth cross‑defendant), Mr Matthew Cheers, who is a friend of the first respondent's son, Mr Adam Mehmet. Except where it is necessary to distinguish between them, the first to fourth respondents will be referred to in this judgment as the purchasers.

The contract for the sale of land

1. The land which formed the subject matter of the contract for sale comprises two lots. Lot 1 covers an area of approximately seven acres and is partly zoned for commercial tourism use. It is the land on which the Rainforest Resort was operated. When the contract was entered into, this parcel was held jointly by the third appellant, Cathscompany Pty Ltd, and by the first appellant's late wife, Mrs Catherine Carter. Lot 10 covers an area of approximately 23 acres and is zoned for environmental protection. When the contract was entered into, this parcel was held by the second appellant, The Wheel Resort Pty Ltd.
2. The land has been held under Torrens title since 14 September 1953. Before then, the land was held under a Crown Lease until 1925, and then under a Crown Tenure Conditional Purchase. Prior to 30 December 1916, part of Lot 1 also formed part of Crown Reserve No. R 43074 "for use of the land by Aborigines". Any potential commercial development of the land was largely, if not wholly, limited to Lot 1.
3. On 6 July 2015, the parties exchanged a contract for the sale of the land for $3 million (including a deposit of $300,000), and a contract for the sale of the Rainforest Resort business (the purchase price for which was included in the price for the sale of land). The contract did not disclose the existence of any Aboriginal objects in or on the land and made no reference to any Aboriginal cultural significance attaching to the site. The terms of the contract made clear that it was an unconditional contract, and that the purchasers were acquiring the property in its present state and condition.
4. On 9 July 2015, the first respondent received a copy of a report prepared by an environmental consultant, Mr Peter Parker, which referred to the land as the burial site of "two prominent Bundjalung elders", Harry and Clara Bray, and noted the site's "particular significance to the Arakwal", the local Aboriginal community group. This report is the genesis of the dispute between the parties which has led them to this Court on two occasions.
5. On 17 July 2015, a transmission application was lodged in respect of the half‑interest of the first applicant's late wife, Mrs Catherine Carter, in Lot 1. Special condition 21(a) of the contract for sale of land provided that completion was conditional on Mr Carter, as executor of the estate of his late wife, becoming the registered proprietor of Lot 1. Special condition 21(c) provided that completion should take place within fourteen days "after the Vendor's solicitors have notified the Purchaser or the Purchaser's solicitor in writing of registration of the Transmission Application". No formal and separate "written notice" of registration was sent to the purchasers. However, in this Court it was contended for the vendors that the provision of a copy of the executed transfer in respect of Lot 1 on 4 August 2015, which bore Mr Carter's name and signature as "transferor", was sufficient notice for the purpose of special condition 21(c). The primary judge considered that the provision of the executed transfer was not sufficient to satisfy the notice requirement in the special condition. As will become apparent, in their communications in August and September 2015 leading to the termination of the contract, the parties overlooked the operation of this clause.

The memorial stone and plaque

1. Situated on Lot 1 are a memorial stone and plaque which were placed there in 1988 with the consent of the then proprietors of the land by the New South Wales Government as part of projects to commemorate Australia's Bicentenary. As can be seen in the photograph below, which also includes a piece of A4 paper for scale, the stone (as distinct from the plaque) is approximately 1 metre in height and 1 metre in width at its base. The plaque affixed to the stone states: "Harry and Clara Bray tribal elders of the Bundjalung tribe buried near this site circa late 1890"
2. However, while the vendors admitted the presence of the memorial stone and plaque on Lot 1, they disputed the accuracy of the words inscribed on the plaque. They also disputed the claim that there were the remains of any Aboriginal persons (whether of Harry and Clara Bray, or others) on or within the land.

The alleged defect in title

1. The possible presence of Aboriginal objects on the land and the assertion of a possible defect in title arising from their presence was first raised in correspondence over three weeks after the contracts were exchanged. On 28 July 2015, the purchasers' solicitor wrote to the vendors' solicitor asserting that there were "Aboriginal objects" on the land within the meaning of the National Parks and Wildlife Act 1974 (NSW) which constituted a defect in title, and requiring the vendors to remove them before completion. The letter relevantly stated: "As your clients are aware, the remains of two Aboriginal elders are buried on the land the subject of the sale. There may be other Aboriginal remains on the land. Aboriginal remains constitute an 'Aboriginal object' as that term is defined in s. 5 of the National Parks and Wildlife Act 1974. Pursuant to s. 83 of the Act, the remains are deemed to be the property of the Crown. Section 86 prohibits the landowner (or any other person) from harming the remains, and 'harm', in relation to an object, is defined to include moving the object from the land on which it had been situated. The presence on the land of things that the vendors do not own and that prima facie cannot be moved is a defect in the vendors' title. … Our clients require this defect in title removed before settlement. Please let us know if you are able to do so, and if so, when and by what means."
2. The vendors' solicitor replied on 5 August 2015 (by letter dated 3 August 2015) noting the purchasers' allegation that the property is subject to a defect in title and asking for "the detail of that alleged defect and your claim". The purchasers' solicitor responded to that request on 17 August 2015 in the following terms: "As indicated in our letter to your office dated 28 July 2015 … we believe there is a defect in title as follows: 1) There are aboriginal objects on the land that the vendors do not own and cannot transfer title to; 2) The said objects cannot be removed (or even moved) without a permit that the purchaser does not have (and may not be able to obtain); 3) The land is accordingly rendered substantially less fit for the purpose for which it was purchased. Our clients request this defect in title be removed, so that good title can be provided on settlement. We respectfully ask you to urgently provide clarification as to your clients' position on providing good title on settlement."

Notices exchanged by the parties

1. The completion date for the sale nominated on the cover page of the contract for sale was the "30th day after the contract date", i.e. 5 August 2015. Special condition 21, however, provided for completion within 14 days after notice of registration of the Transmission Application. On 3 August 2015, the vendors' solicitor confirmed an appointment for settlement on 5 August 2015 at 11am. On 4 August, a copy of the executed transfer was provided together with a settlement adjustment sheet. Directions to pay were also provided. Settlement did not proceed on 5 August.
2. On 27 August 2015, the vendors' solicitor issued a notice to complete, appointing 10 September 2015 as the settlement date. The settlement figures provided with the notice to complete required payment of default interest from 5 August 2015. We will return to the significance of the date from which default interest was sought later in these reasons.
3. On 2 September 2015, the purchasers' solicitor responded to the notice to complete, asserting that the notice was invalid as the vendors had not shown good title at the time of its issue. The letter relevantly provided: "Your letters proceed on the assumption that the onus lies upon our clients to disprove your clients' title. On the contrary it is the obligation of the vendors to first show and then prove, by sufficient evidence, and prior to completion, a good title to the land promised to be sold, which the vendors are able to transfer and convey to the purchasers. … TAKE NOTICE THAT your clients are required to state, within a reasonable time, whether they are in a position to provide good title to the Land on 10 September 2015 by having first obtained from the Crown an assignment of any property vested in it pursuant to section 83 of the National Parks and Wildlife Act 1974, or to affirmatively state and prove by reasonable evidence that no such interest exists in respect of any deposit, object or material evidence located in the subject land. In this regard, we refer to our letters dated 28 July 2015 and 27 August 2015. If such an assignment has not been acquired, and is not able to be acquired in good time, and if the absence of any such object cannot be affirmatively stated and proved by your clients to the requisite standard applicable to conveyancing transactions, then the Notice must be invalid. Indeed the Notice was repudiatory, as your clients at the time of its issue were not in a position to settle by 10 September, nor willing to be so, but were rather attempting to force a doubtful title upon the purchasers in defiance of their obligations as vendors. In any event, the Notice is bad because your clients had not shown a good title and had not provided sufficient particulars for preparation of the transfer of all relevant interests at the time of issue."

Termination of the contract

1. By notice on 25 September 2015 the purchasers purported to terminate the contract: "Whereas your clients, the vendors, have been unable or unwilling to perform the contract for sale of the above mentioned property dated 6 July 2015, as solicitors for and on behalf of the purchasers, we hereby give you notice that the contract is terminated. Our clients rely upon all grounds, whether or not previously disclosed and whether known or unknown." (underline in original)
2. The vendors responded on 6 October 2015 alleging that the purchasers' notice of termination was repudiatory and themselves purporting to terminate the contract: "We refer to you[r] letter dated 25th September but received in our office 2 minutes before 6pm on that date. We advise that your purported termination on behalf of your clients does not profess to rely on any contractual provision of the contract and amounts to a repudiation of the contract which entitles the vendor to terminate the contract and to claim the deposit, costs, and expenses arising out of the contract and damages. We note that the Contract for Sale of Land is interdependent with the Contract for the Sale of Business and that your client has also consequently repudiated that contract. Accordingly, our client terminates both the Contract for Sale of Land dated 6 July 2015 and the interdependent Contract for the Sale of Business dated 6 July 2015. The vendor reserves all rights with respect to the deposit, costs, damages and otherwise."
3. On 29 November 2015, the property was re-sold at auction for $2.525 million.

Proceedings between the parties

1. On 3 December 2015, the purchasers commenced proceedings in the Equity Division of the Supreme Court of New South Wales. The purchasers sought recovery of the deposit and damages or, alternatively, relief under ss 55(1) and 55(2A) of the Conveyancing Act 1919 (NSW). The vendors filed a cross‑claim against the purchasers and Mr Cheers (who is alleged to be a guarantor) for damages for the loss of the sale.
2. In answer to the cross‑claim, the purchasers denied that the vendors were ready and willing to perform, relied on s 55 Conveyancing Act and raised a claim for misleading or deceptive conduct under s 18 of the Competition and Consumer Act 2010 (Cth), Sch 2 - Australian Consumer Law (Australian Consumer Law) in relation to representations allegedly made during the advertising and marketing of the property. Mr Cheers also denied that he was a guarantor under the contracts.

Issues in the primary proceedings

1. The issues raised in the proceedings below were as follows: 1. Repudiation by failure to address defect in title in answer to requisitions - this raised the issue whether the vendors repudiated the contract by refusing to attempt (or being unable) to show and prove a title free of Aboriginal objects, such that they were not ready, willing and able to perform the contract at the time of the two notices to complete and at the time the purchasers purported to terminate the contract? This issue potentially raised the following questions: 1. Whether there were in fact any Aboriginal objects on the land? 2. Whether the Aboriginal objects claimed to exist in or on the land were capable of constituting a defect in title? 3. The relevance, if any, to the process of requesting and answering requisitions of there being a "plausible contention" that there were Aboriginal objects on the land, being the remains of two Aboriginal elders, Harry and Clara Bray, and that such objects were capable of constituting a defect in title. 1. Termination for material or substantial defect in title in accordance with the rule in Flight v Booth - this raised the issue whether any Aboriginal objects in fact on the land constituted a defect in title in the sense of being a material or substantial matter impacting on the use of the land, thereby entitling the purchasers to terminate in accordance with the rule in Flight v Booth [1834] Eng R 1087; (1834) 131 ER 1160? 2. Repudiation by insistence upon payment of default interest - this raised the issue whether the vendors repudiated the contract by insisting on payment of interest from a date when there was no obligation to make a payment of interest? 3. Recovery of the deposit pursuant to the Conveyancing Act - this raised the issue whether the purchasers were entitled to recover their deposit pursuant to s 55 of the Conveyancing Act? 4. Defence to the cross-claim - although other issues were raised in the cross‑claim, the only issue remaining on appeal was whether Mr Matthew Cheers was liable to the vendors as guarantor under the contract of sale?
2. Success on any of the alternative claims (1) to (3) above would have entitled the purchasers to their relief sought, viz recovery of the deposit and damages for breach of contract. Claim (4) under the Conveyancing Act was an alternative means by which the purchasers could recover the deposit (but not damages).

Decision of the primary judge

1. The primary judge found, after "considerable hesitation" on the issue, that the memorial stone with the affixed plaque is an "Aboriginal object" within the meaning of the National Parks and Wildlife Act 1974 (NSW). Her Honour rejected the claim that any other "Aboriginal objects" as defined were present on the land.
2. The primary judge concluded that the presence of an Aboriginal object on the property was capable of constituting a defect in title if, in the particular circumstances of the case, its existence was a material and substantial matter impacting on the use of the land; or alternatively, on the basis that an Aboriginal object was "property that had vested in the Crown, such that the vendors could not convey a title free of third parties' property interests". In reaching the former conclusion, her Honour drew an analogy with the circumstances in Micos v Diamond [1970] 3 NSWR 407; (1970) SR (NSW) 392, where a defect in title existed by reason of the statutory powers which the Water Board could exercise in respect of the land. Her Honour highlighted the "onerous statutory requirements" and the "risk of criminal liability" that Aboriginal objects attract under the National Parks and Wildlife Act. She observed that these requirements under the Act could present "real and significant interference" for use and development of land, depending on the "precise facts of the case", in particular the location of the Aboriginal object on the land.
3. Although her Honour rejected the purchasers' claim that it had been established as a matter of fact that Harry or Clara Bray (or any other Aboriginal person) was buried on Lot 1, the primary judge was satisfied that the evidence established a "plausible contention" that Harry and Clara Bray were buried on Lot 1. Her Honour was also satisfied that it was a plausible contention that the burial site on Lot 1 was in the vicinity of a swimming pool, and that the presence of their remains, being Aboriginal objects, in that location was capable of constituting a defect in title.

Resolution of issue 1 - repudiation by failure properly to address requisitions

1. Having found that the presence of an Aboriginal object on the property was capable of constituting a defect in title, and that there was a plausible contention that there were in fact Aboriginal objects on the property, the primary judge concluded that it was incumbent on the vendors to address the purchasers' requisitions about the Aboriginal objects and establish a good title. The vendors' failure properly to do so amounted to repudiation of the contract, which gave the purchasers the right to rescind.
2. Her Honour found that the position at common law was that a vendor has an obligation to respond to any requisition concerning a possible latent defect in title; that is, a defect in title which cannot be discovered through reasonable inquiries. Failure by a vendor to respond, or to provide an adequate response, may amount to default on the part of the vendor. While the precise rights of the parties will depend on the terms of the contract and the circumstances of the case, the primary judge observed that this contract for sale did not contain any non‑annulment clause for error or misdescription of the subject matter. Furthermore, although cl 6 of the contract gave the purchasers an election to claim compensation for error or misdescription, the purchasers were not confined to that remedy.
3. The primary judge concluded that the vendors' conduct, which she characterised as a failure properly to address requisitions made by the purchasers concerning the presence of the Aboriginal objects on the land, amounted to a repudiatory breach of contract by the vendors, giving the purchasers the right to rescind. The primary judge was much influenced in this conclusion by the decision of Windeyer J in Crowe v Rindock [2005] NSWSC 375; (2005) 12 BPR 22,823.
4. Accordingly, issue 1 was resolved in favour of the purchasers.

Resolution of issue 2 - termination in accordance with the rule in Flight v Booth

1. The purchasers asserted there were six items on the land which were "Aboriginal objects" within the meaning of the National Parks and Wildlife Act, being: 1. a memorial stone and plaque bearing the inscription "Harry and Clara Bray, Tribal Elders of the Bundjalung Tribe buried near this site circa late 1890"; 2. the remains of Harry and Clara Bray (and possibly one or more of their children); 3. the remains/burial sites of other Aboriginal persons; 4. the remains of a gunyah (described as a traditional native Aboriginal home or shelter); 5. a ceremonial "mound"; and 6. a bunya pine tree.
2. The primary judge found that the memorial stone and plaque fall within the definition of "Aboriginal objects" under the legislation, in that it is an object that provides material evidence of the fact that Harry and Clara Bray lived in New South Wales. Her Honour concluded that the memorial stone and plaque had been "abandoned" for the purposes of s 83 of the National Parks and Wildlife Act, applying the test of abandonment set out in Gupta v Fordham Laboratories Pty Ltd [2018] NSWSC 551, with the result that the memorial stone and plaque were property of the Crown.
3. The primary judge concluded that the purchasers' contention that items (2) to (5) were present on the land was not made out, and her Honour was not satisfied that item (6) was "material evidence" relating to human habitation and accordingly was not an "Aboriginal object" as defined. No notice of contention or cross-appeal was filed in relation to those findings.
4. The primary judge concluded that the presence of the memorial stone and plaque was a defect in title that was so material or substantial as to entitle the purchasers to rescind. The presence of that Aboriginal object on Lot 1 imposed a constraint on the purchasers' ability to develop that land, which the purchasers might reasonably have regarded as substantial considerations in a decision whether to purchase the property. The purchasers were therefore entitled to rescind the contract pursuant to the rule in Flight v Booth.
5. Issue 2 was therefore resolved in favour of the purchasers.

Resolution of issue 3 - repudiation by demand for default interest

1. The primary judge concluded that the vendors' notices to complete amounted to a repudiation by insisting on an invalid demand for interest. The primary judge relied upon Carydis v Merrag Pty Ltd [2007] NSWSC 1220 which her Honour found was a case "not unlike the claims and pleadings in the present proceeding". In that case, the vendors purported to terminate a contract for the sale of land on the basis that the purchasers had repudiated the contract by refusing to pay interest on settlement. The judge in that case found that the purchasers' interpretation of the contract was correct and no interest was payable; since the purchasers were insisting on a correct view of the contractual position they could not possibly have been in repudiatory breach of the contract. Instead, it was the vendors who repudiated the contract by insisting on payment of interest where no obligation existed under the contract properly construed.
2. Her Honour considered that the vendors' insistence in early August that settlement should proceed on 5 August 2015 was not reasonable, having regard to the various matters "still to be arranged", with the result that there was no "failure to complete on a date properly appointed for settlement" (cf special condition 8). Furthermore, although special condition 21(c) provided for completion within 14 days after notification of registration of the transmission application, her Honour found that when the notices to complete were issued "there still had been no notice in writing of registration of the transmission application" so that the 14 day period had not commenced.
3. As for the insistence on payment of default interest, the primary judge found that the vendors were not only wrong to require payment of default interest in the absence of any default by the purchasers, but they had refused to withdraw their claim for interest upon being requested to do so by the purchasers, who had also made time of the essence for the vendors to do so. The primary judge found that this conduct amounted to repudiation of the contract by the vendors, giving the purchasers the right to rescind.
4. Accordingly, issue 3 was resolved in favour of the purchasers.

Resolution of issue 4 - recovery of the deposit pursuant to ss 55(1) and 55(2A) Conveyancing Act

1. As the purchasers were successful on their principal claim that they were entitled to rescind the contract and to require the vendors to repay their deposit, this issue did not strictly arise. Even so, the primary judge provided brief reasons on a contingent basis resolving this issue.
2. Section 55 of the Conveyancing Act gives a purchaser the right to recover his or her deposit in certain circumstances. The sub‑sections relied on by the purchasers before the primary judge provide: 55 Right of purchaser to recover deposit etc (1) In every case where specific performance of a contract would not be enforced against the purchaser by the Court by reason of a defect in the vendor's title, but the purchaser is not entitled to rescind the contract, the purchaser shall nevertheless be entitled to recover his or her deposit and any instalments of purchase money he or she has paid, and to be relieved from all liability under the contract whether at law or in equity, unless the contract discloses such defect and contains a stipulation precluding the purchaser from objecting thereto. … (2A) In every case where the court refuses to grant specific performance of a contract, or in any proceeding for the return of a deposit, the court may, if it thinks fit, order the repayment of any deposit with or without interest thereon. …
3. Although the purchasers sought relief pursuant to s 55(1), this sub-section was not considered by the primary judge, who dealt solely with s 55(2A).
4. It was accepted that, on an application under s 55(2A), the purchaser must show some injustice or something that was inequitable about the conduct of the vendor: Greek Orthodox Parish Community of St Marys and District Ltd v Denis Stanley Merrick [2014] NSWSC 1196 at [17] per Young AJA. The primary judge concluded that there was injustice in the present case, arising from the defect in title. If the deposit was not refunded, the purchasers would essentially have been forced to accept something which was less than that for which they bargained, or risk losing their deposit.
5. The primary judge also accepted the alternative submission that injustice arose from the vendors' conduct before and after contracting. Prior to exchanging contracts, the vendors failed to disclose the Aboriginal significance of the land, which was within their knowledge, notwithstanding that the property was marketed as a development proposition. After exchanging contracts, upon the purchasers communicating doubts as to the vendors' title, the vendors did not take up the opportunity to rescind and promptly resell (at a substantially lower price by reason of the disclosure of the Aboriginal significance of the land) in an "attempt to hold on to an unjust gain".

Resolution of issue 5 - defence to the cross-claim for breach of contract

1. As part of its defence to the vendors' cross‑claim for damages for loss of the sale, the purchasers contended that the vendors had engaged in misleading or deceptive conduct in trade and commerce within the meaning of s 18 of the Australian Consumer Law. Her Honour rejected that claim and no notice of contention or cross-appeal has been filed in relation to that finding.
2. In response to the vendors' cross‑claim against him, Mr Matthew Cheers denied that he had guaranteed performance of the purchasers' obligations. Special condition 22 of the contract provided for such a guarantee by the director of the corporate purchaser, Cheers Aviation Pty Ltd, and an indemnity in favour of the vendors. While the execution clause made provision for Mr Cheers to sign as "Sole Director/Secretary", the primary judge recorded that he denied doing so. In the absence of that signature, her Honour found that Mr Cheers was not bound as guarantor under the contract.

Issues on appeal

1. The issues on appeal are as follows: 1. did the vendors repudiate the contract by failing properly to address objections or requisitions founded on the "plausible contention" that there were Aboriginal objects on the land constituting a defect in title, thereby permitting the purchasers to terminate the contract; 2. were the purchasers entitled to terminate the contract in accordance with the rule in Flight v Booth by reason of a material or substantial defect in title arising from the presence on the land of the memorial stone and affixed plaque; 3. did the vendors repudiate the contract by insisting on payment of default interest when there was no obligation to make that payment; 4. were the purchasers entitled to recover the deposit pursuant to s 55 of the Conveyancing Act; 5. was Mr Matthew Cheers liable to the vendors as guarantor under the contract of sale.
2. Because the conclusion in relation to one matter has a critical impact on the conclusion of each of these issues on appeal, we will address it first. That issue is whether the memorial stone and affixed plaque is an "Aboriginal object" within the meaning of the National Parks and Wildlife Act.

National Parks and Wildlife Act 1974

1. The National Parks and Wildlife Act 1974 (NSW) provides that "Aboriginal objects", as defined, are deemed in certain circumstances to be property of the Crown. The relevant definitions are as follows: 5 Definitions (1) In this Act, except in so far as the context or subject-matter otherwise indicates or requires - … Aboriginal object means any deposit, object or material evidence (not being a handicraft made for sale) relating to the Aboriginal habitation of the area that comprises New South Wales, being habitation before or concurrent with (or both) the occupation of that area by persons of non-Aboriginal extraction, and includes Aboriginal remains. … Aboriginal remains means the body or the remains of the body of a deceased Aboriginal person, but does not include: (a) a body or the remains of a body buried in a cemetery in which non-Aboriginal persons are also buried, or (b) a body or the remains of a body dealt with or to be dealt with in accordance with a law of the State relating to medical treatment or the examination, for forensic or other purposes, of the bodies of deceased persons. Act of 1967 means the National Parks and Wildlife Act 1967. …
2. To fall within the definition, the memorial stone and affixed plaque must first be an object "relating to the Aboriginal habitation of the area that comprises New South Wales". The definition includes Aboriginal remains.
3. The provision vesting property in certain Aboriginal objects in the Crown has a number of important features. Critically, for present purposes, s 83(2) provides that "nothing in this section shall be construed as restricting the lawful use of land or as authorising the disturbance or excavation of any land". As far as the memorial stone and affixed plaque are concerned, to fall within the section the object must be "abandoned" on or after the day of commencement of the National Parks and Wildlife Act on 27 November 1974. The section provides: 83 Certain Aboriginal objects to be Crown property (1) Subject to this section - (a) an Aboriginal object that was, immediately before the commencement day, deemed to be the property of the Crown by virtue of section 33D of the Act of 1967, and (b) an Aboriginal object that is abandoned on or after that day by a person other than the Crown, shall be, and shall be deemed always to have been, the property of the Crown. (2) Nothing in this section shall be construed as restricting the lawful use of land or as authorising the disturbance or excavation of any land. (3) No compensation is payable in respect of the vesting of an Aboriginal object by this section or section 33D of the Act of 1967.

Is the memorial stone and affixed plaque an Aboriginal object?

1. The unchallenged evidence is that in about 1988 the memorial stone with its affixed plaque was placed on Lot 1 during that year with the consent of the then registered proprietor of the land by the New South Wales Government as a Bicentennial project. The evidence was that the matters recorded in the plaque were grossly inaccurate. Harry and Clara Bray did not die until some time in the 1920s, more than three decades after the "late 1890" date identified by the plaque. Although there was some evidence that some remains were discovered in the construction of a swimming pool on Lot 1 in 1988, the primary judge was not satisfied that any Aboriginal remains existed on the land as at July 2015 when the contract for sale was made.
2. There was no controversy on the appeal about the principles of statutory interpretation to be applied. The task remains the construction of the words the legislature has enacted. The beginning and end of the task of statutory interpretation is the statute or, in this case, statutes, that fall to be construed: Federal Commissioner of Taxation v Consolidated Media Holdings Ltd (2012) 250 CLR 503; [2012] HCA 55 at [39]. The meaning of words and phrases is influenced by the immediate context in which they are used. The correct approach to statutory interpretation uses "context" in its widest sense "to include such things as the existing state of the law and the mischief which, by legitimate means … one may discern the statute was intended to remedy": CIC Insurance Ltd v Bankstown Football Club Ltd (1997) 187 CLR 384 at 408 (Brennan CJ, Dawson, Toohey and Gummow JJ); [1997] HCA 2.
3. A construction that would promote the purpose or object underlying the Act or statutory rule (whether or not that purpose or object is expressly stated in the Act or statutory rule or, in the case of a statutory rule, in the Act under which the rule was made) shall be preferred to a construction that would not promote that purpose or object: Interpretation Act 1987 (NSW), s 33.
4. The objects of the National Parks and Wildlife Act tend against the purchasers' contention that the memorial stone with its affixed plaque amounts to an "Aboriginal object". The objects are relevantly identified in s 2A: 2A Objects of Act (1) The objects of this Act are as follows - … (b) the conservation of objects, places or features (including biological diversity) of cultural value within the landscape, including, but not limited to - (i) places, objects and features of significance to Aboriginal people.

Issue 1 - The purchasers' principal repudiation case

1. The appellants challenge the primary judge's determination that the purchasers had made out their principal repudiation case against the vendors, namely that by failing properly to address the purchasers' "plausible contention" that there were Aboriginal objects on the land that were capable of constituting a defect in title, the vendors evinced an intention no longer to be bound by the contract. Before turning to that case, three related preliminary issues should be addressed: 1. this Court's decision in the first Mehmet v Carter appeal; 2. the proposition that the Crown's property in an abandoned Aboriginal object pursuant to s 83 of the National Parks and Wildlife Act is an interest affecting the vendors' title to the land; and 3. whether the memorial stone and plaque constitute a constraint on the development of the land.

The first Mehmet v Carter appeal

1. This Court in Mehmet v Carter (2018) 98 NSWLR 977; [2018] NSWCA 305 at [100] (Beazley P, McColl JA agreeing), set aside certain answers to separate questions which had been given by Darke J (Mehmet v Carter [2017] NSWSC 1067) and concluded, obiter, that the presence of "Aboriginal objects" as defined by the National Parks and Wildlife Act may be capable of constituting a defect in title as a question of statutory construction of that Act, notwithstanding that sub-s 83(2) of the National Parks and Wildlife Act makes explicit provision that "[n]othing in this section shall be construed as restricting the lawful use of land or as authorising the disturbance or excavation of any land." Bathurst CJ did not in terms agree with the then President and restricted himself (at [10]) to the observation that "a defect in title is not limited to a failure to convey something which was contracted to be conveyed".
2. In coming to the conclusion that the presence of Aboriginal objects on the land was capable of constituting a defect in title, Beazley P drew an analogy with the facts in Micos v Diamond [1970] 3 NSWR 407. In that case, the purchasers of a parcel of land sued their solicitor for negligence in failing to inform them before completion of the existence of a sewer drain on the property and the rights of the relevant statutory body, the Metropolitan Water, Sewerage and Drainage Board (the Water Board) in relation to that drain. The Water Board had a statutory right to enter upon any private land and to lay or place therein a sewerage main. The statute then made it an offence to erect, construct or place any building or other structure in, upon, over or under that sewerage main so as to interfere with or to obstruct the sewer, and empowered the Water Board to obtain an injunction to prevent any damage to, interference with or obstruction of the sewer in case of a threatened breach.
3. However, we respectfully doubt whether the analogy to Micos v Diamond is apposite in the present case. Unlike the statutory rights and powers conferred upon the Water Board in that case, here the National Parks and Wildlife Act provides no authority to enter onto the land and specifically provides that the fact that an Aboriginal object is deemed to be the property of the Crown is not to be construed as "restricting the lawful use of land or as authorising the disturbance or excavation of any land": s 83(2). Whilst it is correct that the Act proscribes certain conduct in relation to Aboriginal objects, the express statutory provision that the lawful use of the land shall not be restricted by reason of the presence of any Aboriginal object which is "property" of the Crown provides a very significant difference from Micos v Diamond. Resolution of this issue, however, should await a case where it directly arises.

Whether the Crown's property in an abandoned Aboriginal object pursuant to s 83 of the National Parks and Wildlife Act is an interest affecting the vendors' title to the land

1. The vendors do not cavil with the proposition that they have an obligation to show good title to the land free of any interest of a third party therein. The vendors do challenge the primary judge's implicit conclusion that the property that the Crown has in an abandoned Aboriginal object pursuant to s 83 of the National Parks and Wildlife Act is an interest affecting the vendor's title to the land.
2. The terms of s 83 have already been set out at [62] above. Whilst sub‑s 83(1) deems an Aboriginal object that is abandoned as "the property of the Crown", the use of the word "property" in sub‑s 83(1) does not amount to the creation of a proprietary interest in the Aboriginal object which is vested in the Crown and which would prevent the vendors from passing an unencumbered estate in fee simple in the land. Writing in relation to s 7(1) of the Fauna Conservation Act 1974 (Qld) which, like the National Parks and Wildlife Act, also deems certain items as "the property of the Crown", the plurality in Yanner v Eaton (1999) 201 CLR 351; [1999] HCA 53 (Gleeson CJ, Gaudron, Kirby and Hayne JJ) said: "[28] In light of all these considerations, the statutory vesting of 'property' in the Crown by the successive Queensland fauna Acts can be seen to be nothing more than 'a fiction expressive in legal shorthand of the importance to its people that a State have power to preserve and regulate the exploitation of an important resource'. … [30] The 'property' which the Fauna Act and its predecessors vested in the Crown was therefore no more than the aggregate of the various rights of control by the Executive that the legislation created. So far as now relevant those were rights to limit what fauna might be taken and how it might be taken (ss 24, 24A, 25, 27, 30, 60), rights to possession of fauna that had been reduced to possession (ss 71(2), 83(3)), and rights to receive royalty in respect of fauna that was taken (s 67) (all coupled with, or supported by, a prohibition against taking or keeping fauna except in accordance with the Act (s 54(1)(a)). Those rights are less than the rights of full beneficial, or absolute, ownership." (footnotes omitted)
3. That analysis is apposite to the construction of the National Parks and Wildlife Act, notwithstanding that the Act regulates a different subject matter than the statute construed in Yanner v Eaton. The statutory vesting of abandoned Aboriginal objects as property of the Crown under s 83(1) is a "fiction expressive in legal shorthand" of the importance to the people, in particular the Aboriginal people, of New South Wales that the State has the power to preserve and regulate Aboriginal objects. The "property" which the National Parks and Wildlife Act vests in the Crown is the aggregate of the various rights of control by the Executive created by that Act. Those rights are not the rights of full beneficial, or absolute, ownership. They do not affect the legal estate of the land where the Aboriginal object is located. Assuming it is an Aboriginal object, the property of the Crown in the memorial stone and plaque did not constitute an interest in the subject land.

Whether the memorial stone and plaque constitute a development constraint on the land

1. The alternative basis on which the existence of the memorial stone and plaque was said by the purchasers to constitute a defect in title is the development constraint it poses, which meant that the purchasers were not getting substantially the same land for which they had bargained. Reserving to a case where it arises the question whether an Aboriginal object is capable of providing a relevant development constraint, the difficulty with this conclusion in the present case is that it is clear that the presence of the memorial stone and affixed plaque would not in fact pose any additional constraint on the development potential of the land.
2. The primary judge did not find that the memorial stone and plaque resulted in any additional restriction on the purchasers' ability to develop the land. Instead, her Honour's only finding was that they might pose "potential additional development constraints" (italics added).
3. However, the evidence does not support a finding that the presence of the memorial stone and plaque on the land would, or even might, have resulted in additional constraints on its development. The land on which the memorial stone and plaque is located was already subject to development restrictions forbidding development of that part of the land. The joint expert opinion of Messrs Darryl Anderson, Tim Robins and Stephen Connelly identified various constraints affecting the development potential of the property, including endangered flora and fauna, bushfire hazards and traffic generation considerations. Relevantly, the report contained the following summary of the zoning constraints affecting the land: "Zoning Constraint Expanding the development beyond its existing footprint requires the utilising the 'existing use rights' provision of the Environmental Planning and Assessment Act 1979. Part of the existing development is located on land which prohibits such development."
4. The evidence before the primary judge was to the effect that the land on which the memorial stone and plaque rests is located in part of the 50 metre buffer zone required by the State Environmental Planning Policy No 14 - Coastal Wetlands (Coastal Wetlands SEPP). The technique of identifying a buffer around areas identified as "coastal wetlands" is a rational and proportionate legislative device which serves the objects of the Environmental Planning and Assessment Act 1979 (NSW) and the Coastal Protection Act 1979 (NSW) by engaging certain development controls: Reysson Pty Ltd v Minister Administering the Environmental Planning and Assessment Act 1979 [2020] NSWCA 281 at [104]-[105]. Since the land on which the memorial stone and plaque is located is within the 50 metre buffer zone specified by the Coastal Wetlands SEPP, there is a prohibition against development on that portion of land imposed by the Coastal Wetlands SEPP. Even assuming that the memorial stone and plaque might theoretically have posed development constraints on the land, the land on which it is located was already incapable of being further developed by reason of the Coastal Wetlands SEPP.

The principal repudiation case against the vendors

1. The purchasers' principal case was predicated on the "plausible contention" advanced by requisition or objection about the existence of Aboriginal objects on the land constituting a defect in title, and the alleged failure by the vendors adequately to establish their good title in response to that requisition or objection.
2. The primary judge found that the evidence was capable of supporting a "plausible contention" that there were Aboriginal objects present on the land aside from the memorial stone and plaque (whose presence was uncontested), being Aboriginal remains belonging to Harry and Clara Bray. The vendors' failure "squarely" and adequately to address the purchasers' objection that there was a plausible contention as to a defect in title due to the presence of the Aboriginal objects on the land amounted to repudiation, entitling the purchasers to rescind the contract.

Legal principles about requisitions and objections

1. A vendor of land bears an obligation at common law to "show" and "make" a good title. For land under Old System title, where a history of the dealings and interests affecting the land is recorded in an "abstract of title", a vendor "shows a good title when all matters essential to the title are stated in the abstract", and "makes a good title when those matters are proved, by sufficient evidence, to be true": Roy Milner Stonham, The Law of Vendor and Purchaser (1964, Law Book Co) (Stonham) at [665].
2. This obligation is also understood to apply in relation to the sale of land registered under the Real Property Act 1900 (NSW), though the means by which it may be discharged have necessarily changed: Patricia Lane, Sale of Land in New South Wales (6th ed, 2018, Law Book Co) (Lane) at [10.10]; see also FE Moss, Sale of Land in New South Wales (5th ed, 1973, Butterworths) at 264 (referring to the "the vendor's duty to show a good title" without making any distinction between Old System and Torrens title). By reason of the conclusiveness of the Torrens title register, a vendor of Torrens title land "does not face the uncertainties of title which might obtain in the case of land held under common law title" and "should have no difficulty in showing title or of making it": Godfrey Constructions Pty Ltd v Kanangra Park Pty Ltd (1972) 128 CLR 529 at 535 (Barwick CJ); [1972] HCA 36 (Godfrey Constructions).
3. In Travinto Nominees Pty Ltd v Vlattas (1973) 129 CLR 1 at 12; [1973] HCA 14, Barwick CJ explained, albeit using different terminology (i.e. using "prove" in place of "make"), how a vendor discharges its obligation to prove good title in relation to both Old System and Torrens title land: "If an area of land is contracted to be sold without conditions, i.e., under an 'open' contract, the law will import an obligation on the vendor first to show a good title in fee simple to the land, i.e., by an abstract of title or delivery of particulars of title, to prove that title, as on production of deeds or on examination of the register and on settlement to make such title by appropriate conveyance or memorandum of transfer. If it be land the title to which is held under the Real Property Act the vendor under such a contract must place the purchaser on settlement in a position to have himself immediately registered as the proprietor of the land for an estate in fee simple."

Consideration

1. As made, the purchasers' principal repudiation case did not turn on whether it was established that there were Aboriginal objects in or on the land. Their case was that there was a "plausible contention" as to the existence of such objects on the land, and as to their presence being capable of constituting a defect in title. The basis for that contention with respect to the existence of Aboriginal objects on the land was the "reputation" evidence establishing the knowledge and belief of the Arakwal community that Harry and Clara Bray were buried on the land and that there were other Aboriginal remains on the land. In our view, and notwithstanding that evidence and the purchasers' contention as to the capacity of the existence of any such remains to constitute a defect in title, the objections and requisitions raised were not properly made and did not require an answer from the vendors. Furthermore, even if properly made, the answers given by the vendors to those requisitions were sufficient to discharge their obligation to provide a reasonable response and did not constitute or involve any repudiation of the contract.
2. The factor which is particularly relevant to our reaching this conclusion is that the purchasers' requisitions and objections were based not on a defect in title which was actually proved to exist, but merely on the contention that there might be in existence certain matters which, if they existed, could constitute a defect in title. The degree of specificity with which the purchasers were required to formulate their requisitions or objections to title, and the form of answer required of the vendors in order to squarely address such a requisition or objection, must necessarily take account of the fact that the requisitions and objections were based on a reputed, rather than proved, defect.
3. Another key factor arises from the correspondence set out at [11]-[26] above. The only Aboriginal objects alleged by the purchasers to be on the land in that correspondence were "Aboriginal remains", being those of Harry and Clara Bray and possibly other Aboriginal persons. The purchasers did not assert that the memorial stone and plaque were Aboriginal objects. While both parties referred to the presence of the memorial stone and plaque on the land, this was only in relation to whether they constituted evidence of the (contested) existence of Aboriginal remains on the land. The memorial stone and plaque in and of themselves were not asserted to be Aboriginal objects.

Issue 2 - The purchasers' alternative case concerning defect in title

1. In the primary proceedings, the purchasers ran an alternative case that they were entitled to terminate the contract as the vendors did not have good title to the land. That case relied on the common law rule as expressed by Tindal CJ in Flight v Booth [1834] Eng R 1087; (1834) 131 ER 1160 at 1162-1163 that: "We think it is, in all events, a safe rule to adopt, that where the misdescription, although not proceeding from fraud, is in a material and substantial point, so far affecting the subject matter of the contract that it may reasonably be supposed that, but for such misdescription, the purchaser might never have entered into the contract at all, in such a case the contract is avoided altogether, and the purchaser is not bound to resort to the clause of compensation."
2. The purchasers contended that the presence of Aboriginal objects on the land meant that they were not getting substantially the property which they had contracted to buy. The purchasers' alternative contention depends on a finding that there are in fact Aboriginal objects in or on the land.
3. We have already concluded that there are not any Aboriginal objects on the land. The memorial stone and plaque is not an "Aboriginal object" within the meaning of the National Parks and Wildlife Act.
4. However, even if the memorial plaque and stone is an Aboriginal object within the meaning of the Act, we are not satisfied that its presence on the land would be a material or substantial matter giving the purchasers the right to terminate.
5. The test is whether, objectively, a reasonable person in the position of the purchasers would have taken the view that he or she was not getting substantially the property which he or she contracted to obtain: Frankel v Paterson [2015] NSWSC 1307 at [34].
6. As we have explained at [90]-[95] above, development in the location of the memorial stone and plaque was already prohibited, and any reliance on existing use rights would not have assisted the purchasers in realising the development potential of that land. The presence of the memorial stone and plaque, given their location, did not give rise to any further restriction on development of the land.
7. It cannot be said that the presence of the memorial stone and plaque, even assuming they are an Aboriginal object, affected the contract in a material or substantial way. The purchasers' alternative case that they were entitled to terminate the contract by reason of the rule in Flight v Booth also fails.

Issue 3 - The purchasers' alternative repudiation case

1. In the primary proceedings, the purchasers also relied on an alternative case that the vendors had repudiated the contract by purporting to terminate the contract in reliance on an invalid notice to complete which claimed payment of default interest. Having accepted the purchasers' principal repudiation case, it was not strictly necessary for the primary judge to decide the alternative repudiation case. Nevertheless, her Honour determined that the alternative repudiation case would have been made out.
2. The repudiatory conduct alleged by the purchasers before the primary judge was the vendors' insistence that the purchasers comply with a notice to complete which was invalid as it was given in circumstances where the purchasers had not been in default of any valid appointment to complete, coupled with the vendors' insistence on an invalid demand for default interest in the face of a notice from the purchasers requiring the vendors to withdraw the demand for interest (making time of the essence for the vendors to do so).
3. On appeal, the parties' submissions were confined to whether the vendors repudiated the contract by failing to withdraw their claim for default interest. There was no further contention raised in relation to the validity of the notices to complete, or any allegation that the vendors' insistence that the purchasers comply with such notice was repudiatory.
4. The vendors' right to default interest is governed by special condition 8 to the contract. It provides: "8. Interest payable for delay in completion If the purchaser shall not complete this purchase by the completion date, without default by the vendor, the purchaser shall pay to the vendor on completion, in addition to the balance purchase money, an amount calculated as ten per cent (10%) interest on the balance purchase money, computed at a daily rate from the day immediately after the completion date to the day on which this sale shall be completed. It is 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."
5. The cover page of the contract nominated as the completion date the "30th day after the contract date". That date is 5 August 2015, being 30 days after execution on 6 July 2015. However, special condition 21 made completion conditional on transmission of the late Mrs Carter's interest in the property to her husband and imposed a completion period within 14 days of the written notification of that event. It provides: "21. Registration of transmission application (a) Completion of the within contract is conditional upon the Vendor, Murray John Carter, as executor of the Estate of the Late Catherine Carter becoming registered proprietor of the subject land by way of transmission within three (3) months of the date thereof. … (c) Completion shall take place within fourteen (14) days after the Vendor's solicitors have notified the Purchaser or the Purchaser's solicitor in writing of registration of the Transmission Application."

Issue 4 - return of the deposit pursuant to s 55 Conveyancing Act

1. As the primary judge found that the purchasers had demonstrated an entitlement to the return of their deposit through their principal repudiation claim, it was not strictly necessary to consider whether the purchasers also had a right to recover their deposit pursuant to s 55 of the Conveyancing Act. Even so, her Honour stated that, had it been necessary to do so, she would have considered that the power under s 55(2A) should be exercised to require the vendors to repay the deposit to the purchasers.
2. Section 55(2A) of the Conveyancing Act states: 55 Right of purchaser to recover deposit etc ... (2A) In every case where the court refuses to grant specific performance of a contract, or in any proceeding for the return of a deposit, the court may, if it thinks fit, order the repayment of any deposit with or without interest thereon.
3. The parties accepted at trial that a purchaser who makes an application for the return of a deposit under s 55(2A) must show some injustice, or something that was inequitable about the conduct of the vendor: Greek Orthodox Parish Community of St Marys and District Ltd v Denis Stanley Merrick [2014] NSWSC 1196 at [17] per Young AJA. The "principal injustice" relied upon by the purchasers was the defect in title. In the alternative, the purchasers alleged that injustice arose from the vendors' concealment of the Aboriginal significance of the land notwithstanding that the land was marketed as a development proposition.
4. We have found above that there were no Aboriginal objects on the land and that, even if there were, they do not constitute a defect in title. This being so, the "principal injustice" alleged by the purchasers is not established.
5. As for the purchasers' alternative contention, the primary judge did not accept that the evidence established any concealment of Aboriginal heritage on the part of the vendors' agent (or anyone on behalf of the vendors for that matter). Further, in the context of the purchasers' unsuccessful misleading or deceptive conduct claim, her Honour considered that it was "abundantly clear" that the purchasers were acting in reliance on their own enquiries and inspection, rather than any representation by the vendors as to the development potential of the property. The purchasers have not challenged those findings. No notice of contention was relied upon in relation to these issues. Their alternative contention as to injustice therefore also fails.

Issue 5 - The guarantee by Mr Cheers

1. It is no longer in dispute that the fifth respondent, Mr Cheers, signed the personal guarantee provision under special condition 23 of the contract: Exhibit 6. The purchasers accept that Mr Cheers conceded in cross-examination that he had guaranteed the purchasers' performance under the contract. As recorded in the trial transcript: "Q. You have also signed that which appears immediately beneath the guarantee clause and the counterpart clause number 22 and 23? A. Yes, I have. Q. By signing as you did there and as we can see, you were seeking to confirm that as a director of the company, Cheers Aviation, that you see referred to in clause 22, you were guaranteeing the performance of the purchaser of all of the obligations under the contract and some. A. Yes."
2. Since it is no longer in dispute that Mr Cheers guaranteed the purchasers' performance of the contract, his liability follows that of the purchasers.

Costs

1. As the successful party, the vendors are entitled to an order in their favour in relation to the costs of the proceedings before the primary judge and in this Court.
2. As to the costs of the hearing of the separate question, on appeal this Court made no order as to the costs of the appeal and ordered that the costs of the hearing of the separate questions before Darke J be costs in the cause: Mehmet v Carter (2018) 98 NSWLR 977; [2018] NSWCA 305. The vendors are therefore also entitled to their costs of the separate questions hearing before Darke J.

Conclusion and proposed orders

1. The purchasers have failed to demonstrate that they were entitled to terminate the contract on any of the three alternative bases they relied on, being the principal repudiation claim, the rule in Flight v Booth, and their alternative repudiation claim based on a claim for default interest. Consequently, by purporting to terminate the contract on 25 September 2015 when they had no right to do so, the purchasers themselves repudiated the contract. The vendors were entitled themselves to terminate and to an award of loss of bargain damages.
2. On the hypothesis that the appeal was successful, there was no dispute between the parties as to the quantum of damage suffered by the vendors by reason of the purchasers' repudiatory breach. That loss is as follows: 1. Loss of bargain damages of $475,000. This is the difference between the contract price and the price achieved by the vendors on re-sale; and 2. Costs and expenses of $5,832.20 associated with the re-sale of the land.
3. For the reasons above, we make the following orders: 1. Appeal allowed. 2. Set aside the orders of Ward CJ in Eq made on 17 April 2020 and in lieu thereof order: 1. Judgment for the appellants against the respondents in the sum of $480,832.20 plus interest thereon from 29 November 2015 pursuant to s 100 of the Civil Procedure Act 2005 (NSW). 2. Respondents pay the appellants' costs of the proceeding below, including (as per the orders of the Court of Appeal made on 13 December 2018) the costs of the separate determination the subject of the proceeding before Darke J in 2017. 1. Respondents pay the appellants' costs of the appeal.

Amendments 08 December 2021 - Judgment sum recorded on coversheet and pars [176(1)] and [177(2)(a)] amended to $480,832.20 pursuant to slip rule: Uniform Civil Procedure Rules 2005 (NSW), r 36.17. DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 08 December 2021