Haniotis v The Owners Corporation Strata Plan 64915

The management agreement 7The purpose of the management agreement was to regulate the manner in which the manager/caretaker provided what are termed "first class" services to the defendant and to individual owners of lots in the complex. The complex was built specifically as accommodation for older and/or disabled residents to purchase. The obligations imposed on the manager were not only to maintain the premises to a "first class development for older and/or disabled owners and residents" (clause 5(h)), but also to reside in lot 82, a two-bedroom unit adjoining the foyer, and to base operations and carry out duties from that unit, in much the same was as a live-in concierge would do. The management agreement also sets out recognition of a need for 24-hour emergency call services under clause 3(h). 8The relevant provisions in the management agreement are clauses 3, 5, 8, 10 and 11, which provide: "3. Duties of the Manager The Manager shall diligently perform the following duties: (a)Clean the Common Property (except the pool and pool equipment) on a regular basis or when necessary; (b)Supervise the maintenance and repair of the Common Property and the fixtures, fittings furnishings and/or equipment attached to or placed on the Common Property on a regular basis, as it becomes necessary or when directed by the Owners Corporation; (c)Supervise the replacement of any of the fixtures, fittings, furnishings and/or equipment attached to or placed upon the Common Property when directed by the Owners Corporation; (d)Supervise the regular cleaning, repair and maintenance of the pool or as it becomes necessary; (e)Supervise the regular cleaning, repair and maintenance of the pool equipment or as it becomes necessary and the replacement of the pool equipment when directed by the Owners Corporation; (f)Supervise the painting of the Common Property when directed by the Owners Corporation; (g)Supervise regular lift maintenance and the replacement of any lift parts when necessary; (h)Supervise security arrangements when directed by the Owners Corporation; (i)Arrange for a 24-hour emergency call service to be provided to owners and occupiers of the Strata Scheme as requested by the owners and occupiers from time to time; and (j)Use its best endeavours to contact health care personnel to attend to owners and occupiers of the Strata Scheme if and when requested by those owners and occupiers. 5. The Manager's other duties and obligations In addition to the duties in Clause 3, the Manager shall: (a)Attend to its duties described in Clause 3(a) to 3 (h) from 9.00am to 5.00pm from Monday to Friday, excluding public holidays and attend to its duties described in Clause 3(i) and 3(j) at all times. (b)Liaise with and report on a regular basis to the Strata Manager, for the time being, of the Strata Scheme; (c)Be the point of contact for service contractors engaged by the Strata Manager and/or Owners Corporation to perform the duties set out in Clause 3; (d)Be the first point of contact for owner's and occupier's general enquiries; (e)Render invoices to the Owners Corporation for out-of-pocket expenses incurred by the Manager in the performance of the duties set out in Clause 3; (f)Promptly report to the Strata Manager on the work carried out by the engaged service contractors before payment is made by the Owners Corporation to those contractors; (g)Promptly render to the Strata Manager for payment any invoices received from engaged service contractors; (h)Perform its duties to such a standard to maintain the Strata Scheme as a first class development for older and/or disabled owners and residents; (i)Ensure that its employees are at all times aware of its obligations to the Owners Corporation; (j)Promptly pay the salaries, wages, statutory superannuation, worker's compensation, sick pay and all other statutory charges to its employees as and when they fall due; (k)Be responsible to pay for any damage caused to the Common Property and to any fixtures, fittings, furnishings and/or equipment attached to or placed on the Common Property which has been directly caused by the negligence of the Manager or its employees; (l)Not make any representations: (i)that it has any medical or nursing qualifications; (ii)that it is qualified or able to provide any medical assistance in response to requests from residents or in response to any 24-hour emergency call system that may be installed in units or on Common Property; (m)Not pledge the credit of the Owners Corporation without first obtaining approval to do so from the Owners Corporation; and/or (n)Not hold itself out as the authorised agent of the Owners Corporation for any purpose without first obtaining approval from the Owners Corporation to do so. 8. Manager to operated from Lot 82 (a)In the Clause, "the Manager" means the Manager or its principal employee or agent. (b)The Manager, shall, during the term of this agreement and any renewed term, reside in Lot 82 of the Strata Scheme and base its operations to carry out its duties from that Lot. (c)The Manager acknowledges that while the Owners Corporation retains the services of a resident manager/caretaker then the manager so engaged by the Owners Corporation shall be obliged to occupy Lot 82 as its residence. The Manager, as the current owner of Lot 82, agrees that it shall not sell, lease or otherwise occupy or allow anyone else to occupy Lot 82 without the prior written approval of the Owners Corporation. (d)The Manager, while remaining the owner of Lot 82, shall be responsible to pay all strata levies, council and water rates and any other statutory charges imposed on the lot as and when they become due and payable. (e)The obligation contained in sub-clause (c) and (d) shall not merge upon termination of this agreement or any renewal of this agreement. 10. Termination (a)The Owners Corporation may terminated [sic] this agreement by giving one month's notice in writing delivered to the Manager, if (i)the Manager commits a serious breach of this agreement and the breach subsists for more than 28 days after the Owners Corporation has served a notice on the Manager identifying the breach and requesting it to be immediately remedied and provided the Owners Corporation has not waived the breach; or if (ii)the Manager is found, by due legal process, to be guilty of fraud, theft or gross misconduct in the performance of its duties; or if (iii)the Manager has been declared bankrupt or entered into any scheme for the benefit of its creditors, or being a corporation has resolved to go into liquidation or have a petition for its winding up presented, or enter into any scheme of arrangement with its creditors under the Corporations Law, or should any liquidator, receiver or official manager be appointed for it. (b)The Manager may terminate this agreement by giving one month's notice in writing delivered to the Owners Corporation: (i)if the Owners Corporation commits a serious breach of the agreement and the breach subsists for more than 28 days after the Manager has notified the Owners Corporation of the breach and requested it to be immediately remedied and provided the Manager has not waived the breach; or (ii)if the Owners Corporation commits an act of bankruptcy. (c)The term "serious breach" in this clause shall mean: (i)persistent neglect of the duties on the part of the Manager described in clause 3 of this agreement; (ii)persistent neglect of the duties on the part of the Owners Corporation described in clause 7 of this agreement; (iii)a breach of clause 8 (operating from Lot 82); (iv)a breach of clause 11 (assignment); or (v)a breach that becomes a serious breach pursuant to clause 11 of this agreement. 11. Remedies for Breaches by the Parties If either party commits a breach of this agreement which is not a serious breach: (a)The other party may serve a notice on the defaulting party identifying the breach and requesting it to be remedied within 14 days of the date of the notice; and (b)If the breach is not remedied and continues then the innocent party may serve a further notice on the defaulting party stating that unless the breach is remedied within a further 14 days then the breach shall be deemed to be a serious breach and the provisions of clause 10 of this agreement shall apply. (c)Either party may waive the breach at any time." 9In addition, there is an arbitration clause, but it is common ground that the parties did not go to arbitration and that issues relevant to the failure of the parties to go to arbitration (referred to in paragraphs 15 - 18 of the statement of claim) essentially relate to issues of costs. 10It can be seen from clause 10 that the parties put in place a two-stage process for termination of the management agreement. A right to terminate arose if there was persistent neglect of obligations under clause 3, or was in breach of clause 8, and in those circumstances a notice of those breaches could be served under clause 10(a)(i). If those breaches continued to subsist for more than 28 days after notice was provided, a right to terminate arose. 11The second stage occurs when the right to terminate is exercised. In those circumstances, provision of one month's notice in writing under clause 10(a) arises. This requirement of one month's notice in writing was not complied with by the defendant in the termination letter of 6 August 2013. 12The licence agreement term is related to the plaintiff's performance of the management agreement by reason of clause 10 of the licence agreement, which deems a default under the management agreement to be a default under the licence agreement; clause 12 of the licence agreement provides a contractual right of termination where 14 days notice in writing to this effect is given. 13On 11 April 2012, the defendant purported to serve a notice under the management agreement in relation to "serious breach". The principal ground was the failure to reside on the premises. That letter was not replied to and, as is set out in more detail below, the plaintiff agreed in her evidence that she took no steps in relation to the "serious breach" complaints. 14On 26 July 2012 the defendant purported to terminate the contract. The plaintiff argues that both these documents (and a subsequent notice of 13 august 2012) are of no legal effect, but states that in August 2012 she accepted the defendant's repudiation of contract, returned her keys and left the complex.

The circumstances leading to termination of the contract 15Much of the evidence in the case relates to the plaintiff's maintenance of the complex. The plaintiff's case is that many of the complaints about the maintenance of the building related to building problems. It is clear, from documents tendered by both parties, that there had been problems with the building work in relation to the complex from the time that it was first erected. Minutes of meeting of the body corporate refer to a Mr Anthony Gittany attending on behalf of the builder and prior manager, Atiglow, and sending correspondence to the body corporate in relation to these issues, as well as to a court decision of 29 October 2007 in relation to the defendant's claim for damages against the builder (Exhibit 23, p. 8). 16The plaintiff worked at the premises as an employee of Mr Gittany's company from about 2003. There had been complaints about the plaintiff's cleaning activities predating her appointment as manager, which were resolved in March 2009 by the plaintiff sending photographs once a month of the premises to Mr Anthony Gittany, whose company was responsible for the management of the premises up until the assignment of this contract to the plaintiff (Minutes of meeting, Exhibit 23). 17After the assignment from Mr Gittany's company to the plaintiff occurred in 2009, the defendant's minutes for the December 2009 Annual General Meeting noted that the plaintiff was now the manager, although no resolution in relation to the assignment appears in the Minutes. The plaintiff's exercise of the 10-year option occurred the following year. By that time, the defendant was already dissatisfied with the plaintiff's performance of her duties. There were proceedings in the Supreme Court of New South Wales, which were resolved when the parties agreed that the exercise of the option by the plaintiff was valid (Exhibit A, pages 20 - 21). 18The plaintiff's performance of her duties during 2011 and 2012 was the subject of frequent complaint by the residents. However, the principal complaint was that the plaintiff did not reside in the unit provided for her, and residents who needed emergency services or other assistance were left to their own devices outside the hours of 9 am - 5 pm and on weekends. As the complex could only be reached by car, and some of the residents could not drive, this resulted in a series of events where essential services called to the building were unable to enter. 19The relationship between the requirement for a live-in manager and the ongoing problem of access to the premises was as follows. As the body corporate minutes kept by the defendant set out, each unit in the complex was equipped with a red emergency button, but this only worked when the plaintiff was at the complex to answer it (Exhibit 23, p. 7). As the minutes go on to note, when the plaintiff was not at the complex, the emergency was referred to the security company, but it took about one to one and a half hours for someone to attend the premises in response to an emergency. This had long meant that if the plaintiff or some other person was not at the complex to respond to the emergency, residents had to telephone 000, as the minutes for 16 November 2005 (which refer to these matters being raised with the plaintiff, prior to her entering into the management agreement) attest. 20Even more importantly, the emergency services personnel, on arrival, would not be able to enter the building, which had security doors, unless someone was there to let them in. This link between the requirement for a live-in concierge and the provision of first-class services to the aged or disabled persons living in the complex arises from their requirement for assistance if medical or other emergencies arose with which they, due to their health problems or disabilities, were unable to cope. 21The failure of the plaintiff to reside in the premises in accordance with the management agreement meant not only that the red emergency button could not be used to locate the plaintiff, but that unless other residents knew that there was an emergency and could go to the foyer to let the relevant emergency services personnel in, the emergency services would have to either smash their way in or leave the emergency unattended to. 22The 11 April 2012 notice to the plaintiff referred to 11 occasions on which ambulances or other essential services were called to the premises and unable to enter due to the absence of the plaintiff from the unit she was supposed to occupy. The evidence on these issues during the hearing, and in the affidavit material, was somewhat discursive, but with the help of counsel at the close of submissions, I have put together the following list of dates when these events appear to have occurred: (a)A resident named Diane Hampel was obliged to ring 000 in January 2011 at 3.30 am after a smoke or fire alarm went off in the unit of a 90-year-old resident, whose unit was directly above the unit which the plaintiff was supposed to occupy. This was described by Ms Hampel, in her letter of complaint to the managing agent, as "the second time" this had occurred. The smoke alarm could not be switched off, and continued to ring. By the time the fire brigade came at 5 am, many residents appear to have been woken. Ms Hampel told the managing agent, in her letter of complaint, that "we all went back to bed" at that time, but added "where is the caretaker that we pay so much money to" (Exhibit 23, p 29; see also affidavit, paragraph 23). (b)On 17 June 2011 Mrs Hampel described a visit by police and ambulance at 1.30 pm. Although this occurred during working hours, the plaintiff was absent from the building and Ms Hampel had to let them in herself. Ms Hampel had earlier that day seen the plaintiff shopping at Menai (Exhibit 23). (c)Ms Hampel also describes an ambulance arriving at 6 am on 26 June 2007. There was no one to let them in at the front of the building and by the time Ms Hampel arrived, they were "just about to break in to the building" (paragraph 24 of her affidavit). This occurred prior to the plaintiff entering into the contract, and I have accordingly not given this incident any weight in relation to this claim, but it indicates the plaintiff's awareness of the problem and of the need for a live-in attendant to be present on the premises to deal with out-of-hours emergencies. (d)Late in the evening on 23 September 2011, another resident, Ms Jones, had to let two police officers into the complex after they were called to the premises. The police officers told her, according to her complaint to the managing agent at the time, that they were "worried" (Exhibit 23, p. 48) about the occupant of Unit 2, who had not been responding to calls. Ms Jones was alerted to their presence only because her dinner guests, when leaving the premises, saw the police officers at the front door, and telephoned Ms Jones to say that the police were at the front door and could not get in (affidavit, paragraph 17).This was one of several incidents occurring when Ms Haniotis was absent on holidays in Greece for five weeks in September-October 2011. During this time no one occupied the plaintiff's unit, but the plaintiff said she had delegated this task to another resident, Ms Ann Spring. According to Mr Oste, another resident, the plaintiff paid one of the residents, Ms Spring, $100 per week to sit at the front desk for two hours in the morning, and to perform light cleaning duties such as vacuum the foyer once a week and "spot clean" bird droppings in the pool area. Ms Spring gave evidence of performing light cleaning, but there was no evidence she considered herself obliged to assist other residents by attending to emergencies. The plaintiff also claimed that her brother occasionally attended, but according to Mr Oste, he came on six occasions for about two and a half hours to clear the walkways of leaves (Exhibit 23, p 37). (e)On 14 November 2011 the woman occupant of Unit 32 had a fall. This was after the plaintiff's return from her holiday in Greece, but there was no one in residence in the plaintiff's unit, according to Ms Williams, the resident who found this resident in difficulties. Ms Williams wrote to the managing agent complaining that the plaintiff was not there to help gain access to Unit 32 (Exhibit 23). (f)Four residents (Ms Jones, Ms Williams, Ms Hawsworth and Ms Arkwright) gave evidence about an ambulance called late in the evening on 25 November 2011 to Unit 2 of the premises, which was directly above the unit to be occupied by the plaintiff. The ambulance officers had been unable to gain entry to the premises and were let in by Ms Jones and these other residents (affidavit of Helen Hawksworth, paragraph 21; Exhibit 23, p. 44; affidavit of Sue Jones, paragraph 18). The ambulance officers were only found to be at the front door because one of the residents went downstairs to take out her rubbish (affidavit of Wendy Williams, paragraph 14). (g)On 28 November 2011 Ms Williams was at the swimming pool when another ambulance came for a resident who was "on oxygen 24 hours a day" (Exhibit 23, p. 49). There was no one in attendance to let the ambulance officers into the complex (affidavit of Wendy Williams, paragraph 14) and the residents had to let the ambulance officers in. (h)The most serious occasions occurred in 2012. Just before lunch on 14 January 2012, Ms Williams heard that someone on level 6 needed an ambulance. The lady in Unit 32 had fallen over and her niece, who had come to visit her, could not get in. Ms Williams called through the door to ask if the resident was bleeding or injured (Exhibit 23, p. 51). Ms Williams states in her affidavit that "Nora said to me through the door that she wanted to know if Ms Haniotis was available so her family could get into the unit. I looked for Ms Haniotis but I was unable to locate her" (affidavit, paragraph 14). (i)Before Easter 2012 Ms Welch had to go to hospital by ambulance very early in the morning. When the ambulance arrived, there was no one to let them in. Ms Welch's next-door resident heard her crying out and let the ambulance in (affidavit paragraph 17). Ms Welch's apartment is immediately above the plaintiff's apartment. This was one of two occasions when Ms Welch needed an ambulance (T 130). (j)On 30 March, the plaintiff sent an email to the managing agent stating that "as of 5.00 pm today, I am employing Ms Ann Spring to fill in for me while I am not on the premises. This will be on an ongoing basis indefinitely, I have made arrangements with my Accountant" (Exhibit 23, pa. 23). Ms Spring is the resident referred to in paragraph (d) above. However, the problem of how to let emergency services such as ambulance officers into the building did not change. In April 2012, after Ms Welch came out of hospital, another resident (identified by Ms Welch as "Don") required an ambulance. The plaintiff was not available to let the ambulance officers into the building (affidavit, paragraph 17). (k)Ms Jones and Ms Williams referred in their evidence to another ambulance incident in 2012, but the evidence about this was very scanty. (l)Access by police, the fire brigade and ambulances was not the only issue; anyone coming with a delivery after hours was in a similar position. Ms Sadler deposed to problems receiving special dietary meals which were delivered to her home each night (affidavit paragraph 8). Ms Hampel deposed to having to accept a parcel on 29 July 2011 from a delivery person who said "I have been buzzing [the plaintiff's unit] but there's no reply" (affidavit paragraph 12). Many such duties fell to Ms Hampel's lot, as her unit overlooks the front entrance, so she saw and heard persons wanting to get in, such as Optus and Telecom workers needing access to the mobile facility late at night, often around 11 pm (affidavit paragraph 22). Access for tradesmen was a constant problem; Mr Oste arranged for a plumber to attend on a Saturday morning and although the plaintiff was supposed to meet him she failed to attend; he said he "never" saw the plaintiff at the complex on weekends (affidavit paragraph 23). There was no one to supervise the painters while they were working at the complex during the plaintiff's overseas holiday. Ms Welch deposed to a workman who was looking for the plaintiff on 10 July 2012 to sign his worksheet but she was not available (affidavit, paragraph 15). 23As is set out below, the plaintiff's evidence concerning these events consisted of: (a)Statements that she may have been elsewhere in the premises carrying out her cleaning duties during the day and not known about these incidents; (b)The statement that "it's not my job to run to emergencies during the night" (T 218); (c)Denial that any resident required medical assistance, because "I never ever got a phone call from anybody" (T 218); and (d)The assertion the management agreement did not require her to remain on the premises at all times, and that she could stay with her parents if they were ill, or stay overnight with her boyfriend (T 219). When she was not there another resident, Ms Spring, was there to do her work for her (T 222). 24Even if the plaintiff had been in the residential premises to answer inquiries or requests for assistance, the evidence of all the residents called by the defendant was that they did not have her mobile phone number, or the telephone number for her unit. It was put to a number of the defendant's witnesses that they had received this telephone number when they moved into the complex, but each of them denied it. Most of these witnesses already resided in the complex when the plaintiff took assignment of the management agreement on 22 November 2009. There was no evidence of a list of emergency telephone numbers displayed on a notice board or other prominent place. Witnesses shown a piece of paper with the plaintiff's name and telephone typed on it denied having been given such a piece of paper. No evidence of a publicly listed telephone number or mobile was given. 25The grounds in the notice centred around dereliction of duty (whether by inadequate cleaning or failing to attend to emergencies) by the plaintiff relating principally to her absence from the premises.

Did the plaintiff live on the premises? 26The plaintiff agreed that she spent the night at her parents' home, and that both her parents, who live in a suburb some distance from the complex, had required 24-hour care for the last three or four years (T 220). She agreed that their home address at all times was the address for her tax returns and other documents, including the deed of assignment she executed on 22 November 2009. Her explanation for this, that mail from the complex mailboxes was frequently stolen, was not contained in her affidavit. 27The plaintiff stated that when she had spent nights at her parents' home, either her daughter or Ms Ann Spring "would be in place of me" (T 225). There is no evidence that her daughter (who was not called as a witness) attended the premises on any other than the most irregular basis, and Ms Spring's affidavit and oral evidence did not extend to carrying out the plaintiff's residential-related duties. 28The evidence of the other residents was that the plaintiff did not reside in the two-bedroom apartment (Lot 52) at all. Each of the residents called by the defendant was very careful about giving evidence, and clearly regarded taking an oath (or affirmation) seriously. Each of them gave evidence about seeing the plaintiff arrive at the complex by car in the morning, leave in the afternoon, not be present after hours or on weekends with her apartment being in darkness, and that her car was absent from the carpark after hours and on weekends. This evidence followed a generally similar pattern, and the following examples illustrate that pattern. 29Ms Russell gave evidence as follows: "Q. So, I was asking you some questions about your observations covering Ms Haniotis' residence in the unit. A. Yes. Q. You've referred us so far to the existence of a padlock on one of the front doors to her apartment. A. Yes. Q. You've also referred us to the fact that her car was never there. A. Yes. Q. Now, are there any other observations you made concerning her residency? A. Well, of an evening, it would be in darkness, her residence I mean. It would be in darkness. Q. How were you able to observe that? A. Well, we have vertical blinds on our windows, but they never close tightly, and you can see if someone has a light on inside the building. Not that you can see through the verticals when they're closed, but you can tell if there's a light on. Q. What time would you have made these observations in the evening about lights not being on? A. Probably no later than 10 o'clock at night." (T 106-107) 30Other witnesses gave evidence of the plaintiff's car not being in the garage, or the lights being out, and of the lock being placed on the outer door of the plaintiff's unit at such times; one of the residents took a series of time-recorded photographs of this lock. 31I have had the benefit of seeing the residents of this complex in the witness box and observing not only their demeanour but their general state of health. All were over retirement age; some were in their eighties. Some residents were hard of hearing; others had difficulty walking and required assistance to get into the witness box; one witness was too ill to give evidence at all. Their reliance upon a live-in concierge being resident on the premises, in terms of their physical limitations, is self-evident. 32The evidence that the plaintiff did not reside in the premises on any regular basis is overwhelming. Whether or not the presence of a padlock on the outside of the plaintiff's door indicated she was present, the absence of her car from the car park and the absence of lights or noise from her apartment at night are highly persuasive. The only way the complex could be reached was by car, and the plaintiff's 4WD with its distinctive personalised number plate was known to the residents, not least because, according to the evidence of a number of the residents, she would often park in the "no parking" zone in preference to parking in the designated parking spot adjoining the unit allocated for her residence. 33The plaintiff's evidence of her residence in the apartment consisted of a general denial of the allegations and the tender of her driver's licence, which gave her address as being at the complex. She conceded that other documents, such as tax returns, gave other addresses, but as noted above said this was because mail theft at the complex was a problem. 34Residence in the unit would be easy to establish by phone records, photographs or other contemporaneous documentation. No photographs of the interior of the home unit which is Lot 82 were provided; the only photographs of Lot 82 before the court are those taken by the residents of the padlock placed on the outside of what I am satisfied was the plaintiff's main front door, over a period of months. When the contract was terminated, the plaintiff in correspondence identified that she had returned her keys; there is no evidence that she raised any issues about possessions she had to move out of the unit beyond certain goods she appears to have kept in the foyer for sale to residents. 35The witness called by the plaintiff, Ms Ann Spring, did not give evidence that the plaintiff resided in the premises. As a friend of the plaintiff, and as someone living directly above her, she would have been in a position to provide corroboration of the claim that the plaintiff resided there after hours and on weekends. 36The result of the plaintiff not being at the premises after hours was that the residents had only emergency services or the security company (with a turnaround time of about one and a half hours) to turn to if anything went wrong. 37Ms Lola Welch, who had had to get an ambulance on two occasions (T 130), lived next door to Ms Spring and above the residence which was supposed to be occupied by the plaintiff. She knew the plaintiff had a personalised numberplate, and that she occasionally drove her daughter's car. She was the only witness who said that the plaintiff had ever stayed overnight in the premises, but she qualified it by saying that this happened "not very often" (T 129). 38The plaintiff challenges whether residence in the premises is in fact connected to performance of the contract. In additional submissions dated 14 February 2014, Mr Ash states that: "On any view, the plaintiff based her operations from Lot 82. Moreover, she resided in Lot 82. The attempt by the defendant to say to the effect "duty of residence" = "duty to perform the other duties arising from her residence" should be rejected. So should an attempt to say to the effect "duty of residence = "duty to be present or to arrange someone to be present for each and every 24 hours"." (written submissions, paragraph 6(a)) 39This is in response to the "serious breach" identified in the April 2012 letter of failing to respond adequately to emergencies on at least 11 occasions between 1 January 2011 and 29 February 2012 (clauses 3(i), 5(c) and 5(d) of the management agreement). The addition submissions state that clause 3(i) was to arrange for a 24-hour emergency call service to be provided to the owners and occupiers as an emergency, not for the plaintiff to respond to the emergency. It is submitted that this clause does not require physical presence at all. 40Leaving aside the obligation of residence clearly specified in the management agreement, and the failure to cross-examine the defendant's witnesses about how the emergency procedure worked, the minutes of meeting (Exhibit 23) clearly indicate that, for the emergency button system to work effectively, the plaintiff had to be residing within the complex. If the plaintiff was not there, it was necessary to call 000. Even then, it was still necessary to open the main front door and, if necessary, the door of any resident whose injury or disability prevented them from doing so. 41This is the relevance of clause 5(c), namely that the plaintiff needed to be in residence as the point of contact for essential service contractors, namely that the emergency calls to particular residents require a point of service contact, so that all necessary doors could be opened to permit access to the emergency services personnel. The same is the case in relation to clause 5(d). 42The plaintiff further submits, in relation to the 11 April 2012 letter, that complaints were not to any material extent communicated to the plaintiff over a period of 15 to 18 months, and that the notice was invalid because clauses 10(a)(i) and 10(b)(i) required the parties to use their best endeavours. 43Even if there was some aspect of the residence requirement warranting discussion (which I do not accept), all of the defendant's witnesses gave evidence of angry accusations or comments directed at them by the plaintiff. The plaintiff's attitude to these complaints, her failure to provide her mobile and home telephone number and her absence from the premises outside office hours would have made discussion of these issues difficult. In addition, the plaintiff was afforded the opportunity up to the notice of 11 April 2012 to use her best endeavours to resolve the situation by residing in the premises, and she failed to do so. I reject this submission. 44I am satisfied that evidence of serious breach in relation to the plaintiff's failure to reside in the premises is made out in relation to her failure to live on the premises. As is set out below, I consider that this serious breach, notwithstanding the typing and other errors in the notice, was sufficiently clearly communicated to the plaintiff by the April 2012 notice. 45I shall briefly summarise the other evidence of breaches referred to in the letter.

Parking, running a shop and treatment of the residents 46The plaintiff's conduct in parking in the "no parking" part of the carpark (thereby blocking or inconveniencing other carpark users) was put forward as part of her general disregard for the residents' welfare. Most of the evidence tendered by the plaintiff related to the plaintiff's treatment of the residents and statements she made to them which were abusive or intimidating. One example is the conversations she had with Ms Lola Welch, who resides in Unit 3, which is immediately above the plaintiff's unit. It was put to Ms Welch that conversations to which she deposed about the plaintiff accusing her of stealing a plant and a trampoline did not take place and that her contemporaneous complaint referred to a telephone call, whereas her oral evidence referred to an encounter (T 125 - 126). Although Ms Welch only made one complaint in writing to the managing agent, I am satisfied from her evidence that she had more than one conversation with the plaintiff in which the plaintiff accused her of stealing. 47However, Ms Welch was not cross-examined about other statements she had deposed to the plaintiff making, namely statements made within her hearing while Ms Welch was waiting in the foyer for her family to take her out. She heard the plaintiff say to Ms Spring: "They should all be put down like animals" and "They all have dementia and are useless" (affidavit, paragraph 12). Ms Welch believed that the plaintiff was referring to the residents of the units. Ms Spring had laughed at these remarks. 48Ms Welch was so distressed by the plaintiff's treatment of her that she purchased a garage remote control for $70 (although she did not own a car) so that she could go through the garage and avoid the foyer area entirely. 49Ms Welch stated in her affidavit that she is "over 80" (paragraph 13). To my observation of her, in the witness box, she is a short, frail woman of slight build. She described the plaintiff as having "slammed on my door" (T 125) as well as spoken to her in an angry tone. To my observation the plaintiff is a tall, powerfully built woman, and she has a loud and carrying voice. I accept the evidence of Ms Welch that these events occurred, and that she was so frightened of the plaintiff that she went through the garage in order to avoid her. 50Similar evidence was given by the twelve other witnesses called by the defendant. This included a statement that the plaintiff became agitated at a committee meeting in November 2011 and knocked a portable fan over (affidavit of Sue Jones, paragraph 21). Similarly, Ms Welch was not the only resident who avoided entering the foyer in case the plaintiff was there; Ms Sadler also avoided using the foyer after the plaintiff abused her (affidavit, paragraph 6). Ms Williams, who was still employed although of retirement age, stated the plaintiff called her a troublemaker and said "I know directors at your workplace and I can cause repercussions for you" (affidavit paragraph 9), remarks she found intimidating. 51A number of the residents also gave evidence that the plaintiff was persistent in wanting to clean their apartments for money, something they did not want her to do. The plaintiff gave a list of the units she had cleaned on this basis; there were more than a dozen. Ms Hampel's affidavit (at paragraph 32) identified units 1, 6, 7, 10, 11, 14, 17, 19, 20, 23, 30, 37, 39, 43, 50 and 51 as being units she had seen the plaintiff cleaning. The residents found these demands for payment confronting. 52Ms Arkwright gave evidence that the plaintiff set up a shop in the reception area next to the foyer which remained there until her termination (affidavit, paragraph 13), and provided photographs showing the ticketed items. Ms Jones said these items on sale made the foyer look "like a Vinnies store" (affidavit paragraph 14). The plaintiff did not answer these claims in her affidavit but in cross-examination claimed she donated the money to charity. 53This was one of a series of claims which the plaintiff answered only from the witness box and in answer to the evidence of the defendant, which meant that it could not be tested. The same was the case in relation to the complaints about the poor standard of cleaning, as is set out below. This brings me to an assessment of the plaintiff's evidence generally.

The plaintiff's evidence and the cleaning of the premises 54The plaintiff's affidavit evidence was scant. The plaintiff did not file any affidavits in accordance with the timetable, and the first affidavits filed were those of the defendant. When the plaintiff's affidavit in reply was filed, it was a brief document consisting of denials of conversations. Many of the matters deposed to by the defendant's witnesses were not answered at all. The parties dealt with this by reversing the order of the hearing, so that the defendant's witnesses gave evidence first, and the plaintiff gave evidence in reply. Many of the explanations she gave in her evidence were not contained in her affidavit, and were offered after hearing the defendant's witnesses cross-examined. 55The plaintiff answered many of the allegations by saying she had not heard of these complaints until she received the breach notice. However, she acknowledged there had been complaints dating back to occasions prior to the management agreement, although she was uncertain what these were: "Q. What I'm putting to you is that you personally became aware of complaints being made by the residents back in 2007, didn't you? A. Yeah, they were the first ones, yeah. I think so, yeah. Q. So it's fair to say that there have been complaints made about your performance of which you have been aware since 2007? A. No. Q. No? A. No. Q. You accept that you became aware of complaints in 2007? A. I - yes, but not on my performance. I don't know what the complaints were, there was one time when there was complaints and I think it - yeah, it could have been - I'm so sorry. I just need to get my thoughts right. Yes. It could be, yes." (T 165) 56The plaintiff claimed that these earlier complaints related to the noise of the leaf blower only (T 165 - 166). However, the minutes of the body corporate meetings, which record the discussions with the plaintiff concerning emergency services difficulties as early as 2005 (Exhibit 23) are to the contrary. The plaintiff was a member of the body corporate committee in 2011 - 2012 and was aware of the complaints raised; it was on one of these occasions that she became angry and knocked over a fan, according to Ms Jones. 57The plaintiff took a combative attitude in cross-examination concerning the reason for the toilets being unclean: "Q. It would have been unheard of for any of these residents to think to take it upon themselves to clean the toilets themselves. A. I assume weekends they did. I wasn't there on the weekends. Q. You assume, make that assumption? A. I was - yeah, I assume, sorry. Q. If you had complied with the schedule, you wouldn't expect to hear any complaints about soap and towels not being in the toilets to those areas, would you? A. Every Friday, I filled them. Every Friday. Q. That's not the question I asked you. WITNESS: Sorry. NICHOLLS Q. If what you say is true, you would not expect to hear complaints made from a number of residents about the failure for there to be any soap or towels in those areas. WITNESS: So are you trying to tell me that I should tell you now that I never put soap and towels - I'm not understanding." (T 174) 58The plaintiff's reference to not being at the complex on weekends, and to her assumption that the residents cleaned the toilets on weekends, is further evidence both of the fact that she did not reside in the apartment provided, and that she expected, when she was not there, that the residents would attend to cleaning work, not Ms Spring or her daughter, or anyone else on her behalf. This also demonstrates the relationship between the failure to clean and the plaintiff's absence from the premises, which was the "serious breach" of clause 8 complained of in the April 2012 notice. 59The plaintiff's explanations for the unclean smell in the toilets was firstly inadequate vents in the building and secondly the absence of toilet paper, soap and towels, which she said were taken by the residents (T 175 - 176). However, these assertions made in her oral evidence were not contained in her affidavit: "Q. You've given us two explanations. One is the vents. A. Yes. Q. Didn't you think it was important to refer to that in your affidavit? A. Well, I assumed that you would ask me now and I would answer you. Q. But the affidavit in reply was an opportunity provided by you to tell your version of events in full for the purpose of use in court. Do we take it that what you really want to do now is to provide your version of events as I'm asking you these questions? A. No. No. Q. There was nothing said in your affidavit about theft of soap and towels from the toilet areas, either, was there? A. (No verbal reply)" (T 175) 60Similarly, the plaintiff explained the photographs of mould as being due to building defects (T 176), which meant that mould accumulated despite her best efforts. The discolouration of the concrete was not due to dirt but to the bleeding cement problem, which the plaintiff said she regularly reported to the managing agents. This was not an explanation which was given in her affidavit, and the file of documents in which the plaintiff said these reports were documented was never produced (T 181 - 184, 191 - 192). The plaintiff also said, inconsistently, that she was not responsible for reporting defects, and had not been asked to keep any record of notifying the managing agents: "Q. All right, but didn't you think it important to maintain record of those matters around the building which required to be fixed? Matters which you couldn't personally do but matters which you might recommend contractors might come in to fix? A. I wasn't in charge. I had nothing to do with what the workmen had to do and the contractors. I was supposed to report it. It wasn't my job. I wasn't told by the committee that I had to keep a record." (T 190) 61Inconsistently with the above evidence, she also said that there were "not many" (T 191) and indeed "very few" (T 191) problems to report to the managing agents. This is difficult to understand as her answers in cross-examination excused the cleaning problems as due to building problems such as bleeding cement, roof structure and repair issues, lack of toilet ventilation and ceiling damage. 62However, the principal problem was that the plaintiff's affidavit failed to respond at all to large parts of the affidavit material filed by the defendant. One such example was the claim that the plaintiff never cleaned the gazebo: "Q. --about the evidence you gave a short time ago that it was you who cleaned the gazebo. Do you recall I put to you that at no stage during your time as caretaker manager, did you clean the gazebo at all? A. No. Q. Do you recall me putting that question to you? A. Yes Q. And you denied it. You said you cleaned the gazebo. A. Of course. It was-- Q. I'm not talking about-- A. --part of what I cleaned. Q. I'm not talking about the dining table, I'm talking about the whole of the gazebo. A. Yes. Q. And what I'm now putting to you is that a number of witnesses have given evidence in these proceedings by affidavit, which you've read, that it was they who cleaned the gazebo. You deny that, do you? A. Yes. Q. But you didn't bother expressing that denial in your affidavit? A. (No verbal reply) HER HONOUR Q. Look, you have to answer the question. A. Well, no, I didn't." (T 187) 63The evidence about failure to clean and to tend the garden areas was extensively covered in the affidavit evidence of the defendant's witnesses and corroborated by photographs. Having seen those photographs I have no hesitation in accepting that the condition in which the plaintiff left toilet and common area premises were mouldy and dirty (Ms Arkwright, paragraph 12; Ms Fann; paragraph 4; Mr Oste, paragraph 7 - 10; Ms Hampel, Paragraph 8; Ms Hawksworth, paragraphs 2, 7, 8, 15), filthy (Ms Williams, paragraph 7), as is evidenced by the photographs of stains, dead insects, rubbish, cobwebs and unrepaired damage. Rubbish was allowed to accumulate and the smell of unclean lavatories permeated the common area. The plaintiff's affidavit material consisted of general denials only. 64The inconsistencies in the plaintiff's answers in evidence and the inadequacy of her affidavit material both reflect poorly on her credit. She conceded that the terms of the management agreement required her to provide first class service, and when confronted with photographs showing the inadequacy of the cleaning and maintenance, sought to blame others in circumstances where, had such claims been made in her affidavit, evidence could have been led in reply. Nor is it to the plaintiff's credit that she claimed to have sent correspondence to the managing agent about these matters but failed to answer a call to produce this correspondence. 65Taking all of the above into account, I am satisfied that the plaintiff is a witness whose evidence should not be accepted unless independently corroborated. This means that I do not accept her claim that she did in fact reside in the unit allocated for her use in the complex. 66The plaintiff called one of the residents, Ms Spring, The evidence of Ms Spring, who assisted the plaintiff from time to time by carrying out cleaning when the plaintiff was not there, is of little assistance. Her affidavit consists of a few sentences of the most general kind which refer only to the state of cleanliness of the building. Ms Spring, who had retired after 38 years as a musical performer, had no cleaning skills training or experience. In cross-examination she agreed she had only carried out light cleaning and reception desk duties, for which she was at one stage (during the plaintiff's overseas holiday) paid $100 per week, an amount suggesting that her duties were of a limited nature. Ms Spring also agreed that the plaintiff "often" (T 246) visited her parents' home, and stayed overnight there a few times a week. 67Ms Spring, who is the secretary of the body corporate, had in fact signed the affidavit verifying the defence. When asked why she had done so, given her evidence was to support the plaintiff, she said firstly that she had not understood the contents of the defence, or read it, despite agreeing she had been told to do so at the time, and secondly that she had been under pressure to sign it. Inconsistently, she also thought the purpose of signing the certificate for the defence would provide compensation for the plaintiff. This does not reflect well on the accuracy or reliability of her evidence, or her understanding of events generally. 68Ms Spring agreed that she had travelled to court in company with the plaintiff, and that they were friendly. She denied that this would affect her evidence. Her affidavit consists only of the most general statements, and what little corroborative value these statements had was lost under Mr Nicholls SC's cross-examination of her. She appeared not to understand the issues in the case, in that she agreed she had not understood the contents of the defence she had signed. Her evidence is of little or no assistance.

Termination of the agreement 69As a result of the matters set out above, the residents became dissatisfied with the performance of the plaintiff's obligations under the management agreement and made a series of complaints in writing to the Owners Corporation and to the Strata Manager. As the evidence set out above shows, these complaints fell into three main categories: (a)Failure to be present at the premises during the hours of work so as to respond adequately to emergencies between 1 January 2011 and 29 February 2012 (clauses 3(i), 5(c) and 5(d) of the management agreement). Nine occasions have been identified in the evidence. (b)Failure to clean or maintain the premises or to apply herself diligently to performing of caretaking duties, details of which are set out in the breaches of agreement letter dated 11 April 2012. (c)Behaving in a rude and intimidating manner to residents or executive committee members on at least seven occasions between 1 January 2011 and 29 February 2012 in breach of clause 5(h). In addition, there was a complaint that the plaintiff carried on a private commercial business on the common property (clause 5(e)) and contrary to the by-laws parked on the common property. 70The plaintiff's role was as a resident manager/caretaker and this feature was an essential element of many of the manager's duties and obligations as set out in clause 5. 71On 11 April 2012, the defendant's strata managing agency forwarded a letter to the plaintiff as follows: "Ms Haniotis, RE: MANAGEMENT AGREEMENT AND MANAGEMENT LICENSING AGREEMENTSTRATA PLAN 64915BREACHES OF AGREEMENT We are the Strata Managing Agent of the above Strata Plan. It has been brought to our attention that you are in serious breach of the terms and conditions of the Management Agreement and Management Licensing Agreement as follows: In accordance with Clause 10 of the Management Agreement you are hereby notified that the Owners Corporation will be entitled to terminate the Management Agreement if you do not rectify the breach in accordance with the Management Agreement. Further, the Owner's Corporation believe that you have failed to perform the Management Agreement in other respects as follows such that you have demonstrated that you are not prepared to perform your obligations under the Management Agreement in accordance with that Agreement: 1. Failure to clean common property adequately or at all in respect of more than 25 occasions between 1 January 2011 and 29 February 2012 of a resident or Executive Committee Member observing that the common property or part of it was not adequately cleaned, or not cleaned at all. (Clause 3(a), clause 5(h)) 2. Failure to maintain the gardens or common property so that residents undertook that work themselves on at least 9 occasions between 1 January 2011 and 29 February 2012. (Clause 3(a), Clause 3(b), Clause 5(h)) 3. Failure to be present at the premises during the hours of work so as to respond adequately to emergencies on at least 11 occasions between 1 January 2011 and 29 February 2012. (Clause 3(i), Clause 5(c), Clause 5(d)) 4. Failure to attend the premises so as to provide access to the common property or to residents on at least 11 occasions between 1 January 2011 and 29 February 201. (Clause 3(h),(j), Clause 5(c), Clause 5(d)) 5. Failure to apply herself diligently to the performance of caretaking duties by undertaking other activities during business hours on at least 4 occasions between 1 January 2011 and 29 February 2012 (Clause 5(a)). 6. Carrying on a private commercial business from the common property by use of the common property to store merchandise and trading from that part of the common property for personal advantage between 1 January 2011 and 29 February 2012 (Clause 5(e)). 7. Parking in breach of the by-laws on common property on at least 4 occasions between 1 January 2011 and 29 February 2012. 8. Behaving in a rude and intimidating manner to residents or Executive Committee members on at least 7 occasions between 1 January 2011 and 29 February 2012 Clause 5(h). Please be advised that the above is in direct contravention of the Management Agreement and Management Licensing Agreement. You are required to comply with clause 8 of the Management Agreement, and to perform all other duties, including to provide an account of the use of products or services for which you have rendered invoices to the Owners Corporation, within [sic] There is provision for termination of the Management Agreement and Management Licensing Agreement if you do not comply with the obligation to remedy the breach of clause 8. The Owners's Corporation reserves its rights to take proceedings in the CTTT for an order terminating the Management Agreement in relation to the breach of clause 8 and the repudiatory conduct evidenced by the breach of clause 8 and other breaches. Should you require any assistance or further information, please feel free to contact our office. Kind regards, Len Robinson Strata & Community Management Pty Ltd Joanne Counter" 72The plaintiff conceded in her evidence that she continued to provide the same service before the notice as afterwards. No attempt was made by the plaintiff to seek any form of arbitration and she did not contact the strata managing agent of the defendant, despite the invitation in the last line of the 11 April 2012 letter to do so. 73On 26 July 2012, the strata managing agency forwarded the following letter to the plaintiff: "Dear Ms Haniotis Re: Management Agreement and Management Licensing AgreementStrata Plan 64915Termination of Agreements On 11 April 2012 you were sent a letter in relation to a serious breach of the Management Agreement. That letter referred to Clause 8 of the Management Agreement and required you to rectify that breach. In addition, that letter referred to your failure to perform the Management Agreement in other respects, including breaches of clauses 3 and 5 of the Management Agreement. Since that letter, further matters have been referred to us by the Executive Committee. It appears that you are not performing the Management Agreement in accordance with its terms, nor do you intend to take steps to comply with Clause 8 in that you have not occupied Lot 82 as your residence within one month after receiving notice of breach. As a result of those and other defaults, the Management Agreement is terminated with effect from 6 August 2012. In accordance with clauses 10 and 12 of the Licence Agreement, the Licence Agreement is also terminated with effect from 13 August 2012. You will receive payment up to and including 5 August 2012. You are not authorised to undertake any activities as Caretaker, nor are you to represent that you have any authority or role as Caretaker of the premises, after 5 August 2012. The Owners Corporation requires you to remove your property from the area covered by the Licence Agreement by 13 August 2012. You are to hand to the Chairperson of the Executive Committee any keys you may hold to any part of the common property, and deliver to her any property purchased on account of your duties as caretaker for which you have received reimbursement from the Owners Corporation. Yours faithfully,LEN ROBINSON STRATA & COMMUNITY MANAGEMENT PTY LTDPer [Signature]" 74The date of 6 August 2012 is insufficient notice under the agreement. This was pointed out by the letter from the plaintiff's solicitor in reply: "As you are aware, I act for Ms. Haniotis, and refer to your letter of 26 July 2012 to my client, dated 26 July 2012. Even assuming that clause 10(a)(i) of the management agreement is duly engaged (which I am instructed it has not), I observe that the Owners Corporation may only terminate the agreement by giving one month's notice in writing delivered to the manager. A letter dated 26 July 2012 purported to terminate with effect from 6 August 2012 is ineffective. In any event, I am instructed: 1. That at all material times, my client has resided in Lot 82. 2. That my client has not been informed of any "further matters" which have been referred to you. 3. That no notice within the meaning of clause 10(a)(i) of the management agreement has ever been served. If the Owners Corporation is of the view that there is currently a breach of the management agreement, my client invites it to serve her a notice in accordance with clause 11(a), and she shall give it her urgent consideration. Meanwhile, I am instructed that she continues to perform her obligations reasonably and in good faith and that she is unaware of any valid termination of either the management or the licence agreement. Thank you. Yours faithfully,Joe Weller" 75A reminder email was sent on 10 August 2012 as follows: "I refer to the dispute which SP64915 has with my client Ms. Haniotis. As you are aware, Yourselve [illegible] my client, which purported to terminate the management and licence agreements between the [illegible] corresponded with Yourselves, seeking particulars, and identifying that the notice appears to be [illegible] the contract between the parties as still being on foot. I have received no response from Yourselves. The email below from Yourselves of 9 August 2012, seeks various keys from my client. If my client [illegible] keys it will effectively prevent her from performing her contract, however, she is, and remains, [illegible] so. Therefore, could you please respond to my correspondence as a matter of urgency. Thank you. Joe Weller, Solicitor" 76On 13 August 2012 the strata managing agency wrote to the solicitor for the plaintiff as follows: "We refer to your letter dated 3 August 2012 and your email of 10 August 2012 to Ms Counter. Without admissions, in so far as it is asserted that insufficient notice has been given under clause 10(a) of the Management Agreement, we attach herewith a notice, also dated 26 July 2012, which provides 30 days notice. As your client has already had notice from 26 July, to require a fresh notice dated later than 26 July would merely serve to extend the notice period under clause 10(a) and would be artificial exercise. Yours faithfully,LEN ROBINSON STRATA & COMMUNITY MANAGEMENT PTY LTDPer: [Signature]" 77This attached a copy of the notice of 26 July 2012 the terms of which were as follows: "Dear Ms Haniotis Re: Management Agreement and Management Licensing AgreementStrata Plan 64915Termination of Agreements On 11 April 2012 you were sent a letter in relation to a serious breach of the Management Agreement. That letter referred to Clause 8 of the Management Agreement and required you to rectify that breach. In addition, that letter referred to your failure to perform the Management Agreement in other respects, including breaches of clauses 3 and 5 of the Management Agreement. Since that letter, further matters have been referred to us by the Executive Committee. It appears that you are not performing the Management Agreement in accordance with its terms, nor do you intend to take steps to comply with Clause 8 in that you have not occupied Lot 82 as your residence within one month after receiving notice of breach. As a result of those and other defaults, the Management Agreement is terminated with effect from 27 August 2012. In accordance with clauses 10 and 12 of the Licence Agreement, the Licence Agreement is also terminated with effect from 27 August 2012. You will receive payment up to and including 26 August 2012. You are not authorised to undertake any activities as Caretaker, nor are you to represent that you have any authority or role as Caretaker of the premises, after 26 August 2012. The Owners Corporation requires you to remove your property from the area covered by the Licence Agreement by 27 August 2012. You are to hand to the Chairperson of the Executive Committee any keys you may hold to any part of the common property, and deliver to her any property purchased on account of your duties as caretaker for which you have received reimbursement from the Owners Corporation. Yours faithfully,LEN ROBINSON STRATA & COMMUNITY MANAGEMENT PTY LTDPer [Signature]" 78On 2 October 2012 the solicitors for the plaintiff responded as follows: "I refer to your letter dated 13 August 2012. I am instructed that the notice of termination contained in the letter is a repudiation of the management agreement and that my client accepts the repudiation, reserving her right to damages. I refer to clause 14 of the management agreement. In my view, there is a twofold dispute within the meaning of clause 14(b), namely whether your client has repudiated the agreement and if yes, the damages if any to which my client is entitled. I attach a copy of the Law Society's Rules for Expert Determination. Please confirm within 14 days that (a) your client disputes any repudiation; (b) your client (therefore) denies any liability in damages; and (c) that your client accepts that there is a dispute within the meaning of clause 14(b). Upon the confirmation and upon receipt of your client's cheque in the amount of $275 made out to the President, I shall make a request in accordance with clause 2.1 of the Rules. If no confirmation and cheque is received, I expect to be instructed to commence proceedings without further notice. The proceedings will be for two breaches, namely the repudiation and the breach of the promise to approach the President. Thank you. YOURS FAITHFULLYJOE WELLER" 79On 8 October 2012 Robinson & Davies Pty Ltd replied to this letter stating that: "Clause 14 of the Management Agreement has no application. Your client, in alleging repudiation, is limited to a claim for common law damages. This does not appear to us to fall within the scope of Clause 14."

Was the notice of breach letter valid? 80The plaintiff claims that the Owners Corporation's notice of 11 April 2012 is invalid in that it fails to identify the "serious breach" or to give her 28 days notice, which the plaintiff submits must be set out in the letter. If the first step of the two-stage process was not complied with, then the subsequent termination letter repudiated the management agreement in August 2012, which repudiation was accepted by the plaintiff, entitling her to damages in the form of the remaining balance of the management agreement. 81The defendant submits that the management agreement and licence agreement were validly terminated, first by a notice being sent on 11 April 2012 listing the eight matters relied upon to assert that the plaintiff was in "serious breach" and drawing to her attention the relevant clauses in the contract. 82The plaintiff identifies the issues as follows: (1)Did the defendant validly terminate the agreement, by due notice pursuant to clause 10(a)(i)? (2)If the defendant did not give due notice, what are the plaintiff's damages for wrongful termination? (3)If the defendant did give due notice, has it established the breaches alleged therein? 83The defendant identified the issues as follows: (a)Whether Ms Haniotis was in breach of the Management Agreement such that the Owners Corporation was justified in giving notice under clause 10 of the Management Agreement on 11 April 2012; (b)If this is accepted, whether the notice provided to Ms Haniotis by the Owners Corporation on 26 July 2012 and/or the substituted notice given on 12 August 2012 was sufficient to terminate the Management Agreement; (c)Alternatively, whether Ms Haniotis repudiated the Management Agreement at law which termination was accepted by the Owners Corporation; (d)If the purported termination by the Owners Corporation was wrongful, whether, in all the circumstances, Ms Haniotis was able to accept the Owners Corporation's repudiation; and (e)The effect of the dispute resolution clause.

The test for construction of a notice of breach 84The contents of a notice of this kind must be approached objectively, by giving words their ordinary meaning, and with regard to the purpose of the notice. The question is what the reasonable recipient, knowing of the relevant contractual obligations, would have at the forefront of his or her mind. The presence of errors in the notice, particularly if they were immaterial to the parties' respective rights (such as the reference to the CTTT) will not render an otherwise intelligible notice invalid: Mannai Investment Co Ltd v Eagle Star Life Assurance Co Ltd [1997] AC 749 at 767-769 per Steyn LJ: "(1) This is not a case of a contractual right to determine which prescribes as an indispensable condition for its effective exercise that the notice must contain specific information. After providing for the form of the notice ("in writing"), its duration ("not less than six months") and service ("on the landlord or its solicitors"), the only words in clause 7(13) relevant to the content of the notice are the words "notice to expire on the third anniversary of the term commencement date determine this lease." Those words do not have any customary meaning in a technical sense. No terms of art are involved. And neither side has suggested that anything should be implied into the language. That is not surprising since the tests governing the implication of terms could not conceivably be satisfied. The language of clause 7(13) must be given its ordinary meaning. A notice simply expressed to determine the lease on the third anniversary of the commencement date would therefore have been effective. The principle is that that is certain which the context renders certain: Sunrose Ltd. v. Gould [1962] 1 W.L.R. 20. (2) The question is not how the landlord understood the notices. The construction of the notices must be approached objectively. The issue is how a reasonable recipient would have understood the notices. And in considering this question the notices must be construed taking into account the relevant objective contextual scene. The approach in Reardon Smith Line Ltd. v. Yngvar Hansen-Tangen (trading as H. E. Hansen-Tangen) [1976] 1 W.L.R. 989, which deals with the construction of commercial contracts, is by analogy of assistance in respect of unilateral notices such as those under consideration in the present case. Relying on the reasoning in Lord Wilberforce's speech in theReardon Smith case, at pp. 996D-997D, three propositions can be formulated. First, in respect of contracts and contractual notices the contextual scene is always relevant. Secondly, what is admissible as a matter of the rules of evidence under this heading is what is arguably relevant. But admissibility is not the decisive matter. The real question is what evidence of surrounding circumstances may ultimately be allowed to influence the question of interpretation. That depends on what meanings the language read against the objective contextual scene will let in. Thirdly, the inquiry is objective: the question is what reasonable persons, circumstanced as the actual parties were, would have had in mind. It follows that one cannot ignore that a reasonable recipient of the notices would have had in the forefront of his mind the terms of the leases. Given that the reasonable recipient must be credited with knowledge of the critical date and the terms of clause 7(13) the question is simply how the reasonable recipient would have understood such a notice. This proposition may in other cases require qualification. Depending on the circumstances a party may be precluded by an estoppel by convention from raising a contention contrary to a common assumption of fact or law (which could include the validity of a notice) upon which they have acted: Norwegian American Cruises A/S (formerly Norwegian American Lines A/S) v. Paul Mundy Ltd. [1988] 2 Lloyd's Rep. 343. Such an issue may involve subjective questions. That is, however, a different issue and not one relevant to this appeal. I proceed therefore to examine the matter objectively. (3) It is important not to lose sight of the purpose of a notice under the break clause. It serves one purpose only: to inform the landlord that the tenant has decided to determine the lease in accordance with the right reserved. That purpose must be relevant to the construction and validity of the notice. Prima facie one would expect that if a notice unambiguously conveys a decision to determine a court may nowadays ignore immaterial errors which would not have misled a reasonable recipient. (4) There is no justification for placing notices under a break clause in leases in a unique category. Making due allowance for contextual differences, such notices belong to the general class of unilateral notices served under contractual rights reserved, e.g. notices to quit, notices to determine licences and notices to complete: Delta Vale Properties Ltd. v. Mills [1990] 1 W.L.R. 445, 454E-G. To those examples may be added notices under charter parties, contracts of affreightment, and so forth. Even if such notices under contractual rights reserved contain errors they may be valid if they are "sufficiently clear and unambiguous to leave a reasonable recipient in no reasonable doubt as to how and when they are intended to operate:" the Delta case, at p. 454E-G, per Slade L.J. and adopted by Stocker and Bingham L.JJ.; see also Carradine Properties Ltd. v. Aslam [1976] 1 W.L.R. 442, 444. That test postulates that the reasonable recipient is left in no doubt that the right reserved is being exercised. It acknowledges the importance of such notices. The application of that test is principled and cannot cause any injustice to a recipient of the notice. I would gratefully adopt it. (5) That brings me to the application of this test. The facts are simple. Crediting a reasonable recipient with knowledge of the terms of the lease and third anniversary date (13 January), I venture to suggest that it is obvious that a reasonable recipient would have appreciated that the tenant wished to determine the leases on the third anniversary date of the leases but wrongly described it as the 12th instead of the 13th. The reasonable recipient would not have been perplexed in any way by the minor error in the notices. The notices would have achieved their intended purpose." 85The question is what meaning is conveyed by the language read against the objective context of the knowledge of the reasonable recipient. In Etlis v New Age Constructions (NSW) Pty Ltd [2005] NSWCA 165 at [39] the court stated: "[39] The relevant question is whether the letter of 16 September would convey to a reasonable recipient, with this background knowledge, that the building work would be delayed because of the cable. There is no difficulty in so construing this letter. A non-technical approach to its construction is supported by Mannai Investment Co Ltd v Eagle Star Life Assurance Co Ltd [1997] AC 749 , 774 where Lord Hoffmann said that the clause in issue "does not require the tenant to use any particular form of words". This can be said of cl 6. At 767-8 Lord Steyn said: The construction of the notices must be approached objectively. The issue is how a reasonable recipient would have understood [them] ... the notices must be construed taking into account the relevant objective contextual scene ... The real question is what evidence of surrounding circumstances may ultimately be allowed to influence the question of interpretation. That depends on what meanings the language read against the objective contextual scene will let in." 86In particular, "business common sense" is applied both to the contents of the letter and to a consideration of any errors in it, as the NSW Court of Appeal explained in Hometeam Constructions Pty Ltd v McCauley [2005] NSWCA 303 at [148]-[150]: "[148] The practical approach to construction of the notices in Stubbs, Brenmar and Hounslow is consistent with the view that such notices should be interpreted in accordance with business common sense: Mannai Investment Co Ltd v Eagle Star Life Assurance Co Ltd [1997] AC 749 at 771 per Lord Steyn. In Mannai Lord Steyn formulated a number of propositions concerning the validity of a notice to determine a lease which wrongly stated the date of termination, the second and fourth of which were (at 767-768): (2) The question is not how the landlord understood the notices. The construction of the notices must be approached objectively. The issue is how a reasonable recipient would have understood the notices. And in considering this question the notices must be construed taking into account the relevant objective contextual scene ... (4) There is no justification for placing notices under a break clause in leases in a unique category. Making due allowance for contextual differences, such notices belong to the general class of unilateral notices served under contractual rights reserved, eg notices to quit, notices to determine licences and notices to complete: Delta Vale Properties Ltd v Mills [1990] 1 WLR 445 , 454E-G. To those examples may be added notices under charter parties, contracts of affreightment, and so forth. Even if such notices under contractual rights reserved contain errors they may be valid if they are 'sufficiently clear and unambiguous to leave a reasonable recipient in no reasonable doubt as to how and when they are intended to operate': the Delta case, at p. 454E-G, per Slade LJ and adopted by Stocker LJ and Bingham LJ: see also Carradine Properties Ltd v Aslam [1976] 1 WLR 442 , 444. That test postulates that the reasonable recipient is left in no doubt that the right reserved is being exercised. It acknowledges the importance of such notices. The application of that test is principled and cannot cause any injustice to a recipient of the notice. I would gratefully adopt it. (emphasis added) [149] In Etlis v New Age Constructions (NSW) Pty Ltd and Anor [2005] NSWCA 165 Handley JA (with whom Hodgson JA and Brownie AJA agreed) considered cl 6 of the standard "Plain English Building Agreement" (11th Ed, issued by the Housing Industry Assn) which required the builder to notify the owner in writing "within ten (10) days of the event" requiring an extension of time. His Honour held (at [39]) that Mannai supported a "non-technical approach" to its construction. He also said (at [38]) that: [w]here to the knowledge of both parties the proprietors already have the information that cl 6 requires the builder to communicate the notification need not set this out at length. In those circumstances the primary purpose of any written notification will be to provide objective evidence to facilitate contract administration and avoid disputes. [150] He concluded (at [39]) that "[t]he relevant question is whether the letter of 16 September would convey to a reasonable recipient, with this background knowledge, that the building work would be delayed because of the cable". 87The plaintiff submits that clause 10(a) is invalid unless it contains: (a)An assertion of commission of a serious breach, identified with specificity; (b)The specific provision of one-month's notice in writing; (c)A condition subsequent, namely the subsistence of the breach for more than 28 days after service of the notice; and (d)The notice must require the breach to be immediately remedied. Compliance with the third and fourth of these requirements is not challenged; the first and second are the subject of dispute.

(a) Did the notice fail to identify the serious breach? 88The terms of the management agreement are in clear and unambiguous language. The factors of particular relevance were, as is noted in a number of paragraphs of the management agreement, that the complex was a residential complex for a particular market, namely persons of an age and health standard to require a manager who was living on the premises who would be available in the event of need, by reason of many of the occupants living alone, or suffering from disabilities or being of advanced age, or all of the above. The standard expressed in clause 5(h) of the management agreement was that the level to which the complex was to be maintained was "as a first class development for older and/or disabled owners and residents". The concept of "serious breach" consisted of failure to comply with the identified obligations under clause 8 of the management agreement, namely the requirement to live in the premises. These parts of the letter are both highlighted and underlined. They clearly are represented as the principal thrust of the notice. 89The notice is sent pursuant to clause 10 of the agreement, which put in place a two-stage procedure for the termination of the management agreement. The notice correctly identified the following: (a)An asserted persistent neglect of clause 3 obligations and a "serious breach" of the clause 8 obligation of residence; (b)Following service of a notice of these breaches under clause 10(a)(i), there must be rectification of the clause 8 breach concerning residency, or the defendant would exercise its right of termination. 90It is following the notice of breach issues that the owners corporation acquires the right to terminate, which it can be then exercised at any time unless there is evidence of waiver (Pacific Brands Sport & Leisure Pty Ltd v Underworks Pty Ltd (2006) 149 FCR 395 at [45]-[52]), which is not claimed in this case. 91The plaintiff submits (T 258 - 259) that there is a mix of obligations under clauses 3 and 5, and that a typing error (omission of punctuation after "as follows") means that the breach or breaches cannot be identified with specificity. It is submitted that the letter falls well short of what is required for a person to identify what is required to be done (T 261). 92I do not accept that submission. The notice clearly points to the principal serious breach which will result in termination as the breach in clause 8, namely the failure to reside in the premises. This was easily capable of performance by the plaintiff; all she had to do was to take up residence in accordance with her contractual obligation to do so. 93The fact that the "serious breach" is identified on page 2 of the letter makes little difference; the recipient of the letter would be expected to have read it in its entirety. 94Nor does the fact that more than one breach is referred to make render the notice either ambiguous or invalid. It is irrelevant whether the other conduct referred to is capable of amounting to a "serious breach". A notice specifying both a valid and an invalid ground is not ineffective, for the reasons explained in Legione v Hately (1983) 152 CLR 406 at 418, 452. The "serious breach" relied upon is the breach of clause 8, as the notice points out in the sections underlined and in bold on page 2. 95The plaintiff submitted that these breaches were not identified with clarity, in that a series of incidents, unknown to the plaintiff, were identified. The serious breach was the failure to reside. That did not need any further clarity; all that the plaintiff had to do was to reside in Unit 52 (Lot 82). 96The plaintiff also submitted that the reference to proceedings being commenced in the CTTT invalidated the notice. This portion of the letter appears to relate to what will happen if the plaintiff does not comply with her clause 8 obligations, and presumably refers to proceedings which were foreshadowed if there was a disagreement about the lease of Unit 52 of some kind. A sensible commercial reading of the notice, in conjunction with the management agreement, makes the terms of the notice, and the nature of the "serious breach", clear.

(b) Was the notice invalid because it failed to give 28 days notice? 97Notices to terminate an employment contract, like other unilateral notices served pursuant to contractual rights (Hometeam Constructions Pty Ltd v McCauley, supra, at [148]) must "clearly and distinctly" (Robinson v Becata Pty Ltd [2004] NSWSC 310 at [50]-[53]) convey a message to a reasonable reader in the position of the recipient of the notice. Being in the position of a recipient involves having knowledge of the circumstances surrounding the transaction; it is not necessary to spell out information which the recipient has, or ought to have (Mannai Investment Co Ltd v Eagle Star Life Assurance Co Ltd, supra, at 768). For example, if the management agreement identifies the period of time during which the breach must be rectified (namely 28 days), is it necessary to restate this specific time frame in the notice, or is a reference in the notice to the relevant clause in the management agreement sufficient? 98The failure to give 28 days in the notice was described by counsel for the plaintiff as a significant flaw (T 261). It is certainly the case that a notice must specify when the contract is to terminate, or at least contain facts from which that date is ascertainable (Hughes v NM Superannuation Pty Ltd (1993) 29 NSWLR 653). In the present case, where the 28-day period for compliance is clearly identified in the management agreement, I am satisfied that the reference to this clause amounts to containing sufficient facts from which the period of time for compliance is ascertainable. 99The notice provided under clause 10(a) does not, in my view, need to repeat the 28-day period provided in the management agreement, in view of the clear provision in clause 10(a)(i) that a serious breach had been committed if "the breach subsists for more than 28 days after the Owners Corporation has served a notice on the Manager identifying the breach and requesting it to be immediately remedied". By referring to the "serious breach", the notice of 11 April 2012 was clearly invoking clause 10(a)(i). That put the plaintiff on notice that she had 28 days to remedy the breaches. 100I am satisfied that the notice did not require to state the relevant period of notice. The fact that the notice stops in mid-sentence without specifying the notice period is bad drafting, but any reasonable recipient consulting the agreement would quickly identify the 28-day period.

Conclusions concerning the validity of the 11 April 2012 notice 101I am satisfied that the notice of 11 April 2012 could not have left any reasonable person in doubt that a serious breach was alleged and that the defendant intended to exercise its right of termination for the breach of clause 8. On that basis, I am satisfied that the notice of 11 April 2012 was sufficient notice for the purposes of clause 10(a)(i) of the management agreement. 102It is not in dispute that the plaintiff took no steps following the service of the notice of breach. This brings me to the first notice of termination which was sent on 26 July 2012.

The notices of termination sent on 26 July 2012 and 13 August 2012 103I note the concession by the defendant that the notice of termination of 26 July 2012 which purported to terminate the agreement "with effect from 6 August 2012" was in error, because clause 10 of the management agreement allowed a period of one-month before the termination took effect. The first question is whether that error vitiates the rights to terminate which had by then arisen.

Effect of the wrong date for termination 104Senior and Junior Counsel for the defendant, in their helpful outline of submissions, identify the following principles (defendant's submissions, paragraph 32): (a)The purpose of a Notice of Termination is to inform the recipient that a decision has been made to determine the contract. Provided the notice unambiguously conveys a decision to terminate, a court would be entitled to ignore immaterial errors which would not have misled the recipient (Mannai Investment Co Ltd v Eagle Star Life Assurance Co Ltd, supra, at 768); (b)Notices of Termination are to be construed by reference to how a reasonable man would have understood the notice exercising common sense in the context and in the circumstances of the particular case. Absolute clarity or an absolute absence of any ambiguity are not necessarily required (Mannai Investment Co Ltd v Eagle Star Life Assurance Co Ltd, supra, per Lord Clyde at 782); (c)Even if notices contain errors, they may be valid if they are sufficiently clear and unambiguous to leave a reasonable recipient in no reasonable doubt as to how and when they are intended to operate (Mannai Investment Co Ltd v Eagle Star Life Assurance Co Ltd, supra, per Lord Steyn at 768); (d)Notices issued under commercial agreements should be construed practically so as to give effect to their presumed commercial purpose and so as not to defeat that purpose by a narrow and artificially restricted construction (Pan Foods Company Imports & Distributors Pty Ltd v Australia & New Zealand Banking Group Ltd (2001) 70 ALR 579 per Kirby J at [23]-[25]); (e)A notice of breach provision requiring a period of notice to be given is a "practical instrument, and whether it is satisfied should be determined in a practical and not technical manner ..." (Duffy Bros Fruit Market (Campbelltown) Pty Ltd v Gumland Property Holdings Pty Ltd [2007] NSWCA 7 at [142]); (f)A notice of termination should not be analysed with the skills of a lawyer bringing to bear the benefit of hindsight and intent on discerning ambiguity where none truly exists. Total legal perfection is not to be expected. Validity to be determined objectively and business common sense should prevail (Al Jadeed TV v United Broadcasting International Pty Ltd [2011] 283 ALR 205); (g)When Ms Haniotis received the Notice of Termination on 26 July 2012, she had earlier received the Notice of Breach sent 11 April 2012. The Notice of Breach directed attention to "Clause 10 of the Management Agreement" and the right asserted by the owners corporation to terminate under that agreement. She is also taken to be aware of the requirements of Clause 10. Ms Haniotis must have known applying a reasonable and practical approach that the reference in the Notice of Termination to the Management Agreement terminating with effect from 6 August 2012 was incorrect. Indeed, the response to the Notice of Termination bears that out. 105Two responses from the solicitor for the plaintiff dated 3 and 10 August 2012 stated that the plaintiff regarded the contract between the parties as still being on foot. The defendant submits that in doing so, the plaintiff affirmed the management agreement by purporting to continue the performance of obligations under it (Sargent v ASL Developments Ltd; Turnbull v ASL Developments Ltd (1974) 131 CLR 634 at 655-656). The effect of an election to affirm a contract is that once communicated with the other party, the election becomes irrevocable and any right to terminate is lost (Sargent v ASL Developments Ltd; Turnbull v ASL Developments Ltd, supra, at 656). Nevertheless, it is the case that the defendant sent a substituted notice of termination on 13 August 2012 extending the effective date of termination to 27 August 2012. 106The notice must specify when the contract is to terminate: Hughes v NM Superannuation Pty Ltd, supra. The defendant submits that the plaintiff well knew at the time of receiving the notice of termination of 26 July 2012 that the wrong date had been nominated, and clearly received advice to this effect, hence the response of Joe Weller & Associate dated 3 August 2012. The question is whether the substituted notice issued to correct the date from which termination was to take effect can constitute a notice of termination. The defendant draws my attention to the discussion of this issue by Campbell J in Robinson v Becata Pty Ltd, supra, at [24], [42]-[44]. 107The point may, in my view, be summarised quite simply by noting the statement of Lord Steyn in Mannai Investment Co Ltd v Eagle Star Life Assurance Co Ltd, supra, at 768G, namely that even if notices under contractual rights served contained errors, they may still be valid if they are sufficiently clear and unambiguous so as to leave a reasonable recipient in no doubt as to how and when they are intended to operate. The notice in Mannai Investment Co Ltd v Eagle Star Life Assurance Co Ltd, supra, was incorrectly addressed as being on 12 January rather than 13 January, in circumstances where a reasonable recipient with knowledge of the terms of the lease would have known that the relevant date was 13 January (see also EMCL Pty Ltd v Esanda Finance Corp Ltd [1999] FCA 978 at [25]-[28]). The same is the case here, as the response to the termination notice by the plaintiff's solicitor demonstrates. 108Taking all of the above into account, I find that the notice containing the incorrect termination date was nevertheless valid. Alternatively, I find that any defect was cured by the substituted notice of termination sent on 13 August 2012, which corrected the date. It was not necessary to give a further 28 days, since both parties agreed that the correct termination date was 28 days after the letter of 26 July 2012. 109In the event that I have erred in making these findings, I now consider the issue of common law rights of repudiation. The first issue for determination is whether the management agreement was a "code" (plaintiff's written submissions, paragraph 25) displacing the common law.

The common law right of repudiation 110The termination clause in the management agreement, clause 10, does not by its terms purport to expressly exclude any common law right of termination. Both parties directed me to the discussion of this issue by Flick J in Al Jadeed TV v United Broadcasting International Pty Ltd, supra, at [14]-[16] (see the additional written submissions of the plaintiff at paragraphs 9-11). Both parties also drew my attention to the discussion of this issue in Cheshire & Fifoot, Law of Contract (10th Ed, LexisNexis 2012) at [21.3] summarising that, unless otherwise agreed, a contractual right to terminate for breach operates concurrently with any right conferred by law to terminate for the breach in question (see the cases listed at footnote 8). It is only where the parties agree that the right to terminate is governed exclusively by the contract that no such concurrent right will flow: Commonwealth of Australia v Amann Aviation Pty Ltd (1991) 174 CLR 64; see also Wallace-Smith v Thiess Infraco (Swanston) Pty Ltd (2005) 218 ALR 1 at [62], [70], [137] and [142]. 111The question is one of interpretation of this contract. Counsel for the plaintiff drew my attention to the discussion of this issue in Commonwealth of Australia v Amann Aviation Pty Ltd, supra, and Concut Pty Ltd v Worrell (2000) 176 ALR 693, noting the requirement for "clear words" to rebut the presumption that a contracting party does not intend to abandon common law remedies. 112The plaintiff does not contend that the management agreement contained a code which entirely displaced common law rights; what the plaintiff submits is that by providing a letter requiring her to return the keys and refusing to pay her, the defendant's conduct was so fundamentally at odds with the maintenance of the agreement that the plaintiff was entitled to accept this as repudiation, and further that the conduct of which the plaintiff is accused falls within the code, so that the common law does not operate (written submissions, paragraph 27). 113The plaintiff's submissions at paragraph 27 overlook a number of issues. The serious breach resulting in the termination is the failure to reside in the premises (Clause 8). The plaintiff did, in her counsel's words, "evince" herself not to be bound, in that she not only sent an email to the managing agents in March 2012 (Exhibit A) purporting to nominate Ms Spring to replace her when she was not there, but failed to take up residence after the 11 April 2012 notice. This was a breach going to the root of the contract, and one which the defendant points out (written submissions, paragraph 39) must amount to repudiation by the plaintiff since it made performance of the contractual terms impossible. I note the defendant relies upon the conduct specified in paragraph 19(g) of the amended defence in relation to its claim as to common law termination and submits that the right to terminate at common law on the bases set out therein are available if there has not been compliance with the agreement. 114I now consider the competing submissions by each of the parties that the other repudiated the contract. As my principal findings have been that the notices issued by the defendant were valid, my analysis of this issue is brief.

Did either party repudiate the contract? 115The repudiation asserted by the plaintiff's solicitor in correspondence as set out in Exhibit A is twofold: (a)The letter of 11 April 2012 amounted to a repudiation of contract; and/or (b)The first notice of termination was invalid due to the wrong date being given, and the substituted notice of termination sent on 13 August 2012 constituted a repudiation of the management agreement (without specifying upon what basis) which the plaintiff purported to accept. 116As noted above, the defendant also submits that if the notices issued on its behalf were ineffective in terminating the agreement, the continuing breaches which have been established by the evidence constitute a repudiation by the plaintiff of essential performance obligations under the management agreement which the defendant was entitled to accept and thereby terminate the agreement (written submissions, paragraph 10).

Did the defendant repudiate the contract? 117I shall answer this question on two bases: (a)The notice of 11 April 2012 is invalid; and (b)The notice of 11 April 2012 is valid. 118I shall deal with the second of these first, as I have accepted the defendant's claim that the notice of breach sent on 11 April 2012 was valid. 119Essentially, the defendant submits that the right to terminate could not be lost by the issue of a notice of termination incorrectly stating the date from which the termination was to take effect, particularly when cured by the subsequent notice (see Al Jadeed TV v United Broadcasting International Pty Ltd, supra, at [43]). Repudiation is a serious matter, not to be lightly found or inferred where a party is exercising its contractual rights: Shevill v Builders Licensing Board (1982) 149 CLR 620 at 623 per Gibbs CJ and 633 per Wilson J; DTR Nominees Pty Ltd v Mona Homes Pty Ltd (1978) 138 CLR 423 at 432). 120As Flick J noted in Al Jadeed TV v United Broadcasting International Pty Ltd, supra, at [43], the notice provision for termination of agreement essentially identifies the date on which the agreement is to be terminated consequent to the exercise of the right to terminate, so that the parties can regulate their affairs. The letter of termination of 26 July 2012 does not amount to a failure to perform the management agreement. All that would flow from the giving of the wrong date would be damages, which in the present case would be nil as the revised notice corrected this error. 121The submission that the second notice giving the corrected date also amounts to repudiation is made on the same basis, and is rejected for the same reasons. 122However, if the 11 April 2012 notice is invalid, there has not been compliance with the machinery set out in the management agreement. In those circumstances, any rights that the defendant had to terminate the management agreement would be common law rights, which are discussed in more detail above; as noted, I have accepted the defendant's submissions that the conduct of the plaintiff amounted to repudiation of the agreement.

Did the plaintiff repudiate the agreement? 123I shall briefly deal with the submissions made by counsel for the defendants at paragraph 39. 124Inability or unwillingness to perform an essential term of the contract may amount to repudiation: Foran v Wight (1989) 166 CLR 623 at 642. This includes fulfilling obligations in a manner substantially inconsistent with her obligations (Commonwealth of Australia v Amann Aviation Pty Ltd, supra), such as refusing to remain in, or regard herself as obligated to reside in, the complex or to answer after-hours emergencies, or unilaterally appointing some other person (namely Ms Spring) to perform them. 125I am satisfied that this evidence demonstrates persistent and consistent breaches of the obligation to reside on the premises. In the event that the notices of termination do not amount to notice under the management agreement, I am satisfied that the defendant, not the plaintiff, would have been entitled to terminate the contract at common law on the basis of the plaintiff's repudiation.

The arbitration clause 126The plaintiff pleads that failure to engage in dispute resolution in breach of clause 14 should sound in damages (paragraphs 15-18 of the statement of claim). As this was not dealt with in submissions, I sought additional written submissions from the plaintiff. These submissions (dated 14 February 2014, paragraphs 24-30) essentially seek appropriate orders as to costs. 127The defendant submits that these procedures were open to the plaintiff when she received the notice of 11 April 2012, and that by commencing the present proceedings, she was herself in breach of clause 14. The plaintiff commenced these proceedings, in the face of the wrongful refusal of the defendant to participate in arbitration proceedings, the plaintiff had no alternative. Essentially, the plaintiff's entitlement to enforce her right to arbitration would have been to commence proceedings for specific performance, which would have been both expensive and unproductive, given the entrenched positions taken by both parties. 128As the claim in relation to the arbitration clause issue is restricted to the question of costs (the plaintiff relying upon Ritter v Godfrey [1920] 2 KB 47), this is an issue best dealt with in relation to costs issues. As the parties have asked me to reserve the issue of costs, it is a matter which can be dealt with in the course of any costs application.

Conclusions concerning liability 129I am satisfied that the letter of 11 April 2012 was a valid notice of breach and that the notices of termination were valid. In the alternative, I am satisfied that the continuing breaches which have been established by the evidence constituted a repudiation by the plaintiff of essential performance obligations, and that the notices of termination, if invalid, did not amount to repudiation by the defendant. 130In the event that I have erred in these findings, I make the following additional finding in relation to quantum. These findings are brief since, if I have erred in finding for the defendant, the plaintiff's claim for $750,000 is, but for one issue, straightforward.

Quantum 131The plaintiff draws my attention to Commonwealth of Australia v Amann Aviation Pty Ltd, supra, at 98 where Brennan J referred to the general principles concerning the measure of damages as set out in Robinson v Harman (1848) 154 ER 363 at 365, namely that a party who sustain a loss by breach of contract should be "placed in the same position, with respect to damages, as if the contract had been performed". As this was a contract for a fixed term with no provision for early termination other than for breach of contract, the question is the damages for the balance of the contract. The plaintiff may point to additional heads of damage, such as the abandoned claim for failure to use the arbitration process, and the defendant may point to such matters as mitigation (which is not pleaded and about which I have not permitted the leading of any evidence) or a likelihood that the contract would have been terminated in any event. 132The plaintiff's written submissions set out payments due which totalled $841,768. As the jurisdictional limit of the District Court is $750,000 and there is no consent to unlimited jurisdiction, the plaintiff claims the jurisdictional maximum of $750,000. This would be the sum of damages to be awarded unless the defendant could point to some basis for the reduction of damages. 133Mitigation was not pleaded, and in response to an objection by the plaintiff, I did not permit the defendant to lead evidence in mitigation which clearly would have taken the plaintiff by surprise. 134The defendant is, however, entitled to rely upon the principles for reduction of damages set out in Commonwealth of Australia v Amann Aviation Pty Ltd, supra, where a contract run to its full term would have resulted in a profit of $820,000. However, the trial judge was satisfied there was a 50% chance that the Commonwealth of Australia would have validly terminated the contract, and the damages were accordingly reduced by half. 135I accept the defendant's submission (T 284 - 285) that there was a similar likelihood here that the contract would have been cancelled in any event, although it is unclear how this submission sits with the defendant's argument (written submissions, paragraph 39) that the plaintiff, not the defendant, had repudiated the contract. 136Another difficulty I have with this submission is that the plaintiff's claim actually exceeds the jurisdiction, and no allowance has been made for interest. Accordingly, even on the very general 50% estimate derived from Commonwealth of Australia v Amann Aviation Pty Ltd, supra, this is not a sum which can be calculated with precision. 137Taking all of the above into account, I consider that an appropriate award of damages would be $375,000, and that the plaintiff would be entitled to interest on that sum.

Orders (1)Judgment for the defendant. (2)Costs reserved. (3)Liberty to apply in relation to costs. (4)Exhibits retained for 28 days.

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: 01 July 2014