Validity of Termination
164 I note that the Further Amended Cross-Summons seeks a declaration that the Contract was wrongfully terminated. No submissions were addressed to me on that issue per se. I therefore assume the position of Mr Sayer to be that the alleged wrongfulness of the termination of the Contract turns on whether the notice to complete had validly been issued (and hence whether Mr Sayer was in breach of an essential term by not completing on 8 March 2007).
165 It was not, as I understand it, suggested for Mr Sayer that, in the absence of a certificate available on the completion date that the land tax had been cleared or evidence as to arrangements for completion being such as to enable land tax to be cleared at settlement, H G & R Securities was not in a position to tender performance of its obligations when the time came for completion. However, in case that was intended to be raised by way of defence, I address that issue as follows.
166 There is no suggestion that H G & R Securities had obtained, prior to the time appointed for completion, or held at the time it terminated the Contract, cleared land tax certificates. In Dainford v Yulura (1984) NSW Conv R 55-184, Rath J held that, when land was subject to a land tax charge but the amount of tax had not been assessed, the purchaser was not required to accept at completion the vendor's undertaking to pay the land tax when assessed. (On appeal, the parties proceeded on an assumption that the vendor was obliged to have land tax removed as at settlement by payment of the assessed tax and, not having done so, was not able to settle.) However, here, the amount of tax had been assessed, so the difficulty faced in Dainford (or for that matter in McNally v Waitzer) does not arise.
167 Austin J made it clear in Wilde v Anstee that in his view the vendor's obligation to give good title on completion would be discharged if, on completion, the purchaser (and persons acquiring an interest under the purchaser) had the protection conferred by s 47(1c) by virtue of the issue at or prior to completion of a certificate that no land tax is charged on the land, procured by release and payment of an amount estimated by the Office of State Revenue.
168 Particularly in light of the correspondence on 17 January 2007, H G & R Securities could not, in my opinion, have relied upon an assumption that Mr Sayer would have accepted an undertaking on completion to clear the land tax (whatever may be the standard conveyancing practice in that regard). Absent any estoppel arising out of the communications prior to settlement, it would have been open to Mr Sayer to rely upon his strict legal rights to refuse such an undertaking. Whether he would have accepted a bank cheque for the land tax (even assuming one had been drawn for the purposes of the 23 March 2007 settlement, as it apparently was in anticipation of the 28 February settlement but as to which as at 23 March there was no evidence) is perhaps less clear.
169 However, if as seems to be the case no land tax clearance certificate(s) had been obtained prior to completion, does that mean that H G & R Securities was not able to tender performance on its part, so as to be in a position to terminate and claim damages for Mr Sayer's breach in failing to tender the purchase priced on completion?
170 Mr Young submits that I should treat Trinity Legal's letter of 27 February 2007 (Ex A p 264) as a repudiation of the Contract or an assertion that neither Mr Sayer nor MJS would complete unless or until H G & R Securities agreed to delete clauses 7 and 8 from the Deed. I do not consider that the correspondence goes so far as to establish a repudiation. Certainly, the letter contains a clear assertion that Mr Sayer would not execute a Deed of Rescission containing those clauses and would not be proceeding with any rescission/exchange but I do not read this as an assertion that Mr Sayer would not otherwise complete the Contract (particularly given that he could easily have done so without any rescission, by simply nominating MJS as the transferee).
171 I note, in this regard, that in Lohar Corporation Pty Ltd v Dibu Pty Ltd (1976) 1 BPR 9177 Hutley JA considered that there, where the appellant's solicitor had already received notice that there was to be no settlement (because the respondent had not obtained the money to settle) the appellant was justified "in not going through the laborious and expensive processes involved in an abortive settlement". There, however, there seemed to have been a more definitive statement of inability to complete than here where the Trinity Legal had simply failed to respond to a request to confirm whether they would attend upon settlement.
172 In Foran v Wight (1989) 168 CLR 385, the High Court considered whether a notice of rescission which had been given by the purchasers under a contract for the sale of land was invalid on the ground that the purchasers were not ready and willing to complete on the due date for want of funds. It was noted that the obligations of the vendor and purchaser on completion were mutually dependent and concurrent obligations (in the absence of any contrary stipulation) and that the primary rule was that neither party who fails to perform his obligation when the time for performance arrives can rescind for the other party's failure at that time to perform his obligation.
173 Deane J noted that in the ordinary case of a contract for sale of land:
Neither vendor nor purchaser will be guilty of breach of contract if he fails to complete within the time or upon the day fixed in the contract unless the other party tenders performance of his concurrent obligations.
174 Brennan J stated, in the context of considering for a damages claim what was required to be established in terms of readiness, willingness and ability to perform:
A breach by A of an essential term of the contract entitles B to rescind the contract and recover damages for the loss of the benefit of which, had the contract been performed, he would have been entitled. Whether the breach be anticipatory or actual, it is necessary to form an estimate of what would have happened had the contract been performed in comparison with what has happened, the contract being broken: see Hochster v De La Tour [1853] 2 EL & BL 678 at 691.
Where B, being otherwise ready and willing to perform his part of mutually dependent and concurrent obligations , acts on A's intimation of non-performance and does not tender performance of his own obligation, his is entitled to damages for A's non-performance. In assessing the damages, it is necessary to form an estimate of the benefit to which B would have been entitled had performed his contractual obligation. (my emphasis)
175 In other words, in order to terminate a contract for sale of land in reliance on a breach of an essential term (as was the case here), the party so terminating must be in a position to tender performance and, if it does, then the relevance of that party establishing (on the balance of probabilities) its readiness and willingness to complete is as to whether that party can establish damages by reference to the position that party would have been in had there been no breach of that essential term.
176 If a party in the position of H G & R Securities, as vendor, terminating for what on this case is a clear breach of an essential term, is not in a position to prove that (had the purchaser not breached its obligation to attend at completion and pay the purchase price) it would have been able to perform its concurrent obligation to transfer title, then the party terminating the contract would not be in a position to claim damages (although it would appear that the party would be in a position to recover the deposit). Brennan J drew a distinction between readiness and willingness up to the time of an intimation of non-performance and readiness and willingness when the time for performance arrives (at p 431). Readiness and willingness to pay the price when the time for completion arrives was seen by his Honour as a condition precedent for the recovery of substantial damages but not essential to establish that a vendor, who had given an intimation of non-performance and failed to perform, was in breach.
177 In Foran v Wight the question of assessment of damages did not arise as the purchasers, having purported to rescind for the vendors' breach, sought merely to recover the deposit. Brennan J noted that:
The finding, albeit obiter , of Needham J that the purchasers had not discharged the onus of proving readiness to complete seems to relate to the likelihood of the purchasers' having in hand on 22 June the finance needed to settle. That question does not fall for determination. Had the purchasers sought to recover substantial damages from the vendors for the vendors' failure to complete on 22 June, the purchasers' inability to prove, on the balance of probabilities, that they would have been able to pay the price on that day would have been fatal to the claim. But the purchasers abandoned a claim for damages for the vendors' breach.
178 In circumstances where his Honour considered that it could not be found that the purchasers were substantially incapable of raising the finance needed to complete at the time the vendors' solicitor intimated that completion would not take place, and had acted upon that intimation to suspend arrangements with the finance company which was to provide the major part of the finance, his Honour considered that the inference was that the purchasers had acted on the intimation and were up to the time when the intimation was given, ready and willing to complete. In those circumstances, the vendors' failure to complete on 22 June was a breach of contract which entitled the purchasers to rescind. Upon rescission of the contract, the consideration for which the purchasers had paid the deposit failed totally and Brennan J considered that the purchaser became entitled to recover the deposit not as damages but in quasi contract as money paid for a consideration that totally failed (citing Fibrosa Spolka Akcyjna v Fairbairn Lawson Combe Barbour Ltd [1943] AC 32) and noting that the purchasers' claim for the deposit was not founded on the contract which they had rescinded.
179 Failure to complete within a stipulated time, where time is of the essence, clearly constitutes an actual breach of the contract entitling the other party to terminate at least where that party is in a position to tender performance of its concurrent obligations under the contract.
180 Here, there is an argument that Mr Sayer had intimated that he would not attend on settlement (by his solicitor's letter of 27 February 2007, and their failure to confirm arrangements to do so) and therefore that H G & R Securities did not need to put itself in a position to tender performance. However, I do not consider that in the present case there was an unequivocal or unqualified intimation that Mr Sayer would not complete the Contract on the date fixed for completion, even though I think the likely inference from the failure of Trinity Legal to respond to Bransgroves' enquiry on 22 February 2007 is that Mr Sayer did not intend to do so.
181 Nevertheless, there is evidence that H G & R Securities was in a position to tender performance on the date nominated for completion and attended at the time and place nominated for settlement ready to do so. There was (admitted over objection in the absence of the solicitor in question) an email or electronic file note of attendance by a solicitor, Ms Haleh Hamzavian, at the time and place specified for settlement (Ex A p 269, 292). The evidence by Ms Cooper, also of Bransgroves, was that this email attendance note was in accordance with the ordinary practice within Bransgroves for solicitors recording (electronically) attendances on conveyancing matters. This email is consistent with other similar attendance notes exhibited in the proceedings.
182 I gave leave to H G & R Securities to read an affidavit of Ms Hamzavian, notwithstanding that Ms Hamzavian was unavailable for cross-examination, on the basis that Ms Hamzavian's affidavit, other than in paragraph 15, largely dealt with documentary evidence and it seemed to me that in assessing paragraph 15 this would a question of weight given the absence of the ability for her to be cross-examined by Mr Sayer's Counsel. There was a minor discrepancy between paragraph 15 of the affidavit and Ms Hamzavian's electronic file note of attendance (Ex A p 292); there being a ten minute discrepancy in the time frame noted. The electronic file note was in the same form as attendance notices that had been posted in relation to the first date scheduled for settlement both from Ms Hamzavian and another solicitor who attended at a separate address for the first 28 February 2007 settlement. Given that Ms Hamzavian was not cross-examined, I would rely on the contemporaneous written record of her attendance in preference to her affidavit and do not place any weight in this regard on paragraph 15 of the affidavit.
183 There was evidence to suggest that Ms Hamzavian had attended on the earlier date specified for completion in February 2007 with a bank cheque payable for the land tax. There is nothing to suggest Ms Hamzavian did not similarly attend settlement on 8 March 2007 with, among other things, the necessary documents in order to convey title to the purchaser (including, consistent with what according to her earlier file note had occurred on 28 February 2007, a bank cheque for settlement of the land tax) and would, had the purchaser been entitled to insist thereon at the time fixed for completion, have been in a position to obtain a land tax clearance certificate on presentation of a bank cheque for the assessed amount. However, there is no direct evidence of this. Ms Obrart submits, and I accept, that it is for H G & R Securities to establish its loss. It is required to do so on the balance of probabilities.
184 I consider that on the balance of probabilities, H G & R Securities, has established, first, that there was an attendance on its behalf on the completion date for the purposes of tendering performance of the vendor's obligations under the contract and, secondly, that it would have been in a position to complete on 23 March 2007 (the land tax being capable of clearance by the simple procedure of tendering a bank cheque on settlement or at the Land Titles Office). The fact that Mr Sayer chose not to attend on settlement means that the purchaser did not, in effect, put the vendor to the test (unlike the situation which occurred in Fekala v Castle Constructions where the purchaser did so and the vendor was in fact unable to complete).
185 Significant in this regard is that this is not a case where land tax had not already been assessed. It had been assessed and the Land Tax Office had indicated what was required for the land tax to be cleared. There is no suggestion that H G & R Securities would not have been financially in a position to clear the land tax on completion.
186 By contrast, in Wilde v Anstee, where the issue was whether there was readiness and willingness to complete as at the time of issue of the notice to complete, no steps had been taken to ascertain the land tax to be paid and, according to his Honour, it seems there was real doubt as to the ability of the vendors to arrange for clearance of the land tax certificate at the time the notice to complete was issued.
187 In McNally v Waitzer, on the other hand, where the land tax assessment had been issued before the notice to complete was served (and therefore, at the time of service of the notice, the vendor was in a position to remove the land tax charge simply by payment of the assessed amount), Hutley JA noted that the vendor did not have to satisfy the purchaser prior to completion that the land was not subject to a charge for land tax "he has, at the most on completion, to present satisfactory evidence to the purchaser that either the land is not subject to land tax or, if it is, that liability has been discharged in the course of completion itself." His Honour there drew an analogy with the practice on discharge of mortgages. In those circumstances, in Wilde v Anstee, Austin J accepted that the analogy drawn with the discharge of the mortgage would be a close one. Approaching the issue in that way, his Honour reconciled the apparent point of difference between the Court of Appeal in McNally v Waitzer and McLelland J's comments in Jillinda. His Honour read Hutley JA's remarks in the Court of Appeal as proceeding on a factual assumption that there would be no obstacle to the vendor freeing the land from the land tax charge on or prior to completion and went on to say: "this is clearly so if land tax has been assessed before the notice is served, and it is also the case if land tax is assessed after the service of the notice but before the date fixed for completion. It is also true, in the absence of a relevant assessment, if it is clear that at the time of service of the notice the Office of State Revenue will release the land upon payment of an estimated amount out of the settlement moneys."
188 Austin J considered that the court could have regard to the practical circumstances of the case. His Honour accepted that a vendor who had first made proper arrangements with the Office of State Revenue could proceed to issue a notice to complete requiring completion before a land tax assessment was available. I have already found in this regard that it was open to the vendor here (H G & R Securities) to issue the notice to complete when it did, arrangements having already been made as to the amount for which the land tax could be cleared.
189 I note that in Zaccardi, Campbell JA, albeit again in the context of assessing the validity of a notice to complete, appeared to have been prepared (notwithstanding the absence of evidence of steps taken to obtain discharge of the mortgage) to infer that the vendors were ready and willing to complete on the day the notice was issued and would be ready, willing and able to complete at the time called for by the notice, having regard to "the rudimentary tasks that vendors under a contract for sale of Torrens title land are called on to perform (even when they need to arrange discharge of a mortgage), and the prompt service of the purported Notice to Complete". Here the preparation of a GST invoice, even if (which I doubt) essential for completion, was clearly a rudimentary step and the arrangements for clearance of land tax (likened in McNally to discharge of a mortgage) had earlier been put in train.
190 In the circumstances, having regard to the evidence of the land tax assessments, I am satisfied that the land tax charges would have been able to be cleared by H G & R Securities tendering the assessed amount prior to or in the course of completion. (Similarly, had Mr Sayer on completion insisted on provision of a GST invoice it would have been a simple matter to provide one - if necessary by preparing one during the course of completion.)
191 Accordingly, had this been a separate ground on which the claim by H G & R Securities was resisted, I would have held that it failed.
Damages claimed
192 H G & R Securities claims: