Mehmet v Carter

The contract for sale

1. The contract for sale employs the 2005 edition of the Law Society of New South Wales/Real Estate Institute of New South Wales Standard Form, supplemented by Special Conditions.
2. The front page of the contract describes the Vendor as: Murray John Carter, The Wheel Resort Pty Limited ACN 050 057 013 and Cathscompany Pty Ltd ACN 050 057 022 "Byron Bay Rainforest Resort", 39-75 Broken Head Road, Byron Bay, NSW 2481
3. The Purchaser is described as: Ian Mehmet as Trustee for the Ian G Mehmet Testamentary Trust, Cameron Mehmet as Trustee for Cameron Mehmet Testamentary Trust, and Errol Mehmet as Trustee for Errol J Mehmet Testamentary Trust as the I+C+E Mehmet Testamentary Trust Partnership as to 70/100; and Cheers Aviation Pty Ltd as trustee for KMGC Investment Trust as to 30/100
4. Stuart Garrett Lawyers S+P is named as the solicitor for the Vendor and also for the Purchaser. The Vendor's agent is named as Unique Estates of Byron Bay.
5. The Land is described as: 39-51 & 61-75 Broken Head Road, Byron Bay, New South Wales 2481 Registered Plan: Lot 1 & 10 Plan DP558340 & 708338 Folio Identifier 1/558340 & 10/708338
6. A cross on the front page indicates that the Land is sold subject to existing tenancies. It appears that the only lease was a lease of Lot 1 in Deposited Plan 558340 in favour of The Wheel Resort Pty Ltd, which company was the vendor of Lot 10 in Deposited Plan 708338.
7. Other crosses appearing on the front page of the contract indicate that the Improvements consisted of a house and nine cabins, cabana, shed, swimming pool and office. Inclusions were identified by reference to the inventory which was attached to the Contract for the Sale of Business which was entered into as part of the same transaction. Under that contract, the plaintiffs agreed to purchase the business known as Byron Bay Rainforest Resort from The Wheel Resort Pty Ltd. The price for the sale of the business was included in the contract for the sale of land. Each of the contracts contained a condition to the effect that they were interdependent with each other. The only Exclusions noted on the front page of the contract for the sale of land were described as "Furniture from Managers Home".
8. As noted earlier, the purchase price was $3 million, with a deposit of $300,000. It is common ground that the deposit is being held by the stakeholder pending the resolution of the dispute.
9. The contract date was 6 July 2015. The Completion date was described as: 30th day after the contract date (clause 15).
10. The printed form of the contract contains the following (on page 3): The vendor sells and the purchaser buys the property for the price under these provisions instead of Schedule 3 Conveyancing Act 1919, subject to any legislation that cannot be excluded.
11. "Property" is defined in cl 1 to mean "the land, the improvements, all fixtures and the inclusions, but not the exclusions". Clause 10.2 provides that the purchaser cannot rescind or terminate only because of a defect in title to or quality of the inclusions.
12. Printed cl 15 provides: The parties must complete by the completion date and, if they do not, a party can serve a notice to complete if that party is otherwise entitled to do so.
13. Printed cll 16.1 to 16.3 provide: 16.1 On completion the vendor must give the purchaser any document of title that relates only to the property. 16.2 If on completion the vendor has possession or control of a document of title that relates also to other property, the vendor must produce it as and where necessary. 16.3 Normally, on completion the vendor must cause the legal title to the property (being an estate in fee simple) to pass to the purchaser free of any mortgage or other interest, subject to any necessary registration.
14. It is provided that the Special Conditions prevail over the printed terms if there is a conflict between them.
15. The Special Conditions include the following: 4. General release and indemnity (a) The purchaser releases the vendor from all demands, claims, actions, suits, costs and expenses now or later arising in relation to: (i) Any approvals required by any competent authority (ii) Any infestation or dilapidations of the properties; (iii) Any interests of any 3rd party to any property, goods or chattels included in the sale (b) And indemnifies the vendor against any claims whatsoever and howsoever in relation thereto. … 7. Notice to Complete If completion does not take place as provided herein then either party may forthwith give to the other fourteen (14) days notice in writing to complete and making time of the essence of this Contract. Neither party shall be entitled to object to the sufficiency or adequacy of the period of such notice and they hereby acknowledge that fourteen (14) days notice shall be sufficient and adequate as to time. In the event the Vendor issues a Notice to Complete the Purchaser shall pay to the Vendor as liquidated damages on completion in addition to the balance of the purchase money and any other monies payable to the Vendor the sum of $385.00 (inclusive of GST) to cover, legal costs and other expenses incurred as a consequence of the delay, as a genuine pre estimate of those additional expenses. 8. Interest payable for delay in completion If the purchaser shall not complete this purchase by the completion date, without default by the vendor, the purchaser shall pay to the vendor on completion, in addition to the balance purchase money, an amount calculated as ten per cent (10%) interest on the balance purchase money, computed at a daily rate from the day immediately after the completion date to the day on which this sale shall be completed. It is agreed that this amount is a genuine pre-estimate of the vendor's loss of interest for the purchase money and liability for rates and outgoings. … 12. Amendments to the standard Contract Notwithstanding any other provision in this Contract to the contrary the printed form of Contract is amended as follows:- (a) Clause 29.2 - delete "42 days" and insert "30 days". (b) Clause 29.7.3 - delete "21 days" and insert "14 days". (c) Clause 29.8.3 - delete "21 days" and insert "14 days". … 18. Interdependency The Purchasers acknowledge that they have executed this Contract and a further Contract between themselves and The Wheel Resort Pty Ltd ("the interdependent Contract") with respect to the business known as "Byron Bay Rainforest Resort", and the parties agree that this Contract and the interdependent Contract: - (a) refer to and comprise one single transaction and indivisible Contract; (b) are interdependent and failure to observe and perform one of them will constitute a breach of both of them; (c) shall be exchanged and completed simultaneously; (d) completion of one contract shall be dependent upon completion of the other contract; (e) rescission of one contract shall be deemed to be rescission of both contracts. … 21. Registration of transmission application (a) Completion of the within contract is conditional upon the Vendor, Murray John Carter, as executor of the Estate of the Late Catherine Carter becoming registered proprietor of the subject land by way of transmission within three (3) months of the date hereof. (b) The Vendor undertakes to do all things reasonable and necessary to obtain and become proprietor by way of registration of a Transmission Application. (c) Completion shall take place within fourteen (14) days after the Vendor's solicitors have notified the Purchaser or the Purchaser's solicitor in writing of registration of the Transmission Application. (d) Should the Vendor be unable to obtain such registration and be or become registered as a proprietor by way of Transmission Application within the time limited, then either party may rescind this contract by notice served on the other party whereupon the provisions of Clause 19 shall apply. 22. Guarantee for corporate purchaser In consideration of the Vendor contracting with the corporate Purchaser, Cheers Aviation Pty Limited the Director of the corporate Purchaser, as is evidenced by the Director execution hereof, guarantee the performance by the Purchaser of all of the Purchaser's obligations under the Contract and indemnify the Vendor against any cost or loss whatsoever arising as a result of the default by the Purchaser in performing its obligations under this Contract for whatever reason. The Vendor may seek to recover any loss from the guarantor before seeking recovery from the Purchaser and any settlement or compromise with the Purchaser will not release the guarantor from the obligation to pay any balance that may be owing to the Vendor. This guarantee is binding on the guarantors their executors, administrators and assigns and the benefit of the guarantee is available to any assignee of the benefit of this Contract by the Vendor.
16. Title searches for Lot 1 in Deposited Plan 558340 and Lot 10 in Deposited Plan 708338 were attached to the contract. The title search for Lot 1 in Deposited Plan 558340 disclosed that the owners were Cathscompany Pty Ltd and Catherine Carter as tenants in common in equal shares. The Second Schedule to the search included the following notifications: 1. that the land excludes minerals and is subject to reservations and conditions in favour of the Crown - see Crown Grant(s); 2. that land below 15.24m from the surface is excepted; 3. that there is a restriction as to user; 4. that there is a mortgage in favour of Perpetual Nominees Ltd; and 5. that there is a lease to The Wheel Resort Pty Ltd.
17. The title search for Lot 10 in Deposited Plan 708338 disclosed that The Wheel Resort Pty Ltd was the owner. The Second Schedule to the search included the following notifications: 1. that the land excludes minerals and is subject to reservations and conditions in favour of the Crown - see Crown Grant(s); 2. that the land is burdened by a right of carriageway; and 3. that there is a mortgage in favour of Perpetual Nominees Ltd.
18. The Agreed Facts include the following: 3. The parties agree that located on the land there (a) is a rock bearing a plaque stating HARRY AND CLARA BRAY TRIBAL ELDERS OF THE BUNJALUNG TRIBE BURIED NEAR THIS SITE CIRCA LATE 1890 (b) a Bunya pine tree; 4. It is agreed that Clara and Harry Bray died in circa 1922. 5. The plaintiffs assert and the defendants deny that located on the land there are "Aboriginal Objects" as defined under s 5(i) [sic] of the National Parks and Wildlife Act 1974, including (a) remains of H & C Bray &/or one or more of their children (b) a ceremonial mound "destroyed" (c) remains of a gunyah (d) another burial site (e) lots of other burials/remains (f) and in particular, remains of Harry Bray, remains of Clara Bray, remains of a descendant of Harry and/or Clara Bray, remains of other aboriginal persons.
19. It is also apparent from the pleadings that the plaintiffs allege, and the defendants deny, that the rock and plaque which refers to Harry and Clara Bray is itself an Aboriginal object located within the land the subject of the sale.
20. It appears that by 14 July 2015 the issue concerning Aboriginal objects had been brought to the attention of Mr Garrett, the solicitor acting for both parties on the transaction. A file note made by Mr Garrett on 14 July 2015 indicates that he appreciated the existence of a conflict, and informed the first defendant, Mr Carter, that he would not be able to advise either party because of the existence of the conflict. It further appears that steps were promptly taken by the respective parties to obtain new solicitors to act for them. By no later than 18 July 2015 the plaintiffs had nominated Beswick Lynch Lawyers to act for them, and the defendants had nominated Heydons Lawyers and Attorneys to act for them. By 18 July 2015 Mr Garrett had forwarded the purchasers' file to Beswick Lynch Lawyers.
21. On 28 July 2015 Mr Lynch of Beswick Lynch sent a letter to Ms Barry of Heydons Lawyers. The letter was in the following terms: We now act for Mr I Mehmet, Mr C Mehmet, Mr E Mehmet and Cheers Aviation Pty Ltd in the above matter and understand that you are now instructed in place of Stuart Garrett Lawyers S+P for the vendors. As your clients are aware, the remains of two Aboriginal elders are buried on the land the subject of the sale. There may be other Aboriginal remains on the land. Aboriginal remains constitute an "Aboriginal object" as that term is defined in s. 5 of the National Parks and Wildlife Act 1974. Pursuant to s. 83 of the Act, the remains are deemed to be the property of the Crown. Section 86 prohibits the landowner (or any other person) from harming the remains, and "harm", in relation to an object, is defined to include moving the object from the land on which it had been situated. The presence on the land of things that the vendors do not own and that prima facie cannot be moved is a defect in the vendors' title. This is not raised just as a formality. Our clients sought to acquire the property in order to re-develop it. The vendors knew this. They also knew that there were Aboriginal remains on the land, but did not tell our clients. The presence of these remains will undoubtedly have a significant impact on the scope of any re-development. At the very least, it would require our clients to obtain an Aboriginal heritage impact permit. The process of seeking these is cumbersome, time-consuming and expensive, and the outcome is by no means certain. Our clients require this defect in title removed before settlement. Please let us know if you are able to do so, and if so, when and by what means.
22. On 3 August 2015 Mr Lynch sent an email to Ms Barry which attached the results of a search known as an Aboriginal Heritage Information Management System (AHIMS) search. A search of that character is undertaken using an internet site of the Office of Environment and Heritage. The search, which was for Lot 1 of Deposited Plan 558340 (with a buffer of 50m) revealed that one Aboriginal site was recorded "in or near the above location". The site disclosed was identified as site "04-4-0036" and named "Tallow Creek; Tallow Beach". The site is said to be a burial site. It is not clear whether the site is located within the boundaries of Lot 1 in Deposited Plan 558340.
23. It seems that on 3 August 2015 Ms Barry composed a letter to be sent in reply to Mr Lynch's letter of 28 July 2015. However, the letter was initially sent by facsimile to an incorrect address. The letter was not in fact sent to Mr Lynch until 5 August 2015 at about 9:30am. In any event, the letter included the following: We refer to your letter of 28 July and advise that we are instructed by the vendors in this matter. We confirm that the appointment for settlement of the Contracts for the Sale of Land and Business both dated 6 July 2015 on Wednesday the 5th August 2015 at 11am at SAI Global, Level 7, 400 George Street Sydney NSW, 2000. We note you have not served transfers or figures for settlement. Accordingly we have drafted same but will shortly email you a copy of the duly executed transfers for your records. We will prepare figures and advise you of same and cheque directions. We note that there is land tax adjustable under the contract, and shall shortly provide an invoice for same. … Kindly advise if you require further information or documentation and if so please itemise same and advise the writer. If before the Completion Date you do not respond to the writer with a list of documents that you require we will assume that you are satisfied with that which we propose to supply and will settle on receipt of same. … In relation to your letter of the 28th July, we note that you state that the property is subject to a defect in title. We are unimpressed by your argument as set out to date. Kindly advise of the detail of that alleged defect and your claim. In the meantime, we will prepare for settlement on the 6th [sic] August.
24. On 4 August 2015 Ms Barry sent two letters to Mr Lynch by facsimile. The first letter attached various documents including executed Transfers for the two lots and a settlement adjustment sheet. The letter referred to the appointment for settlement at 11am on 5 August 2015. It should be noted that the Transfer in respect of Lot 1 in Deposited Plan 558340 named both Murray John Carter and Cathscompany Pty Ltd as the transferor, and was signed by both. Mr Carter had become registered as a proprietor on 17 July 2015 upon registration of a transmission application, as contemplated by Special Condition 21 of the contract. The second letter of 4 August 2015 contained an authorisation and direction in relation to the cheques required on settlement. The letter contained a further confirmation that settlement was scheduled to take place at 11am on 5 August 2015.
25. Settlement did not take place on 5 August 2015.
26. On 17 August 2015 Mr Lynch sent a further letter to Ms Barry. It was asserted that there was a defect in title because: 1. there are Aboriginal objects on the land that the vendors do not own and cannot transfer title to; 2. the said objects cannot be removed (or even moved) without a permit that the purchaser does not have (and may not be able to obtain); and 3. the land is accordingly rendered substantially less fit for the purpose for which it was purchased.
27. The letter also contained a request that "this defect in title be removed, so that good title can be provided on settlement."
28. Ms Barry responded to the letter on 20 August 2015. In essence, she sought further particulars of the purchasers' claim, and requested an explanation of how the remains of Harry and Clara Bray, if any, affect the title as distinct to the quality of the land the subject of the contract.
29. Further correspondence passed between the solicitors on 27 August 2015 concerning the alleged defect in title. Mr Lynch's letter of that date suggested that it may be necessary for the parties to approach the Court for declaratory relief on the issues so as to obtain certainty. Ms Barry's letter of that date was accompanied by a Notice to Complete, and draft figures for settlement. The Notice to Complete called for completion to take place by 10 September 2015 with time of the essence. The notice appointed 2pm on that day as the time for completion to occur. It should be noted that the draft figures for settlement included an amount of interest calculated from 5 August 2015 to 10 September 2015 at a rate of 10% p.a.
30. On 28 August 2015 Ms Barry sent a further letter to Mr Lynch in which she took issue with him about the alleged defect in title. Ms Barry stated that the Notice to Complete would not be withdrawn, and that it was a matter for the purchasers what applications they make to the Court.
31. On 2 September 2015 Mr Lynch sent a letter to Ms Barry. The letter included the following: Your letters proceed on the assumption that the onus lies upon our clients to disprove your clients' title. On the contrary it is the obligation of the vendors to first show and then prove, by sufficient evidence, and prior to completion, a good title to the land promised to be sold, which the vendors are able to transfer and convey to the purchasers. The vendors must be able to remove at completion encumbrances or interests in the land so as to be able to convey and transfer the promised estate free of any such encumbrance or interest, as required by clause 16.3. The vendors must also provide to the purchaser any information needed to prepare the form of transfer: clause 4.2. Where the title includes objects owned by a third party, the purchasers cannot prepare the form of transfer without a statement of the title to those objects. It is for your clients to identify these matters or to show that they do not exist, in circumstances where there is reason to believe that they do exist. No doubt in many cases under Torrens title it will be sufficient to show an unencumbered estate in fee simple and to tender at completion a discharge of any registered encumbrances and to have any caveats removed at completion. However, it is far from unprecedented to find statutory provisions providing for estates or interests in the land to subsist notwithstanding the Torrens register, and it is ultimately the vendors' obligation to transfer the promised title free of any interest or encumbrance because that it [sic] what the vendors have contracted to do. … It is apparent, from the approach taken in your letters that your clients neither accept their obligation to show a good title, nor to supply particulars of the title to the objects, nor to take any step to prove title at the requisite (or any) degree of satisfaction, but that they are insisting upon completion willy-nilly and without any demonstration that their title is free of an interest vested in the Crown under s. 83 of the 1974 Act. That is repudiation by your clients. … Your final suggestion that the contract is for sale of land and not for sale of aboriginal remains proceeds on the false assumption that the remains do not constitute part of the land. On the contrary, they are buried in the land and permanently affixed to it. They are not chattels. These circumstances are like North Shore Gas Co. Ltd v. Commissioner of Stamp Duties (NSW) (1940) 63 CLR 52 where it was held that gas pipes vested by statute in the company were nevertheless part of the land, and Georgeski v. Owners Corporation SP49833 (2004) 62 NSWLR 534 where a jetty was held to be part of the land to which it was affixed. … TAKE NOTICE THAT your clients are required to state, within a reasonable time, whether they are in a position to provide good title to the Land on 10 September 2015 by having first obtained from the Crown an assignment of any property vested in it pursuant to section 83 of the National Parks and Wildlife Act 1974, or to affirmatively state and prove by reasonable evidence that no such interest exists in respect of any deposit, object or material evidence located in the subject land. In this regard, we refer to our letters dated 28 July 2015 and 27 August 2015. If such an assignment has not been acquired, and is not able to be acquired in good time, and if the absence of any such object cannot be affirmatively stated and proved by your clients to the requisite standard applicable to Conveyancing transactions, then the Notice must be invalid. Indeed the Notice was repudiatory, as your clients at the time of its issue were not in a position to settle by 10 September, nor willing to be so, but were rather attempting to force a doubtful title upon the purchasers in defiance of their obligations as vendors. In any event the Notice is bad because your clients had not shown a good title and had not provided sufficient particulars for preparation of the transfer of all relevant interests at the time of issue.
32. On 8 September 2015 Mr Lynch sent a letter to Ms Barry which enclosed forms of Transfer for execution by her clients. The form of Transfer in respect of Lot 1 in Deposited Plan 558340 named Murray John Carter and Cathscompany Pty Ltd as the transferor.
33. The solicitors exchanged further correspondence on 9 September 2015 concerning the alleged defect in title. It is not necessary to refer to the detail of that correspondence. It is sufficient to note that the defendants maintained that they were in a position to deliver good title, and this was disputed by the purchasers who asserted that the vendors were apparently unwilling and unable to show a good title. Also on 9 September 2015 Ms Barry sent numerous letters to Mr Lynch concerning the settlement scheduled to take place on 10 September 2015. Settlement figures were provided (which included an amount for interest from 5 August 2015 to 10 September 2015) and an authority and direction was given in relation to the cheques required at settlement.
34. Representatives of both the vendors and the purchasers attended at the offices of SAI Global at 2pm on 10 September 2015. Mr Hazlett of Hazlett & Co. attended on behalf of the vendors. Mr Lynch (and Sherman Lai from Mr Lynch's office) attended on behalf of the purchasers. Mr Lynch brought cheques drawn in accordance with the direction that had been given by Ms Barry. The settlement proceeded to a point when Mr Lynch requested a deed of assignment of title in relation to Aboriginal objects or some other evidence in relation to such objects, and Mr Hazlett informed Mr Lynch that this would not be provided. It appears that there was some discussion about the possibility of the vendors providing an undertaking of some sort, but this did not bring about any resolution of the impasse. The settlement was called off.
35. On 11 September 2015 Ms Barry sent a letter to Mr Lynch advising that the Notice to Complete served on 27 August 2015 was withdrawn. The letter was accompanied by a second Notice to Complete. This notice called for completion to take place by 28 September 2015 with time of the essence. The notice appointed 2pm on that day as the time for completion to occur.
36. On 17 September 2015 Ms Barry sent settlement figures to Mr Lynch. These figures included an amount for interest in respect of the period from 5 August 2015 to 28 September 2015.
37. On 23 September 2015 Mr Lynch sent a letter to Ms Barry. Mr Lynch disputed the settlement figures insofar as interest was included. The letter stated: We refer also to your letter dated 17 September, 2015 enclosing settlement figures which we note includes an item for default interest of $39,945.21. Given that our clients are not in default of the contract, those settlement figures are not correct. TAKE NOTICE THAT our clients require the vendors to submit revised settlement figures omitting that item.
38. Mr Lynch's letter also took issue with the second Notice to Complete. The letter included the following: As you know, the date for completion of the contract nominated in the contract passed in circumstances where our clients had raised the problem of your clients' title not being free of other interests. Your clients had done nothing to address the problem. Indeed, your clients did not even propose settlement figures until 4 August, a time at which was too late for cheques to be arranged by 5 August. For either of these reasons that date therefore went off. In those circumstances, the time to complete is a reasonable time. Your clients then continued in refusing to address the problem and, without any default on our clients' part, issued a notice to complete purporting to make time of the essence for completion on 10 September, 2015. Your clients were not entitled to issue that notice, and, in any event, they have now withdrawn it. It follows that on any view, the contractual obligation is to complete within a reasonable time. There has been no default by our clients. Your clients were not entitled to issue their second notice to complete. As you know, despite the invalidity of your clients' first notice to complete, our clients attended on 10 September, 2015, with their money ready. The only reason the matter did not proceed to completion was that your clients were unwilling and unable to show a clear title at a time that they themselves were attempting to make essential. Indeed, they have persistently refused even to attempt to show a clear title. … …your clients have not complied with our clients' Notice to Perform of 2 September, 2015 and have not supplied any of the information requested by our clients. Nor have they so much as outlined any proposal to take steps to solve the difficulty. Moreover, they have rejected our clients' earlier suggestion that the dispute be submitted for determination by the Court. Given that your clients have not proposed any constructive steps to solve the problem of showing a clear title and providing to our clients an assignment of title to any Aboriginal Object in the land, it is apparent that your clients are merely proposing a repetition on 28 September, of the events of 10 September. … TAKE NOTICE THEREFORE THAT our clients demand that by 5pm on Thursday, 24 September, 2015 your clients must withdraw their second notice to complete. Failure to comply with this demand will be taken by our clients as manifesting your clients' intention to insist on completion in a manner and at a time that does not conform with the contract, notwithstanding the inconvenience to our clients thereby occasioned, for no useful purpose. Our clients will be entitled to consider that is repudiation and will be entitled to terminate therefor. TAKE FURTHER NOTICE THAT our clients require your clients to do the following by 5pm on 24 September, 2015: (a) Admit that they are obliged to comply with the Notice given on page 3 of our letter dated 2 September, 2015; (b) Undertake to comply with that Notice within a reasonable time; and (c) Identify, at least in a preliminary way, the steps and enquiries proposed to be taken by the Vendors towards compliance with that Notice, with some at least preliminary estimate of the times needed for the taking of those steps and the making of those enquiries. If, despite these demands, your clients persist in failing or refusing to attend to the problem of showing and making a clear title, our clients will be entitled to assume that your clients are finally unwilling or unable to comply with the contract and will be entitled to consider that your clients are guilty of repudiation and will be entitled to terminate therefor.
39. On 24 September 2015 Ms Barry sent a letter to Mr Lynch in response to the abovementioned letter. Ms Barry's letter included the following: As to settlement on the 28 September and your request that our client submit revised settlement figures and omit the default interest we respond as follows: Our client does not agree to waive interest The contract provides for the Completion Date 30 days after the Contract Date which was the 6 July 2015 Special Condition 8 of the Contract relevantly provides that "If the purchaser shall not complete by the completion date…then the purchaser shall pay to the vendor on completion, in addition to the balance purchase price…an amount calculated as…10% on the balance purchase monies…" The vendor is not in default under the contract The purchaser is in default of the contract. The purchaser did not attend settlement on the 5th August Further, we note that the purchaser: Did not prepare settlement figures and furnish same on our office Did not draft and serve a transfer on our office The transfer was drafted by the writer, executed by our client, and sent to our Sydney Agent in time for settlement on the 5th August. It was not until the 8th September the vendor [sic] drafted and served on the writer a transfer for execution by our client. Our Sydney Agent now holds the transfer drafted by your office duly executed by the vendor in anticipation of settlement … The service of a notice to complete under the contract makes time for completion of the essence. The service of a notice to complete does not detract from the vendor's right to charge interest pursuant to Special Condition 8. … As to your demand that our client withdraw their second notice to complete: we are instructed to advise the demand is rejected. As to your notice that the purchaser requires the vendor by 5pm on the 24 September (using your numbering): Make Admission: Not Agreed Give undertakings: the vendor has provided all responses that he is required to make Not applicable: the vendor has done all things required to settle this matter. As to your claim that the vendor has repudiated, repudiates, or will repudiate the contract, the vendor denies this claim. The vendor is ready, willing and able to complete this contract as planned at 2pm on 28 September 2015, at the offices of SAI Global, Level 3 No 60 Castlereagh Street, Sydney.
40. On 25 September 2015 Mr Lynch sent a letter to Ms Barry which was in the following terms: Whereas your clients, the vendors, have been unable or unwilling to perform the contract for sale of the abovementioned property dated 6 July 2015, as solicitors for and on behalf of the purchasers, we hereby give you notice that the contract is terminated. Our clients rely upon all grounds, whether or not previously disclosed and whether known or unknown.
41. On 6 October 2015 Ms Barry sent a letter to Mr Lynch referring to his letter of 25 September 2015. Ms Barry's letter contained the following: We advise that your purported termination on behalf of your clients does not profess to rely on any contractual provision of the contract and amounts to a repudiation of the contract which entitles the vendor to terminate the contract and to claim the deposit, costs, and expenses arising out of the contract and damages. We note that the Contract for Sale of Land is interdependent with the Contract for the Sale of Business and that your client has also consequently repudiated that contract. Accordingly, our client terminates both the Contract for Sale of Land dated 6 July 2015 and the interdependent Contract for the Sale of Business dated 6 July 2015. The vendor reserves all rights with respect to the deposit, costs, damages and otherwise.

National Parks and Wildlife Legislation

1. The National Parks and Wildlife (Amendment) Act 1969 (NSW) introduced a new Part IVA into the National Parks and Wildlife Act 1967 (NSW) headed "Relics". A "relic" was defined to mean "any deposit, object or material evidence (not being a handicraft made for sale) relating to indigenous and non-European habitation of the area that comprises the State of New South Wales, being habitation both prior to and concurrent with the occupation of that area by persons of European extraction".
2. Part IVA consisted of ss 33A to 33L. Section 33A provided for the establishment of an Aboriginal Relics Advisory Committee (which would include archaeologists and anthropologists as well as officers of the Department of Mines and the National Parks and Wildlife Service) to advise the Minister and the Director upon matters relating to the preservation, control of excavation, removal and custody of relics.
3. Section 33B provided for the dedication of unoccupied Crown lands as "aboriginal areas", for the purpose of preserving, protecting and preventing damage to relics therein. (Section 33I provided for the declaration of lands, not being unoccupied Crown land, on which a relic is situated, as a protected archaeological area.)
4. Section 33C conferred responsibility upon the Director for the proper care and protection of any relic in a national park, state park, historic site, nature reserve or aboriginal area.
5. Section 33D provided: (1) Subject to this section, a relic that, immediately before the commencement of this Act - (a) was not the property of the Crown; and (b) was not in the possession of any person, and any relic that is abandoned after that commencement by a person other than the Crown, shall be deemed to be, and always to have been, the property of the Crown. (2) For the purposes of subsection one of this section, a person shall not be deemed to have had possession of a relic that was not originally real property only by reason of the fact that it was in or on land owned or occupied by him. (3) Nothing in this section shall be construed as restricting the lawful use of land or as authorising the disturbance or excavation of any land. (4) No compensation shall be payable in respect of the vesting of a relic by this section.
6. Section 33E provided for certain offences against the Act, including excavation of land for the purpose of discovering a relic except in accordance with a permit issued under s 33F, and removing a relic from a national park, state park, historic site, nature reserve or aboriginal area except in accordance with a permit issued under s 33F.
7. Section 33K created an offence of knowingly destroying, defacing or damaging a relic without first obtaining the written consent of the Director. Section 33L created a further offence of a person, aware of the location of a relic that is the property of the Crown or, not being the property of the Crown is real property, failing to notify the Director of the location of the relic.
8. In his Second Reading Speech in the Legislative Assembly, the Minister stated, in relation to the new Part IVA: The remaining provisions of this bill relate to measures for the protection and preservation of anthropological, archaeological, and aboriginal relics, with emphasis on aboriginal relics. As with the wanton destruction of our unique scenic landscapes, native flora and wildlife, the public conscience has of latter years become increasingly disturbed by the progressive and senseless vandalism, despoliation and plundering of areas which were, and in many cases still are, rich in relics and cultural artefacts inherited from those people who originally occupied our lands. … In the bill, the term "relic" is defined as any deposit, object or material evidence relating to the indigenous and non-European habitation of the area that comprises the State of New South Wales, being habitation both prior to and concurrent with the occupation of that area by persons of European extraction. Thus the scope of "relic" is extended to cover cultures other than those of the present Australian Aborigines and their predecessors who might have been in occupancy of the State either prior to or concurrent with the Australian Aborigine. In framing the definition of relic, care has been taken to exclude therefrom handicrafts which are made for sale by members of the aboriginal community of the present day. All relics will be deemed to be the property of the Crown other than those which immediately before the commencement of the Act were located in private collections, or being real property, were not the property of the Crown. To be in possession of the Crown, a relic which is not real property, and not located on an area reserved under the Act, must be under the control of the trustees of the Australian Museum. Any person who owns a private collection of portable relics prior to the commencement of the Act, or on or after the commencement of the Act owns relics which are real property - for example, cave paintings, rock carvings, carved trees, in situ - will be regarded as the owner of such relics. However, portable relics subsequently discovered on occupied or unoccupied Crown land or freehold will be the property of the Crown. No compensation is payable for relics vested in the Crown in this manner.
9. The National Parks and Wildlife Act 1967 (the "Act of 1967") was repealed by the National Parks and Wildlife Act 1974 (NSW) ("the Act"), which commenced on 1 January 1975. Part 6 of the Act (ss 83 to 90R) is headed "Aboriginal objects and Aboriginal places".
10. An "Aboriginal object" is defined to mean "any deposit, object or material evidence (not being a handicraft made for sale) relating to the Aboriginal habitation of the area that comprises New South Wales, being habitation before or concurrent with (or both) the occupation of that area by persons of non-Aboriginal extraction, and includes Aboriginal remains".
11. "Aboriginal remains" is defined to mean (subject to certain exceptions not presently relevant) the body or the remains of the body of a deceased Aboriginal person.
12. Section 83 provides: (1) Subject to this section: (a) an Aboriginal object that was, immediately before the commencement day, deemed to be the property of the Crown by virtue of section 33D of the Act of 1967, and (b) an Aboriginal object that is abandoned on or after that day by a person other than the Crown, shall be, and shall be deemed always to have been, the property of the Crown. (2) Nothing in this section shall be construed as restricting the lawful use of land or as authorising the disturbance or excavation of any land. (3) No compensation is payable in respect of the vesting of an Aboriginal object by this section or section 33D of the Act of 1967.
13. Section 84 provides for the declaration of places of special significance with respect to Aboriginal culture as "Aboriginal places" for the purposes of the Act. By s 85, the Chief Executive of the Office of Environment and Heritage is the authority responsible for the protection of Aboriginal objects and Aboriginal places in New South Wales.
14. Section 85A provides for the Chief Executive, in certain circumstances, to dispose of Aboriginal objects that are the property of the Crown by returning them to an Aboriginal owner or owners, or otherwise dealing with the objects in accordance with the reasonable directions of an Aboriginal owner or owners. ("Aboriginal owners" has the same meaning as in the Aboriginal Land Rights Act 1983 (NSW)).
15. Sections 86 to 87B make provision for and in relation to certain offences concerning the harm or desecration of Aboriginal objects or Aboriginal places.
16. Section 89 provides, amongst other things, for the Crown to acquire Aboriginal objects (not including an Aboriginal object that is real property) by agreement with a person having ownership or possession of the object.
17. Section 89A provides that it is an offence for a person who is aware of the location of an Aboriginal object that is the property of the Crown or, not being the property of the Crown, is real property, to fail to notify the Chief Executive of the location of the object.
18. Division 2 of Part 6 (ss 90-90R) principally provides for the issue of Aboriginal heritage impact permits in relation to specified Aboriginal objects, Aboriginal places, land, activities or persons (or specified types or classes of such). By s 90Q the Chief Executive is required to establish and keep a database known as the Aboriginal Heritage Information Management System ("the AHIMS").
19. Part 6A of the Act concerns stop work orders, interim protection orders and remediation directions. These may be made in relation to actions that may affect Aboriginal objects or Aboriginal places.
20. Under the applicable legislation, only some Aboriginal objects are the property of the Crown. These are: 1. the Aboriginal objects that were, immediately before the commencement of the Act, deemed to be the property of the Crown by virtue of s 33D of the 1967 Act; and 2. Aboriginal objects that on or after that day are abandoned by a person other than the Crown.
21. Section 33D(1) of the 1967 Act deemed certain relics to be (and always to have been) the property of the Crown. These were relics that, immediately before the commencement of the 1967 Act, were not already the property of the Crown and not in the possession of any person, as well as relics that were abandoned after that date. Aside from a relic that was "originally real property", a person was not deemed to have had possession of the relic only by reason of the fact that the relic was in or on land owned or occupied by the person (see s 33D(2) of the 1967 Act; referred to by Bergin J, as her Honour then was, in Stockland (Constructors) Pty Ltd v Carriage (2003) 56 NSWLR 636; [2002] NSWSC 1179 at [49]-[51]).
22. A relic that was not originally real property was not, by reason only of the fact that it was in or on land, deemed to be in the possession of the owner or occupier of the land. Absent some other reason to conclude that the relic was in the possession of someone, the relic would become (if it was not already) the property of the Crown.
23. Aboriginal objects not deemed to be the property of the Crown by virtue of s 33D of the 1967 Act immediately before 1 January 1975 will be deemed to be the property of the Crown only if they are abandoned on or after that date by a person other than the Crown.

Question 1: Whether the existence of the alleged Aboriginal objects (as defined under the National Parks and Wildlife Act, 1974) are capable of constituting a defect in title to the land on which they are located.

1. I take the "alleged Aboriginal objects" the subject of the question to be the objects that are referred to in Agreed Facts 3 and 5 (and the particulars to paragraph 24 of the Amended Statement of Claim). The plaintiffs' case is that the objects (or some of them) are the property of the Crown (or someone other than the defendants). The plaintiffs do not contend that a defect in title would exist if property in the alleged objects rested with the defendants.
2. The plaintiffs, for whom Mr Smallbone of counsel appeared, submitted that the affectation of land by an Aboriginal object present in or on the land would be a defect in title because it would vest in the Crown part of the subject matter which the defendants contracted to sell. It was submitted that the terms of s 33D of the 1967 Act and s 83 of the Act plainly vest property in such objects in the Crown. It was further submitted that to the extent such objects are "deposits" in the land they form part of the land vested in the Crown notwithstanding the provisions of the Real Property Act 1900 (NSW). Accordingly, so it was put, an Aboriginal object "permanently affixed to land" is: 1. an affectation which prevents the vendor from giving a good marketable title; and 2. an interest in the land comprised within the Certificate of Title, and on either basis is capable of constituting a defect in the registered proprietor's title to the land.
3. Mr Smallbone noted the terms of printed cl 16.3 of the contract which impose an obligation upon the vendor on completion to cause the legal title to the property to pass to the purchaser "free of any mortgage or other interest", subject to any necessary registration.
4. The defendants, for whom Mr Lever SC and Mr Southwick of counsel appeared, submitted that even if there are any Aboriginal objects in or on the land to be sold, those objects do not themselves form part of the subject matter of the sale. Reliance was placed upon the approach taken by Young CJ in Eq in Borda v Burgess (2003) 11 BPR 21,203; [2003] NSWSC 1171 to a contract for sale of land that was subject to a mining lease for coal (see at [11]-[14] and [34]).
5. It was further submitted that the presence of Aboriginal objects would not amount to an interest in the land, and that there would at most be a defect in quality (see Eighth SRJ Pty Ltd v Merity (1997) 7 BPR 97,635 at 5). The defendants again relied upon Borda v Burgess (supra) (at [34]) in this regard.
6. It is first necessary to identify the subject matter of the contract for sale.
7. Mr Smallbone emphasised the definition of "property" which includes "the land", and the description that appears next to "Land" on the front page of the contract. That description consists of an address in Broken Head Road, Byron Bay, and title details concerning two parcels of land (Lot 1 in DP 558340 and Lot 10 in DP 708338). He submitted that the street address confirmed the view that the subject matter of the contract is the whole of the land at that address and includes all of the land within the boundaries of the nominated titles. Mr Smallbone submitted that this conclusion was strengthened by (although not dependent upon) printed cl 16.3. It was put that in circumstances where there was no provision relieving the vendor in respect of Aboriginal objects, title to the property was required to be given free of the interest of the Crown (or of anyone else) in Aboriginal objects.
8. The plaintiffs' contentions in this regard seem to me to have some force. However, they suffer from the difficulty that they attribute to the parties an intention that objects of a certain type would be conveyed by the defendants to the plaintiffs even though property in the objects is not with the defendants, and any transfer of property in the objects to the defendants would be highly problematic, if not practically impossible (see s 85A of the Act). The legislative background is of course part of the context in which the contract for sale is to be construed, in accordance with the established principles of construction. The parties to the contract may be assumed to know of the provisions of the Act (see Fletcher v Manton (1940) 64 CLR 37 at 45 per Starke J). Those provisions form part of the background knowledge available to the parties (see Westfield Management Ltd v AMP Capital Property Nominees Ltd (2012) 247 CLR 129; [2012] HCA 54 at [36]).
9. The situation bears some similarity to that which was present in Borda v Burgess (supra). In that case, the plaintiff agreed to sell land near Cessnock to the defendant. The contract did not disclose that the land was subject to a mining lease for coal. The purchaser purported to rescind on the basis of the undisclosed lease, and thereafter failed to complete the contract after the vendor served a Notice to Complete. The vendor then itself terminated the contract.
10. Young CJ in Eq first dealt with the vendor's contention that any coal that may have been under the surface of the land was not the subject of the contract for sale. His Honour said (at [12]-[14]): [12] By virtue of proclamation in the Government Gazette of 24 January 1850, all reservation of coal contained in Crown Grants prior to that date were abandoned and given up and it was declared that the grantees, their heirs and assigns should have full liberty to dig for the coal. However, by the Coal Acquisition Act 1981 (NSW), s 5, all coal vested in the Crown. The Minister for Mines may then grant leases including leases to explore for or win coal under the Mining Act 1992 (NSW). [13] The legislative regime dealing with coal in NSW was considered by Sperling J in Nardell Colliery Pty Ltd v NSW Coal Compensation Review Tribunal [2003] NSWSC 462; BC200302667. Essentially this bears out what I have summarised above. [14] Accordingly, there is no obvious defect in title if, because of a mining lease, someone else has title to the coal as the coal was divested from the registered proprietor of the land by legislation at least 20 years ago.
11. The reasoning is only briefly stated, but should be read as being to the effect that there was no defect in title because coal, which was vested in the Crown and not within the ownership of the registered proprietor, was not included in the sale. His Honour appears to have regarded it as clear that in those circumstances the coal did not form part of what the vendor promised to sell. The reasoning supports the approach advanced by the defendants in the present case even if, as submitted by Mr Smallbone, the contract in the former case contained provisions which precluded the purchaser from complaining about any mining lease, and may have afforded a further basis for his Honour's decision. However, I do accept Mr Smallbone's submission that Borda v Burgess (supra) does not stand for a general proposition that no contract for sale of land ever promises a title free of an interest of the Crown in the land, nor any general proposition that statutorily vested or reserved Crown interests in land do not have the character of land.
12. The plaintiffs referred to the decision of Holland J in Abraham v Mallon (1975) 1 BPR 97,012 in support of the proposition that the reference to improvements in the definition of "property" suggests that the whole of the land is included in the sale. That decision provides an example of a case where a contract for sale of land was construed so that its subject matter included land that was not owned by the vendor at the time of contract. Under the terms of the contract in that case certain improvements, being a house and a separate toilet and garage, were to be conveyed. However, both the separate toilet and the garage encroached to an extent on to neighbouring land that was not in the ownership of the vendor. Holland J held that the vendor agreed to sell all of the improvements, not three quarters of a toilet and "nearly all" of the garage. The case arises from facts very different to those that confront the Court here. It does seem, however, to be an example of the Court construing a contract in a manner so as to avoid an unexpected or impractical result.
13. The High Court has recently reaffirmed the well-established principles that the terms of a commercial contract are to be understood objectively, by what reasonable business persons would have understood them to mean, and that the court is entitled to approach the task of construction on the basis that the parties intended to produce a commercial result which makes commercial sense (see Ecosse Property Holdings Pty Ltd v Gee Dee Nominees Pty Ltd (2017) 343 ALR 58; [2017] HCA 12 at [16]-[17], referring to Electricity Generation Corporation v Woodside Energy Ltd (2014) 251 CLR 640; [2014] HCA 7 at [35]).
14. The contract for sale in the present case describes "the land" by reference to the street address and the title details. As a matter of language, it is undoubtedly capable of being read as including everything that is in or on the land which is physically located at that address and within the boundaries identified in the title details, including any Aboriginal objects that are in or on the land so described. Nevertheless, I do not think that the contract should be construed in such a way that any Aboriginal objects not owned by the defendants are included as part of the subject matter of the sale.
15. In my opinion, reasonable business persons in the position of the plaintiffs and the defendants would not have understood that the provisions of the contract for sale contained an obligation on the part of the defendants to sell to the plaintiffs any Aboriginal objects in or on the land that were not owned by the defendants. The legislative background, notably the Act, tells against such a construction. The definition of Aboriginal objects is broad, and the likelihood of their existence throughout the State is large, particularly in areas where intensive construction work has not been undertaken (see Country Energy v Williams (2005) 63 NSWLR 699; [2005] NSWCA 318 at [7], [56]-[57] and [67]). Moreover, Aboriginal objects are by their very nature most likely to be beneath the surface of the soil. Given the legislative regime, which makes it an offence to harm Aboriginal objects unless authorised by an Aboriginal heritage impact permit, it would be highly problematic, if not impossible, to determine the extent to which Aboriginal objects are present in or on any land. These circumstances, coupled with the highly restricted regime concerning the transfer of Aboriginal objects, means that the defendants would likely face great difficulty, if not impossibility, in proving a good title if Aboriginal objects not owned by the defendants were included in the sale. It seems to me that the construction favoured by the plaintiffs would thus give rise to commercially unexpected and inconvenient results. The parties should not be taken to have agreed that the defendants would convey such objects, which they do not own, and have no realistic prospect of owning.
16. I have therefore concluded that the better view is that the property (being the land, the improvements, all fixtures and inclusions, but not the exclusions) which the defendants promised to convey to the plaintiffs, does not include any Aboriginal objects in or on the land that are not owned by the defendants, such as Aboriginal objects that are the property of the Crown. Those objects (if any) do not in my opinion form part of the subject matter of the contract for sale. In these circumstances the effect of Special Condition 4(a)(iii), referred to in the defendants' submissions, does not arise for consideration.
17. The plaintiffs' argument that the alleged Aboriginal objects form part of the subject of the sale rests in part upon the contention that the objects are embedded within the soil (including as "deposits") or are otherwise affixed to the land. Reference was made to authorities including Elwes v Briggs Gas Company (1886) 33 Ch D 562 and The North Shore Gas Company Ltd v The Commissioner of Stamp Duties (NSW) (1940) 63 CLR 52. It may be accepted that an Aboriginal object can itself be considered to be (or to have become) real property. That is expressly contemplated by ss 89(3) and 89A of the Act (see also ss 33D(2) and 33L of the 1967 Act). It does not necessarily follow that a vendor of land that includes Aboriginal objects should be taken to have promised to convey the objects as part of a conveyance of the land of which they form part. For the reasons I have set out above in relation to the contract for sale in this case, it is my opinion that the defendants should not be taken to have promised to convey any Aboriginal objects in or on the land that are not owned by the defendants. Those objects (if any) retain an identity that is separate from the land which surrounds or supports them even if they might be considered more in the nature of fixtures than chattels, and their ownership is divorced from that of the surrounding or supporting land.
18. I am also of the view that if any such objects exist, the Crown (or other owner) would not thereby have an interest in "the property" to be conveyed, within the meaning of printed cl 16.3. Even if such objects are in or on the land, the rights of property in the objects themselves do not confer an interest in the surrounding or supporting land. There is nothing in the nature of an encumbrance over such land. The vesting in the Crown of property in an Aboriginal object does not give rise to any restriction upon the lawful use of land, and does not authorise the disturbance or excavation of any land (see s 83(2) of the Act). The Crown is not given rights to enter land merely because the land contains Aboriginal objects. (Any right to enter land to carry out a direction issued under Division 3 of Part 6 of the Act is conditional upon satisfaction that an Aboriginal object has been harmed due to the commission of an offence under the Act: see ss 91L, 91M, 91O and 91P.)
19. That is not to say that the presence of Aboriginal objects cannot have an effect upon the use or enjoyment of land. For example, it is possible, depending upon the circumstances, that a particular development of land could be restricted or made more difficult as a consequence of the presence of Aboriginal objects. However, I do not see these considerations as affecting the title to the land the defendants promised to convey to the plaintiffs. The defendants would not, by reason of the existence of Aboriginal objects not owned by them, be precluded from satisfying their obligation to show a good title to the property sold (see Travinto Nominees Pty Ltd v Vlattas (1973) 129 CLR 1 at 27 per Menzies J). It is not necessary to consider whether the existence of Aboriginal objects might amount to a defect in quality of the land sold.
20. For the above reasons, I do not think that the alleged Aboriginal objects are capable of constituting a defect in title for the purposes of the contract for sale entered into by the parties on 6 July 2015. Question 1 should be answered "No".
21. It is agreed that if Question 1 is answered "No" the plaintiffs accept they have no right to terminate and no claim for damages arising from the existence or possible existence of the alleged Aboriginal objects. It is further agreed that Question 2 and 3 become redundant. I will therefore proceed to deal with Question 4.

Question 4: Whether the plaintiffs were entitled to demand that the defendants withdraw their claim for interest and because of the defendants' refusal to do so, the plaintiffs were entitled to and did effectively terminate the contract on 25 September 2015?

1. The defendants' claim for interest was based upon Special Condition 8 which provides: If the purchaser shall not complete this purchase by the completion date, without default by the vendor, the purchaser shall pay to the vendor on completion, in addition to the balance purchase money, an amount calculated as ten per cent (10%) interest on the balance purchase money, computed at a daily rate from the day immediately after the completion date to the day on which this sale shall be completed. It is agreed that this amount is a genuine pre-estimate of the vendor's loss of interest for the purchase money and liability for rates and outgoings.
2. The right to interest arises if the purchaser does not complete the purchase by the completion date without default by the vendor. It is therefore necessary to determine the completion date under the contract.
3. The defendants asserted, and maintain, that the completion date was 5 August 2015, and that the plaintiffs failed to complete by that date without default by the defendants. Accordingly, the defendants claimed that the plaintiffs were obliged to pay interest (from 6 August 2015) on completion of the contract.
4. The plaintiffs submit that 5 August 2015 was not the completion date, and that they were not in default by failing to complete the contract on that date. They submit that the completion date is set by reference to the date upon which the vendor (or the vendor's solicitor) notifies the purchaser (or the purchaser's solicitor) in writing of the registration of a transmission application whereby Murray John Carter became the registered proprietor of Lot 1 in Deposited Plan 558340.
5. By Special Condition 21(a), completion of the contract was made conditional upon Mr Carter, as executor of the estate of the late Catherine Carter, becoming the registered proprietor (of Lot 1 in Deposited Plan 558340) "by way of transmission" within three months of the date of the contract. By Special Condition 21(b), the vendor undertook to do all things reasonable and necessary to "become proprietor by way of registration of a Transmission Application".
6. Mr Carter became registered as a proprietor of Lot 1 in Deposited Plan 558340 on 17 July 2015 upon registration of a transmission application (AJ 659085). The condition contained in Special Condition 21(a) was thereby satisfied.
7. The completion date of the contract is described on the front page of the contract as "30th day after the contract date (clause 15)". That date would be 5 August 2015, as the contract is dated 6 July 2015.
8. Clause 15 then provides that the parties must complete the contract by the completion date and, if they do not, a party can serve a notice to complete if that party is otherwise entitled to do so (see Carrapetta v Rado (2012) 16 BPR 30,997; [2012] NSWCA 202 at [20]-[27]). However, cl 29 needs to be considered. That clause applies if a provision says the contract or completion is conditional on an event (see cl 29.1). Special Condition 21(a) says that completion of the contract is conditional upon Mr Carter, as executor of the estate of the late Catherine Carter, becoming the registered proprietor (of Lot 1 in Deposited Plan 558340) by way of transmission within three months of 6 July 2015. Accordingly, cl 29 applies.
9. Clause 29.8.3 operates if the parties cannot lawfully complete without the event happening. That is the case here as the title to Lot 1 in Deposited Plan 558340 is to be conveyed from Mr Carter and Cathscompany Pty Ltd. Clause 29.8.3 (as amended by Special Condition 12(c)) provides that: the completion date becomes the later of the completion date and 14 days after either party serves notice of the event happening.
10. Clause 29 operates so that the completion date, which was the 30th day after the contract date, becomes the later of that date and 14 days after either party serves notice of Mr Carter becoming the registered proprietor of Lot 1 in Deposited Plan 558340 by way of transmission.
11. It should be noted that cl 29 (read with cl 15) would in certain circumstances operate inconsistently with Special Condition 21(c), which provides that completion shall take place within 14 days after the vendor's solicitors have notified the purchaser or the purchaser's solicitor in writing of registration of the transmission application. If such notice was given more than 14 days before 5 August 2015, Special Condition 21(c) would require completion to occur before 5 August 2015 whereas cl 29 (read with cl 15) would enable completion to occur on 5 August 2015.
12. The registration of Mr Murray as a proprietor occurred on 17 July 2015. It seems that by that time Mr Garrett (who had been acting for both parties) had ceased to act. There is no evidence about when (if at all) Mr Garrett became aware of the registration of the transmission application. There is no evidence of either party giving notice to the other, more than 14 days prior to 5 August 2015, of the registration having occurred. The potential inconsistency noted above did not therefore arise. In any case, whether pursuant to cll 15 and 29, or pursuant to Special Condition 21(c), completion of the contract was not required to take place on 5 August 2015.
13. The defendants contend that written notice of registration of the transmission application was given by the defendants' solicitors to the plaintiffs' solicitors on 4 August 2015. The notice is said to consist of the first letter sent on that day and the attached copy of a Transfer in respect of Lot 1 in Deposited Plan 558340. The Transfer named Mr Carter and Cathscompany Pty Ltd as the transferor and was signed by both. The letter stated that the original Transfer would be sent to the vendor's agent "for settlement tomorrow".
14. The documents were not expressly stated to constitute notice of Mr Carter becoming the proprietor on registration of the transmission application. Mr Smallbone did not suggest that it was necessary for a notice (under Special Condition 21(c)) to expressly identify itself as a notice under the provision, though that would be desirable. However, the content of the documents clearly indicated that Mr Carter had become registered as a proprietor in place of the late Catherine Carter, such that he was able to execute a Transfer to be used for settlement of the contract on the following day. In my view, the plaintiffs' solicitors, upon reading the documents, would have come to understand (assuming they did not already have the understanding) that Mr Carter had become the registered proprietor by way of transmission. In support of the submission that the letter of 4 August 2015 did not constitute written notice, Mr Smallbone noted that a prudent conveyancing solicitor, before completing on the strength of what was stated in that letter, would need to undertake a search to determine whether the transmission application had in fact been registered. That may be accepted, but that would be the case with any notice which did not include direct evidence of the contents of the register.
15. There is much to be said for the view that the documents sent to Mr Lynch on 4 August 2015 constituted notice of satisfaction of the condition in Special Condition 21(a), but it is not necessary to decide that question. If the documents sent to the plaintiffs' solicitors on 4 August 2015 did amount to sufficient notice of the registration of the transmission application, the terms of the contract (whether cl 15 read with cl 29, or Special Condition 21(c)) would require completion to occur by 18 August 2015. If they did not, then the completion date had still not been set.
16. The defendants maintained the position that completion was required by 5 August 2015. They served a Notice to Complete on 27 August 2015. Draft settlement figures, served with the notice, included an amount of interest calculated from 5 August 2015 (presumably in reliance upon Special Condition 8).
17. The plaintiffs challenged the validity of the Notice to Complete based on the alleged defect in title. The plaintiffs asserted, through Mr Lynch's letter of 2 September 2015, that the defendants were not at the time of service of the Notice to Complete themselves willing or able to show a good title by 10 September 2015. The notice was not attacked on the basis that it was premature, or that the time for completion in accordance with the contract had not arrived.
18. Mr Lynch had obtained an historical search of Lot 1 in Deposited Plan 558340 on 31 August 2015. That search showed that the most recent edition of the certificate of title had issued on 17 July 2015, following registration of transmission application AJ 659085. On 8 September 2015 Mr Lynch forwarded a form of transfer to Ms Barry in respect of Lot 1 in Deposited Plan 558340 which named Mr Carter as a transferor. Mr Lynch carried out a title search of Lot 1 in Deposited Plan 558340 on 10 September 2015 which showed that Mr Carter was a registered proprietor with Cathscompany Pty Ltd as tenants in common in equal shares, following registration of dealing AJ 659085. There is no doubt that the plaintiffs, through Mr Lynch, were aware by that time that the condition referred to in Special Condition 21(a) of the contract had been satisfied on 17 July 2015.
19. Mr Lynch attended the appointment of the settlement later on 10 September 2015, with cheques drawn in accordance with the direction given by Ms Barry. The amount of interest claimed by the defendants was included in the total amount of the cheques. No complaint was raised by the plaintiffs concerning the interest until 23 September 2015. The settlement went off on 10 September 2015 by reason of the alleged defect in title question.
20. The defendants served a second Notice to Complete on 11 September 2015, calling for completion to occur by 28 September 2015. The Notice to Complete did not itself call for the payment of interest on completion (see Carrapetta v Rado (supra) at [67]). However, the settlement figures sent by Ms Barry on 17 September 2015 included an amount of interest calculated from 5 August 2015. The plaintiffs challenged this claim for interest.
21. My Lynch, in his letter of 23 September 2015, stated in effect that the defendants were not entitled to "default interest" because the plaintiffs "are not in default of the contract". Revised settlement figures (minus the interest component) were requested to be supplied by 24 September 2015 so that cheques could be organised in time for a settlement on 28 September 2015.
22. Mr Lynch's letter went on to state: As you know, the date for completion of the contract nominated in the contract passed in circumstances where our clients had raised the problem of your clients' title not being free of other interests. Your clients had done nothing to address the problem. Indeed, your clients did not even propose settlement figures until 4 August, a time at which was too late for cheques to be arranged by 5 August. For either of these reasons that date therefore went off. In those circumstances, the time to complete is a reasonable time. Your clients then continued in refusing to address the problem and, without any default on our clients' part, issued a notice to complete purporting to make time of the essence for completion on 10 September, 2015. Your clients were not entitled to issue that notice, and, in any event, they have now withdrawn it. It follows that on any view, the contractual obligation is to complete within a reasonable time. There has been no default by our clients. Your clients were not entitled to issue their second notice to complete.
23. It appears that the plaintiffs were proceeding on the basis that the date for completion under the contract was 5 August 2015, and that the obligation was now to complete within a reasonable time. It was stated that there had been no default by the plaintiffs and the defendants were not entitled to issue their second Notice to Complete. No point was taken that notice of Mr Carter becoming the registered proprietor of Lot 1 in Deposited Plan 558340 by way of transmission application had not been given.
24. Mr Lynch's letter went on to state that the defendants were not even attempting to show and make a clear title, and were insisting on completion in a manner and at a time that does not conform with the contract. It was stated that the defendants' conduct in that regard was repudiatory.
25. Ms Barry responded on behalf of the defendants on 24 September 2015. In relation to interest, she stated that the contract provided for the completion date to be 30 days after 6 July 2015 (i.e. 5 August 2015). After citing Special Condition 8, Ms Barry then stated that the vendor was not in default under the contract, and that the purchaser was in default, including by not attending the settlement on 5 August 2015, and not serving a form of transfer until 8 September 2015. Ms Barry rejected the demand that the second Notice to Complete be withdrawn, and denied that the vendor was repudiating the contract.
26. The defendants were proceeding on the basis that the date for completion under the contract was 5 August 2015. That seems to have been a position which was common to the parties.
27. On that basis, the defendants' right to interest under Special Condition 8 would arise if the purchaser did not complete the purchase by 5 August 2015 "without default by the vendor" (see Zaps Transport (Aust) Pty Ltd v PJG Warehousing and Distribution Pty Ltd [2016] NSWCA 97 at [39] and [59]-[60] per Payne JA, with whom Gleeson JA and Emmett AJA agreed).
28. However, for the reasons set out earlier, it is my opinion that completion of the contract was not required to take place by 5 August 2015. The terms of the contract would require completion to occur by 18 August 2015, but only if the documents sent to the plaintiffs' solicitors on 4 August 2015 amounted to notice of registration of the transmission application. On either view, the defendants did not have the right to claim interest under Special Condition 8 from 5 August 2015. The plaintiffs would have been entitled to demand, on that basis, that the defendants withdraw (or at least reduce) their claim for interest.
29. The plaintiffs did not challenge the interest claim on that basis. The plaintiffs apparently accepted that 5 August 2015 was the date for completion under the contract, but said that the defendants could not claim interest because the plaintiffs were not in default of the contract. This approach does not seem to accord with Special Condition 8, which requires only that the purchaser not complete by the completion date without default by the vendor. I do not think that the reference in the last sentence of the condition to "a genuine pre-estimate of the vendor's loss" has the result that the condition should be construed as operating only where the purchaser is in breach of the contract. I think that the condition is intended to operate so as to compensate the vendor for delay in completion whenever the delay is not due to the vendor's default.
30. Faced with the challenge in fact made by the plaintiffs to the interest claim, the defendants asserted that the plaintiffs were in default of the contract. The defendants refused to withdraw their claim for interest.
31. The question posed for determination is whether, because of that refusal, the plaintiffs were entitled to terminate the contract on 25 September 2015. The answer to the question turns upon whether the defendants' conduct amounted to a repudiation of the contract.
32. Mr Smallbone submitted that on 24 September 2015 the defendants adopted the firm stance (in the face of an enunciation that they were wrong) that they would only perform the contract on the basis that the plaintiffs paid interest that was not actually due under the contract, and moreover were insisting that completion take place on that basis in accordance with the second Notice to Complete. Mr Smallbone submitted that this conduct amounted to a repudiation of the contract.
33. It should be observed that the argument is one of repudiation in an anticipatory sense, rather than by way of actual breach of an essential term of the contract (see DTR Nominees Pty Ltd v Mona Homes Pty Ltd (1978) 138 CLR 423 at 431; J W Carter, Contract Law in Australia, Sixth Edition paragraph 30-30).
34. For the following reasons, I do not think that an intention on the part of the defendants to repudiate or renounce the contract should be inferred from the defendants' conduct.
35. It is true (based on what I consider is the correct interpretation of the contract) that the defendants did not have a right to claim interest from 5 August 2015 in accordance with Special Condition 8. The defendants' assertion to that effect on 24 September 2015 was erroneous. Moreover, the assertion was made in circumstances where the defendants had earlier served a Notice to Complete which they maintained was valid.
36. The assertion was incorrect because 5 August 2015 was not the completion date of the contract, and completion of the contract was thus not required to take place by that date. This particular error was not pointed out to the defendants. The plaintiffs seemed to accept that the date for completion under the contract was indeed 5 August 2015. Both parties then proceeded from that erroneous base to debate whether the plaintiffs were in default under the contract. In my view, that debate was itself beside the point, the key question being whether the purchaser did not complete by the completion date without default by the vendor. In DTR Nominees Pty Ltd v Mona Homes Pty Ltd (supra) it was stated (at 432): No doubt there are cases in which a party, by insisting on an incorrect interpretation of a contract, evinces an intention that he will not perform the contract according to its terms. But there are other cases in which a party, though asserting a wrong view of a contract because he believes it to be correct, is willing to perform the contract according to its tenor. He may be willing to recognize his heresy once the true doctrine is enunciated or he may be willing to accept an authoritative exposition of the correct interpretation. In either event an intention to repudiate the contract could not be attributed to him. As Pearson L.J. observed in Sweet & Maxwell Ltd. v. Universal News Services Ltd. (10): "In the last resort, if the parties cannot agree, the true construction will have to be determined by the court. A party should not too readily be found to have refused to perform the agreement by contentious observations in the course of discussions or arguments…"
37. In the present case, unlike the position in DTR Nominees Pty Ltd v Mona Homes Pty Ltd (supra), there was an attempt to persuade the defendants that they were wrong about their claim for interest, and the defendants were given the opportunity to reconsider their position. However, the defendants were not at any time confronted with the correct interpretation of the contract. They were told that the plaintiffs were not in default, but were not told that the completion date had not yet arrived. It is therefore difficult to conclude that the defendants were persisting in their erroneous interpretation in the face of a clear enunciation of the true agreement (cf DTR Nominees Pty Ltd v Mona Homes Pty Ltd (supra) at 432).
38. It is appropriate to consider the defendants' conduct in the context in which it occurred. That context includes the on-going debate over what can fairly be described as the central issue, namely, whether the defendants were willing and able to show and make a good title. On that score, the defendants were in my view acting in accordance with the contract. Moreover, in circumstances where the parties had attended an appointment for settlement on 10 September 2015 (which did not proceed to completion only because of the defect in title issue), and no suggestion had been made that the time for completion had not arrived, the defendants were justified in thinking that they had grounds to issue the second Notice to Complete when they did on 11 September 2015 (see cl 15 and Special Condition 7).
39. Even if the defendants had no right to interest at all, I would not be prepared to infer from the defendants' conduct, viewed overall, that the defendants intended to repudiate the contract or not perform it in accordance with its terms. The erroneous position advanced concerning interest does not evince an intention to be no longer bound by the contract. In my view, neither does the defendants' conduct indicate that the defendants were only prepared to proceed in a manner inconsistent with the terms of the contract. I do not think that the conduct of the defendants was such as to convey to reasonable persons in the position of the plaintiffs that the defendants were renouncing the contract (see Koompahtoo Local Aboriginal Land Council v Sanpine Pty Ltd (2007) 233 CLR 115; [2007] HCA 61 at [44]). I have not overlooked the fact that the defendants did not take up the plaintiffs' suggestion that an approach be made to the Court. I note, however, that this suggestion was made in relation to the defect in title question, not the interest question.
40. Contractual repudiation is a serious matter, not something to be lightly found or inferred (see DCT Projects Pty Ltd v Champion Homes Sales Pty Ltd [2016] NSWCA 117 at [39] per Gleeson JA, with whom Macfarlan JA and Sackville AJA agreed). I am not prepared to conclude that the conduct of the defendants in this case was repudiatory as contended by the plaintiffs. The defendants' refusal to withdraw their claim for interest did not entitle the plaintiffs to terminate the contract on 25 September 2015.
41. Question 4 should be answered "No".
42. It is agreed that if Question 4 is answered "No", the plaintiffs were not entitled to terminate on the ground of the defendants' refusal to withdraw their claim for interest.

Conclusion

1. The Court orders that the separate questions be answered as follows: Question 1: No. Question 2: Does not arise. Question 3: Does not arise. Question 4: No.
2. The Court will further order that the plaintiffs pay the defendants' costs of the determination of the separate questions. The plaintiffs' claims under s 55(2A) of the Conveyancing Act, and the defendants' claims pursuant to the Amended Cross-Claim, remain for determination at a further hearing.

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: 06 August 2018