Memik v Taylor

Medium Neutral Citation: Memik v Taylor [2025] NSWSC 1418

Hearing dates: 9 and 10 September 2025

Date of orders: 27 November 2025

Decision date: 27 November 2025

Jurisdiction: Common Law

Before: Walton J

Decision: The Court makes the following orders and directions:
(1) The defendant shall file and serve Short Minutes of Order as to the final form of relief reflecting this judgment, together with a submission in support thereof, not exceeding 3 pages in length, on or before 4pm on Monday, 1 December 2025.
(2) The plaintiffs shall file and serve any submissions in reply by 4pm on Wednesday, 3 December 2025.

Catchwords: CONTRACTS – Contract for sale – Deed of life estate – Obligations in a deed – Whether the deed formed part of the consideration for the contract of sale
CONTRACTS – Construction of terms of deed of life estate – Consideration of whether maintenance condition was an essential or intermediate term – Breach of intermediate term established – Whether breach constituted valid basis for termination – Consideration of insurance condition – Whether there was an implied duty of cooperation – Where insurance condition unable to be performed by the defendant – Impossibility of performance – No breach established
EVIDENCE – Credibility findings – Where first plaintiff found to be unsatisfactory witness – Weight to be given to evidence
EQUITY – Relief against forfeiture

Legislation Cited: Real Property Act 1900 (NSW)

Cases Cited: Browne v Dunn (1893) 6 R 67
Liu v Lam [2024] NSWSC 1306
Pavlis v Pavlis [2021] NSWSC 1117
Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd (2015) 256 CLR 104; [2015] HCA 37
Tin-Tagel Majikk Pty Limited v Hockey [2025] NSWSC 578
Barry v Heider (1914) 19 CLR 197; [1914] HCA 79
Koompahtoo Local Aboriginal Land Council v Sanpine Pty Ltd (2007) 241 ALR 88; [2007] HCA 61
Codelfa Construction Pty Ltd v State Rail Authority (NSW) (1982) 149 CLR 337; [1982] HCA 24
Aurel Forras Pty Ltd v Graham Karp Developments Pty Ltd [1975] VR 202; Nelson v Kimberley Homes Pty Ltd [1989] ANZ ConvR 123; (1988) 4 BCL 289
Secured Income Real Estate (Australia) Ltd v St Martins Investments Pty Ltd (1979) 144 CLR 596
Commonwealth Bank of Australia v Barker [2014] HCA 32; (2014) 253 CLR 169
Secured Income Real Estate (Australia) Ltd v St Martins Investments Pty Ltd (1979) 144 CLR 596; [1979] HCA 61
WIN Corporation Pty Ltd v Nine Network Australia Pty Ltd [2016] NSWCA 297

Texts Cited: JW Carter and DJ Harland, Contract Law in Australia (4th ed, 2002, Butterworths)

Category: Principal judgment

Parties: Cengiz Memik (First Plaintiff)
Suzan Memik (Second Plaintiff)
Anne Marilyn Taylor (Defendant)

Representation: Counsel:
First and Second Plaintiff (Self Represented)
P Lane (Defendant)
Solicitors:
First and Second Plaintiff (Self Represented)
Legal Aid NSW (Defendant)

File Number(s): 2024/297632

Publication restriction: Nil

JUDGMENT

1. By a Statement of Claim (“SOC”) filed on 13 August 2024, Cengiz Memik and Susan Memik (“the plaintiffs”) bought a claim seeking vacant possession of the property at 26 Brian Street, Balgownie NSW 2519, being the whole of the land in title reference 69/193312 (“the property”) from Marilyn Anne Taylor (“the defendant”).

2. The defendant and her son, Mitchell Dellapina (“Mr Dellapina”), were formerly the registered proprietors of the property. On 10 October 2018, the defendant and Mr Dellapina (“the vendors”) entered into a contract with the plaintiffs for the sale of the property (“the contract for sale”). On that same day, the defendant entered into a deed of life estate with the plaintiffs (“the Deed”), which granted the defendant a life estate in the property and the improvements located within the property, subject to and conditional upon:

3. the defendant regularly maintaining the property and improvements (“the maintenance condition”);

4. the defendant keeping the property and improvements insured for building replacement value and public liability in the sum of $20,000,000 (“the insurance condition”),

(collectively, “the conditions”).

3. Upon settlement of the contract for sale on 21 November 2018, the plaintiffs became the registered proprietors of the property, and the Deed became binding.

4. In late 2023, the plaintiffs claimed that the defendant was in default of the Deed by reason of her failure to comply with the conditions or rectify that default upon notice. The plaintiffs served a notice of termination on the defendant on 16 July 2024 (“the termination notice”), advising the defendant to vacate the property on or before 2 August 2024.

5. The defendant continues to occupy the property on the basis that the termination notice was invalid and did not put an end to her interest in the property under the Deed.

6. While the plaintiffs were self-represented on the day of the hearing, the affidavit evidence which was tendered and relied on by the plaintiffs was prepared at a time when they were legally represented. No further testimonial evidence was adduced by the plaintiffs at hearing.

7. The issues for determination by the Court were outlined in an Agreed Statement of Issues (“ASOI”) prepared by the parties on 4 April 2025 pursuant to orders made by Justice Campbell. That document was also prepared at a time when the plaintiffs were legally represented. The ASOI recorded the issues in the proceedings and identified the position of each party in respect of those issues.

8. The ASOI also included a table setting out the plaintiffs’ particulars of breach and the respective position of each party with respect to those particulars (“the table”). The table variously refers to evidence.

9. The evidence for the plaintiffs, in that respect, was:

10. an affidavit of Mr Memik filed 14 November 2024 (including Exhibit CM-1 to that affidavit);

11. an affidavit of Mr Memik filed 10 March 2025; and

12. an affidavit of Ismail Memik filed 14 November 2024.

13. The evidence of the defendant was an affidavit of the defendant filed 12 February 2025 (including Exhibit MT-1 to that affidavit).

14. It may be noted for present purposes, that, having closely considered Mr Memik’s evidence, the Court will find him to be an unsatisfactory witness.

15. The issues for the determination by the Court, as set out in the ASOI, were as follows:

“Consideration

3. Was the consideration for the transfer of the Property to the plaintiffs:

a. $600,000;

a. $600,000 and the equitable life estate granted under the Deed;

b. $600,000 + $200,000 and the equitable life estate granted by the Deed;

c. $600,000 + $200,000;

d. Some other amount?

The defendant's interest

4. Do the terms of the Deed record the whole agreement between the plaintiffs and the defendant or are there additional terms:

a. in respect of the consideration for entry into the Deed, or

b. in any other respect?

5. On the proper construction of the Deed does the grant by the plaintiffs in Clause 2.1 of the Deed confer on the defendant:

a. life estate in fee simple, or

b. a personal right of residence, or

c. some other right?

6. What area of the Property was the defendant entitled to occupy under the Deed?

a. the whole of the Property; or

b. only as to the Dwelling and curtilages, and

c. does that area include the interior of the dwelling and garage on the Property?

Obligations of the defendant

7. On the proper construction of clause 2.1 and 2.2 of the Deed:

a. do the words "subject to" in clauses 2.1 and 2.2 create a contingency such that the defendant's interest is subject to defeasance on non-compliance with clause 2.2;

b. do the words 'subject to' impose a contractual obligation on the defendant to comply with the terms of clause 2.2, and

c. if the words impose a contractual obligation is that obligation:

i. an essential contractual term;

ii. an intermediate contractual term; or

iii. a warranty?

8. On the proper construction of clause 2.2 of the Deed:

a. what is meant by and required of the defendant in order to "regularly maintain the Property and Improvements taking into account their condition as at Completion"?

b. Did the defendant breach this obligation?

9. On the proper construction of clause 2.2 of the Deed:

a. What is meant by and required of the defendant in order to keep the Property and Improvements insured for building replacement value and public liability in the sum of$20,000,000.00?

b. Were the plaintiffs required to co-operate with the defendant to enable the defendant to comply with this obligation?

c. Did the defendant breach this obligation?

d. If the defendant breached this obligation, are the plaintiffs entitled to rely on this breach?

Termination

10. In what circumstances were the plaintiffs entitled to terminate performance of the Deed?

a. Was the defendant relevantly in breach of the Deed so as to give the plaintiffs a right to terminate?

b. Were the plaintiffs in breach or otherwise disentitled to rely on any breach of the defendant -

i. By reason of failing to co-operate with the defendant in insuring the Property, or

ii. By making demands of the defendant which were not justified by the terms of the Deed including the payment of rent and outgoings?

c. Were the letters of 29 September 2023, 2 November 2023, 13 November 2023 or 30 November 2023 effective as a basis on which the plaintiffs could rely to terminate the Deed?

d. Was the Notice given on 16 July 2024 effective to terminate the Deed?

e. Are the plaintiffs entitled to rely on any other ground to justify terminating the Deed?

Forfeiture

11. Has the defendant a sufficient interest to seek relief against forfeiture?

12. In the circumstances, has the defendant established a basis for relief against forfeiture to be given?”

13. The hearing proceeded on the basis that the plaintiffs adopted and relied on their submissions in the ASOI and the short outline of written submissions filed 5 September 2025. They did not make any oral submissions at hearing.

14. I will address each of the issues for determination seriatim below, with the exception of the question of consideration for the sale of the property, which is only relevant in so far as the Court comes to consider relief against forfeiture.

OVERVIEW OF THE DEED

15. It was common ground between the parties that the deed of life estate annexed to the contract for sale differed from the Deed which was executed by the parties. The deed of life estate annexed to the contract for sale included an obligation on the defendant to pay any outgoings. However, the Deed (which was executed) provided that any outgoings were to be paid by the plaintiffs. Both parties accepted that the valid contract between them was the version of the deed which had been executed by the parties.

16. Recital B of the Deed provided that it is was essential term of the contract for sale that on completion of the contract for sale, the defendant would be granted an equitable life estate in the property.

17. The relevant definitions of the Deed, set out in cl 1.1, are as follows:

“Agreement has the meaning ascribed to it at recital A; [1]

…

Improvements means the Improvements located within the Property;

Life Estate means the equitable life interest of Ms Taylor in the Property granted pursuant to the terms and conditions of the Agreement and this Deed;

Outgoings means Council Rates, Water Rate, electricity and gas and any other services attributable to the Improvements and Ms Taylor’s use of the Property;

Property has the meaning ascribed to it at recital A. [2] However, for the purpose of this deed the area to be occupied pursuant to the deed shall be restricted to the area between the front boundary and a parallel line six metres north of the rear of the existing dwelling. Mr & Mrs Memik shall be free to develop, as they see fit, the balance of the lot to the north of that parallel line to the rear boundary. They shall also retain the right of unfettered access to the rear of the lot between eh western boundary of the lot and the existing dwelling.”

18. Clause 2.1 of the Deed stated:

“(a) Subject to completion of the Agreement on and from the completion date Mr and Mrs Memik grants to Ms Taylor a Life Estate in the Property and the improvements thereon.

(b) Subject to Ms Taylor's compliance with clause 2.2, for as long as Ms Taylor is alive she may have use of the Property and the Improvements thereon, which may be used by Mrs Taylor in her absolute discretion.”

19. The conditions of the life estate are contained in cl 2.2 of the Deed, as follows:

“(a) Ms Taylor regularly maintaining the Property and Improvements taking into account their condition as at Completion. Despite this, Ms Taylor will not be restricted in undertaking any renovations or modifications to the Property or the Improvements provided the work performed is undertaken by duly qualified tradesmen and performed in a proper and workmanlike manner;

(b) Ms Taylor keeping the Property and Improvements insured for building replacement value and public liability in the sum of $20,000,000.00”

20. Clause 2.2A of the Deed provided:

“For the duration of the Life Estate Mr and Mrs Memik are required to pay all outgoings associated with the property including any Land Tax or other tax liability incurred by Mr and Mrs Memik due to their ownership of the Property and warrant to Ms Taylor that they will comply with the requirements of this clause.”

21. Clause 2.3 of the Deed related to the potential development of the property by the plaintiffs, and relevantly stated:

“(a) The parties acknowledge that Mr and Mrs Memik may wish to develop the rear part of the property during the term of this life estate.

(b) The parties agree that Mr and Mrs Memik may serve written notice on Ms Taylor at any time during the term of this life estate of their intention to develop recognising that at all times Ms Taylor shall be permitted to reside in the existing dwelling and that area between the front boundary and a parallel line 6 metres north of the rear of the existing dwelling.

(c) Subject to the above, Mr and Mrs Memik shall be free to develop, as they see fit, the balance of the lot the north of the parallel line referred to in clause 2.3(b) all the way to the rear boundary.

(d) Mr and Memik shall be entitled to the right of unfettered access to the rear of the lot between the western boundary of the lot and the existing dwelling but in doing so shall be consideration of Ms Taylors quiet enjoyment of her home.

(e) The parties acknowledge that from the date of commencement of any development works the outgoings then payable by Ms Taylor shall, where appropriate, be apportioned on an area basis and her obligation to maintain shall be then limited to the area occupied by her.

(f) For the purpose of this clause Mr and Mrs Memik shall do all in their power to ensure as little disturbance to Ms Taylor as possible during the period of any development works.

(g) The parties acknowledge that for the purpose of this clause redevelopment may include a Torrens or Strata subdivision.

(h) The parties agree that during the undertaking of any development works Mr and Mrs Memik shall install a temporary dog fence If and when required to ensure Ms Taylor's dog remains secure within her property.”

22. Clause 2.5 of the Deed was the termination clause, which relevantly provided:

“(a) The Life Estate shall end on the death of Ms Taylor and this Deed shall terminate on that date.

(b) Ms Taylor’s estate shall be granted up to three months following her death to remove all personal items and chattels located within the Property after which time Mr and Mrs Memik shall be entitled to enter the Property and deal with any of those items remaining on the land as they see fit.

(c) Ms Taylor may otherwise terminate the Life Estate any time on providing 3 months written notice to Mr and Mrs Memik.”

23. Clause 3 of the Deed provided:

“3.1 Subject to Ms Taylor being in compliance with the conditions of the Life Estate, Mr and Mrs Memik grants a charge in the Property to Ms Taylor and consents to Ms Taylor registering a caveat on title of the Property.

3.2 Mr and Mrs Memik warrant that clause 3.1 grants Ms Taylor a valid caveatable interest in the Property and indemnifies Ms Taylor against any loss or damage sustained by Ms Taylor (including legal costs on a full indemnity basis) as a result of Mr and Mrs Memik breaching this warranty and/or Ms Taylor having to set aside a lapsing notice issued by Mr and Mrs Memik or Mr and Mr Memik’s agent with respect to a caveat lodged pursuant to clause 3.1.”

24. Clause 5.3 of the Deed contained an entire agreement clause, as follows:

“This Deed and the Agreement is the entire agreement of the parties on the subject matter. The only enforceable obligations and liabilities of the parties in relation to the subject matter are those that arise out of the provisions contained in this Deed and the Agreement. All representations, communications and prior agreements in relation to the subject matter are merged in and superseded by this Deed and the Agreement.”

RELEVANT PROVISIONS UNDER THE REAL PROPERTY ACT

25. The parties referred to the following sections of the Real Property Act 1900 (NSW) (“the Real Property Act”), as will be referred to later in this judgment:

41 Dealings not effectual until recorded in Register

(1) No dealing, until registered in the manner provided by this Act, shall be effectual to pass any estate or interest in any land under the provisions of this Act, or to render such land liable as security for the payment of money, but upon the registration of any dealing in the manner provided by this Act, the estate or interest specified in such dealing shall pass, or as the case may be the land shall become liable as security in manner and subject to the covenants, conditions, and contingencies set forth and specified in such dealing, or by this Act declared to be implied in instruments of a like nature.

(2) (Repealed)

42 Estate of registered proprietor paramount

(1) Notwithstanding the existence in any other person of any estate or interest which but for this Act might be held to be paramount or to have priority, the registered proprietor for the time being of any estate or interest in land recorded in a folio of the Register shall, except in case of fraud, hold the same, subject to such other estates and interests and such entries, if any, as are recorded in that folio, but absolutely free from all other estates and interests that are not so recorded except—

(a) the estate or interest recorded in a prior folio of the Register by reason of which another proprietor claims the same land,

(a1) in the case of the omission or misdescription of an easement subsisting immediately before the land was brought under the provisions of this Act or validly created at or after that time under this or any other Act or a Commonwealth Act,

(b) in the case of the omission or misdescription of any profit à prendre created in or existing upon any land,

(c) as to any portion of land that may by wrong description of parcels or of boundaries be included in the folio of the Register or registered dealing evidencing the title of such registered proprietor, not being a purchaser or mortgagee thereof for value, or deriving from or through a purchaser or mortgagee thereof for value, and

(d) a tenancy whereunder the tenant is in possession or entitled to immediate possession, and an agreement or option for the acquisition by such a tenant of a further term to commence at the expiration of such a tenancy, of which in either case the registered proprietor before he or she became registered as proprietor had notice against which he or she was not protected—

Provided that—

(i) The term for which the tenancy was created does not exceed three years, and

(ii) in the case of such an agreement or option, the additional term for which it provides would not, when added to the original term, exceed three years.

(iii) (Repealed)

(2) In subsection (1), a reference to an estate or interest in land recorded in a folio of the Register includes a reference to an estate or interest recorded in a registered mortgage, charge or lease that may be directly or indirectly identified from a distinctive reference in that folio.

(3) This section prevails over any inconsistent provision of any other Act or law unless the inconsistent provision expressly provides that it is to have effect despite anything contained in this section.

43 Purchaser from registered proprietor not to be affected by notice

(1) Except in the case of fraud no person contracting or dealing with or taking or proposing to take a transfer from the registered proprietor of any registered estate or interest shall be required or in any manner concerned to inquire or ascertain the circumstances in or the consideration for which such registered owner or any previous registered owner of the estate or interest in question is or was registered, or to see to the application of the purchase money or any part thereof, or shall be affected by notice direct or constructive of any trust or unregistered interest, any rule of law or equity to the contrary notwithstanding; and the knowledge that any such trust or unregistered interest is in existence shall not of itself be imputed as fraud.

(2) Subsection (1) does not operate to defeat any claim based on a subsisting interest, within the meaning of Part 4A, affecting land comprised in a qualified folio of the Register.

…

74F Lodgment of caveats against dealings, possessory applications, plans and applications for cancellation of easements or extinguishment of restrictive covenants

(1) Any person who, by virtue of any unregistered dealing or by devolution of law or otherwise, claims to be entitled to a legal or equitable estate or interest in land under the provisions of this Act may lodge with the Registrar-General a caveat prohibiting the recording of any dealing affecting the estate or interest to which the person claims to be entitled.

(2) Any registered proprietor of an estate or interest who fears an improper dealing with the estate or interest by another person may lodge with the Registrar-General a caveat prohibiting the recording of any dealing affecting the estate or interest.

(3) Any person who claims to be entitled to a legal or equitable estate or interest in land that is or may become the subject of a possessory application may, at any time before such an application is granted, lodge with the Registrar-General a caveat prohibiting the Registrar-General from granting such an application.

(4) Any person who claims to be entitled to a legal or equitable estate or interest in land that is the subject of a delimitation plan lodged for registration under section 28V may, at any time before the plan is registered, lodge with the Registrar-General a caveat prohibiting the registration of the delimitation plan.

(4A) Any person who claims to be entitled to any legal or equitable interest in an easement the recording of which is the subject of an application for cancellation under section 49 may, at any time before the application is granted, lodge with the Registrar-General a caveat prohibiting the Registrar-General from granting the application.

(4B) Any of the following persons may lodge with the Registrar-General a caveat prohibiting the Registrar-General from granting an application to extinguish a restrictive covenant—

(a) a person who has a registered interest in the land to which the benefit of the restrictive covenant is appurtenant,

(b) a person who claims to be entitled to an equitable estate or interest in that land,

(c) a person who is recorded in the Register as having the right to release, vary or modify the restrictive covenant,

(d) a person who is recorded in the Register as a person whose consent is required to a release, variation or modification of the restrictive covenant.

(4C) A caveat may be lodged under subsection (4B) whether or not the restrictive covenant is already the subject of an application for extinguishment under Part 8A. However, if such an application has been made and a notice in relation to the application has been given under section 81D then, to be effective, the caveat may only be lodged before the end of the period specified in the notice.

(5) A caveat lodged under this section must—

(a) be in the approved form, and

(b) specify the following—

(i) the name of the caveator,

(ii) an address for the caveator,

(iii) an address at which notices may be served on the caveator,

(iv) unless the Registrar-General dispenses with those particulars—the name and address of the registered proprietor concerned,

(v) the prescribed particulars of the legal or equitable estate or interest, or the right arising out of a restrictive covenant, to which the caveator claims to be entitled,

(vi) the current reference allocated by the Registrar-General to the folio of the Register, or, as the case may be, the lease, mortgage or charge, to which the caveat relates,

(vii) where the caveat relates only to part of the land described in a folio of the Register or a current lease—a description of that part in the form or manner prescribed, and

(viii) (Repealed)

(c) be verified by statutory declaration or, in the case of a caveat lodged electronically, be verified in a way approved by the Registrar-General, and

(d) be signed by the caveator or by a solicitor or other agent of the caveator.

(5A) The address provided under subsection (5)(b)(iii) for the service of notices must—

(a) be an address in Australia, or

(b) if the regulations provide that notices under this section may be served electronically—comply with requirements prescribed by the regulations.

(6) On the lodgment of a caveat under subsection (1), the Registrar-General must give notice in writing of the lodgment of the caveat to the registered proprietor of the estate or interest affected by the caveat by—

(a) sending the notice in the approved way to the address of the registered proprietor specified in the caveat, or

(b) giving the notice in such other manner, whether by advertisement or otherwise, as the Registrar-General considers appropriate.

(7) In subsection (6), a reference to the registered proprietor in relation to an estate or interest referred to in that subsection includes a reference to a person who claims to be entitled to such an estate or interest under a dealing lodged in the office of the Registrar-General for recording in the Register.

(8) On the lodgment of a caveat under subsection (3), the Registrar-General shall, if a possessory application referred to in that subsection has been lodged in the office of the Registrar-General, give notice in writing of the lodgment of the caveat to the possessory applicant concerned.

(9) On the lodgment of a caveat under subsection (4), the Registrar-General shall give notice in writing of the lodgment of the caveat to the registered proprietor of the estate or interest affected by the caveat.

(10) On the lodgment of a caveat under subsection (4A) in relation to an easement, the Registrar-General must, if an application for cancellation of the recording of the easement has been lodged in the office of the Registrar-General, give notice in writing of the lodgment of the caveat to the applicant concerned.

(11) On the lodgment of a caveat under subsection (4B) in relation to a restrictive covenant, the Registrar-General must, if an application for extinguishment of the restrictive covenant has been lodged in the office of the Registrar-General, or is later lodged, give notice in writing of the lodgment of the caveat to the applicant concerned.

FACTUAL FINDINGS

Facts which were undisputed

26. Having regard to the evidence given by both parties, the following facts were undisputed.

27. The vendors were the registered proprietors of the property prior to 21 November 2018 and held their interest in the property as tenants in common. The defendant owned a 95% share of the property and Mr Dellapina owned a 5% share of the property.

28. The plaintiffs have lived across the road from the property for 20 years. At some date prior to 2010, Mr Memik expressed an interest in purchasing the property, which, at that stage, was owned by the defendant’s mother. In 2018, the defendant approached Mr Memik to enquire if he would be interested in purchasing the property.

29. On 10 October 2018, the contract for sale and the Deed were executed by the parties and, in respect of the contract for sale only, Mr Dellapina.

30. The contract for sale listed the purchase price as $600,000, with a deposit of $60,000 and balance of $540,000 to be paid. A deposit of $30,000 was paid by the plaintiffs on 10 October 2018, pursuant to a special condition in the contract for sale which permitted that only 5% of the purchase price needed to be paid at the time of exchange.

31. The contract for sale contained a number of “special conditions”, including, inter alia, the following clause:

**“**43 LIFE ESTATE

43.1 On and from the completion date the Purchaser grants to the Vendor a Life Estate in the property.

43.2 The parties must enter into the Deed of Life Estate attached to this contract on or before the completion date at which time it will become binding.

43,3 The parties acknowledge that this Clause 43 is an essential term of the Contract.

43.4 The obligations of this clause 43 will not merge on Completion.”

32. The total consideration for the transfer of the property, including whether the Deed formed part of that consideration, is a question which is in issue between the parties. I will address that issue later in this judgment.

33. The contract for sale settled on 21 November 2018, and legal title to the property passed from the vendors to the plaintiffs (“settlement”). The plaintiffs became the registered proprietors of the property as joint tenants. On that same day, the Deed became binding as between the plaintiffs and the defendant.

34. On 24 April 2023, Mr Memik sent a letter to the defendant requesting payments for council and water rates from 2019 to 2023. The total amount claimed to be owed by the defendant was $17,734. The letter also alluded to the property being in an unsatisfactory state, and that Mr Memik would take legal action if no response was received by him within 21 days of the date of the letter. An extract of the letter is as follows:

“This letter is to provide you with notice of the outstanding payments you owe in relation to the tenancy on 26 Brian Street Balgownie nsw 2519. lt has been brought to our attention that you have failed to make payments for your council rates and water rates for more than four years, and that the property has been left in an unsatisfactory state.

On the contract of sale agreement states clearly that it is your responsibility to keep the property in a state of cleanliness and tidiness and to pay all associated council rates, water rates. Also on the sale of contract it clearly stats on clause 2.3 d that I would be entitled to the right of unfettered access to the rear of the lot between the western boundary of the lot of the existing dwelling there for I would like 24/7 access as I will, commence building at the rear very soon.(this means could you please not park your car there please)

As this will be my 5th letter written to you and had no response in the past so I will be taking legal action if I don't get a response within 21 days from the date of this letter. We are now giving you formal demand to reimburse us for the past council rates and water rates you should make full payment of the outstanding amounts. In the event you cannot pay the full amount, we require that you commence negotiations for an agreed payment plan that can be followed to settle the debt.

This is your final notice to settle your debts or legal action for the recovery of the amount owed to will commence....”

35. Mr Memik never sought to be reimbursed by the defendant in respect of insurance premiums he had paid in respect of the property.

36. Mr Memik accepted that, following the provision of legal advice, he later realised that the Deed did not require the defendant to pay any outgoings.

37. I accept, as was conceded by Mr Memik during cross-examination, that the plaintiffs have never paid for electricity and gas for the property. The defendant has paid for electricity and gas since settlement, and has contributed to water rates since February 2024, following the request for contribution by Mr Memik (despite the fact that there was no obligation to do so under the Deed).

38. Between September 2023 and February 2024, a number of letters passed between the plaintiffs’ solicitor and the defendant. The principal parts of those communications were as follows:

39. The first letter from plaintiffs’ lawyer to defendant was dated 29 September 2023:

“…We are instructed that on or about [no date appears in the original] you sold the property located at 26 Brian Street, Balgownie NSW 2519 ("Property'') to my clients. On or about 10 October 2018, you entered into a Deed Life Estate ("Deed'') with my clients. The life estate provides you with the right to reside in the Property provided you comply with the conditions set out under clause 2.2 of the Deed. These conditions are:

1. Clause: 2.2(a) - You must regularly maintain the Property and improvements.

2. Clause: 2.2(b) You must keep the Property and Improvements insured for building replacing value and public liability insane (sic) in the sum of $20,000,000.

I am instructed that the Property has not been maintained by you in accordance with clause 2.2 of the Deed. In addition, you also do not comply with clause 2.2(b).

I note that your life estate is subject to your compliance with these conditions and that at this stage you do no longer have the right to reside in the Property. My clients are therefore entitled to evict you.

However, without waiving any rights or entitlements under the Deed, my clients request that by 3 October 2023, you:

1. Maintain the Property and carry out any repairs so that the property will be in the same conditions as it was when you obtained the life estate; and

2. Take out the required insurances under clause 2.2(b) and provide the certificate of insurances to my clients.

Should you not comply with clause 2.2 by 31 October 2023, my clients will take steps to have you evicted.”

2. Letter from defendant to plaintiff’s lawyer dated 19 October 2023:

“In regard to 2.2(a), I am unsure & am seeking clarification on what Mr Memik requires. The property has been cleared of overgrowth, trees & hedges have been topiaried to former shape, side access path made accessible again. Sydney Water is due for routine plumbing maintenance on Monday 23rd October 2023.

In regard to 2.2(b), I have endeavoured to obtain a quote for insurance, however, all bar 1 (one) insurer was unable to quote due to the fact that Mr & Mrs Memik are the owners & beneficiaries of any monies in the event of a claim…”

3. Letter from plaintiffs’ lawyer to defendant dated 13 November 2023:

“…As per your letter, it has come to our attention that the property is currently, and to our surprise, has never been insured in compliance with the Deed. Consequently, it appears that you have not had the right to reside in the property at any time. My client is contemplating charging you rent for this period.

It is evident from the provided photographs that you have not fulfilled your obligations to maintain the property. In essence, it seems that the house has been grossly neglected over the last five years.

My client requests that you adhere to the following:

1. Obtain the necessary insurance for the house as stipulated in the Deed.

2. Restore the property to its condition as of 21 November 2018, specifically:

a. Repair any damages on the property, including the upstairs bedroom window, which, I am informed, was broken four years ago and only replaced with a plastic per-specs.

b. Clean the exterior of the house, as mould is reported to be growing on it.

c. Rectify any damage to the brickwork, which was absent upon completion.

3. Remove all rubbish from the backyard, as neighbours have voiced concerns.

4. Remove all shrubs from underneath the tiles, as their presence has led to damage.

Although you desire the benefits of owning the house, it is clear that it has fallen into disrepair due to negligence. My client made a significant investment in this property and is eager to protect it. It would have been feasible to obtain insurance and maintain the property after receiving the purchase price.

In summary, your non-compliance with the Deed invalidates your right to reside in the property. The Deed was drafted by your solicitors and you should have received legal advice on its terms and in particular your duties under the Deed.

Over the past five years of residence in the property, you have essentially enjoyed rent-free living, valued at $210,000 (considering a weekly rent of $800.00). Additionally, my client has settled all incurred rates for the property.

My client insists that you promptly start adhering to the Deed's terms. Failure to provide the following by 10 December 2023 will result in my client requiring you to vacate the property…”

4. Letter from defendant to plaintiffs’ lawyer dated 21 November 2023:

“As previously requested, Mr Memik is to provide the following documentation. (1) A copy of a DA or certified building plan for [the property] with a firm starting date. (2) A copy of the mortgage papers applying to [the property].

Without these documents I am, as previously stated, unable to even obtain a quote for insurance.

As to 2.2(a). (2) (b) Mould is not present on the southern side of the house. It is merely discolouration due to recent rain & does not impair the condition of the walls.

(a) The upstairs window has been professionally fitted. It is watertight & there is no evidence of damage. This replaced a piece of plasterboard.

(c) there is no damaged brickwork.

(3) The vegetation that Mr Memik & family produced during an initial clean up & left on the court was removed years ago by myself as it posed a fire hazard. Neighbours also complained of the toxic smoke produced by Mr Memik by trying to burn green vegetation on the court.

The mass of scrap metal produced by Mr Memiks removal of the north eastern section of a fence still remains.

(4) There are no ‘shrubs’ underneath tiles anywhere on the property, however, the creeping fig on the north eastern side of the house was sprayed approx. 2 weeks ago before Mr Memik proposed this as an issue. In spite of my strong objections to any chemical usage, I sprayed the fig & carefully targeted any weeds growing down the eastern side of the hous as the area had been cleared. The spray may take up to a month to produce any results & may need a second application due to recent rain…

If Mr Memik wishes the property to return to its 2018 state, I have evidence to show the original overgrown dysfunctional condition it was in at that time…”

5. Letter from plaintiffs’ lawyer to defendant dated 30 November 2023:

“…The insurance is not connected to or dependent on any mortgage or DA (there is no requirement for my client to obtain a DA).

I note that for the last 5 years you did not insure the property as per the terms of the Deed. As per clause 2.2 the life estate was subject to and conditional on you taking out the required insurance. As you did not comply with that clause you did not have a right to reside in the property rent free. My client demands that for you pay him a market rent for the time you resided/reside in the property without legal basis. We estimate the market rent for a property like 26 Brian Street, to be $800.00 per week. At a weekly rate of $800.00 rate, my client requires you to pay to him outstanding lease payments in the amount of $210,000.

Work done

Please provide name and details of each qualified tradesman that worked on the house. My client does also not consider that the property is in the same condition as it was on 21 November 2018.

My client requests that as per our previous letter by 10 December 2023 you:

1. Provide confirmation of insurance (insurance as per the Deed)

2. Provide proof that all damages have been rectified and the property restored to its state as of 21 November 2018

3. Pay my client an amount of $210,000 rental payments for the last 5 years (as you had no valid life interest).

Should you not comply with the above, we kindly ask you to vacate the premises as soon as possible so that my client can repair the property and rent it out to a family in need of rental property.”

6. Letter from defendant to plaintiffs’ lawyer dated 7 December 2023:

“(1) As previously stated in my previous correspondence I have not been able to obtain a quote for insurance due to me not having an insurable interest in the property. I have endeavoured to gather information from Mr Memik to assist me in obtaining appropriate insurance, however, no information has been forthcoming therefore I cannot proceed unless Mr Memik takes out a policy & invoices me on a monthly basis. Furthermore, it was discovered that no building application has yet been submitted for [the property] suggesting that Mr Memik has lied about ‘starting building soon’…”

7. Letter from plaintiffs’ lawyer to defendant dated 24 January 2024:

“We refer to our previous correspondence in this matter.

My client has informed me that you have still not complied with all provisions of the Deed.

In the circumstances, I am instructed to require you to vacate the premises by 14 February 2024.”

8. Letter from defendant to plaintiffs’ lawyer dated 31 January 2024:

“Please advise your client that I cannot proceed until he can provide documentation of insurance details, ownership & parameters of future development of property.

It is abundantly obvious that Mr Memik simply wishes to demolish my existing premises to make it easy for him to develop the property in spite of ready access being available.

Every opportunity has been offered [to] Mr Memik to resolve the initial misunderstanding re: rates, via mediation, however, Mr Memik has continuously rejected every effort made to remedy this situation, evidence that he is not interested in negotiating a suitable outcome…”

9. Letter from plaintiffs’ lawyer to defendant dated 15 February 2024:

“My client has instructed me that:

1. You and him entered into a deed under which you received a right to reside in the property provided that you:

a. Maintain it in the same condition it was when the contract of sale was entered into; and

b. You take out insurance.

My client has instructed me that you have not complied with the conditions set out under the deed. You have therefore no right to reside in the property. Should you not leave the property, my client will obtain an eviction order.”

39. I accept, on the basis of these letters, that the defendant raised an issue regarding her ability to comply with the insurance condition as early as 19 October 2023, and requested the plaintiffs’ cooperation to facilitate her compliance with that condition. Perhaps in consequence of the inappropriately aggressive content and tone of the plaintiffs’ solicitors’ letters, they either ignored or disregarded any request by the defendant for their cooperation. In my view, the plaintiffs were intent on advancing their position that the defendant vacate the property, and as a result, failed to consider their own obligations under the Deed.

40. Further, I note that the demand by the plaintiffs that the defendant pay them market rent of $210,000 for the past 5 years, was completely unfounded under the Deed or otherwise in law. This appears to have been a tactic used to bully a vulnerable member of the community into relinquishing her legal rights and is inappropriate.

41. The termination notice was served on the defendant on 16 July 2024, which provided as follows:

“1. By Deed of Life Estate dated 10 October 2018 Cengiz Memik and Suzan Memik of 124 Meadow Street, Fairy Meadow NSW 2519 agreed to grant Marilyn Anne Taylor of 26 Brian Street, Balgownie NSW 2519 an equitable life estate to the property being the whole of the land in title reference 69/193312 known as 26 Brian Street, Balgownie NSW 2519.

2. You have failed to comply with clause 2.2(a) and (b) of the Deed of Life Estate.

3. Despite request to do so, you have failed to rectify your compliance of these clause and are in default of the Deed.

As solicitor for and on behalf of Cengiz Memik and Suzan Memik, WE HEREBY GIVE YOU NOTICE THAT:

A. You are to vacate the premises on or before 2 August 2024, and in this respect, time is of the essence,

B. As a result of your default under the Deed, we give you notice that the Deed is terminated and is entirely at an end. Our clients will take action to recover possession of the property.”

42. The defendant did not vacate the property, and these proceedings were commenced on 13 August 2024.

Facts in dispute

43. The plaintiffs did not cross-examine the defendant or otherwise seek to challenge her evidence. In this respect, the Court had the following exchange with Mr Memik:

“HIS HONOUR: What now follows is for you to have the capacity to cross-examine Ms Taylor. Is it your intention to do so?

FIRST PLAINTIFF: No, your Honour.

HIS HONOUR: Right, perhaps I should just mention to you these factors. One of the purposes of cross-examination is to challenge any matter that you wish to contest in Ms Taylor’s affidavit. That’s one function. The second function, as you’ve seen today, is to inquire as to information that you may wish to elicit that doesn’t necessarily fit within the affidavit or to deal with matters of credit but you do not wish to cross-examine?

FIRST PLAINTIFF: No, your Honour.

HIS HONOUR: All right, thank you, and that’s a joint position of both of you? Do you speak for both of you?

FIRST PLAINTIFF: Yes, your Honour.

HIS HONOUR: In that event you can resume your seat. That would then complete the evidence on that basis.”

44. Notwithstanding this exchange, it is necessary to resolve a number of factual disputes between the parties. I will first address my findings with respect to Mr Memik’s credibility, who was cross examined, before turning to the specific issues of fact which arose in the course of the proceedings. I do not propose to give effect to the principles in Browne v Dunn (1893) 6 R 67 in reviewing the evidence, given the unrepresented status of the plaintiffs.

45. It should also be observed that despite the detailed particularisation of breaches in the table, many of them were not sustained in evidence, particularly as Mr Memik was cross-examined as to the propositions put and, in many respects, found wanting in his evidence. Nonetheless, I will make some occasional references to the table in examining either Mr Memik’s credit or the issues in dispute.

Credibility of Mr Memik

46. In relation to credibility, I adopt the statement of principle in Liu v Lam [2024] NSWSC 1306 at [59] to [60]:

“[59] The assessment of credibility of a witness may be based upon whether the accounts of a witness is inherently probable or given against interest. It does not follow that a witness who has been found not to be honest or unreliable about one matter should necessarily be disbelieved about everything else: Cubillo v Commonwealth (No 2) (2000) 103 FCR 1; [2000] FCA 1084 at [118] (O’Loughlin J). Nor does the disbelieving of a witness as to a particular proposition necessarily mean that the proposition has been proven: Steinberg v Commissioner of Taxation (Cth) (1975) 134 CLR 640; [1975] HCA 63 at 694.

[60] Further, as Basten JA observed in Sangha v Baxter [2009] NSWCA 78 (with whom Handley AJA agreed), considerable caution should be exercised in making global credibility findings. His Honour observed:

‘[155] There are risks in making global findings about credibility of any particular witness. Because a witness has not told the truth with respect to a particular matter does not mean that other parts of his or her evidence are untruthful. Where possible, an assessment should be made of the reasons for the untruthfulness in order to see if other aspects of the evidence are likely to be infected by the same concern. Further, evidence may be rejected because it is apparently unreliable, possibly mistaken or deliberately untruthful or capable of being categorised in a variety of ways which are unlikely to be capable of clear delineation in some cases.

[156] Further, findings of credibility are not usually findings with respect to factual issues in the case, but are rather subsidiary findings on the way to determination of issues. Like many aspects of the evidence in a trial, the evidence of a witness who is believed to have lied in a particular respect, will nevertheless be able to bear some weight and should be placed into a balance, with other material evidence, before a conclusion is reached in relation to a critical fact. The rejection of a witness in total, absent corroboration is likely to mean that, even where corroborated, little attention will be paid to the evidence of the witness and less to the possible consequences which might flow from the fact that particular evidence is shown to be truthful: see generally, King v Collins [2007] NSWCA 122 at [44].’”

47. I have also taken into account the observations of Kunc J in Pavlis v Pavlis [2021] NSWSC 1117 (“Pavlis”) at [158] to [167], with which I broadly agree.

48. However, the principles set out by Kunc J in Pavlis are, of course, not principles of law to be applied on every occasion. Rather, they are matters stated to be derived and applied from particular cases based on the facts of those cases. Ultimately, it is up to the Court to assess the whole of the evidence presented, including, in that respect, issues concerning credit, and make its own findings based on that evidence.

49. Based on my overall assessment of Mr Memik’s evidence, which derived, in part from my close observations of him as a witness, I have real doubts about Mr Memik’s credibility.

50. Mr Memik was often evasive and argumentative in his evidence and had difficulty accepting propositions which could not reasonably or sensibly be denied. In my view, Mr Memik was intent on advancing his own case rather than giving candid and frank evidence, or making concessions where properly required.

51. For example, when Mr Memik was questioned about the purchase price of the property and whether he and the defendant had a conversation about the proposed price, Mr Memik gave evidence that:

“No, well we never actually talked about the price. We just talked about the property and what she was going to do, and how she was going to cooperate after she sells the house.”

52. I do not accept that the parties never discussed the purchase price prior to their agreement to sell and purchase the property. That suggestion is fanciful, contrary to other evidence (including his own), and, in my view, demonstrates Mr Memik’s resolve to advance his own interests rather than give honest evidence.

53. Further, when Mr Memik was asked how the purchase price was fixed, he gave evidence that “It wasn’t fixed. I only offered her what I could afford. The price was not fixed”, before going onto say “Well, my borrowing capacity is pretty high, I’m not worried about that, but it’s just that, what I could afford”. Mr Memik’s evidence, in this respect, was unclear, inconsistent and disingenuous.

54. When giving evidence about his obligation to insure the property pursuant to the terms of his mortgage, Mr Memik gave the following evidence:

“Q. Can I just remind you that you were under an obligation to insure the property under the terms of your mortgage?

A. At the time, but that’s irrelevant now. Maybe I don’t have a mortgage. That’s irrelevant. I’m, I’m - I mean, what happens if I don’t have a mortgage now, just out of respect?

Q. That’s not a question I’m required to answer, Mr Memik. You are required by the terms of your mortgage to take out insurance?

A. Yes, I agree with that, but I’m just asking you, what would happen if I don’t have any mortgage?

Q. Is it your position that if Ms Taylor took out insurance, the condition in your mortgage would not apply and you wouldn’t have to take out insurance?

A. No, I don’t think - I’m just asking you, for argument’s sake, if I didn’t have any mortgage at the moment - at the time, yes, I did have a mortgage. But at this present time, if I don’t have a mortgage, do I still need to take out insurance?

Q. Are you suggesting that the title search is incorrect and the property’s no longer subject to a mortgage?

A. No, I’m not saying that. I’m just - no, I’m not saying that. But I’m just saying for argument’s sake, if I didn’t have a mortgage, who’s going to take out the insurance?”

55. In my view, this exchange demonstrates Mr Memik’s propensity to be argumentative in response to simple propositions, especially where the truth or reality of the circumstances may not assist his case.

56. Lastly, and most significantly, I also find that there were parts of Mr Memik’s evidence which were deliberately false. For example, Mr Memik’s affidavit stated that “[s]hortly after the purchase of the property I took photographs of the exterior of the house where the defendant was living and the surrounds of the property”. The photographs which were said to be taken by Mr Memik in January 2019 were contained at pages 69 to 73 of Exhibit 2 in these proceedings (being the Exhibit to Mr Memik’s affidavit dated 14 November 2024).

57. However, I accept, as was submitted by counsel for the defendant, that the photographs contained at pages 69 to 73 of Exhibit 2 were not taken by Mr Memik at all. As was ultimately accepted by Mr Memik in cross-examination, the images contained at pages 69 to 73 were downloaded from Google Maps. Further, the image contained at page 69 of Exhibit 2 was not taken in January 2019, but was date stamped 29 December 2021. This fact was also accepted by Mr Memik.

58. Hence, Mr Memik’s affidavit contained two lies:

59. That he personally took the photographs contained at pages 69 to 73 of Exhibit 2, when in fact, these were images downloaded from Google Maps.

60. That each photo was taken in January 2019, when in fact, the image contained at page 69 is from a date in December 2021.

61. I will discuss further inconsistencies with Mr Memik’s evidence in my consideration of the facts which are in dispute. However, given the issues of credit I have discussed and the further discussion of those inconsistencies below, I am not inclined to accept Mr Memik’s evidence unless it is independently corroborated, or, against his interests.

The consideration paid for the property

60. There was a dispute between the parties as to whether the purchase price for the property was $600,000 or $800,000. The plaintiffs claimed that the purchase price was $600,000, however, the defendant claimed that the agreement reached between the parties was $800,000.

61. The defendant claimed that Mr Memik wanted the additional $200,000 to be “dealt with privately and not on the books”. As evidence of her claim, the defendant tendered a photocopy of her notebook which contained a handwritten note, as follows:

“RICHARD

600 - FORMAL + 800 - AFTER = 800 TOTAL”

62. While I accept that this does represent some objective proof of the fact of the purchase price, this must be matched against the balance of the objective documentation in this matter.

63. There is nothing on the face of the defendant’s affidavit, when viewed in the light of Mr Memik’s evidence, which would warrant a conclusion that the evidence she gave in her affidavit was either dishonest or unreliable, and as such, I accept that there were likely conversations and negotiations between the parties whereby they discussed the purchase price and even an offer of $800,000. However, I also accept, that whatever those discussions were, they ultimately did not come to fruition.

64. In the face of objective documents, including the contract for sale and the Land Registry transfer (which both list the consideration as $600,000), I do not accept that the purchase price was $800,000. Rather, I accept that the purchase price (in monetary terms) was $600,000.

65. I note there was also a question as to whether the equitable interest in the life estate granted by the Deed formed part of that consideration. It was submitted by counsel for the defendant that having regard to the market value of the property at the time of settlement, the plaintiffs essentially got a bargain on the basis that they were agreeing to grant the defendant a life estate in the property.

66. I accept that the Deed, and in particular the equitable interest granted to the defendant pursuant to the Deed, did form part of the consideration for the transfer of the property to the plaintiffs.

67. I accept that this was the case, for the following reasons:

68. The defendant had received verbal quotes from local real estate agents during 2017, estimating the value of the property at around $850,000 and $900,000.

69. The grant of the life estate was a special condition in the contract for sale and was specifically designated as an “essential term” of the contract for sale.

70. Hence, I accept the submission made on behalf of the defendant, that the grant of the life estate was, on the balance of probabilities, part of the deal struck between the parties, and that the contract for sale (at a purchase price of $600,000) would not have proceeded without the grant of the life estate.

Condition and maintenance of the property

69. With the exception of the photos downloaded from Google Maps, there was no evidence before the Court to demonstrate what condition the property was in prior to settlement. During cross-examination, Mr Memik accepted that he did not document (in writing or in photographs) the condition of the property prior to settlement, despite accepting that this would have been “sensible”.

70. When asked about the condition of the property prior to settlement, Mr Memik responded that the condition was “good” and clarified that by “good” he meant that the property was “liveable”.

71. Mr Memik accepted that there were no other photos that show the condition of the property as at October or November 2018, and hence, it was up to the Court to simply accept his evidence that the condition was “good”.

72. In summary, Mr Memik gave the following oral evidence by reference to photographs he had taken of the property, in support of the claim that the property had not been adequately maintained by the defendant:

73. Mr Memik noted that his concern was “the overall situation of the house”, noting that before “[i]t was a nice, liveable situation”.

74. In respect of the shrubs at the front of the house, that it was a “jungle out the front now”, and that there was “overgrowth of the shrubs” and vegetation in other areas of the property.

75. That there were missing tiles on the garage roof.

76. That there was rubbish on the tennis court in the backyard.

77. That there was mould on the front of the house.

78. That there was vegetation growing from underneath the roof tiles on the garage, and along the exterior walls of the house.

79. That the front gate of the house was not connected to its hinge.

80. That the upstairs window at the front of the house was replaced with Perspex, was not professionally installed, and as a result is not watertight.

81. Rubbish at the front entrance of the house, and general rubbish around the property and on the veranda.

82. That there were cobwebs on a window on the western side of the house.

83. The “general care of the guttering” and that the gutters were “rusted away”.

84. That the windows on the right-hand side of the house have a 20-millimetre gap between the top of the window and the window frame.

85. That the brickwork was “dirty” and “cracking”.

Structural issues and water ingress

73. Mr Memik claimed that there were “probably” structural problems with the house, and that “the amount of water that’s going into my house at the moment is just unexplainable”. These claims were made by Mr Memik despite him also accepting that he had never inspected the interior of the house.

74. Mr Memik’s claim of water ingress was on the basis that the Perspex window replaced by the defendant was not watertight because it was not professionally fitted. The table set out the following contentions, in this respect:

75. Weather including wind and rain has entered the interior of the dwelling at each of the areas the window frames have rotted out where there is the placement of what appear to be ‘perspex sheets’ leaving gaps between the sheets and the frames.

76. The placement of ‘perspex sheets’ leaving gaps between the sheets and the window frames was not undertaking by a duly qualified tradesman and/or was not performed in a proper and workmanlike manner.

77. When Mr Memik was questioned as to whether he had any particular expertise or knowledge that would enable him to conclude that a perspex window was not watertight, Mr Memik responded that “[i]t’s just common sense”. Similarly, when questioned as to what led him to conclude that the window had not been professionally fitted, he responded “[b]ecause a professional won’t leave a job like that”. When it was suggested that Mr Memik was in no position to know whether there was water ingress, he again responded that “it’s just common sense”.

78. In my view, these claims by Mr Memik as to water ingress are, on the evidence, without foundation. However, it would appear that perspex was used to replace a broken window. It is quite improbable this was undertaken professionally or that the replacement maintained the property in the state it was in before settlement, which appears to have had a window where the perspex is now located. The affixing of a perspex barrier or window does not maintain the property to the standard it was at settlement or maintain a proper and effective means of enclosing the building.

79. I also do not accept that there are any structural defects with the house, or any defects with respect to the interior of the property. There is simply no evidence to support that contention.

80. Similarly, with respect to the plaintiffs’ contention that the “brickwork [was] cracked” (as set out in the table), in my view, there is an absence of evidence to support a finding, on the balance of probabilities, that the brickwork was in a different condition as at settlement. The photos said to support that conclusion are inconclusive.

Missing tiles on garage roof

79. There was extensive cross-examination in respect of the missing tiles on the garage roof, whereby Mr Memik was asked to mark on photographs where he said that the tiles were missing.

80. Having regard to this evidence, and my own observations of the photographs, I accept that the extent of the issue complained of by Mr Memik, is that there is one singular tile missing from the roof of the garage contrary to his evidence that there were missing “tiles”.

81. Further, I also note that there is no evidence to substantiate the plaintiffs’ contention (as set out in the table) that, “[t]iles missing from the roof permits the ingress of water into the roof cavity and interior envelope of the dwelling”.

82. The only evidence before the Court was as to a single missing tile on the garage roof. There is no evidence as to whether that had permitted any water ingress into the garage, or whether it had caused any water damage. There is no evidence of a missing tile in the roof of the building proper. Further, Mr Memik has never inspected the interior of the house, and there is otherwise no evidence to suggest water ingress in the roof cavity of the dwelling.

Mould on the front of the house

83. The plaintiffs complained that the front of the house had “mould on it” and that the exterior walls on the second storey were “mouldy” and “dirty”. This claim, as set out in the table, was that “[e]xterior fascia, bargeboards, soffits, eaves, exterior walls on second storey” were “mouldy and dirty” and “require cleaning and painting”. It was also contended that the exterior brickwork was “dirty and requires cleaning”.

84. The photographs provided in evidence did not concern or make clear each area of the dwelling referred to in the table. I further note that a distinction needs to be drawn between areas which were mouldy and dirty and those that were simply dirty.

85. However, during cross examination as to page 164 of the court book, Mr Memik accepted that this complaint was difficult to sustain by reference to the photographs of the house alone. He stated that:

“… the front of the house, its got mould on it. But you can’t really sight it with this photograph; I can’t, I can’t justify that.”

86. The photograph at page 164 depicts a distant view of exterior walls on the second storey, and a very unclear view of the face of the brick walls at the front of the house. I agree with Mr Memik, that the complaint that the front of the house has mould on it cannot be sustained on the basis of the photographs at page 164 of the court book.

87. Further, even if the photographs were sufficiently clear, I am in no position to conclude, on the evidence, as to whether something is mould, on the basis of photographs alone. Mr Memik is not qualified to make such an assessment and I, for the reasons earlier given, do not accept him as a credible witness. The Memiks bear the onus of establishing non-compliance of the clause 2.2(a) of the Deed, and their view on this issue amounts to no more than mere speculation. Hence, that part of the table dealing with exterior walls on the second storey as being mouldy cannot be sustained.

88. A different proposition arises as to whether the exterior walls on the second storey or the brick walls on the front of the house are dirty. There would appear to be a sufficient material in the photographs before the Court to allow such a conclusion when regard is also had, for example, to the photograph at page 192 of the court book of the exterior brick wall.

89. I find, therefore, that the complaint by the plaintiffs as to mould, both in the table and in the evidence is unsubstantiated on the evidence. There is evidence as to dirty exterior walls.

Vegetation growing underneath the roof tiles

90. In the table, the plaintiffs contended that there were “[s]hrubs growing between the roof tiles”. I accept that the aerial photos of the property taken in July 2024, do demonstrate that there is vegetation which appears to be growing from underneath the roof tiles on the garage, through the guttering and otherwise growing in an unkempt manner.

91. However, there was no evidence before the Court to demonstrate that such vegetation did not exist prior to settlement. In this regard, I note that the aerial picture provided (which was said to demonstrate the condition of the property in January 2019) was date stamped 29 December 2021, being a date almost 3 years after settlement.

92. As such, I do not accept that there is sufficient evidence to support this particular contention, namely, that the defendant had permitted the growth of vegetation after settlement which affected the integrity of the built structure or part of the built structure, namely, the garage.

Windows and window frames

93. The table set out a number of claims with respect to the windows and window frames, including:

94. That the window frames (in various locations) were “rotted out” and that “[w]eather including wind and rain would have entered the interior of the dwelling at each of the areas the window frames have decayed and/or deteriorated”.

95. That the window frames (in various locations) “require replacement or repair, and sealing and painting”, and are “dirty and mouldy”.

96. That the windows (in various locations) are “dirty and require cleaning”.

97. Other than the photographs provided by the plaintiffs, there was no further evidence adduced with respect to these claims. As such, on the basis of the evidence, I do not accept the plaintiffs’ contentions in this respect.

Gardens

95. With respect to the finding as to the overgrown gardens, there were a number of issues raised by the plaintiffs in this respect, including:

96. Shrubs overgrown.

97. Weeds growing on driveway.

98. Front hedge not pruned.

99. Grass, garden and shrubs in backyard and on ground storey side access overgrown and unkempt.

100. Weeds in backyard.

101. Whilst I will later find that gardening falls within the requirements of cl 2.2(b) of the Deed, there are many elements of the complaints in the table (as set out immediately above) that are rather trivial in nature. Some are more substantial in nature. In either case, in my view, the non-performance by the defendant with respect to gardens could not possibly establish a basis for a breach, let alone a breach constituting a basis for termination.

Conclusion on disputed facts

97. In my view, by reference to the only objective evidence before the Court as to the pre-settlement condition of the property (being images downloaded from Google Maps), the only complaints that can be sustained by the plaintiffs are as follows:

98. A singular missing roof tile.

99. Overgrown gardens (including shrubs), although, I do accept that the defendant has regularly retained a lawn mowing service since October 2021.

100. Front gate not connected to its hinge.

101. Excessive general rubbish and debris around the house, except for the rubbish on the tennis court, which I accept (as was conceded by Mr Memik) was not removed by Mr Memik following the removal of a structure from the tennis court.

102. The replacement of a perspex rather than glass window at the front of the house following heavy storms.

103. Dirty exterior walls.

104. While the evidence does establish that there is excessive waste and garbage around the property, I do not intend to deal with the particulars in the plaintiffs’ table because I will later find that the existence of such waste or rubbish, does not fall within the obligations reposing in the defendant under cl 2.2(a) of the Deed.

Insurance of the property

99. In his affidavit, Mr Memik gave evidence that “[i]n order to protect the property because the defendant refused to insure it as she had agreed… I took out an insurance property for [the property].” He also gave oral evidence, as follows:

“Q. Had you arranged insurance for the property before you signed that contract?

A. No, after.”

100. However, when questioned on this aspect of his evidence, Mr Memik conceded that the policy of insurance he took out for the property ran from a time before the plaintiffs had entered into the contract for sale, and that the property had been separately insured by him from 20 September 2018 (being a date before the parties had entered into the contract for sale and the Deed) to date.

101. When further questioned about whether the defendant’s failure to take out insurance was really the motivating factor in Mr Memik taking out an insurance policy, he gave the following evidence:

“Q. Ms Taylor’s failure to take out insurance was not the activating factor for you to take out insurance yourself on the property?

A. No, that wasn’t the activating - no, absolutely not. But she was obliged to take out insurance.

Q. You’ve had a policy of insurance in place, have you not, continuously from 20 September 2018?

A. Yes, I did, and it’s still current.

Q. What I’m going to suggest to you is that you took out insurance because you were required to do so under the terms of your mortgage?

A. That’s correct.

…

Q. So you were obliged, weren’t you, to keep the land insured and also maintain public liability insurance. That’s correct, isn’t it?

A. That’s correct.

Q. And that’s what you’ve done?

A. That’s what I’ve done.

Q. And so the terms of that public liability insurance, it’s covering $20 million in public liability?

A. That’s correct.

Q. And that it’s a policy that covers damage to the buildings?

A. That’s correct.

Q. And the value of the buildings, how is the value of the buildings for insurance purposes calculated, do you know?

A. I have no idea.

Q. But you do accept that the insurance policies contain an amount insured in respect of the building?

A. Yes, I do.”

102. In my view, it was both misleading and dishonest for Mr Memik to suggest that the only reason he insured the property was because of the defendant’s failure to do so. The plaintiffs clearly had an obligation to insure the property (with an approved insurer) pursuant to the terms of their mortgage, and in my view, did take out and maintain an insurance policy for the property regardless of the defendant’s actions.

103. Further, Mr Memik gave evidence that he had never told the defendant about the terms of that mortgage or gave her information about who an “approved insurer” was for that purpose. Ultimately, Mr Memik conceded that he never provided the defendant with the information that was necessary for her to insure the property in a way that would comply with the mortgage:

“Q. What I am putting to you is that it was just you never provided Ms Taylor with the information that was necessary for her to insure in a way that would comply with your mortgage, did you?

A. Yeah, well, I’m - no, I didn’t, no.”

104. I accept that the defendant did seek to obtain insurance for the property, including by contacting a number of different insurance companies for quotes. I also accept the defendant’s evidence, that each insurance company refused to provide the defendant with insurance on the basis that she was not the registered proprietor of the property.

105. Mr Memik conceded that, despite the defendant’s requests, he did not provide her with the documents she requested to allow her to comply with her obligations under the Deed. In my view, Mr Memik did not properly or adequately cooperate with the defendant in respect of her obligations under the Deed.

106. I accept that on 7 December 2023 the defendant even suggested to the plaintiffs, that they take out an insurance policy and invoice the defendant on a monthly basis, in order to facilitate her compliance with the terms of the Deed, as she did not otherwise have an “insurable interest” in the property that would allow her to comply with cl 2.2(b) of the Deed. In cross-examination, Mr Memik stated that he would have been content with that course.

107. I also note that Mr Memik had already asked the defendant to reimburse him for council and water rates, so the concept was not foreign.

108. However, the plaintiffs did not take up the defendant’s suggestion, and on 24 January 2024 again notified the defendant that she was required to vacate the premises on the basis, inter alia, she had not taken out the requested insurance. Mr Memik accepted that he had no reason to doubt the truth of what the defendant conveyed to the plaintiffs with respect to her inability to obtain insurance. However, regardless of that, the plaintiffs continued to ask the defendant to take out an insurance policy in strict accordance with cl 2.2(b) of the Deed.

109. I accept, as was suggested by the defendant, that the plaintiffs did not cooperate with the defendant to facilitate her compliance with the terms of the Deed. The plaintiffs effectively precluded the defendant from complying with her obligation to take out insurance contrary to her desire to so comply. As I will discuss below, this circumstance arose in breach of the plaintiffs’ obligation to cooperate and made the performance of the Deed effectively impossible.

110. There is some force to the suggestion by the defendant that these circumstances illustrate that the plaintiffs’ true intention was to gain possession of the property by manufacturing a basis to terminate the Deed. The plaintiffs’ solicitors’ letters also resonate with this proposition. However, it is unnecessary to decide this point to resolve the issues in this manner.

111. In summary, I find that:

112. The defendant endeavoured to take out insurance but was unable to do so because she did not have an insurable interest.

113. The defendant approached the plaintiffs with the express intention of curing that impasse by having the plaintiffs take out the requisite insurance and making payment to the plaintiffs for the cost of that insurance.

The plaintiffs’ plans to develop the property

112. Given the Deed contained a clause with respect to the development of the property by the plaintiffs, I accept that at the time of purchasing the property, the plaintiffs had plans to develop the property.

113. Following settlement, Mr Memik visited the property fortnightly, as he “was wanting to develop the back of the block”. However, Mr Memik deposed that:

“My plans for developing the back for the block did not eventuate as after obtaining quotes from developers, I realised that developing the block would be outside my budget.”

114. In a letter to the defendant dated 24 April 2023, Mr Memik stated that cl 2.3 of the Deed provided for right of unfettered access to the rear of the property, and that he “would like 24/7 access as I will commence building at the rear very soon”.

115. As such, it is unclear exactly when the plaintiffs abandoned their plans to develop the property. While Mr Memik claimed during cross-examination that this was in late 2019, that is difficult to believe given the letter dated 24 April 2023.

116. Given the credit findings I have made with respect to Mr Memik, I have difficulty accepting that the plaintiffs have no plans whatsoever to develop the property, whether now or in the future.

CONSIDERATION

117. My consideration proceeds on the basis of the aforementioned factual findings with respect to the issues stated in the ASOI. However, I shall compress the discussion of the issues under a number of overarching headings, which appear below. I have adopted this approach as there was significant overlap in the submissions received under various headings which the parties adopted in the ASOI, which did not correspond to the issues or order of the issues in the ASOI.

118. I shall commence the discussion of eachbundle of issues by setting out the position of the parties as recorded in the ASOI. I will commence by a consideration of the construction of the Deed and the nature of the defendant’s interest (on a proper construction of the Deed).

The nature defendant’s interest under the Deed

119. Plainly the delineation of the defendant’s interest (and the resolution of other issues raised by the parties) will require a construction of the Deed, and in that respect, I accept, the submission of counsel for the defendant, that the Deed is to be interpreted in accordance with the principles of interpretation articulated in Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd (2015) 256 CLR 104; [2015] HCA 37, that is, objectively by reference to its text, context and purpose.

120. In Tin-Tagel Majikk Pty Limited v Hockey [2025] NSWSC 578, the following further observations were made about the construction of a contract (at [147] – [150] per Walton J):

“General principles of construction of contracts

[147] The discussion of claims 1 to 4 below, and corresponding issues 1 to 16, variously involve the construction of the Agreement and other instruments, such as the Charge. It is appropriate, therefore, before coming to those topics, to deal, albeit at a level of generality, with the applicable principles of construction, in that respect.

[148] The plaintiff placed reliance upon the judgment of Richmond J in Western Sydney Wanderers FC Pty Ltd v Football Australia Limited [2024] NSWSC 426 (“Western Sydney Wanderers”) which appears to succinctly state some of the relevant principles. However, given the way the plaintiff approached those principles, in the context of some of the issues arising in this matter, I propose to briefly revisit, at a broad level, the relevant principles.

[149] An authoritative statement of the principles for the construction of a commercial contract were provided by the High Court in Electricity Generation Corporation (t/as Verve Energy) v Woodside Energy Ltd (2014) 251 CLR 640; [2014] HCA 7 (“Electricity Generation”) at [35] (per French CJ, Hayne, Crennan and Kiefel JJ) as follows:

“[35] Both Verve and the Sellers recognised that this Court has reaffirmed the objective approach to be adopted in determining the rights and liabilities of parties to a contract. The meaning of the terms of a commercial contract is to be determined by what a reasonable businessperson would have understood those terms to mean. That approach is not unfamiliar. As reaffirmed, it will require consideration of the language used by the parties, the surrounding circumstances known to them and the commercial purpose or objects to be secured by the contract. Appreciation of the commercial purpose or objects is facilitated by an understanding "of the genesis of the transaction, the background, the context [and] the market in which the parties are operating". As Arden LJ observed in Re Golden Key Ltd, unless a contrary intention is indicated, a court is entitled to approach the task of giving a commercial contract a businesslike interpretation on the assumption "that the parties … intended to produce a commercial result". A commercial contract is to be construed so as to avoid it "making commercial nonsense or working commercial inconvenience".” (footnotes omitted)

[150] The judgment in Electricity Generation has been more recently been applied, albeit in a variety of contexts involving the construction of a contract or an instrument, in Young v Chief Executive Officer (Housing) (2023) 278 CLR 208; [2023] HCA 31 (“Young”) at [27] (per Kiefel CJ, Gageler and Gleeson JJ); Construction, Forestry, Maritime, Mining and Energy Union v Personnel Contracting Pty Ltd (2022) 275 CLR 165; [2022] HCA 1 (“CFMEU”) at [173] (per Gordon J); Price v Spoor (2021) 270 CLR 450; [2020] HCA 20 (“Price”) at [60] (per Steward J); Rinehart v Hancock Prospecting Pty Ltd (2019) 267 CLR 514; [2019] HCA 13 at [44] (per Kiefel CJ, Gageler, Nettle and Gordon JJ); Ecosse Property Holdings Pty Ltd v Gee Dee Nominees Pty Ltd (2017) 261 CLR 544; [2017] HCA 12 (“Ecosse Property Holdings”) at [16]-[17] (per Kiefel, Bell and Gordon JJ), [73] (per Nettle J); Simic v NSW Land and Housing Corporation (2016) 260 CLR 85; [2016] HCA 47 at [78] (per Gageler, Nettle and Gordon JJ); Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd (2015) 256 CLR 104; [2015] HCA 37 at [46]–[52] (per French CJ, Nettle And Gordon JJ).

[151] From those authorities, the following statements of principle may be derived:

(1) The meaning of the term of a commercial contract is to be determined objectively by what a reasonable businessperson would have understood those terms to mean: Electricity Generation at [35]; Price at [60].

(2) That analysis is not to be undertaken by reference to the subjectively stated intentions of the parties to the contract: Ecosse Property Holdings at [16], citing Electricity Generation at [35].

(3) An objective factor will require consideration of at least three factors which are discussed below.

(4) One such assessment is that there must be a consideration of the language used by the parties in the contract. What is required, in that respect, is a consideration of the totality of the legal requirements and obligations provided for in the contract: CFMEU at [173]. The court must strive to give meaning and effect to the contract by consideration of the whole of the instrument: Australian Broadcasting Commission v Australasian Performing Rights Association Ltd (1973) 129 CLR 99; [1973] HCA 36 (“ABC”) at 109 (per Gibbs J), and thereby giving effect to all of the clauses of the contract such that the words of every clause must, “if possible be construed so as to render them all harmonious one with another”: ABC at 109.

(5) Such an assessment necessarily involves a consideration of context which may involve consideration of the second factor discussed below but must necessarily involve a consideration of the surrounding words of the provisions of the instrument or contract being construed: ABC at 109 or relevant statutory provisions: Young at [27].

(6) The plaintiffs placed considerable reliance upon one aspect of the principles stated in Western Sydney Wanderers which was a derivative of statements of principle by Gibbs J in ABC at 109. In particular, the plaintiffs emphasised that “if the language of the contract is open to two constructions, preference will be given to the construction which avoids consequences which appear to be capricious, unreasonable, inconvenient or unjust.” That principle does derive from the judgment in ABC but it is not a full statement of the principle enunciated by Gibbs J (albeit in dissent) which has been applied in many judgments since. The full statement was as follows: [6]

“If the words used are unambiguous the court must give effect to them, notwithstanding that the result may appear capricious or unreasonable, and notwithstanding that it may be guessed or suspected that the parties intended something different. The court has no power to remake or amend a contract for the purpose of avoiding a result which is considered to be inconvenient or unjust. On the other hand, if the language is open to two constructions, that will be preferred which will avoid consequences which appear to be capricious, unreasonable, inconvenient or unjust, "even though the construction adopted is not the most obvious, or the most grammatically accurate", to use the words from earlier authority cited in Locke v. Dunlop, which, although spoken in relation to a will, are applicable to the construction of written instruments generally; see also Bottomley's Case” (emphasis added)

(7) Secondly, it is necessary to consider the surrounding circumstances known to the parties: Electricity Generation at [35].

(8) Thirdly, consideration should be given to the commercial purpose or objects to be secured by the contract: Electricity Generation at [35].”

121. In this respect, the defendant correctly submitted that the Deed must be interpreted in the context that the defendant was giving up her right of proprietorship of the property in favour of the plaintiffs, and that the plaintiffs promised the defendant that she could live in part of the property for an extended and indefinite period of time.

122. The plaintiffs submitted that:

123. The metes and bounds of the grant of a life estate to the defendant are recorded entirely in the contract for sale (per clause 43) and the Deed. Both the contract for sale and the Deed have an entire agreement clause and were prepared by the solicitor for the defendant. There was valuable consideration for both and reflected the objective intention of the parties of entering into each instrument.

124. The defendant has not identified or asserted any additional term(s), or the source of any such additional term(s), other than those expressed in the contract for sale and the Deed, save for an implied term requiring cooperation between the parties.

125. The metes and bounds of the grant of a life estate to the defendant was a personal right of residence to the dwelling and curtilages for as long as she is alive which may be used by the defendant in her absolute discretion, subject to the defendant’s compliance with cl 2.2 of the Deed. The dwelling and curtilages included the interior of the dwelling and the garage.

126. The defendant has not identified any specific rights, duties or obligations on the parties beyond referring to the interest “carrying such rights as attached to a life tenant of land in equity comparable to the rights of a beneficiary under a will”. The defendant has not identified the rights that are said to attach to a life tenant of land in equity comparable to the rights of a beneficiary under a will and/or how her interest is a life estate in equity rather than a set of rights and obligations pursuant to the contract between the parties (as expressed in the contract for sale and the Deed).

127. The plaintiffs submitted that the grant of the life estate was only a personal right of residence to the defendant. There is no life estate recorded on the title to the property, and there was no term of the contract between the parties that the defendant was to retain any legal or equitable interest in the property. Further, the defendant is not able to transfer to anyone else her interest in the property. By the operation of ss 41 to 43 of the Real Property Act, the plaintiffs have indefeasibility of title in the property.

128. Clause 3 of the Deed did not give the defendant a legal or equitable interest (i.e. a proprietary interest in the property). The clause provides no more than a right in personam to the defendant to lodge a caveat on the property, in limited circumstances. In any event, no caveat has ever been lodged by the defendant against the property.

“Mr. Loxton argued very strenuously that sec. 41 of the Real Property Act was decisive in his favour. It says "No instrument, until registered in manner hereinbefore prescribed, shall be effectual to pass any estate or interest in any land under the provisions of this Act, or to render such land liable as security for the payment of money." His point was that that provision applied to both legal and equitable estates, interests, and liability.

I agree with him SO far as to the meaning of that provision. "Estate" and "interest," as used in the Act, include both legal and equitable estates and interests. The interpretation section, sec. 3, defines Proprietor" as "any person seised or possessed of any freehold or other estate or interest in land at law or in equity in possession in futurity or expectancy," and "Transfer" as "the passing of any estate or interest in land under this Act whether for valuable consideration or otherwise." But what follows Mr. Loxton contended that the consequence was that until registration no person can acquire any interest in land legal or equitable. He said that whatever personal liability existed might be enforced as "a chose in action" against the person liable, but not against the land, for the Act recognizes no interests legal or equitable except in the registered proprietor.

Such a contention is absolutely opposed to all hitherto accepted notions in Australia with regard to the Land Transfer Acts. They have long, and in every State, been regarded as in the main conveyancing enactments, and as giving greater certainty to titles of registered proprietors, but not in any way destroying the fundamental doctrines by which Courts of Equity have enforced, as against registered proprietors, conscientious obligations entered into by them. The notion that an equitable right is a mere chose in action, once accepted by the Court (Finch's Case (1590) (2)) but definitely and finally parted from by Lord Hanlwicke in Hopkins v. Hopkins (1) and Lord St. Leonards in Stump v. Gaby (2), has not, so far as I know, except in one notable instance been considered by Australasian Courts as applicable to the Land Transfer Acts.” (footnotes omitted)

124. The Deed defines “Property” in a way which confines the defendant’s interest to a particular portion of the property. The definition confines the area the defendant is permitted to occupy to the dwelling and curtilage on the property, within the defined area to which the defendant’s interest under the Deed was restricted. The defendant was not entitled to occupy the area of the tennis court at the rear of the land, and cl 2.3 of the Deed permitted the plaintiffs to enter and undertake development.

125. The defendant’s interest in that portion of the property is described in the Deed as “an equitable life interest” (in the definition of a “Life Estate” in cl 1.1 of the Deed), which includes, I would accept on the submissions of the parties, the dwelling and curtilage on the land.

126. The question which arises in this context then, is, what is the nature of the defendant’s equitable life interest?

127. In my view, the proper construction of the Deed must result in the conclusion that the parties intended in something more than a mere right of residence.

128. A right of residence is properly characterised as a licence to occupy the dwelling and curtilage in the defined area, but the Deed also gives the defendant the right to lodge a caveat over the whole property, which suggests that the parties objectively intended to grant a proprietary interest.

129. Clause 3 of the Deed not only grants the defendant a capacity to register a caveat on “title” of the property (see cl 3.1 of the Deed). Clause 3.2 also stated that the plaintiffs warranted that cl 3.1 granted the defendant a “valid caveatable interest in the Property” and, furthermore, indemnified the defendant against any loss or damage sustained by her, including legal costs on a full indemnity basis, as a result of the plaintiffs breaching the warranty or the defendant having to set aside a lapsing notice issued by the plaintiffs.

130. I do not consider that the title to cl 3 of the Deed, namely, “charging provision” adequately describes the nature of the interest conferred by that clause as the interest described therein is not confined to a “charge”. Furthermore, for the purposes of construing the Deed, it matters little that the defendant did not take out a caveat, because it was the nature of the right conferred by cl 3 of the Deed itself, which specifies the nature of the interest conferred by the clause and sets out the intention of the parties in that respect.

131. The same conclusion follows from an examination of the contract for sale. Notwithstanding that the parties concur that the relevant Deed for the purposes for these proceedings is the Deed executed by the parties as opposed to the deed attached to the contract for sale, the deed annexed to the contract for sale contains a counterpart provision to cl 3 of the Deed, such that, there was established by that deed a caveatable right in the defendant. The fact that the Deed attached to the contract was not ultimately signed by the parties does not diminish the significance of this consideration as it formed part of the contract for sale. Nor is the defendant’s interest diminished by the defendant not having registered the interest in the title, because cl 3.1 provides a capacity in the defendant to register the caveat on title.

The meaning of the words “subject to” in cl 2.2 of the Deed and the nature of the obligations under cl 2.2 of the Deed

135. The plaintiffs submitted that the maintenance condition was an essential term where the defendant was to live in a property that was owned by the plaintiffs. The vendors had been paid $600,000 for the property, and the defendant was permitted to use it in her absolute discretion, provided she regularly maintained the dwelling and curtilages to the standard that existed at the time of settlement. This was an essential term that protected the owners of the property from waste and damage to their valuable asset by the defendant.

136. The parties’ attention with respect to the preamble to cl 2.2 of the Deed were fixed upon the words “subject to” and generally omitted consideration of the words “and conditional upon”. The expression which is used in the chapeau to cl 2.2 is “subject to and conditional upon”.

137. The first observation that may be made in that respect is that, that expression is not intended to communicate an intention that the entry into the contract for sale or the grant of a life estate in the property was conditional upon the satisfaction of the obligations of under cl 2.2(a) and (b) of the Deed.

138. The Deed arises from the terms of cl 43 of the contract for sale. Whilst cl 43 of the contract for sale is said to be an essential term (see cl 43.3) and the obligations of cl 43 do not merge on completion (see cl 43.4), the limit of the obligation under the contract for sale is that the parties will enter the deed of life estate attached to the contract on or before the completion date. Clause 43.2 of the contract for sale provides that the Deed will become binding upon its execution. There is no other requirement attaching to the Deed or appearing in cl 43 which makes any aspect of the Deed conditional for the purposes of the contract for sale.

139. Nonetheless, the expression used in the preamble to cl 2.2 of the Deed could be suggestive that, when read literally and in isolation from a consideration of the whole of the Deed, the life estate was conditional upon the fulfilment of the provisions of cl 2.2(a) and (b), such that the failure to satisfy those conditions might, as the plaintiff contends, result in a forfeiture of the life estate.

140. However, and consistently with the proper interpretation of contracts, the expression in the preamble cannot be interpreted in isolation from the context in which those words appear in the Deed or the purpose of the Deed.

141. Ms P Lane of Counsel for the defendant was correct, in my view, to place reliance, in this respect, on the judgment of the High Court in Koompahtoo Local Aboriginal Land Council v Sanpine Pty Ltd (2007) 241 ALR 88; [2007] HCA 61 (“Koompahtoo”).

142. In the judgment of the majority (Gleeson CJ, Gummow, Haydon and Crennan JJ), there was a relevant discussion, for present purposes, as to the legal principles as to termination for breach. At [47]-[56], the majority opined:

“[47] For present purposes, there are two relevant circumstances in which a breach of contract by one party may entitle the other to terminate. The first is where the obligation with which there has been failure to comply has been agreed by the contracting parties to be essential. Such an obligation is sometimes described as a condition. In Australian law, a well-known exposition was that of Jordan CJ in Tramways Advertising Pty Ltd v Luna Park (NSW) Ltd who, in comparing conditions and warranties, employed language reflected in many statutory provisions. The widespread statutory adoption of the distinction between conditions and warranties, or essential and inessential terms, is an established part of the background against which the common law has developed. The Chief Justice of New South Wales said (references omitted):

"In considering the legal consequences flowing from a breach of contract, it is necessary to remember that (i) the breach may extend to all or to some only of the promises of the defaulting party, (ii) the promises broken may be important or unimportant, (iii) the breach of any particular promise may be substantial or trivial, (iv) the breach may occur or be discovered (a) when the innocent party has not yet performed any or some of the promises on his part, or after he has performed them all, and (b) when the innocent party has received no performance from the defaulting party, or has received performance in whole or in part; and to remember also that the resultant rights of the innocent party and the nature of the remedies available to him may depend upon some or all of these matters.

The nature of the promise broken is one of the most important of the matters. If it is a condition that is broken, ie, an essential promise, the innocent party, when he becomes aware of the breach, has ordinarily the right at his option either to treat himself as discharged from the contract and to recover damages for loss of the contract, or else to keep the contract on foot and recover damages for the particular breach. If it is a warranty that is broken, ie, a non-essential promise, only the latter alternative is available to the innocent party: in that case he cannot of course obtain damages for loss of the contract.

The question whether a term in a contract is a condition or a warranty, ie, an essential or a non-essential promise, depends upon the intention of the parties as appearing in or from the contract. The test of essentiality is whether it appears from the general nature of the contract considered as a whole, or from some particular term or terms, that the promise is of such importance to the promisee that he would not have entered into the contract unless he had been assured of a strict or a substantial performance of the promise, as the case may be, and that this ought to have been apparent to the promisor. If the innocent party would not have entered into the contract unless assured of a strict and literal performance of the promise, he may in general treat himself as discharged upon any breach of the promise, however slight. If he contracted in reliance upon a substantial performance of the promise, any substantial breach will ordinarily justify a discharge. In some cases it is expressly provided that a particular promise is essential to the contract, eg, by a stipulation that it is the basis or of the essence of the contract; but in the absence of express provision the question is one of construction for the Court, when once the terms of contract have been ascertained. In general, Courts of common law have been more ready than Courts of Equity to regard promises as essential. This is in part due to the fact that Courts of common law are in the main concerned with ordinary commercial contracts in which it is common to find provisions which are intended to be strictly and literally performed. It is now provided by s 13 of the Conveyancing Act, 1919 (taken from the Judicature Act, 1873, 36 and 37 Victoria, Chap 66, s 25(7)) that stipulations in contracts, as to time or otherwise, which would not before the commencement of the Act have been deemed to be or to have become of the essence of such contracts in a Court of Equity shall receive in all Courts the same construction and effect as they would have heretofore received in such Court. This serves to make equitable liberality of construction supersede common law strictness, so far as is consistent with apparent intention, in fields where equity and common law overlap; but it does not affect the principle that effect must be given to the apparent intention of the parties as disclosed in the contract."

[48] What Jordan CJ said as to substantial performance, and substantial breach, is now to be read in the light of later developments in the law. What is of immediate significance is his reference to the question he was addressing as one of construction of the contract. It is the common intention of the parties, expressed in the language of their contract, understood in the context of the relationship established by that contract and (in a case such as the present) the commercial purpose it served, that determines whether a term is "essential", so that any breach will justify termination.

[49] The second relevant circumstance is where there has been a sufficiently serious breach of a non-essential term. In Hongkong Fir Shipping Co Ltd v Kawasaki Kisen Kaisha Ltd, the English Court of Appeal was concerned with a stipulation as to seaworthiness in a charterparty. Breaches of such a stipulation could vary widely in importance. They could be trivial or serious. The Court of Appeal held that to the accepted distinction between "conditions" and "warranties", that is, between stipulations that were in their nature essential and others, there must be added a distinction, operative within the class of non-essential obligations, between breaches that are significantly serious to justify termination and other breaches. This was a recognition that, although as a matter of construction of a contract it may not be the case that any breach of a given term will entitle the other party to terminate, some breaches of such a term may do so. Diplock LJ said that the question whether a breach by one party relieves the other of further performance of his obligations cannot always be answered by treating a contractual undertaking as either a "condition" or a "warranty". Of some stipulations "all that can be predicated is that some breaches will and others will not give rise to an event which will deprive the party not in default of substantially the whole benefit which it was intended that he should obtain from the contract; and the legal consequences of a breach of such an undertaking, unless provided for expressly in the contract, depend upon the nature of the event to which the breach gives rise".

[50] In this way Diplock LJ set the policy of the law favouring certainty of outcome through the classification of terms as conditions against that which encourages contractual performance and favours restriction of the right to terminate to cases where breach occasions serious prejudice. As it is put in the eleventh edition of Treitel:

"[T]he policy of leaning in favour of classifying stipulations as intermediate terms can be said to promote the interests of justice by preventing the injured party from rescinding on grounds that are technical or unmeritorious."

Perhaps the adoption of other taxonomies for contractual stipulations might achieve similar outcomes. However, Hongkong Fir was decided in 1961 and has long since passed into the mainstream law of contract as understood and practised in Australia.

[51] It may be true that this Court has yet to accept Hongkong Fir as an essential element in the grounds for decision in any particular case. However, in Ankar Pty Ltd v National Westminster Finance (Australia) Ltd, Mason ACJ, Wilson, Brennan and Dawson JJ referred to Hongkong Fir with evident approval and said that the concept of the intermediate and innominate term brings a greater flexibility to the law of contract. With that in mind, it was entirely appropriate for Campbell J to proceed with an analysis of the facts in which Hongkong Fir was applied.

[52] The practical utility of a classification which includes intermediate terms, and the consequent greater flexibility of which the Court spoke in Ankar, appears from several consequences. First, the interests of justice are promoted by limiting rights to rescind to instances of serious and substantial breaches of contract. Secondly, a just outcome is facilitated in cases where the breach is of a term which is inessential.

[53] As will appear later in these reasons, we rest our decision in the appeal not upon the ground of breach of an essential obligation, but upon application of the doctrine respecting intermediate terms.

[54] We add that recognition that, at the time a contract is entered into, it may not be possible to say that any breach of a particular term will entitle the other party to terminate, but that some breaches of the term may be serious enough to have that consequence, was taken up in Ankar. Breaches of this kind are sometimes described as "going to the root of the contract", a conclusory description that takes account of the nature of the contract and the relationship it creates, the nature of the term, the kind and degree of the breach, and the consequences of the breach for the other party. Since the corollary of a conclusion that there is no right of termination is likely to be that the party not in default is left to rely upon a right to damages, the adequacy of damages as a remedy may be a material factor in deciding whether the breach goes to the root of the contract.

[55] A judgment that a breach of a term goes to the root of a contract, being, to use the language of Buckley LJ in Decro-Wall International SA v Practitioners in Marketing Ltd, "such as to deprive the injured party of a substantial part of the benefit to which he is entitled under the contract", rests primarily upon a construction of the contract. Buckley LJ attached importance to the consequences of the breach and the fairness of holding an injured party to the contract and leaving him to his remedy in damages. These, however, are matters to be considered after construing the agreement the parties have made. A judgment as to the seriousness of the breach, and the adequacy of damages as a remedy, is made after considering the benefit to which the injured party is entitled under the contract.

[56] A question as to contractual intention, considered in the light of the language of the contract, the circumstances in which the parties have contracted and their common contemplation as to future performance, is different from a question as to the intention evinced by one of the parties at the time of breach, such as arises in cases of alleged renunciation. That difference is exemplified by the way in which the majority in the Court of Appeal dealt with the decision of the primary judge in this case.” (footnotes omitted)

143. Reference should also be made to the majority’s discussion of the justification for termination in the following passages (at [68]):

“[68] The approach of Campbell J was correct. The focus of attention should be the contract, and the nature and seriousness of the breaches. There being, at this stage, no concern with waiver, estoppel, variation or forbearance, the intention that is relevant is the common intention of the parties, at the time of the contract, as to the importance of the relevant terms and as to the consequences of failure to comply with those terms. This is a question of construction of the contract to be decided in the light of its commercial purpose and the business relationship it established. The contract established a joint venture for a land development project of considerable size and complexity, to be carried out over a number of years. Koompahtoo brought to the joint venture its land. Sanpine brought its management and financial expertise. Sanpine's obligations as to dealing with joint venture funds (which were borrowed on the security of Koompahtoo's land) and maintaining proper books and accounts were of importance, not only to working out the ultimate result of the joint venture when the land had been developed and sold, but also to enabling the parties (and a person such as the administrator) to know material facts, and to make decisions and judgments informed by that knowledge. The inability of Sanpine to inform the administrator, or even the trial judge, of the true financial position of the joint venture, and to produce informative joint venture accounts, exemplifies the point. It was not within the contemplation of the contract that it should have been necessary for Koompahtoo, at any time, to have engaged in extensive legal process in order to find out what had become of the money borrowed on the security of its land, or to assess the financial state of the joint venture.”

144. Compliance with that orthodoxy must result in a rejection of the plaintiffs’ contentions, in this respect, for the following reasons:

145. The immediate context is to be found in the requirements of subs (a) and (b) of cl 2.2 of the Deed. The words “regularly maintaining the Property and Improvements” in cl 2.2(a) of the Deed are strongly suggestive that the requirements of cl 2.2(a) are not to be construed as creating a condition precedent or an essential term constituting a basis for termination.

146. As is evident from the expression “regularly maintaining the Property and Improvements”, the provision makes no distinction in its terms between substantial and insubstantial or trivial occurrences of non-performance. It is inconceivable that the clause may strictly operate so as to effect a basis for termination upon mere trivial non-performance.

147. The many and varied ways in which a breach may occur pursuant to cl 2.2(a) tells against the terms imposing conditions under which immediate termination is the appropriate outcome.

148. By its very nature, the notion of “regularly maintaining” cannot constitute a contingency, because the provision does not operate with respect to a specified event, but an ongoing obligation on the part of the defendant. The obligations in the Deed, including the grant of the life estate, are unlikely to be contingent on the occurrence of cl 2.2(a) because of the indeterminate nature of that obligation.

149. There is no provision for termination for breach in the Deed. In my view, this reflects the purpose of the Deed, as earlier mentioned, to provide for long term occupancy for the defendant

150. These same factors point to cl 2.2 of the Deed constituting an intermediate term. It is not possible to delineate whether any particular breach of the term would entitle a party to the Deed to terminate, but it is conceivable that some breaches may be serious enough to have that consequence in so far as they go to the “root of the contract”. The focus of attention should be the contract and the nature and seriousness of any breach or breaches.

151. In my view, there is no reason on the construction of the Deed to treat the provisions of cl 2.2(b) of the Deed any differently. The nature and seriousness of any breach will govern whether the breach warrants termination.

152. Returning then to the questions posed in the ASOI, the answer to the question 7 should be, respectively, as follows:

153. No.

154. Yes.

155. An intermediate term.

The meaning of the words “regularly maintaining the Property and Improvements taking into account their condition as at Completion”

148. The plaintiffs submitted that the term “regularly maintaining” is to be given its natural and ordinary meaning in the objective circumstances in which these parties contracted, that is to say the defendant was legally obliged to maintain (i.e. keep, upkeep, manage, preserve, conserve, care for, protect, retain, sustain, uphold) the dwelling and curtilages taking into account (i.e. meaning up to the standard of) their condition as at settlement.

149. The plaintiffs further submitted that the requirement that this was done regularly was not a prescriptive requirement as to time or frequency but rather was the requirement that it occur routinely, so the dwelling and curtilages were kept up to the standard that existed at the time of settlement.

150. There would not seem to have been a dispute about the plaintiffs’ construction of cl 2.2(a) of the Deed in that respect. Certainly, there was common ground that the words “taking into account there conditions as at Completion” meant that the requirement reposing in the defendant by the clause was to maintain the condition of the dwelling and curtilage at the date of settlement and that the obligation did not extend to putting into repair, items that were out of repair as at that date.

151. Whilst not explicit in the plaintiffs’ submissions, there would nonetheless seem to be common ground that the obligation to maintain can only logically extend to the area the defendant was entitled to occupy under the Deed.

152. In my view, the plaintiffs’ attribution of meaning “regularly maintaining” in cl 2.2(a) of the Deed, when understood in the light of the restrictions to the scope of the meaning of the expression imposed by the Deed and as discussed above, are sound.

153. The real issue, in this context, was the scope of the obligation of the defendant to maintain the property within the restricted area of the property, as defined in the expression “Property” in cl 1.1 of the Deed.

154. In that respect, and again subject to the limitations to which I have referred, there was no dispute that the defendant had an obligation to maintain the dwelling. The garage did not receive particular attention by the defendant, but in view of the conclusion I have earlier reached, it too must be subject to the obligations to regularly maintain in cl 2.2(a), as it is situated immediately adjacent to the dwelling within the restricted area occupied by the defendant.

155. The defendant submitted that most of the matters alleged by the plaintiffs do not fall under the head of maintenance as that term should be understood in context, which relates to the structural condition of the property.

156. It was from that proposition that the defendant submitted that the requirements of cl 2.2(a) of the Deed were confined to structures and that that interpretation was fortified by the reference to “Improvements” in cl 2.2(a) because the natural meaning of that expression, when in read in context, was improvements to the physical structure on the property.

The meaning of the words “keeping the Property and Improvements insured for building replacement value and public liability in the sum of $20,000,000.00”

169. The plaintiffs submitted that the requirement on the defendant to keep the property and improvements insured for building replacement value and public liability in the sum of $20,000,000.00 is clear on its face in that the defendant either did or did not keep such insurance. This clause was to protect the plaintiffs against loss.

170. The defendant submitted that the defendant does not have an insurable interest in the property, so the requirement to insure cannot be interpreted literally in the context that the defendant has no legal interest in the property and is only entitled to occupy a part of the property.

171. There is real substance in the defendant’s submission in this respect. To read the provision literally would, in the circumstances, create a condition of impossibility. I have given close consideration to whether the terms of the Deed should be read down, or read with an implication, that the requirement of cl 2.2(b) of the Deed is for the defendant to “use all reasonable endeavours” to keep the property insured. However, it is unnecessary to decide that question, because there are very clear bases to find that no breach would be established, or alternatively, that equity would restrain the plaintiffs from reliance upon that term in the circumstances that I have found existed, including a failure by the plaintiffs to cooperate in enabling the provision to be met.

172. I answer question 9(a) in this fashion. I will return to questions 9(b), (c) and (d) below.

The obligations of the defendant under the Deed

Regular maintenance

173. The plaintiffs submitted that:

174. While there appears to be some common ground between the parties as to the construction of the maintenance condition, the factual dispute remains about:

(a) the actual condition of the dwelling and curtilages (including the interior and the garage) at the time of settlement; and (b) whether the identified defects and/or any structural damage which is alleged to be present now, existed at the time the plaintiffs inspected the dwelling and curtilages.

2. The plaintiffs submitted that the defendant has conceded that she is not ready, willing and/or able to perform her contractual obligations.

3. The defendant submitted that the particulars of breach do not identify any structural damage that was not present at the time of settlement, and that otherwise the allegations of breach relate to the appearance of the property including the presence of chattels and state of vegetation, which do not fall within the scope of the obligation properly interpreted. Further, the plaintiffs have alleged a failure to maintain areas that do not form part of the area subject to the grant of any interest to the defendant, such as the tennis court.

4. I have earlier set out my conclusions in this respect, substantially contrary to the plaintiffs’ contentions, at [95].

Insurance

176. The plaintiffs submitted that it appears to be common ground that the defendant has not insured the property as required under the Deed. The plaintiffs submitted that the defendant has conceded that she is not ready, willing and/or able to perform her contractual obligations in this regard.

177. The defendant submitted that the insurance condition cannot be performed without the cooperation of the plaintiffs. As the registered proprietors, the plaintiffs have the insurable interest in the property, and they have in fact kept the property insured as they are required to do so under the terms of their mortgage. In circumstances where the defendant has sought to insure the property and has advised the plaintiffs that she cannot insure the property in her own interest, the mechanism for performance of that term directly by the defendant cannot be carried out. However, the plaintiffs are not entitled to insist on a particular mechanism, where the intent of the term would be achieved by the defendant reimbursing them for the cost of insurance. The plaintiffs have not sought to do this and so are disentitled from relying on the defendant’s failure to insure on her own account.

178. As I have earlier found, without recourse to reading down the provision, cl 2.2(b) of the Deed does not operate in such a way that the failure to take out insurance, in circumstances where it is impossible to do so, would constitute a breach. In any event, as I have mentioned, any non—performance could not constitute a basis for the relief of termination in the event of non-performance if, as in this case, the plaintiffs have failed to cooperate to permit the taking out of insurance by the defendant or, in the absence of an ability to do so, to give recompense to the plaintiffs who had taken out such insurance, consequent upon their mortgage and insurable interest. Finally, equity would act to restrain the plaintiffs’ reliance on non-performance in these circumstances.

Alleged breaches and termination

179. The plaintiffs submitted that:

180. The defendant has not regularly maintained the dwelling and curtilages, taking into account their condition as at settlement.

181. The defendant has not kept the property and improvements insured for building replacement value and public liability in the sum of $20,000,000.00.

182. The defendant has not acted cooperatively and honestly with respect to the above.

183. Given the breaches by the defendant, the plaintiffs were lawfully entitled to terminate the Deed, and did so validly on 16 July 2024. In any event, were the plaintiffs to be granted the relief they seek in the proceedings, the validity of said notice would be otiose.

184. The defendant is not ready, willing and/or able to perform her contractual obligations.

185. The defendant submitted that:

186. The plaintiffs were themselves in breach of an implied term to cooperate to permit the defendant to comply with the requirement to insure by paying the cost of their insurance, which they have never required her to do.

187. The letters sent in September and November 2023 are ineffective to ground any right to terminate for non-performance of the terms of the Deed as:

(a) the defendant’s breaches were not such as to justify a notice to terminate; (b) the plaintiffs were themselves in breach of the implied duty to cooperate, and further made illegitimate demands of the defendant to pay rent; and (c) the correspondence did not specify with sufficient particularity what the alleged breaches were or give a proper basis on which they could, if proved, be cured.

3. In oral submissions, the defendant submitted that:

“And that is the process by which Mr Memik sought to rely on those breaches, and I would simply say this: that the letters that his solicitor sent were not such as to give adequate particulars to Ms Taylor about what she needed to do to avoid the forfeiture. I'll just say that.

…

The deed contains no clause dealing with the ability of the plaintiff to terminate the deed. In that circumstance, unless it is alleged that Ms Taylor is refusing, has set her face firmly against performance, or is refusing to perform the deed, there would be no need for notice, because that would be a repudiation. That would be an intimation of a fixed intention not to perform the contract, and that justifies termination.

…

I would suggest that none of those letters gave sufficient indication of what Ms Taylor had to do to avoid forfeiture of the interest, because that’s really what we’re talking about. It’s the right to forfeit Ms Taylor’s interest. In those circumstances, and with no clause for termination contained with the deed and no procedure for termination, it would have to be a very clear basis upon which to demonstrate that Ms Taylor is not performing her obligations.

A notice is and can provide evidence of that repudiation. If somebody is given a notice to perform and fails to perform, that’s material from which the Court can draw an inference that a party is no longer ready, willing and able to perform the contract, but we say those notices did not have that effect because, one, they were incorrect in material respects, and they didn’t say with sufficient specificity what Ms Taylor had to do in order to avoid a forfeiture.

So that’s why we do take issue with each one of those notices for various reasons, as your Honour has probably apprehended when I was cross examining Mr Memik, but they were either incorrect, overreaching and/or confusing in that they gave only the vaguest of terms or vaguest of instructions to Ms Taylor about what she had to do to avoid a forfeiture. So, in other words, leaving it entirely up to Mr Memik and Mrs Memik as to whether they were satisfied that she had performed.

So the obligation to maintain by itself begs the very question that’s being discussed here and that’s why we say that those notices ought not to be regarded as providing sufficient evidence of an intention if they weren’t complied with not to be bound by the contract.”

Regular maintenance

181. I accept, on the basis of my findings at [95], that the defendant is in breach of cl 2.2(a) of the Deed as a result of the following circumstances:

182. A singular missing roof tile.

183. Overgrown gardens.

184. Front gate not connected to its hinge.

185. The replacement of a Perspex rather than glass window at the front of the house following heavy storms.

186. Dirty exterior walls.

187. However, to use the language in Koompahtoo, I do not accept that the nature of the breach and its consequences are sufficiently serious to deprive the plaintiffs of substantially the whole benefit of the contract: Koompahtoo at [49] (per Gleeson CJ, Gummow, Heydon and Crennan JJ). Hence, the breaches do not constitute a valid basis for the plaintiffs to terminate the Deed.

188. I answer question 8(b) in the affirmative. However, I do note that the breach established is of limited scope compared to that claimed by the plaintiffs, and as such, would not constitute a basis to grant the relief sought by the plaintiffs in the SOC, being termination of the Deed.

189. That still leaves open the question about the appropriate form of relief, in these proceedings, particularly in relation to the defendant’s case in equity.

Insurance

185. I have earlier dealt with the reasons why the plaintiffs have not established a breach of cl 2.2 of the Deed, and in any event, why relevant principles in equity would restrain the plaintiffs from reliance upon any non-performance of the Deed in the circumstances of this case.

186. In that earlier discussion, the Court referred to impossibility of performance and an implied duty to cooperate. These concepts are expanded upon briefly, at this juncture.

Impossibility of performance

187. Where the parties contracted on the basis that their bargain would be performed in a particular way, and that method of performance is not possible, the contract may be discharged under the doctrine of frustration, provided that the change in performance is radical or substantial: Codelfa Construction Pty Ltd v State Rail Authority (NSW) (1982) 149 CLR 337; [1982] HCA 24 (per Stephen, Mason, Aickin, Wilson and Brennan JJ).

188. Generally, a party cannot rely on frustration as ground for a partial discharge of the contract, since when frustration occurs, it discharges the whole contract (see Aurel Forras Pty Ltd v Graham Karp Developments Pty Ltd [1975] VR 202; Nelson v Kimberley Homes Pty Ltd [1989] ANZ ConvR 123; (1988) 4 BCL 289 at 291).

189. However, there are a number of exceptions to this rule. One such exception arises where an event occurs which does not frustrate the performance of the contract, but instead, proves the promisor with an excuse for not performing (JW Carter and DJ Harland, Contract Law in Australia (4th ed, 2002, Butterworths) at 791).

190. I accept that, despite her attempts, the defendant could not perform the obligation in cl 2.2(b) of the Deed on the basis that she did not have an insurable interest in the property. As such, it was impossible for the defendant to give effect to the obligation in cl 2.2(b) of the Deed. In the result, the defendant is excused from compliance with cl 2.2(b) of the Deed, and accordingly, is not in breach of that provision.

Implied duty of cooperation

191. Both parties agreed that there is an implied term at law to cooperate. The implied duty of cooperation refers to the cooperation required between all contracting parties to ensure that each party has the benefit of the contract: Secured Income Real Estate (Australia) Ltd v St Martins Investments Pty Ltd (1979) 144 CLR 596 at 607 (per Mason J).

192. The implied duty of cooperation, which was endorsed by the High Court in Commonwealth Bank of Australia v Barker [2014] HCA 32; (2014) 253 CLR 169 (per French CJ, Kiefel, Bell, Gageler and Keane JJ) was articulated in Secured Income Real Estate (Australia) Ltd v St Martins Investments Pty Ltd (1979) 144 CLR 596 at 607-608; [1979] HCA 61 (per Mason J) as follows:

“But it is common ground that the contract imposed an implied obligation on each party to do all that was reasonably necessary to secure performance of the contract. As Lord Blackburn said in Mackay v. Dick:

"as a general rule ... where in a written contract it appears that both parties have agreed that something shall be done, which cannot effectually be done unless both concur in doing it, the construction of the contract is that each agrees to do all that is necessary to be done on his part for the carrying out of that thing, though there may be no express words to that effect."

It is not to be thought that this rule of construction is confined to the imposition of an obligation on one contracting party to co-operate in doing all that is necessary to be done for the performance by the other party of his obligations under the contract. As Griffith C.J. said in Butt v. M'Donald:

"It is a general rule applicable to every contract that each party agrees, by implication, to do all such things as are necessary on his part to enable the other party to have the benefit of the contract."

It is easy to imply a duty to co-operate in the doing of acts which are necessary to the performance by the parties or by one of the parties of fundamental obligations under the contract. It is not quite so easy to make the implication when the acts in question are necessary to entitle the other contracting party to a benefit under the contract but are not essential to the performance of that party's obligations and are not fundamental to the contract. Then the question arises whether the contract imposes a duty to co-operate on the first party or whether it leaves him at liberty to decide for himself whether the acts shall be done, even if the consequence of his decision is to disentitle the other party to a benefit. In such a case, the correct interpretation of the contract depends, as it seems to me, not so much on the application of the general rule of construction as on the intention of the parties as manifested by the contract itself.” (footnotes omitted)

193. In WIN Corporation Pty Ltd v Nine Network Australia Pty Ltd [2016] NSWCA 297 (per Barrett AJA, with whom McColl JA and Sackville AJA agreed), the NSW Court of Appeal referred to the implied duty to cooperate as follows (at [70] to [71]):

“[70] The implied duty to cooperate enunciated by Mason J in Secured Income Real Estate (Australia) Ltd v St Martins Investments Pty Ltd (1979) 144 CLR 596; [1979] HCA 51 at 607 [32] was said by French CJ, Bell and Keane JJ in Commonwealth Bank of Australia v Barker (2014) 253 CLR 169; [2014] HCA 32 (at [37]) to reflect the criterion of “necessity” referred to in Byrne v Australian Airlines Ltd (1995) 185 CLR 410; [2014] HCA 32. McHugh and Gummow JJ there explained (at 450) that “many of the terms now said to be implied by law in various categories of cases reflect the concern of the courts that, without the term, the enjoyment of the rights conferred would or could be rendered nugatory, worthless, or, perhaps, seriously undermined”. They also referred (at 453) to the situation where the contract would be “deprived of its substance, seriously undermined or drastically devalued”.

[71] The implied term now under consideration is concerned with the enjoyment of the rights conferred by the contract. The nature and scope of those rights must therefore be determined before any attempt is made to assess the impact of the implied term and the duty it imposes. In that respect, I would respectfully endorse the following statement by McMurdo J (as his Honour then was) in Jackson Nominees Pty Ltd v Hanson Building Products Pty Ltd [2006] QCA 126 at [51]:

‘To assess the scope of the duty in a particular case, it is first necessary to define the relevant obligations, and in particular, to define the circumstances in which the parties have agreed that a certain obligation must be performed. It is not a duty upon one party to act so as to enhance the commercial value to the other party of the contract.’”

194. I accept that there was an implied duty for the plaintiffs to cooperate with the defendant in respect of her obligations under cl 2.2(b) of the Deed.

195. As I have previously found, the defendant raised the fact that she was unable to insure the property on the basis of not having an “insurable interest” in October 2023. The defendant then approached the plaintiffs in December 2023, with the intention of curing that impasse by having the plaintiffs take out the requisite insurance and invoicing the defendant for payment on a monthly basis. However, on all occasions, the plaintiffs refused to respond to the defendant’s difficulty and requests for cooperation.

196. Hence, I accept that the plaintiffs failed to cooperate with the defendant in taking out insurance for the property, in circumstances where the defendant was unable to comply with the obligation in cl 2.2(b) of the Deed without such cooperation. In the result, the plaintiffs would be constrained in their reliance upon non-performance of cl 2.2(b) of the Deed, such that the relief of termination would not be available to them.

Conclusion

197. I find that the defendant is in breach of cl 2.2(a) of the Deed as a result of the following circumstances, which have been proven on the evidence and fall within the remit of the defendant’s obligation to regularly maintain the property under the Deed:

198. A singular missing roof tile.

199. Overgrown gardens.

200. Front gate not connected to its hinge.

201. The replacement of a Perspex rather than glass window at the front of the house following heavy storms.

202. Dirty exterior walls.

203. However, as I have earlier mentioned, the breaches of cl 2.2(a) of the Deed, being an intermediate term, are not sufficiently serious to warrant termination of the Deed.

204. In any event, the plaintiffs have not demonstrated that they have suffered any loss, and to the extent that they have failed to cooperate, any loss they may have suffered, is of their own doing.

205. Lastly, I find that the defendant has not breached cl 2.2(b) of the Deed. In any event, I find that equity would restrain the plaintiffs from relying upon a breach of cl 2.2(b) of the Deed in the circumstances that I have found existed, including the failure by the plaintiffs to cooperate in enabling the defendant to meet her obligations under that provision, and, the fact that the plaintiffs themselves have kept the property insured since settlement. In all the circumstances, the plaintiffs should not be granted the relief sought in the SOC.

206. Hence, I answer the questions raised by 9(b), (c) and (d), respectively, as follows:

207. Yes.

208. No.

209. While it is not necessary to answer this question, I note that in any event, the plaintiffs would not be entitled to rely upon a breach of cl 2.2(b) to establish a basis for termination or recission of the Deed.

210. I also answer the questions raised by question 10(a), (b) and (e) of the ASOI, respectively, as follows:

211. No.

212. Yes.

213. No.

214. It is not necessary to answer the questions raised by question 10(c) and (d) of the ASOI.

Relief against forfeiture

204. While it is not strictly necessary to pass upon the question of relief against forfeiture, having regard to the conclusions I have reached in my earlier consideration, I propose to nonetheless set out my conclusions in this regard, noting that it was the defendant’s case that if their primary argument was not accepted, they sought equitable relief in relation to the forfeiture of a sufficient interest.

205. As I will find, if those principles were applied, the defendant must also be successful on that basis.

206. The plaintiffs submitted that the defendant is not entitled to relief against forfeiture in circumstances where:

207. The defendant’s breach is serious and not trivial.

208. The cost of the necessary rectification works and/or ongoing maintenance are significant.

209. The defendant is not ready, willing or able to have any rectification works carried out, let alone any necessary rectification and/or ongoing maintenance works.

210. There has been no unconscionable or unconscientious conduct by the plaintiffs toward the defendant that would prevent them from insisting on their legal rights.

211. Any hardship, unfairness or adverse consequences that may be suffered by the defendant are due to the defendant’s conduct in circumstances where she was paid the agree purchase price.

212. The defendant has paid or divested her share of the sale proceeds to others without legal obligation to do so.

213. The plaintiff’s loss comprising the wasting and degrading of the dwelling on the property and the curtilages and/or having to meet the cost of insurance materially subverts the bargain struck by the parties who were legally represented at the time of the sale and entering into the Deed.

214. It would be inequitable to grant the defendant relief against forfeiture.

215. I do not accept the arguments of the plaintiff, in this respect, as I consider that, if I was required to consider the matter, there is a substantial basis to find relief against forfeiture. I make that finding for the following reasons.

216. First, forfeiture of the interest will deprive the defendant of the benefit of occupation of the property for life which was part of the consideration for the plaintiffs’ acquisition of the land such that the defendant will be homeless with no resources to obtain another residence.

217. Secondly, the defendant sold the property to the plaintiffs on the condition that she would be able to reside there for life. She made financial and other decisions on this basis. If the defendant were to lose the right to live at the property after only 7 years from the date of the Deed, the defendant would be significantly disadvantaged.

CONCLUSION

219. The Court has found breaches with respect to cl 2.2(a) of the Deed, although the breaches found are narrower in scope than contended for by the plaintiffs and not of a nature and seriousness as would ground the relief of termination sought by the plaintiffs.

220. Clause 2.2(a) of the Deed is an intermediate term, and the nature and seriousness of the breaches were not such as to constitute a basis for relief by termination.

221. As to cl 2.2(b) of the Deed, the primary finding of the Court is that the defendant did not breach that intermediate term. In any event, the nature and seriousness of any non-performance by the defendant could not constitute a basis for the termination of the Deed. In all relevant respects, any failure to take out insurance by the defendant was a product of the plaintiffs’ own conduct.

222. Furthermore, the Court has found that, in all the circumstances, the defendant has available relief against forfeiture. However, relief against forfeiture would necessarily be dependent upon appropriate conditions, having regard to the need for maintenance in various areas, discussed at [197].

223. Neither party addressed the Court as to the appropriate form of relief. In those circumstances, I will give the parties a limited opportunity to make submissions with respect to the appropriate relief in light of this judgment and in accordance with the orders and directions made by the Court in this judgment.

224. Notwithstanding that the Court has rejected the primary form of relief sought by the plaintiffs, the defendant has not been entirely successful in her defence of the SOC. If the Court were assessing costs on that basis, the preliminary view would be that the plaintiffs would pay 70% of the defendant’s costs on an ordinary basis, as agreed or assessed. The parties shall have the opportunity to address the question of costs in submissions made in conformity with the orders and directions of the Court in this judgment.

ORDERS AND DIRECTIONS

225. The Court makes the following orders and directions:

226. The defendant shall file and serve Short Minutes of Order reflecting this judgment, together with a submission in support thereof, not exceeding 3 pages in length, on or before 4pm on Monday, 1 December 2025.

227. The plaintiffs shall file and serve any submissions in reply by 4pm on Wednesday, 3 December 2025.

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Endnotes

Recital A defines “Agreement” as the contract for sale.

Recital A of the Deed defines “Property” as the whole land compromised in certificate of title folio identified 69/193312 known as 26 Brian Street, Balgownie NSW 2519.