National Australia Bank Limited v Sayed

In Principle Agreement

1. From 13 August 2012 to 23 August 2012, there was a chain of email communication between Mrs Sayed's solicitor (Mr Andrew Luong) and NAB's solicitors (Ms Danielle Kuti and Ms Emma Hodgman, of DibbsBarker) including a series of offers and counter-offers and draft versions of the formal deed of settlement and release.
2. On 20 August 2012, the proceedings came on for hearing in the Supreme Court before Adams J. Settlement negotiations continued during that hearing.
3. At 1.51pm on 23 August 2012, Mrs Sayed's solicitor sent an email to NAB's solicitors saying "We are very close to settling this matter. Our client would accept the general terms of the offer made", except for some alterations to the judgment amount. Mrs Sayed's solicitor asked NAB's solicitors to let him know her instructions so that the matter could be settled "when we return to Court at 2pm." An In Principle Agreement was signed by all parties and handed up to Adams J. His Honour noted the agreement of the parties and vacated the balance of the days set aside for hearing. The In Principle Agreement is a handwritten document dated 23 August 2012 (on green paper and marked Ex D before Rein J). I shall refer to the terms of the In Principle Agreement in more detail later in this judgment.
4. By 30 August 2012, Mrs Sayed (through her solicitor) had agreed to all of the terms of the Settlement Agreement. Mr Sayed had agreed to all the terms except for clause 7(a).
5. Clause 7(a) is in these terms: "Upon exchange of this deed, Mr Sayed and Mrs Sayed (jointly and individually) immediately, unconditionally and absolutely release NAB, its employees, officers and agents, from all Claims which they now have or, but for this deed, might have had against NAB, its employees, officers and agents, or any other person, whether individually or jointly, in respect of the Woonona Loan, Woonona Mortgage, Corrimal Loan, Corrimal Mortgage, Corrimal Sale and the Proceedings."
6. Clause 7(a) was included in the Settlement Agreement. Mr Sayed was not prepared to agree to this clause being included.
7. At 1.57pm on Thursday 30 August 2012, NAB's solicitor emailed Mr Sayed setting out "the maximum to which NAB is prepared to compromise on the terms of the deed of settlement and release". The solicitor wrote that she was instructed that, if Mr Sayed did not consent to the terms of the Settlement Agreement, she was to make an immediate application to the Court for specific performance of the agreement and would also seek NAB's costs against Mr Sayed on an indemnity basis.
8. Mr Sayed responded at 11.24am on Friday 31 August 2012, saying that there were other issues but agreed that they needed to go back to Court. Mr and Mrs Sayed did not sign the Settlement Agreement. The matter was urgently relisted before Adams J.

The notice of motion filed 6 September 2012

1. The notice of motion, filed in Court on 6 September 2012, relevantly sought: "Pursuant to section 73 of the Civil Procedure Act 2005, the plaintiff seeks: 1. A declaration that the parties to these proceedings entered into a binding settlement agreement on the terms contained in a Deed of Release and Settlement attached to an email sent by Danielle Kuti on 30 August 2012 at 1:57pm, a copy of which is under tab 27 of exhibit 'DK 2' to the affidavit of Danielle Catherine Kuti sworn 5 September 2012 ('the Settlement Agreement'). 2. Orders and directions that the first defendant and the second defendant specifically perform the Settlement Agreement by executing the Settlement Agreement and the Consent Judgment referred to in the Settlement Agreement within three business days."
2. NAB sought a declaration that the parties to the proceedings had entered into a binding settlement agreement on the terms contained in the deed of release and settlement. A copy of the deed was attached to the email sent by Ms Kuti at 1.57pm on 30 August 2012. The motion sought orders and directions that Mr and Mrs Sayed specifically perform the deed of release and settlement by executing it, together with the consent judgment. This motion did not refer to the In Principle Agreement.

The decision of Rein J dated 22 October 2012

1. On 22 October 2012, the motion came before Rein J for hearing. His Honour delivered an ex tempore judgment. Mrs Sayed was represented by both a solicitor and counsel. Mr Sayed represented himself.
2. It is now necessary to set out the terms of the In Principle Agreement. That document reads: "In Principle Agreement 1 Non-b Binding but subject to formal deed that will contain further terms not inconsistent. 2 Defendants will pay the Settlement Amount by the Deadline. 3 Bank will accept the Settlement Amount in full and final accord and satisfaction of the Judgment Debt, if paid by the Deadline. 4 If the Settlement Amount is not paid by the Deadline, Bank will enforce the Writ and recover the Judgment Debt, plus interest on the Judgment Debt since 23 August 2012 plus enforcement expenses (on an indemnity basis). 5 Settlement Amount = $670,000 Judgment Debt = $700,000 Judgment (entered forthwith but stayed until Deadline) Writ = writ of possession over Woonona Property (stayed until Deadline) Deadline = 23 December 2012. 6 CRA terms per email Emma Hodgman to Andrew Luong dated 23 August 2012 sent at 12.31pm. 7 Settlement Amount and Judgment Debt includes amount owing on 'Classic Account' (approx $26,000)." (My emphasis added).
3. The In Principle Agreement was signed at the foot by Mr and Mrs Sayed, and by Ms Kuti on behalf of NAB.
4. It is important to observe that in clause 1, before the word "binding" the word "non" was crossed out and the word "but" interposed between the word "binding" and "subject". These alterations were initialled by Mr and Mrs Sayed.
5. Apart from Clause 1, the In Principle Agreement can be summarised as follows: judgment for NAB in the sum of $700,000 will be entered forthwith against Mr and Mrs Sayed; that judgment will be stayed until 23 December 2012; judgment for possession of the Woonona property will be entered in favour of NAB and a writ of possession will be issued forthwith; that writ of possession will be stayed until 23 December 2012; Mr and Mrs Sayed will pay the settlement sum of $670,000 by 23 December 2012; if the settlement sum of $670,000 is not paid by 23 December 2012, NAB will be entitled to enforce the writ of possession and the judgment debt of $700,000, and will be entitled to recover interest on the judgment debt from 23 August 2012, together with enforcement expenses, on an indemnity basis; the terms of the email concerning credit listing sent at 12.31pm on 23 August 2012 will be observed; and the settlement sum of $670,000 and the judgment debt of $700,000 both include any amount owing by Mr Sayed in respect of his "classic account" with NAB.
6. On 22 October 2012, Rein J held at [18] and [19] of his reasons that the Settlement Agreement was binding. His Honour stated: "[18] I have no doubt that the parties entered into a binding settlement agreement on 23 August 2012. The only issue is whether the release should include agents of the bank. There is no doubt that mutual releases were to be included. As I have said, that term was sought by the defendants and agreed to by the bank. I accept Mr Lucarelli's submissions that, objectively, it must have been envisaged by all parties that all matters relating to the proceedings were to be brought to finality by the settlement, including a release of the bank itself and its servants and agents in connection with the loan and the sale of the Corrimal property. [19] The deed as now propounded through Ms Kuti's affidavit (see pp 193-205) actually includes the words 'or any other person' in cl 7(a). Those words are not words that I would regard as reasonable or necessary to reflect the agreement reached between the parties and of their obvious desire to terminate any claims against each other in relation to the proceedings. Mr Lucarelli accepted that those words should not be included and they should not be included in the form of deed which I think must be executed by Mr and Mrs Sayed."
7. Rein J made a declaration that the parties to these proceedings entered into a Settlement Agreement. He ordered that Mr Sayed and Mrs Sayed specifically perform the Settlement Agreement (subject to deletion of "or other persons" in clause 7(a)) by executing the Settlement Agreement and the consent judgment. His Honour ordered that in the event the Sayeds failed to execute the Settlement Agreement and consent judgment by 25 October 2012, any Registrar or Deputy Registrar of the Supreme Court of New South Wales be empowered to execute the Settlement agreement and the consent judgment on behalf of them. On 6 November 2012, a Registrar of the Court executed the Settlement Agreement and the consent judgment on behalf of Mr and Mrs Sayed.

The appeal decision dated 17 September 2013

1. On 20 August 2013, Mr and Mrs Sayed appealed the declaration and orders of Rein J. On 17 September 2013, the Court of Appeal set aside the orders and allowed the appeal: see Sayed v National Australia Bank Limited [2013] NSWCA 304.
2. The parties have differing views as to exactly what was decided by the Court of Appeal in Sayed v National Australia Bank. Hence, it is necessary for this Court to analyse the decision. Emmett JA (with whom McColl JA and Tobias AJA agreed) held that the parties had not entered into a binding Settlement Agreement on the terms contained in the email sent by Ms Kuti.
3. At the hearing of the appeal, Mr Sayed was represented by counsel. He sought to file an amended notice of appeal. By consent, Mrs Sayed was removed as an appellant and joined as a respondent. She submitted to the orders of the Court. Ultimately, leave was granted to Mr Sayed to reply upon the amended grounds of appeal (1), (2), (3), (4) and (5) (J [46]). They read: "(1) The primary judge erred in construing the In Principle Agreement as unconditionally binding when it provided that it was to be binding subject to a formal deed that had not been agreed or resolved at the time of making the In Principle Agreement. (2) On its true construction, the In Principle Agreement: incorporated a condition subsequent, namely, entry into a formal deed containing further terms, which meant that it amounted to an agreement to agree; did not impose any obligation to agree or accept terms that released independent contractors and other persons who were not party to the principal proceedings; did not identify a standard or mechanism whereby bona fide differences about the terms of the proposed deed could be resolved; did not establish a contractual regime under which the Court could adjudicate further terms if the parties failed to agree; did not authorise the Court to infer that the settlement included a term that any release went beyond what would be necessary to bring the principal proceedings to finality. (3) Upon failure of the parties to agree the further terms, the condition subsequent operated to discharge the accord comprised in the In Principle Agreement. (4) The In Principle Agreement was a 'mere accord executory' that was not capable of being specifically enforced or, alternatively, was an immediately binding agreement under which satisfaction and discharge of existing obligations was deferred pending performance and rendering the discharge conditional on an event that had not occurred. (5) The primary judge erred in not finding that the In Principle Agreement had been unfairly obtained and was oppressive and should have received the rejected evidence about the circumstances in which Mr Sayed came to initial the alteration to the In Principle Agreement by changing the words 'Non-binding' to 'Binding but'."
4. Leave to appeal was refused in relation to ground (6).
5. Emmett JA set out the two different approaches in the interpretation of the In Principle Agreement. His Honour stated at [23] to [25]: "[23] The words 'subject to formal deed that will contain further terms not inconsistent' in cl 1 are of critical importance as to the question of whether the parties had reached a binding and enforceable contract when the In Principle Agreement was signed. Clause 1 could be construed as evidencing an intention of the parties that there would be a contract subject to a condition precedent, being that the terms of a formal deed be subsequently agreed. On that construction, in the absence of subsequent agreement, there would be no enforceable contract as the condition precedent would not be satisfied. [24] Alternatively, the words could be construed as a statement by the parties that they intended to formalise their contract by a deed but that, whether or not such a deed was made, they intended nevertheless to be bound unconditionally by the terms of the In Principle Agreement. Even if no such deed were agreed upon, the In Principle Agreement was still enforceable according to its terms. [25] The Bank contends that the terms of certain of the emails in the exchanges described above should be incorporated into the In Principle Agreement, as terms of a binding contract between the parties. Specifically, the Bank contends that the term specified in the email sent at 10.51am on 23 August 2012, that the parties are to enter into a deed of settlement and release, should be incorporated as a term of a binding and enforceable contract entered into on 23 August 2012 when the parties signed the In Principle Agreement. That contention leaves unanswered the question of the specific content of such a deed of settlement and release. That is to say, the reference in the email sent at 10.51am on 23 August 2012 to entering into a deed of settlement and release may itself be void for uncertainty. Questions may then arise as to whether that term, assuming it were incorporated into the In Principle Agreement, would be severable so as to leave the balance of the contract on foot. It is unnecessary to resolve those questions.
6. At [26] to [27] the Court of Appeal expressed the better view as: [26] It is significant that one of the terms of the In Principle Agreement specifically incorporates the terms of the email sent at 12.31pm on 23 August 2012. In circumstances where the terms of one email were expressly incorporated into the In Principle Agreement, it is difficult to see why the term of another email that was not mentioned, namely, the term concerning a deed of settlement and release contained in one of the Bank's counter-offers in the email sent at 10.51am on 23 August 2012, should also be treated as being part of the contract. [27] The better view is that the email exchanges were no more than negotiations that ultimately led to the In Principle Agreement. None of the email exchanges can fairly be regarded as a contractual document, except to the extent that it is expressly incorporated by specific reference to it in the In Principle Agreement. It is clear enough that the parties were intending to make a binding contract when they signed the In Principle Agreement. The terms of that contract, without clause 1, are clear and precise and are capable of specific performance. However, clause 1 contemplated further negotiations. As contemplated by clause 1, the parties then embarked, after signing the In Principle agreement, on negotiations as to the terms of a 'formal deed'."
7. At [48] Emmett JA continued: "[48] It is clear that, prior to the signing of the In Principle Agreement, there was no binding contract between Mr and Mrs Sayed and the Bank. The emails exchanged were no more than a series of offers and counter-offers, none of which was finally accepted."
8. NAB contended at the appeal that three conclusions may be drawn in relation to the In Principle Agreement. They were firstly, that the provisions of clause 1, that the In Principle Agreement was binding but "subject to formal deed that will contain further terms not inconsistent", had legal effect, since all essential terms had at that point been agreed there was no impediment to giving effect to that common intention for any want of certainty or lack of agreement on any essential matter; secondly, having agreed on all essential terms, but wishing to record that agreement in a formal deed, the arrangement was binding, being one where the parties had made a provisional contract intending to be bound by it but assuming that, in due course, a further contract would be made between them containing both the agreed terms and further terms that they might both agree upon; and thirdly, because the parties had agreed to all essential terms and wished those terms to be set out in a formal deed, their agreement to include "further terms not inconsistent" meant no more than that the parties intended to include such further incidental or consequential terms as might be appropriate, but not inconsistent with those upon which they had agreed (J [53]).
9. In relation to NAB's submissions in the Court of Appeal, Senior Counsel for NAB emphasised (in oral argument before this Court) that it was Mr Sayed who had put the In Principle Agreement into contention. Senior Counsel submitted that accordingly, the submissions made defending the In Principle Agreement as a binding were only made because it was an issue raised on the notice of appeal.
10. At [54] Emmett JA stated: "[54] There is a great deal to be said for the Bank's contentions [above], except for its reliance on the incorporation of terms from the email exchanges. Apart from the express reference to one of the emails in cl 6 of the In Principle Agreement, there is no reference to any of the other emails. There is no basis for treating any of the emails that constituted the negotiations that led to the In Principle Agreement as being part of any contractual arrangement between the parties, other than the one expressly mentioned, which did not refer to mutual releases. That is to say, there was a binding contract, but its essential terms were set out exhaustively in the In Principle Agreement."
11. The Court of Appeal emphasised that because the parties deleted the word "Non" before the word "binding", they were intending to make a binding contract when they signed the In Principle Agreement. Emmett JA stated at [56] and [58]: [56] When the handwriting of the In Principle Agreement was first produced, containing in clause 1 the words 'Non-binding', the parties did not intend it to be a binding contract. Perhaps the question of mutual releases was intended to be dealt with in the proposed deed. However, there was a change of heart. The parties agreed that the In Principle Agreement would be a binding contract. Hence the deletion of the word 'Non'. One might draw the inference that they wished to have a binding contract so as not to risk the compromise they had reached by further negotiations as to the terms of the proposed deed, which would include mutual releases. The parties were prepared to commit themselves in the expectation that the terms of such a deed would be agreed in the fullness of time. In those circumstances, commercial efficacy did not require the implication of a term for mutual releases. The parties were prepared to accept the limited finality afforded by the In Principle Agreement, in the expectation that they would agree later on the terms of mutual releases. Unfortunately, that expectation was not fulfilled. … [58] There are cogent grounds for concluding that the parties intended that the In Principle Agreement was to be an immediately binding contractual arrangement. First, the In Principle Agreement was signed when the proceedings before Adams J were still part-heard. The parties clearly intended that, by signing the In Principle Agreement, the proceedings before Adams J would come to an end immediately. Secondly, and more significantly, the fact that the parties deleted the word 'Non' before the word 'binding' is very compelling evidence of their intention to enter into a legal binding arrangement immediately."
12. In relation to the specific performance of the In Principle Agreement, Emmett JA observed at [60]: "[60] The Bank did not seek specific performance of the In Principle Agreement. That may well because of the absence in it of any provision for mutual releases. That is to say, the Bank was only prepared to enforce the contract if it obtained a release from Mr and Mrs Sayed that it regarded as satisfactory. For example, there is no reference in the In Principle Agreement to disposition of the cross-claim. On one view, the effect of the In Principle Agreement was to confer the benefit of a compromise on Mr and Mrs Sayed, without any real benefit for the Bank, other than finality and certainty in being able to obtain possession of the Woonona property and to enforce the security that it has over that property. The Bank may well prefer to pursue its original causes of action, rather than accept a reduced payment in full satisfaction without any release of the claims made in the cross-claim."
13. However, so far as the Settlement Agreement was concerned, Emmett JA at [57] and [62] expressed the view that: "[57] It is clear that the parties never reached accord as to the terms of the proposed deed of settlement and release. It may well be that, in the end, only one clause was in dispute, namely, the terms of clause 7(a). However, there can be no doubt that Mr Sayed was not prepared to enter into a deed of settlement and release that contained clause 7(a), at least in the broad terms in which it was drafted. On the other hand, it is equally without doubt that the Bank was not prepared to enter into a deed of settlement and release that did not contained clause 7(a). … [62] The draft deed of settlement and release that was attached to the email sent by Ms Kuti at 1.57pm on 30 August 2012 was not part of any contractual arrangements between the parties. The primary judge erred in making a declaration that it was and in ordering Mr and Mrs Sayed to execute such an instrument together with the consent judgment referred to in it. It follows that the orders made by the primary judge should be set aside. In addition, the judgments entered pursuant to the orders made by the primary judge should be set aside. In lieu of those orders, there should be an order that the Bank's Motion be dismissed with costs."
14. The issue before the Court of Appeal for determination was whether the declaration to enforce the Settlement Agreement should have been made. In doing so the Court addressed and made comments in relation to the In Principle Agreement. It stated that the In Principle Agreement was a binding contract and that its essential terms were set out exhaustively in it. Further, the Court of Appeal stated that the In Principle Agreement would have been enforceable had NAB had sought specific performance of it.
15. The Court of Appeal also stated that there are cogent reasons for concluding that the parties intended that the In Principle Agreement was to be an immediately binding contractual arrangement. The reasons were, first, the In Principle Agreement was signed when the proceedings before Adams J were still part heard and that the parties clearly intended that, by signing the In Principle Agreement, the proceedings before Adams J would come to an end immediately; second, and more significantly, the fact that the parties deleted the word "Non" before the word "binding" and that was very compelling evidence of their intention to enter into a legal binding arrangement immediately (J [58]). The Court of Appeal's view was that the parties intended that the In Principle Agreement was to be a binding contract. However, on a strict legal analysis, these comments concerning the In Principle Agreement are obiter dicta.

The current notice of motion to enforce the In Principle Agreement

1. Having failed in its attempt to have the Settlement Agreement enforced, NAB now seeks to enforce the In Principle Agreement according to its terms under s 73 of the Civil Procedure Act.
2. Section 73 relevantly reads: "73 Power of court to determine questions about compromises and settlements (1) In any proceedings, the court: (a) has and may exercise jurisdiction to determine any question in dispute between the parties to the proceedings as to whether, and on what terms, the proceedings have been compromised or settled between them, and (b) may make such orders as it considers appropriate to give effect to any such determination. (2) This section does not limit the jurisdiction that the court may otherwise have in relation to the determination of any such question."
3. There are two main issues to be determined here. They are: (A) whether the In Principle Agreement is binding; and (B) if the In Principle Agreement is binding, whether specific performance can be enforced.

A. Is the In Principle Agreement binding?

1. NAB's primary submission is that the reasoning and conclusions of the Court of Appeal regarding the In Principle Agreement were correct and should be adopted and applied. NAB's argument is that the express terms of clause 1 mean what they say; a fortiori because the parties specifically changed the words "Non-binding" to "Binding". Senior Counsel for NAB submitted that Emmett JA in Sayed v National Australia Bank was correct in finding that this amendment evidenced "…a change of heart. The parties agreed that the In Principle Agreement would be a binding contract. Hence the deletion of the word 'Non'."
2. Senior Counsel for NAB also argued that the heading of the document "In Principle Agreement" cannot prevail over the clear words in clause 1: "Binding but subject to formal deed that will contain further terms not inconsistent".
3. Senior Counsel for NAB relied upon the well known passage by McLelland J at 628D in Baulkham Hills Private Hospital Ltd v GR Securities Pty Ltd (1986) 40 NSWLR 622; (1986) 4 BPR 9315 in support of that proposition, where his Honour stated: "…I do not consider that any implication of an intention not to be legally bound which might otherwise be suggested by the words 'agreement in principle' can prevail over the clear import of the words 'legally binding'. The intention of the parties to be legally bound by their consensus is sufficiently clearly expressed to take the case out of the third class of cases referred to in Masters v Cameron (1954) 91 CLR 353 at 360-362, that is '…cases in which the terms of agreement are not intended to have, and therefore do not have, any binding effect of their own' (at 361). There is in reality a fourth class of case additional to the three mentioned in Masters v Cameron, as recognised by Knox CJ, Rich J and Dixon J, in Sinclair, Scott & Co v Naughton (1929) 43 CLR 310 at 317, namely, '…one in which the parties were content to be bound immediately and exclusively by the terms which they had agreed upon whilst expecting to make a further contract in substitution for the first contract, containing, by consent, additional terms'. Their Honours refer to the speech of Lord Loreburn, in Love & Stewart v S Instone & Co (1917) 33 TLR 475 at 476, where his Lordship said that: 'It was quite lawful to make a bargain containing certain terms which one was content with, dealing with what one regarded as essentials, and at the same time to say that one would have a formal document drawn up with the full expectation that one would by consent insert in it a number of further terms. If that were the intention of the parties, then a bargain had been made, none the less that both parties felt quite sure that the formal document could comprise more than was contained in the preliminary bargain.'"
4. NAB submitted that the clear words of clause 1 put the In Principle Agreement squarely into that "fourth class" of case referred to by McLelland J in Baulkham Hills Private Hospital, and that the parties were "content to be bound immediately and exclusively by the terms which they had agreed upon". This view, it says, accords with what was stated by the Court of Appeal at [56].
5. Senior Counsel for NAB further submitted that Emmett JA was also correct in finding that the terms of the In Principle Agreement "are clear and precise and capable of specific performance." It was submitted that the In Principle Agreement follows the "usual" structure: the defaulting mortgagors are given a period of grace to realise the mortgaged security and tender a compromised amount by a certain deadline, failing which the mortgagee recovers possession and the full debt.
6. Mr Sayed contended that the In Principle Agreement was not binding for three reasons. They are first, that NAB repudiated the In Principle Agreement, discharging them from any obligations of further performance; secondly, that the parties had abandoned the In Principle Agreement by 17 September 2013; and thirdly, that there had been laches and unconscionable delay in asserting a right to specific performance. I shall deal with each of these issues in turn.

(i) Repudiation

1. Mr Sayed submitted that NAB repudiated the In Principle Agreement by first, insisting in the mail exchanges on 29 and 30 August 2012 that it required him to enter into a deed releasing NAB and its agents from liability to it despite Mr Sayed's warning that NAB would not proceed with the In Principle Agreement on that basis; secondly, refusing to accommodate his reasonable request to limit the scope of the release on which NAB was insisting; thirdly, seeking and obtaining orders for specific performance on the basis of an entitlement to a wide release in the formal deed; and finally, maintaining that stance in seeking to uphold that judgment in the Court of Appeal.
2. After 3.22pm on 28 August 2012, Mr Sayed deposes (Aff, 11/11/2014 at paragraph 54) that he had a telephone conversation with Ms Kuti where he said words to the effect: "I will not accept any deed which has clauses 2(d) and 7(a). If the bank insists on having those clauses I am not having anything more to do with this settlement and I will go back to court and fight the case [referring to the case that was before the court and about to be heard when the In Principal Agreement was negotiated and signed]."
3. Ms Kuti recalls having this telephone conversation (Aff, 24/11/2014 at paragraph 4). Her letter dated 29 August 2012 refers to some parts of that conversation. While she does not deny that Mr Sayed used those words, she cannot recall Mr Sayed saying, "I will go back to Court."
4. Following that telephone conversation, on 29 and 30 August 2012 there was email correspondence between the parties concerning the deed of release, in which Mr Sayed says NAB's repudiatory conduct is implicit. Accordingly, it is now necessary for me to briefly refer to that correspondence, the contents of which are also relevant to other topics covered in this judgment.
5. On 29 August 2012 at 8.54am, NAB's solicitor emailed Mr Sayed and stated: "I refer to your email below and to our subsequent telephone conversation with you. As discussed, if you do not understand any of the clauses within the deed and/or wish to seek legal advice in respect to the deed, we suggest that you obtain legal advice as soon as possible. Following our conversation with you we understand that you agree with the current deed apart from paragraphs 2(d) and 7(a). We note that you will consent to all other paragraphs on the basis that an additional paragraph is added along the following lines (NB. this paragraph has been inserted at paragraph 4(d)): … In respect to paragraph 7(a), as previously advised, this term is not negotiable. As advised in our earlier email and discussed with you, the deed is a deed of settlement and release i.e. it must bring to an end all claims against NAB, which includes NAB's agents. You will appreciate that NAB would not, under any circumstances, agree to compromise its debt and forebear from enforcing its mortgage without a complete release from all claims made by you and Mrs Sayed, which includes claims against its agents." (NAB's emphasis).
6. On 29 August 2012 at 9.20am, Mr Sayed emailed NAB's solicitors advising that he did not accept the terms when he stated: "I would have never agreed to a settlement if I had known of the full Deed terms, a draft deed should have been supplied during negotiations so the contents could have been evaluated, instead I was handed a handwritten note which was hardly legible to say the least. …"
7. Mr Sayed also pointed out that: "One of the deciding factors in agreeing to a settlement was that I would be able to recover my losses through proceedings against Taylor, Realta and MMJ North … I guess I will see you in court."
8. On 30 August 2012 at 1.57 pm, NAB's solicitor emailed Mr Sayed advising him of the maximum it was prepared to compromise on the terms of the deed of settlement and release. NAB advised that if he did not consent it would make an immediate application to the Court seeking specific performance of the Settlement Agreement (this email was referred to earlier at [18]).
9. On 30 August 2012 at 2.08pm, Mr Sayed wrote to NAB's solicitors: "I have already written to the court and asked to be heard on this matter."
10. On 30 August 2012 at 4.28pm Mr Sayed emailed Mrs Sayed's solicitor (Mr Luong) saying: "We are going back to court! That's FINAL."
11. On 31 August 2012 at 1.51pm, Mr Sayed wrote to the Associate to Adams J requesting that the matter be listed before his Honour at "the soonest available day."
12. According to Mr Sayed, NAB's conduct concerning the deed of release was repudiatory, and due to that repudiatory conduct, he elected not to be bound by and treated himself as discharged from further performance of the In Principle Agreement. He says that both the email of 29 August stating, "I guess I will see you in court", and the email dated 31 August 2012 to the Associate to Adams J requesting that the matter be relisted, amounted to a communication of that election. Mr Sayed submitted that accordingly, his obligations of further performance of the In Principle Agreement have been discharged.
13. NAB disputed the idea that it repudiated the In Principle Agreement. It submitted that the position it took in the Court of Appeal is that it did not seek to impugn the In Principle Agreement. NAB submitted that rather, in the Court of Appeal, it sought to establish by declaration that a binding agreement had been reached in the terms recorded in the Settlement Agreement which was, on any version of things, a larger agreement than that recorded by the In Principle Agreement. In any event, even though it was found by the Court of Appeal to be wrong in thinking that the Settlement Agreement was binding, NAB submitted that a party who seeks a judicial ruling as to the term of a contract is not taken to have repudiated the "true" agreement as ultimately determined by the Court. In support of this proposition senior counsel for NAB relied upon DTR Nominees Pty Ltd v Mona Homes Pty Ltd [1978] 138 CLR 423; (1978) 19 ALR 223, where the High Court (per Stephen, Mason, Jacobs, Murphy and Aickin JJ) stated at 431: "For the respondents it was submitted that such an intention should be inferred from the appellant's continued adherence to an incorrect interpretation of the contract. It was urged that the appellant, because it was acting on an erroneous view, was not willing to perform the contract according to its terms. No doubt there are cases in which a party, by insisting on an incorrect interpretation of a contract, evinces an intention that he will not perform the contract according to its terms. But there are other cases in which a party, though asserting a wrong view of a contract because he believes it to be correct, is willing to perform the contract according to its tenor. He may be willing to recognize his heresy once the true doctrine is enunciated or he may be willing to accept an authoritative exposition of the correct interpretation. In either event an intention to repudiate the contract could not be attributed to him. As Pearson LJ observed in Sweet & Maxwell Ltd v Universal News Services Ltd [1964] 2 QB 699 at 734; [1964] 3 All ER 30 at 43: 'In the last resort, if the parties cannot agree, the true construction will have to be determined by the court. A party should not too readily be found to have refused to perform the agreement by contentious observations in the course of discussions or arguments …'." (NAB's emphasis).
14. It is my view that the statements and conduct of NAB from the 28 August 2012 up until the time of the Appeal cannot be construed as repudiating the In Principle Agreement. During the telephone call of 28 August 2012 and the correspondence of 29 and 30 August 2012, Mr Sayed did not specifically say to NAB that he regarded himself as no longer bound by the In Principle Agreement. Nor within that correspondence did NAB say that it no longer intended to be bound by the In Principle Agreement. Rather, since the terms incorporated in the In Principle Agreement were included in the subsequent Settlement Agreement, NAB's conduct was to the contrary. NAB sought to enforce the subsequent Settlement Agreement even though Mr Sayed had refused to sign it. That conduct by NAB indicates that although its preference was to have the Settlement Agreement enforced, it did not repudiate the In Principal Agreement. NAB's refusal to accommodate Mr Sayed's request not to include the release in the Settlement Agreement also does not, in my opinion, amount to repudiatory conduct.
15. On appeal, NAB did not express the view that In Principle Agreement was unenforceable. Emmett JA noted, "The Bank did not seek specific performance of the In Principle Agreement" and then offered the explanation that: "That may well be because of the absence in it of any provision for mutual releases. That is to say, the Bank was only prepared to enforce the contract if it obtained a release from Mr and Mrs Sayed that it regarded as satisfactory." Emmett JA went on to say, "The Bank may well prefer to pursue its original causes of action, rather than accept a reduced payment in full satisfaction without any release of the claims made in the cross-claim." The Court did not make a finding that NAB would prefer to pursue its original causes of action, rather that it may prefer to do so. (My emphasis added).
16. However, if I am wrong, after the Court of Appeal decided that the Settlement Agreement was unenforceable, NAB accepted that it had an incorrect interpretation of the Settlement Agreement. In these circumstances, NAB's erroneous view of the law does not evince its intention to repudiate the In Principle Agreement. Mr Sayed's argument in relation to repudiation fails.

(ii) Abandonment

1. Whether abandonment is shown is characterised as an objective test based on the conduct of the parties. The nature of the inquiry to be made when it is alleged that the parties to a contract have abandoned that contract has recently been discussed in Fazio v Fazio [2012] WASCA 72 and Cedar Meats (Aust) Pty Ltd v Five Star Lamb Pty Ltd [2014] VSCA 32. In the former case, Murphy JA said at [74]: "The abandonment of a contract, in the sense of the mutual release of future obligations, being an inferred agreement, does not depend upon the subjective intention of the parties, but upon whether their conduct (both acts and omissions) viewed objectively manifests an intention to discharge the contract: Summers v The Commonwealth [1918] HCA 33; 25 CLR 144, 151-152; Wallera Pty Ltd v CGM Investments Pty Ltd [2003] FCAFC 279 [2], [40], [57]; DTR Nominees Pty Ltd v Mona Homes Pty Ltd [1978] HCA 12; 138 CLR 423; Marminta Pty Ltd v French [2003] QCA 541 [21]-[22]."
2. The Court of Appeal in Sayed v National Australia Bank referred to abandonment at [61] when it stated: "[61] The date for payment of the sum of $670,000 has long since passed, without any offer on the part of Mr and Mrs Sayed to pay the sum. The Bank has made no effort to enforce any contractual obligation to pay the sum. In the circumstances, it may be appropriate to conclude that neither party wishes to have the In Principle Agreement enforced and that both parties have effectively abandoned it."
3. Mr Sayed submitted that NAB had abandoned the enforcement of the In Principle Agreement by 17 September 2013. He submitted that the following conduct, when viewed objectively, supports the conclusion that NAB abandoned the In Principle Agreement: (a) NAB's explicit insistence that the In Principle Agreement required the giving of the release even when explicitly warned that Mr Sayed would ask for the matter to return to court to continue the hearing if that stance was maintained, and his implementation of that threat by email on 30 August 2012. (b) NAB's conduct in "heading of at the pass" [sic] Mr Sayed's attempt to resume the hearing by filing its notice of motion for specific enforcement and its insistence on that stance throughout the hearing before Rein J and before the Court of Appeal. (c) The "telling absence" of any alternative case put at any stage of that litigation, indicating that enforcement of the In Principle Agreement without a release was an option that NAB was willing to contemplate as an alternative or fallback position. (e) The absence of any occasion to examine the termination/abandonment issue in the Court of Appeal, which was a direct consequence of NAB's "all or nothing" attitude as to the release which was apparent throughout the proceedings and in the correspondence. (f) The communication from NAB's solicitor to Mr Sayed's counsel and Mrs Sayed on 9 September 2013, foreshadowing that upon an adverse result in the Court of Appeal, "the matter will return to a first instance hearing". (g) The absence of any correcting or qualifying communication following the publishing of the reasons for judgment incorporating the observation about abandonment in the Court of Appeal judgment at paragraph [61]. (h) NAB's acceptance of Mr Sayed's demands for return of interest paid on the monetary judgments that had been set aside by the Court of Appeal.
4. Mr Sayed submitted that the Court of Appeal was correct to read the carriage of that matter by NAB as indicative of abandonment of the In Principle Agreement "if the release it was after wasn't included", and that it was also correct in interpreting the stance taken by Mr Sayed in the proceedings as indicative of abandonment, especially in the absence of any need to adduce evidence of and litigate Mr Sayed's primary stance, namely, that he had terminated the In Principle Agreement on 30 August 2012 because of the Bank's stance on the release.
5. In response, NAB submitted that there is no evidence of any express statement by NAB that it considered the In Principle Agreement as no longer on foot. NAB says that the conduct of the parties after the Court of Appeal ruling is quite inconsistent with the idea that there had been abandonment of rights by NAB, either generally or specifically.
6. In my view, the Court of Appeal did not make a definitive finding that both the parties have effectively abandoned the In Principle Agreement. It dropped short of doing so when it stated, "… it may be appropriate to conclude …". (My emphasis).
7. To ascertain whether objectively, there has been an abandonment of the In Principle Agreement, it is necessary to refer to some more correspondence between the parties and examine their conduct. I have already referred to the emails dated 29 and 30 August 2012 earlier in this judgment under the heading "Repudiation".
8. On 12 April 2013, the Court of Appeal granted a stay of the orders for possession on terms that Mr and Mrs Sayed made fortnightly payments of interest to NAB. Mr and Mrs Sayed made payments in accordance with those terms.
9. On 9 September 2013, NAB's solicitor wrote to Mr Jim Thompson, counsel for Mr Sayed and stated: "Although judgment has not yet been handed down in the appeal proceedings, it is apparent that there is a real possibility that the deed of settlement and release will be set aside and the matter will return to a first instance hearing. NAB does not consider that Mr or Mrs Sayed will be successful at a final hearing. However, getting to that stage will obviously incur further substantial costs."
10. NAB went on to make an offer of settlement without prejudice, save as to costs (in the Court's copy of this letter, the settlement offer has been redacted).
11. On 18 September 2013, Mr Sayed wrote to NAB's solicitors requesting the return of the moneys that were paid in relation to the terms of the stay of proceedings. The letter continues: "As for the return of the monies paid, it is on record that NAB did not object to the repayment of these monies if the court found that there was no agreement and as you know, this is the case. … If NAB wish to settle this matter, then you already have my offer. The offer is open for a period of 7 days only after the monies referred to above have been paid in full." [Mr Sayed's emphasis].
12. Mr Sayed's letter of 18 September 2013, does not make clear which "agreement" he is referring to. The Court of Appeal held that the Settlement Agreement was not binding on the parties. It appears that Mr Sayed was referring to only one of the agreements, as he uses the singular not the plural. It is more likely that as this letter is written two days after the Court of Appeal handed down its decision, the reference is to the Settlement Agreement. Hence, Mr Sayed does not say anything about the validity of the In Principle Agreement.
13. On 12 November 2013, the associate to Davies J emailed Ms Kuti seeking confirmation "that the proceedings are now concluded." Ms Kuti replied, "We are awaiting instructions in respect of NAB's position regarding these proceedings" and requested that the court listing on 15 November 2013 be vacated. That listing was vacated.
14. Also on 12 November 2013, this Court issued an order that incorrectly stated "finalised as per Johnson J's orders". Johnson J had previously dealt with and refused the Sayeds' initial application to grant a stay pending the appeal.
15. On 11 May 2014 (some eight months later), Mr Sayed emailed NAB's solicitors "in response to your letter dated September 2013", with a counter offer to settle proceedings on a without prejudice save as to costs basis. He also requested that these current proceedings, including his cross claim, be dismissed by consent with no order as to costs and also that all past costs orders vacated.
16. On 12 June 2014, Mr Sayed wrote a follow up letter to NAB's solicitor referring to his earlier email of 11 May 2014. He stated, "I am sending this letter because I haven't received a reply from you or your office."
17. While there was a period of eight months of inactivity by both parties, it was Mr Sayed who responded to NAB's offer of settlement and then chased NAB up.
18. On 24 September 2014 (over 3 months later), NAB wrote to Mr and Mrs Sayed in the following terms. "1. NAB considers that under the In Principle Agreement you have agreed that NAB is entitled to a judgment for $700,000 plus interest since 23 August 2012 and a writ of possession, but NAB has by this letter agreed to accept $670,000, if paid within the time referred to above, in discharge of that judgment and writ; 2. NAB has also by this letter agreed to forego any right to claim interest on $700,000 and costs from 23 August 2012 to 15 September 2014, on the condition that you sign and return the enclosed consent judgment to us within 14 days; 3. If you do not return the signed consent judgment to us within 14 days NAB will file a motion seeking to enforce its right to judgment for $700,000 plus interest from 23 August 2012 or in the alternative, from such other date as the court determines, plus costs on an indemnity basis as well as a writ of possession, as you agreed to under the IPA; 4. If you do not pay to NAB the sum of $670,000 by 15 January 2015 in full and cleared funds, NAB will enforce the judgment it obtains ie, enforce the consent judgment or should you fail to provide consent judgment, enforce the judgment NAB obtains by way of a motion."
19. In response to this letter, on 24 September 2014, Mr Sayed on his behalf and Mrs Sayed's, wrote: "In reply to your letter dated 15 September 2014, we consider the In Principle Agreement (IPA) dated 23 August 2012 neither binding nor enforceable, well and truly expired and therefore reject NAB's offer to settle the proceedings under those conditions. We consider NAB's intension [sic] to file the proposed motion to be completely misguided and will be a waste of the Court's time and ours, we strongly object to its filing and intend to vigorously defend it in any case. We note that we have not had any form of contact from your office for the past year and therefore presumed that the proceedings have been concluded and that NAB had no interest to pursue us at all, we also sent you a letter Offer to Settle Proceedings dated 12 June 2014. I have now attached a copy of that letter and reiterate that we will only settle the dispute between us under those conditions. If NAB rejects our Offer, then we would invite it to reapply the original matter before the court so we can debate the real issues in this dispute. We are confident that NAB will not be successful in that respect either. This letter, our counteroffer 12 June 2014, the Judgment 17 September 2013 and NAB's offer 9 September 2013 and other material will be tendered to the court on any application NAB makes to the court in this matter."
20. On 12 November 2014, NAB emailed Davies J's associate and stated: "We also refer to Davies J order made on 12 November 2013 and to the order made by Johnson J on 12 February 2013, as well as a notice of listing dated 30 October 2013, copies of which are attached. Our client, National Australia Bank, filed a notice of motion in these proceedings on 2 October 2014 which has been listed for hearing in February 2015. The defendant, Mr Sayed, asserts the proceedings have been finalised pursuant to Davies J's order on 12 November 2013. Davies J's order made on 12 November 2013 appears to be inconsistent with the email correspondence below. Our client requests that the matter be relisted before Davies J to clarify this issue and the current status of the proceedings, noting that on 17 September 2013 the NSW Court of Appeal set aside the consent judgment entered in these proceedings on 6 November 2012."
21. Mr Sayed (Aff, 11/11/2014 at [23]) deposed that the Court of Appeal decision meant the Court was holding that the In Principle Agreement was no longer valid or enforceable, as referenced in his email to Ms Kuti on 24 September. At no stage, did NAB or its legal representatives inform him that they did not accept what Emmett JA said about the position or that NAB disagreed with his statements about that in his email of 24 September 2013. Mr Sayed's own understanding as a result of reading the judgment and because of the correspondence concerning repayment of interest instalments, was that the In Principle Agreement was no longer valid or enforceable and that NAB was not contending to the contrary.
22. At the hearing of this motion before me, Mr Sayed was cross examined in relation to the effect of the Court of Appeal decision. His evidence is as follows: "Q. Well after the IPA you say to her Honour, don't you, that it was your view that you wished to preserve the right to sue third parties in relation to the dealings with the property at Corrimal, didn't you? A. Yes. Q. So that you needed to organise your financial affairs in order to now pursue claims against the third parties in relation to Corrimal, is that right? A. That's very broad, because you are going from when the IPA was signed up until now and that's not the case exactly. When the IPA was signed that was my view, but then the IPA and the deed fell over and from that point I didn't have any dispute with anyone. I would just rather that the whole thing just went away." (T19.40-50; (T20.1) … Q. And after the appeal you then set about trying to settle the case, didn't you? A. Yes. (T20.7-9) … Q. But the fact of the matter was in 2014 in May and again in June you were perfectly well‑aware that there were proceedings on foot between you and the Bank that you wanted to settle, weren't you? A. I was trying to prevent them from refiling and I would not go so far as to say there were proceedings. (T20.22-26) … Q. And what was in there was an invitation to the Bank to consider disposing of the current proceedings by a settlement, wasn't it? A. Well it's to resolve the dispute. Q. It wasn't anything to do with trying to stop the Bank refiling, was it? A. Yes, it was. Q. Is that a serious and honest answer? A. Yes. (T21.12-20) … Q. In any event is that a reference to the consent judgments having been set aside and then continues 'we are awaiting instructions in respect of NAB's position'? A. Yeah but I, to tell you the truth, all I went to on this email is the bottom part of that which says 'please confirm by return email that the proceedings had been concluded', so I just assumed that it was." (T22.50; T23.1-2)
23. In his affidavit dated 11 November 2014, Mr Sayed deposed at [27]: "27 As a result of his understanding and my belief that the Bank agreed that the In Principle Agreement was no longer valid or enforceable, I organised my financial affairs on that basis, and spent funds that became available to me that I would have otherwise used to fight these proceedings. I spent funds carrying out renovations to our home totalling about $20,000, using funds that I would otherwise have kept available to deal with the banks claim in these proceedings. I also spent about $26,000 to purchase a new car using funds that I would otherwise have kept available to deal with the banks claim in these proceedings. I would also have sought legal advice about the further conduct of the claim in these proceedings and my cross-claim. Subject to that advice, I would have taken such steps as were recommended for the purpose of ensuring that the parties I intended to sue over the losses suffered as a result of the mortgagee sale and sale at an undervalue were added as cross defendants in the proceedings so as to protect my capacity to recover losses inflicted because of their wrongdoing, even if the bank was not itself vicariously liable for their misconduct."
24. On 13 November 2014, the Associate to Davies J replied to the parties and stated: "His Honour has read the email from Ms Kuti received this morning and an email from Bill and Nicole Sayed received a short time ago. His Honour has also reviewed the file to understand the purpose of the re-listing request. His Honour did not make any order on 12 November 2013 except to remove the matter from his call-up on 15 November. His Honour's and my best recollection is that that was done pursuant to a telephone request by Ms Kuti. The Judgment/Order attached to Ms Kuti's email was not made by his Honour. In those circumstances his Honour can see no utility in re-listing the matter before him."
25. I accept that as at 24 September 2014, Mr and Mrs Sayed made it clear that they considered the In Principle Agreement neither binding nor enforceable and that it had well and truly expired. That means that as at 24 September 2014 Mr and Mrs Sayed took the view that the In Principle Agreement had been abandoned. However, the tenor of NAB's letter indicates is that it regarded the In Principle Agreement as still being operative. For the In Principle Agreement to be abandoned, the conduct of both parties, viewed objectively, had to convey an intention to discharge the In Principle Agreement.
26. While NAB took no steps in these proceedings for months, it had made an offer to settle. Mr Sayed eventually made a counter offer and then chased it up. The parties conduct viewed objectively does not evince its intention to abandon the In Principle Agreement. This is because NAB's conduct did not indicate it regarded the In Principle Agreement as operative. It is my view that the In Principle Agreement has not been abandoned. This submission fails.

(iii) Laches and unconscionable delay

1. No specific submissions were made on this topic other than Mr Sayed saying that this application should be refused by reason of NAB's laches and unconscionable delay in asserting a right to specific performance of the In Principle Agreement.
2. There was a delay of about eight months between the Court of Appeal judgment and NAB's letter dated 24 September 2014. During that period there was a further attempt by the parties to settle the proceedings. In my view, in these circumstances, NAB's delay does not preclude its right to seek specific performance of the In Principle Agreement. This submission fails.

B. If the In Principle Agreement is binding, can specific performance be enforced?

1. Mr Sayed submitted that the orders of the Court of Appeal included the In Principle Agreement. Counsel for Mr Sayed argued that since the In Principle Agreement was not remitted to the trial judge for further hearing it has merged. According to counsel for Mr Sayed, this current application for specific performance is an impermissible attempt by NAB to relitigate the same question. He says that the claim for specific performance should not be allowed because:

• • Firstly, the principles of res judicata and issue estoppel apply, because the cause of action on which it is based merged upon judgment of the Court of Appeal; and also that it is barred by the legal policy of finality in litigation and Anshun estoppels because they could and should have been made at the 5 September hearing, the hearing before Rein J, or by cross appeal or notice of contention in the Court of Appeal;
• • Secondly, that the proceedings are an abuse of process giving rise to issue estoppel;
• • Thirdly, that there has been an election by NAB not to enforce the In Principle Agreement;
• • Fourthly, that there has been additional conduct by NAB that gives rise to an estoppel.

(i) Res judicata and issue estoppel

1. The principles of res judicata or issue estoppel apply where there is an attempt to re-litigate issues that have previously been determined in proceedings. Alternatively, an attempt to litigate issues which could and should have been litigated in previous proceedings will give rise to an Anshun estoppel: Port of Melbourne Authority v Anshun Pty Ltd (1981) 147 CLR 589; [1981] HCA 45.
2. Dixon J's analysis of res judicata and issue estoppel in Blair & Perpetual Trustee Co Ltd v Curran (Adams' Will) [1939] HCA 23; (1939) 62 CLR 464 remain a guiding precedent. His Honour says at 531-532: "A judicial determination directly involving an issue of fact or of law disposes once for all of the issue, so that it cannot afterwards be raised between the same parties or their privies. The estoppel covers only those matters which the prior judgment, decree or order necessarily established as the legal foundation or justification of its conclusion, whether that conclusion is that a money sum be recovered or that the doing of an act be commanded or be restrained or that rights be declared. The distinction between res judicata and issue estoppel is that in the first the very right or cause of action claimed or put in suit has in the former proceedings passed into judgment, so that it is merged and has no longer an independent existence, while in the second, for the purpose of some other claim or cause of action, a state of fact or law is alleged or denied the existence of which is a matter necessarily decided by the prior judgment, decree or order."
3. Re-litigation of the same cause of action in fresh proceedings is likely to involve the same issues and gives rise to res judicata and issue estoppel.
4. Mr Sayed argued that the authorities show that all claims on a contract need to be brought in the one proceeding, and that failure to litigate an available claim in initial proceedings creates a res judicata whereby all available claims are treated as merged in the first judgment. Mr Sayed premised these submissions by stating that: "the cause of action heard and determined at first instance by Rein J and on appeal by the Court of Appeal was the plaintiff's claim for specific enforcement of the IPA". Mr Sayed then submitted that the claim for specific performance on the current motion is thus barred because it could and should have been made at the hearing of the original proceedings (commenced on 5 September 2012 and heard by Rein J on 22 October 2012), but was not, and also that it could and should have been made by cross appeal or notice of before the Court of Appeal.
5. Mr Sayed submitted that it was open to NAB to seek to enforce the In Principle Agreement without the inclusion of a release provision when it prosecuted its original motion in September 2012. Since NAB failed to do so then, Mr Sayed submitted that it is not open to it to do so now. Nor, according to Mr Sayed, has NAB sought to adduce evidence capable of explaining how or why it failed to adduce a claim for specific performance of the IPA in the motion before Rein J or in the Court of Appeal.
6. According to Mr Sayed, the judicial determination of the Court of Appeal directly involved the Settlement Deed between the parties and the issue of whether the Settlement Deed can be ordered to be specifically performed has been disposed of once and for all. Mr Sayed says that the result is that the cause of action for specific performance of the In Principle Agreement was litigated in the notice of motion filed 5 September 2012, was merged in the decision on that motion, and has now been disposed of.
7. In support of this proposition, counsel for Mr Sayed referred to McGrory v Alderdale Estate Company Ltd [1918] AC 503; [1918-19] All ER Rep 1184, where the House of Lords held that it was not open to the vendor to adduce evidence after proceedings for specific performance had been determined. However, I note that there is an important distinction between McGrory and the factual situation here. In McGrory, the proceedings had been finalised. After they had been finalised, the vendor sought to adduce evidence. The factual situation here is that these proceedings have not been finalised. For these proceedings to be finalised, the part heard hearing has to continue until judgment is given, it is settled or discontinued.
8. NAB argued that the premise on which Mr Sayed has based his submissions, that NAB's notice of motion filed 5 September 2010 was an action "for specific performance of the IPA", is erroneous. NAB submitted firstly, that the orders sought in the motion of 6 September 2012 did not seek to enforce the In Principle Agreement, but rather sought to enforce the formal deed of settlement and release; and secondly, that the orders of the Court of Appeal, applied only to the Settlement Agreement and not to the In Principle Agreement. Further, NAB says that comments made by Emmett JA regarding whether the In Principle Agreement was binding and enforceable were obiter dicta.
9. Counsel for NAB argued that the finding concerning the Settlement Agreement is the dispositive finding, which is the subject of any res judicata or issue estoppel, and that that finding was not in respect of the In Principal Agreement. Counsel for NAB further submitted that Emmett JA was able to find both that there had been an agreement in terms of the In Principle Agreement and that the Settlement Agreement, the subject of the appeal, did not record the larger agreement. As no relief was sought pursuant to the terms of the In Principal Agreement itself no res judicata or issue estoppel arises.
10. In my opinion, Mr Sayed's submissions on this issue are circular. While they are premised on the basis that the original motion was for specific performance of the In Principle Agreement, they criticise NAB on the basis that: "the claims for relief formulated in the [current] Notice of Motion… could and should have been made at the hearing of the original proceedings, but were not, and they could and should have been made by Cross-Appeal or Notice of Contention in the Court of Appeal". In effect, Mr Sayed contends that NAB should have made a claim for specific performance of the In Principle Agreement in the original notice of motion or on appeal, but simultaneously contends that the original notice of motion and appeal concerned specific performance of the In Principle Agreement.
11. NAB's case before Rein J was that as at 1.57 pm on 30 August 2012 an agreement in terms of the Settlement Agreement had been reached, as evidenced by the communications before the In Principle Agreement, the In Principle Agreement itself and communications after the In Principle Agreement. That is, a larger agreement was contended as being encompassed by the Deed. Mr Sayed denied that proposition. Rein J agreed with NAB's position. Mr Sayed appealed. The Court of Appeal disagreed, finding that one terms of the Settlement Agreement, the release clause, had not been agreed by Mr Sayed, so that the Agreement terms did not reflect an agreement between the parties.
12. In my opinion, a cause of action for specific performance of the In Principle Agreement has not yet been litigated. Contrary to the submissions of Mr Sayed, the original order for specific performance explicitly stated that it concerned the Settlement Agreement, not the In Principle Agreement. Nor have the In Principle Agreement and the Settlement Agreement "merged on judgment". A cause of action for specific performance, including a contract, merges in a decree of specific performance (see K.R. Handley, Spencer, Bower and Handley: Res Judicata, (Butterworths 4th ed. 2009) [20.01]). However, in these proceedings, the order for specific performance has been set aside. The proceedings are still on foot. The contract has not merged: the In Principle Agreement still stands and is capable of being litigated.
13. So far as issue estoppel is concerned, it was Mr Sayed who appealed to the Court of Appeal, not NAB. On appeal, NAB's position was that it wanted the order for specific performance of the Settlement Agreement upheld and the appeal dismissed. NAB did not seek to enforce the In Principle Agreement by cross-appeal as that agreement was not the one for which specific performance was sought originally.
14. Accordingly, it is my view that the In Principal Agreement is not subject to issue estoppel or res judicata. This claim fails.

(ii) Abuse of process giving rise to issue estoppel

1. Mr Sayed submitted that NAB's entitlement to obtain specific performance of the In Principle Agreement is precluded by the determination made in the Court of Appeal that NAB was not entitled to the consent judgments it had obtained. According to Mr Sayed, NAB is precluded by issue estoppel from again seeking to have those judgments entered and as the balance of the relief is consequential it must fall away if the judgments are precluded by the determination of the Court of Appeal that NAB was not entitled to them.
2. Counsel for Mr Sayed referred to In the matter of Joe & Joe Developments Pty Ltd (subject to a Deed of Company Arrangement) [2014] NSWSC 1444 where Black J quoted from Ritchie's Uniform Civil Procedure NSW at [104]: "Proceedings will also be regarded as an abuse of process to the extent that they involve an attempt to re-litigate particular issues that were determined, either explicitly or necessarily, in earlier judicial proceedings (including proceedings determined by consent). Such a determination gives rise to "issue estoppel": Blair & Perpetual Trustee Co Ltd v Curran (Adam's Will) (1939) 62 CLR 464; Noall v Middleton [1961] VR 285; Commissioner for Railways v Bielewicz [1963] NSWR 482 at 486; [1963] SR (NSW) 466 at 468; Carl Ziess Stiftung v Rayner (No 3) [1970] Ch 506; [1969] 3 WLR 991. … The scope of the estoppel is confined to those issues that were directly involved in the actual decision made in the previous proceedings (and does not include every finding that was made): Murphy v Abbi-Saab (1995) 37 NSWLR 280; BC 9505070. Where the basis for "issue estoppel" has been made out, the Court retains an overriding discretion to permit the proceedings to continue, although this discretion is likely to be exercised only in exceptional circumstances: see Arnold v National Westminster Bank plc [1991] 2 AC 93; [1991] 3 All ER 41; Johnson v Gore Wood & Co (a firm) [2002] 2 AC 1 at 30; [2001] 1 All ER 481 at 498 per Bingham LJ."
3. After the Court of Appeal decision was handed down, both parties were of the view that the claim for possession before Adams J should continue to be heard. They were also of the view that and the cross claim was still on foot and was to be heard separately after the possession proceedings had been determined.
4. NAB is seeking to enforce the In Principle Agreement. As I elucidated earlier in this judgment, it has not previously sought to enforce this particular agreement. In my view, seeking to enforce the In Principle Agreement does not constitute an abuse of process that gives rise to an issue estoppel. Even if I am wrong, I would exercise my discretion to permit the possession proceedings to continue to finality, either by seeking specific performance or continuing with the part heard hearing of the proceedings.

(iii) Election

1. An election between rights occurs where a party has two alternate rights, and acts in a manner consistent with the exercise of one of those rights and inconsistent with the other: see Bibby Financial Services Australia Pty Limited v Sharma [2014] NSWCA 37 at [15]. Accordingly, to be an election there must be a choice between inconsistent rights.
2. Mr Sayed says that by seeking to enforce the Settlement Agreement, NAB made an election by exercising its right to litigate its version of the In Principal Agreement and insist on the release. According to Mr Sayed, NAB had to choose between exercising its right to litigate its version of the In Principle Agreement and insist on the release (which it did) or it could have elected to withdraw its demand for a release and implement the In Principle Agreement settlement without one. Mr Sayed submitted that those two rights were inconsistent with each other and presented NAB with an election. He argued that NAB chose to reject the opportunity it had to implement the In Principle Agreement without a release clause and pursue its claim for a release. This, he says, caused him to request that the matter be relisted to continue the hearing. However, he says that NAB thwarted his attempt to continue the hearing when it invoked s 73 by notice of motion and prosecuted that claim to its conclusion, albeit with adverse results: see O'Connor v SP Bray Ltd (1936) 53 WN(NSW) 72; (1936) 36 SR(NSW) 248 at 258 to 261 per Jordan CJ.
3. Counsel for Mr Sayed also referred to Sargent v ASL Developments Ltd [1974] HCA 40; 131 CLR 634 at 655 to 666 where Mason J stated: "Essential to the making of an election is communication to the party affected by words or conduct of the choice thereby made and it is accepted that once an election is made it cannot be retracted (R v Paulson (1921) 1 AC 271 at 284 and Tropical Traders Ltd v Goonan (1964) 111 CLR 1 at 55). No doubt this rule has been adopted in the interests of certainty and because it has been thought to be fair as between the parties that the person affected is entitled to know where he stands and that the person electing should not have the opportunity of changing his election and subjecting his adversary to different obligations."
4. Counsel for Mr Sayed further submitted that NAB's present application is inconsistent with the election it made on 30 August 2012 to file the s 73 application based on the In Principal Agreement. He says that it is also inconsistent with its communications with Mr Sayed in September 2013 disclosing a decision to resume litigation of the original issues in dispute if the Court of Appeal set aside the Settlement Deed.
5. Counsel for NAB submitted that again, Mr Sayed's argument proceeds on the erroneous premise that it was seeking to enforce its version of the In Principal Agreement when in fact it was not seeking to enforce either its or any version of the In Principal Agreement, but rather a declaration that a binding agreement had been reached in the terms recorded in the Settlement Agreement which was, on any version of things, a larger agreement than the one recorded in the In Principle Agreement.
6. NAB further submitted that there was no election by it between any inconsistent rights, such as accepting rent, on the basis there is a lease, after termination of a lease and then seeking to evict the tenant, on the basis the lease is at an end. In support of this proposition NAB referred to a passage from Evans v Bartlam [1937] AC 473; [1937] 2 All ER 646 at 652 where Lord Russell of Killowen stated that a person "Having accepted a benefit given him by a judgment, cannot alleged the invalidity of the judgment which conferred the benefit." NAB also referred to the recent decision of Mad Dogs Pty Ltd v Gilligan's Backpackers Hotel & Resort Pty Ltd [2014] QSC 165 at [30] where Henry J stated, "The inconsistent, truly alternative character of the competing courses open is a vital feature of the doctrine of election."
7. According to NAB, by seeking a declaration as to the existence of an agreement in terms of the deed of settlement and release, it was not choosing between any inconsistent rights but rather, was requesting the assistance of the courts in connection with a contractual dispute, again referring to Mad Dogs at [25] where Henry J stated, "…the bare fact a party resorts to the assistance of the courts in connection with a contractual dispute will not bespeak an election."
8. I agree with the reasoning of NAB. The decision to proceed to claim for specific performance of the Settlement Agreement was not inconsistent with a decision to claim for specific performance of the In Principle Agreement. NAB's position at all times was to finalise the possession proceedings whether it be by settlement, or by continuing with the part heard hearing. NAB was not willing to "withdraw its demand for a release and implement the In Principle Agreement without one", which Mr Sayed says was the other, inconsistent option. It is my view that NAB was not presented with an election since I cannot see what type of benefit NAB would have received through a decision to claim specific performance of the In Principle Agreement without a release over a decision to claim specific performance of the Settlement Agreement, which was (as described by NAB), a larger version of the In Principle Agreement and contained the release provision. Mr Sayed did not elucidate any possible benefits, nor did he make submissions about why the two rights were inconsistent with each other. Accordingly, it is my view that NAB should not be precluded from seeking to enforce the In Principle Agreement in circumstances where the wider Settlement Agreement has been set aside. This submission fails.

(iv) Estoppel - additional conduct

1. Mr Sayed's submissions on this topic are similar to those he made in relation to election. Mr Sayed submitted that he organised his life and his financial affairs and has conducted this litigation since 30 August 2012, and since September 2013, on the basis of the understanding and belief, induced by NAB's conduct, that NAB was not prepared to implement the In Principle Agreement without the provision of the release for which it was then stipulating and that an outcome of the September 2012 motion adverse to NAB's stance would mean that the matter would return to a first instance hearings. The result he says is that NAB's belated attempt to abandon its insistence on the wide release is precluded by estoppel arising from the elections made by NAB and that detrimental reliance.
2. So far as detriment is concerned, Mr Sayed deposed that (Aff, 11/11/2014 at [29]): "29 Further and alternatively, the bank's conduct in erroneously insisting that performance of the In Principle Agreement required execution of wide releases: a. Resulted in the period that was available to discharge our liabilities to the bank for the Settlement Amount expiring before we were able to do so without giving up our rights under a wide release; b. Caused interest to accrue on the amount described as the Judgment Debt in the In Principle Agreement (assuming - contrary to my primary position - that the IPA is still on foot); c. Deprived us of the four-month period to enable myself and my wife to effect a private sale of our home to discharge the bank's claims for the Settlement Amount."
3. The four month period is referred to again by the Sayeds under the next heading "Terms of relief".
4. In response to this, NAB submitted that it was not the conduct of the bank that induced this conduct, but a misreading by Mr Sayed of the Court of Appeal judgment. Senior Counsel for NAB argued that no conduct of the bank could sensibly be said to have induced Mr Sayed either to a belief that the In Principle Agreement was not relied upon, or that if the Settlement Agreement reliance was unsuccessful, that somehow the proceedings as a whole had been disposed of by the Court of Appeal (and that NAB accepted that proposition). He submitted that such a submission was "simply fanciful".
5. As explained above, I do not agree that NAB made an election not to rely upon the In Principle Agreement. This ground fails.

Terms of relief

1. The Sayeds submitted that any orders for specific performance of the mortgaged property and discharge of NAB's claims for the settlement amount should not commence before expiry of that four month period set out in the In Principle Agreement. NAB submitted that if the Court was to consider that a further period of time is required in order to confer on Mr Sayed the full benefit of the moratorium agreed in the In Principle Agreement, then orders can be made accordingly.
2. In my view, as the In Principal Agreement contemplated that the Sayeds would have a period of four months to pay the moneys owed, and arrange a private sale of the property they should have the same opportunity to do so now. I shall afford the defendant a four month period contemplated in the In Principle Agreement. I will make an order to this effect.

Stay of proceedings

1. The Sayeds seek that the enforcement of any judgment to which NAB may be entitled under the In Principle Agreement should be stayed pending determination of Mr Sayed's cross claim in the proceedings which should be set down for expedited hearing. Alternatively, they seek that such cross claim should be set down for expedited hearing in any event.
2. As the period of four months has been allowed for the Sayeds to pay the settlement moneys, it is not appropriate that a stay application be determined now, particularly as no evidence in support of this application has been provided. I decline to grant a stay of the enforcement of this judgment. No grounds have been given for expedition of the hearing of the cross claim so I decline to make this order.

Conclusion

1. The orders I make are that the parties are to specifically perform the In Principle Agreement dated 23 August 2012. I propose to make an order that judgment is not to be entered on or before 16 August 2015.
2. Costs are reserved. The Court orders that: (1) The parties are to specifically perform the In Principle Agreement dated 23 August 2012 in accordance with Orders 1A, 1B, 1C and 1D: 1A. Subject to Order ID, the plaintiff is at liberty after 16 August 2015 to enter judgment against the defendants on its amended statement of claim for: (a) $700,000 (seven hundred thousand dollars); (b) interest from 16 April 2015; and (c) possession of the whole of the land referred to in Certificate of Title, Folio Identifier 3/1017140 and known as 25 Gahans Lane, Woonona, New South Wales. 1B. Subject to Order ID, after 16 August 2015 the plaintiff is to have leave to issue a writ of possession for the whole of the land referred to in Certificate of Title, Folio Identifier 3/1017140 and known as 25 Gahans Lane, Woonona, New South Wales ("the Woonona Property"). 1C. Subject to Order ID, in the event the defendants fail to pay to the plaintiff the Settlement Amount of $670,000 (six hundred and seventy thousand dollars) by 16 August 2015, then the plaintiff shall be entitled to recover the plaintiff's enforcement expenses (on an indemnity basis) of enforcing the judgments and writ of possession referred to in Orders 1A and IB. ID. In the event the defendants pay to the plaintiff the Settlement Amount under the In Principle Agreement, namely, $670,000 (six hundred and seventy thousand dollars) by 16 August 2015, then Orders 1A, IB and 1C are discharged, the amended statement of claim is to be otherwise dismissed and the plaintiff must deliver a discharge of its mortgage over the Woonona Property. IE. The parties have liberty to apply in respect of performance of these orders. (2) I decline to grant a stay on the enforcement of this judgment. (3) I decline to grant expedition for hearing of the cross claim. (4) The cross claim is listed for directions before the Registrar at 9.00 am on 28 May 2015. (5) Costs are reserved.

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