PELLEY & ANOR v. TEBRAN PTY. LIMITED [2006] NSWSC 1072

PELLEY & ANOR v. TEBRAN PTY. LIMITED [2006] NSWSC 1072 | Case summary | Zoe

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(2) The plaintiff's concern over a proposed change to the contract in relation to Lot 264 8 On 21 May 2003, Priest McCarron again wrote (there was no response by Thorntons to the letter of 27 November 2002). In that letter it was stated:- "We refer to the contract for the sale of Lot 264 which exchanged on 6 September 2002 and advise that our client has received a further plan which would seem to indicate that the location of the Lot 264 and also its general dimensions may have changed, however, our client notes that the survey pegs relating to the lot he purchased remain in the same position as at the date of the contract." 9 The letter went on to request confirmation that Lot 264 referred to in the contract was still located as shown on annexed contract plan as their client was anxious to firm up design plans for a residence. 10 On 22 May 2003, Thorntons responded in the following terms:- "We refer to your letter of 21 May 2003. By way of clarification we are instructed that your client at all times was to purchase Lot 264 in the plan enclosed. The plan attached to the exchanged contract shows Lot 264 but should have in fact read 263 as is evident from the areas in the enclosed plan. Accordingly, we suggest that the contract be amended to provide that your client (sic) what is to be known on the registration of the enclosed plan as Lot 264 (incorrectly shown on the previous plan as Lot 263 ie. it is the second lot from the reserve). We understand that both your client and the agent have discussed the matter and agreed that the new Lot 264 is the correct block of land." 11 On 26 May 2003, Priest McCarron responded, stating that the plaintiffs were adamant that the plan which was attached to the exchanged contract depicting Lot 264 reflected the area, dimensions and position of the land which they inspected prior to entering into the contract, adding:- "… in fact they said they were given the plan in similar terms to that attached to the contract by the agent and after returning from a site inspection told the agent that they wished to purchase Lot 264 as shown on that plan. They further say that there have been no other discussions with the agent since then until they called in at the agency a week or so ago and the agent gave them another plan showing Lot 264 as the land which had previously been Lot 263. Our clients have certainly not agreed with the agent that Lot 264 and Lot 263 are to be swapped." 12 The letter concluded by requesting advice as to when it was anticipated the plan was to be lodged for registration and sought confirmation that the defendant conceded that the plaintiffs had in fact contracted to purchase Lot 264 as shown on the plan attached to the contract. 13 On the evidence, there does not appear to have been any response to that letter. 14 On 3 June 2003, Priest McCarron again wrote to Thorntons stating that the agent had advised them that the plan should be registered in a month and requested confirmation that that was the case and that the changes to the plan had been rectified so that their clients would receive the lot, the subject of the contract. 15 On 6 June 2003, Priest McCarron again wrote noting:- "We note that we have not heard from you in relation to our letter 3 June 2003 and our client is concerned that the Vendor may be deliberately seeking to avoid its obligations under the contract. In the event that a satisfactory response is not received by Thursday next, we anticipate being instructed to place a Caveat on the title to protect our clients' interests. In the circumstances, could we please urgently hear from you." 16 On 19 June 2003, Thorntons sent a letter purporting to rescind the contract in the following terms:- "We refer to previous correspondence and to the Contract dated 6 September 2002. Our client instructs us that, despite its best efforts to have proposed plan of subdivision approved by Hastings Council, that the plan has still not yet been finally released from Council and that accordingly registration cannot be effected within the period prescribed by special condition 2.1 of the Contract. We are accordingly instructed to formally rescind the Contract as at the date hereof. We have instructed the agent to refund the deposit paid in accordance with Clause 19 of the Contract." 17 On 20 June 2003, Priest McCarron responded, acknowledging receipt of the letter of 19 June and advising:- "… on the basis of the evidence available to our clients, our clients do not accept that your client is acting in a bona fide manner in attempting to escape from the contract in the manner which has now been devised. We are instructed to place a Caveat on the title to your client's land to protect our clients' interest and we have written to the agent confirming that it is required to retain the deposit monies as stakeholder pending the outcome of litigation. We envisage that our client will institute proceedings for appropriate relief and we will be in touch with you again shortly in that regard." 18 On 28 June 2003, Priest McCarron again wrote to Thorntons stating that they had conferred with their clients and were instructed that at the time the purchasers discussed the proposed purchase of the land with the agent, they were informed that the sale should be completed by Christmas 2002. The letter also referred to the fact that their clients had noted the lots had been pegged, the earthworks appeared to be finalised and the sewer line had been laid. The road, it was said, was in place and serviceable and noted that there were only five lots to be created in the subdivision shown as Annexure A in the contract. Stage 5A of the subdivision in fact consisted of only four lots. 19 The letter went on to refer to checks that had been made by the plaintiffs on progress towards registration of the plan and there had been "no hint" that the vendor was experiencing any delays "… other than those which may have been self-imposed and in fact only one week ago the agent was indicating that the plan should be registered within a month …". 20 The letter went on to state that the plaintiffs had stated that the land was currently worth at least $130,000 and that "our client" was of the view "… that the several attempts your client has made to stop our clients from completing the purchase of Lot 264 cannot be explained on any basis other than that the vendor wishes to now obtain the benefit of the increase in value of the land since the contract was entered …". 21 A Caveat dated 23 June 2003 was lodged. 22 On 29 July 2003, Thorntons wrote to Priest McCarron referring to their letter of 8 July 2003 and to previous correspondence, including the letter concerning the purported rescission. 23 The letter referred to the defendant's denial of any attempt to delay registration of the linen plan and plan of subdivision. 24 The letter went on to refer to matters raised "in your letter of 23 June 2003" noting that they were instructed in the following terms:- "1. The Sewer Plan was submitted to Council on 16 September 2002 and released from Council on 18 December 2002. 2. Work on the project ceased over the Christmas holidays from 18 December 2002 until mid January 2003. 3. Contracts for the development of both stages 5 and 6 of our client's subdivision were let out after the Bill of Quantities were sent out by Hopkins & Associates on 5 February 2003. 4. The quotation from G.H. Lindsay Earthmoving of 21 February 2003 was accepted and work commenced in March 2003. 5. The linen plan was submitted to Council on 19 May 2003 and released from Council at 3.30 pm on 7 July 2003. 6. Works Certificate was completed by Council on 26 June 2003. 7. The plan has now been approved by the Mortgagee and is in order for registration. 8. The Caveat lodged against 262/1045298 is preventing registration of the Plan and our client requires the caveat removed to permit registration of the plan. Failure to do so will cause our client financial loss in relation to the completion of the sale of other lots in the subdivision. Our client totally denies any deliberate attempt to delay the completion of the subdivision and certainly any 'deceptive and misleading conduct' as contemplated in your letter of 23 June 2003. We are instructed that there is no doubt in the minds of both our client and his salesman that your clients were well aware of the exact lot being purchased and the fact that a change in numbering took place does not alter the fact that the lot being purchased was at all times the second block of land from the reserve shown on the draft plan." 25 The letter concluded that any proceedings would be defended and a claim for costs and damages made for consequential loss. 26 On 9 September 2003, Priest McCarron responded to the letter of 29 June 2003 from Thorntons. It is unnecessary to refer in detail to this letter. The letter contained a contention that the defendant had been acting in bad faith in the matter. 27 On 28 November 2003, Priest McCarron again wrote to Thorntons confirming that the plaintiffs were ready, willing and able to complete the contract to purchase the land the subject of the contract of sale. The letter went on to the refer to the history with the land inspected and the particular lot chosen by the plaintiffs for purchase. It is unnecessary to set out the detail of this letter. 28 On 13 February 2004, Thorntons wrote again to Priest McCarron essentially re-stating the defendant's position. 29 Further correspondence ensued between the solicitors dated 16 February 2004 which it is not necessary here to refer to in detail. 30 The defendant on 31 May 2004, filed a cross-claim in which it sought two forms of relief. Firstly, a declaration that the contract for the sale of Lot 264 had been rescinded by the defendant/cross-claimant. Secondly, and alternatively to declaratory relief, in the event that it was found that the cross-claimant had not validly rescinded the contract, rectification of the contract upon the basis of a mutual intention that the land, the subject of the contract, was to be the second lot from the reserve on Cobblers Place. 31 At the outset of the hearing on 4 September 2006, Mr. R.D. Wilson of counsel on behalf of the defendant/cross-claimant, confirmed that, for reasons stated, an order for rectification was no longer sought. In those circumstances, the issue for determination was whether or not the contract had been validly rescinded.

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(3) Events associated with obtaining consent of Hastings Council 32 Mr. Alan Dale Miller, director of Tebran Pty. Limited, swore two affidavits, the first on 11 May 2005 and the second on 16 November 2005. In the first affidavit, Mr. Miller sets out the history of the acquisition of the land at Timbertown Estate in the year 2000. It comprised approximately 20 acres with a Development Consent No. DA2000/0340 that was issued by Hastings Council on 23 December 2000. The consent gave approval for a subdivision comprising 122 residential lots. 33 Tebran developed the land in stages. As at the date of his first affidavit, they were Stages 1, 2, 3, 4, 5, 5A and 6. All of these had, by that date, been developed. The lot, the subject of the proceedings, was located in Stage 5A, a small subdivision of four lots. 34 A modified consent was issued by Hastings Council on 5 September 2001. 35 The defendant engaged Mr. Alan Edwards, surveyor, and Hopkins Consultants Pty. Limited, engineers, to prepare the subdivisions for each stage including Stage 5A. 36 Mr. Edwards did the initial survey and prepared the draft lot layout in each stage of the subdivision. The survey for Stage 5A was provided to Hopkins Consultants who designed the sewer and roof water reticulation which was, in due course, submitted to Hastings Council. 37 Following the issue of the construction certificates for the sewer and roof water in each stage, the defendant constructed the sewer and other work. The defendant either undertook the construction work itself using its own sub-contractors or it engaged outside contractors through tender processes. 38 Mr. Miller stated that the sewer construction work associated with Stage 5A was carried out by G.H. Lindsay Earthmoving. Following execution of the works by G.H. Lindsay Earthmoving, Mr. Edwards prepared a survey and a linen plan. The linen plan was, in due course, provided to Hopkins Consultants to prepare the computer generated "works as executed" ("WAX") plan for submission to Council. He stated that after meeting further requirements of Council, the linen plan was released. These events will be analysed in detail later in this judgment. 39 Mr. Miller stated that, following the release of the linen plan, the defendant obtained the consent of its mortgagee to the lodgment of the plan and the plan was then registered with Land & Property Information. Upon registration of preceding lots in the subdivision, contracts for the sale were completed. 40 Mr. Miller said that the procedure abovementioned was adopted for each stage of the subdivision including Stage 5A 41 In relation to special condition 2.1 of the subject contract, Mr. Miller stated that, based on his dealings in the past with Hastings Council, he considered a period of nine months for registration of the plan of subdivision was a sufficient period of time within which to procure the consent of the Council to the plan of subdivision and to arrange for it to be lodged for registration. 42 On 10 October 2002, Hastings Council, by its development engineer, Andy Davis, sent a facsimile transmission to Mr. Michael Mowle of Hopkins Consultants. The facsimile was entitled "Timbertown Estate Stage 6 - Construction Certificate Application". By reason of its significance in these proceedings, I reproduce it below:- "Michael, In reference to the plan submitted (DWG 5334G), the following amendments are required before further processing of the Construction Certificate:- 1. Show the DA number on ALL plans. 2. Include the erosion control notes and show the extent of erosion/sediment control measures. 3. That the concrete encasement and 'Rock Protection in Valley' be certified by a structural engineer to demonstrate that it would provide the required protection without placing excessive forces on the sewer main. 4. The encased section would need to be designed so that the concrete does not overly reduce the movement provided by the flexible rubber ringed joints. 5. Detailed drawings of any pipe protection would need to be submitted to Council for evaluation. 6. Construction be given to providing fill as an alternative to the concrete encasement of the sewer line main. Andy Davis Development Engineer HASTINGS COUNCIL"

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(4) Work undertaken by Hopkins Consultants Pty. Limited 43 Mr. Mowle, a chartered engineer and a director of Hopkins Consultants Pty. Limited, supervised the preparation of the engineering design plan for Stage 5A. His company originally submitted the application for the relevant construction certificate on 16 September 2002. 44 In due course and following Council's facsimile of 10 October 2002, amended engineering plans were submitted to Hastings Council in early December 2002. Exhibit MSM-1 to Mr. Mowle's affidavit sworn 17 August 2006 contains copies of sheets one to four in relation to drawing 5334/6 (pp.33 to 36 of the exhibit). Page 33 of Exhibit MSM-1 depicts a different solution to the drainage sewerage problem to that originally shown in drawing 5334/6. Mr. Mowle said that he acted in developing that solution as a proposal in response to the fax from Council. Instead of a concrete casing of the sewer pipe as Mr. Mowle originally proposed, it depicted a different formation with the pipe connecting up to a detention basin, namely, detention basin no. 2. 45 A subdivision construction certificate No. 11.2000.0340.05 was issued by the Council on 18 December 2002 in respect of sewer and stormwater works for Stage 5A. Mr. Miller stated that Hopkins Consultants provided him with a copy of the certificate on Thursday 19 December 2002. The defendant's office was closed for Christmas the following day, Friday 20 December 2002. The defendant re-opened in the New Year on Monday 13 January 2003. 46 Mr. Mowle later, at Mr. Miller's request, in January 2003, prepared a bill of quantities and tender documentation which were sent to Mr. Miller on 10 February 2003. 47 Mr. Mowle confirmed that Mr. Miller invited tenders for the work which was ultimately carried out by G.H. Lindsay Earthmoving. Mr. Mowle stated that the subdivision was not a greenfield site at that time and was already under construction. His opinion, expressed in paragraph 17 of his affidavit, was that it is more difficult to "retro fit" detention basins into an already constructed subdivision by reason of noise and dust and access issues and having to take account of residents. He stated that these issues were confronted by G.H. Lindsay Earthmoving. 48 Mr. Mowle confirmed that an application for a subdivision certificate in respect of Stage 5A was submitted to the Council on 14 May 2003 when the sewerage and the detention basins were complete. He referred to a facsimile transmission from the Council to Mr. Miller dated 19 June 2003 (Exhibit MSM-1, p.51) which required a number of matters to be attended to before the linen plan for Stage 5A could be released. As indicated earlier, I will refer to Council's requirements later in this judgment. 49 According to Mr. Mowle, it was usual practice during the 2003 year, for Hastings Council to take at least four weeks to process a subdivision application. He stated that at that time the Council only employed two engineers and one inspector to deal with such applications. He asserted that due to the Council staffing issues, there were delays in obtaining approvals from Council. It is sufficient to observe here, however, that the evidence in fact establishes that Hastings Council in the relevant period acted promptly and efficiently in relation to subdivision applications and related matters. 50 Mr. Mowle said that as at 19 June 2003, the preparation of "the works as executed" plan was nearing completion and it was submitted to Council by email on 20 June 2003. The subdivision certificate for Stage 5A was issued by Council on 30 June 2003. 51 Mr. Mowle gave evidence on a number of other matters including the following:-

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(e) The construction of the sewer and detention basins by G.H. Lindsay Earthmoving was also completed within normal commercial time frames. 52 Mr. Mowle swore an affidavit of 17 August 2006 and also made a statement dated 5 September 2006 (Exhibit 1). Exhibit 1 was produced pursuant to leave granted in response to and by reason of objections taken to paragraphs 10 and 11 of his affidavit. 53 He stated that he was personally involved in and supervised the design and construction of the engineering works associated with Stage 5A. In his statement, Exhibit 1, he dealt with the events following the facsimile dated 10 October 2002 from Mr. Davis of the Council. He stated that he met with Mr. Davis at least twice a month between 10 October 2002 and December 2002. Paragraphs 5 and 6 of Exhibit 1 are reproduced below. They concern events which were central to the delay in obtaining the construction certificate:- "5. In the first meeting I had with Mr. Davis following receipt of his facsimile dated 10 October 2002 which meeting occurred about a week after receipt of that facsimile, Mr. Davis and I had a conversation to the following effect:- I 'Can I talk to you about Timbertown? We have your fax. Can you clarify what you want?' Davis 'We have a concern over the sewer line being protected from damage as the concrete encasement is above ground. We need a structural certification that it will be sound.' I 'We need to figure out how to sort it out and we will come back to you.' 6. Following this meeting with Mr. Davis an internal office design meeting occurred which was attended by me, Mr. Kevin Hall the designer, and Mr. Syd Hopkins. At that meeting the three of us workshopped the issue of solving the question of how to protect the sewer line with a concrete encasement. At that meeting Mr. Kevin Hall, the designer, said words to the effect: 'Michael can you certify the concrete encasement?', to which I replied: 'Perhaps we can have a structural concrete encasement over the pipe'. After further discussion I came to the conclusion that it was not feasible in a gully (which was the physical feature of the area in which this concrete sewer pipe in Stage 5A was to be constructed) to put structure concrete around the sewer. I then said: 'If we do it this way it will be very expensive'. The meeting then broke up." 54 Mr. Mowle went on to state, in Exhibit 1, that, when contemplating a retention basin system as an alternative solution (paragraph [44] of this judgment) he was mindful of the fact that the original subdivision approval that had been granted on 13 December 2000 in relation to stormwater drainage required that a stormwater detention system had to be provided for the subdivision (page 15 of Exhibit MSM-1 to his affidavit). He stated at a meeting with Mr. Hall and Mr. Hopkins that:- "It may be cost effective to build a detention basin incorporating the sewer line in the wall of the detention basin." 55 The meeting is said to have finished after Mr. Hopkins said words to the effect, "that sounds good". 56 The evidence of Mr. Mowle was that a period of three to four weeks elapsed between 10 October 2002 and instructions being given by Mr. Miller to proceed with the detention basin proposal which would incorporate the sewer line. It is of some importance to note at this point that, as indicated in paragraph [54] of this judgment, the proposal constituted an advantage to the defendant in complying with the requirements of the approval granted on 13 December 2000. This point is discussed again below (see paragraph [91]). 57 Mr. Mowle's statement (Exhibit 1) did not elucidate or identify why, as contended, the original proposal for the concrete encasement of the sewer line was "not feasible in a gully", especially given that it had originally been his own proposal in the application lodged with Council in September 2002. He did not seek to establish, in his affidavit or statement, why the proposal for concrete encasement would be "very expensive" or as to why it would be "cost effective" to build a detention basin incorporating the sewer line. In that sense, his statements on these aspects amounted to little more than assertion without supporting explanations as to how and why he had originally considered his concreting casement proposal to be feasible but shortly thereafter (in October 2002) no longer considered it to be so. 58 The proposal to build a detention basin incorporating the sewer line constituted a revision which would plainly involve delay by reason of:-

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• Discussions with the structural engineer in determining whether to proceed (one to two days were estimated for the engineer to consider the matter). 73 In the facsimile from Hastings Council sent by Mr. Andy Davis, reference was made to "consideration be given to providing fill as an alternative to the concrete encasement of the sewer main". Although this alternative was offered by Mr. Davis, Mr. Mowle did not take it up. Mr. Mowle was asked:- "Q. Why didn't you take that up? A. We did, we produced the bund wall detention system. We did take up the option to fill, in the form of a bund wall, for a detention basin." 74 He agreed, however, that Mr. Davis had not referred to a detention basin at all and that he had done nothing to investigate simply covering the pipe as suggested by Mr. Davis. I should observe here that I was not impressed with Mr. Mowle's evidence on this point. He failed to provide any cogent explanation for effectively having ignored the "fill" alternative that Mr. Davis had raised. Mr. Mowle asserted that he considered that if that option was provided that it would block the creek bed. He conceded, however, that a small wall to the extent necessary to cover the pipe would only have blocked the creek to about one metre and, in that way, would have operated in the fashion of a weir. Mr. Mowle persisted in saying that it was his understanding that Mr. Davis "… was seeking fill in the form of a bund wall as part of a detention system". He conceded that there was no reference in his affidavit or statement to any discussion with Mr. Davis as to a bund wall. Nor was there any reference to any consideration at all by them to Mr. Davis' alternative proposal or suggestion. 75 Mr. Mowle, in cross-examination, conceded that his company was working for the defendant on Stage 6 (a 52 lot subdivision) in late 2002. He also agreed that the work associated with that stage was at that time his major focus. He conceded that it took most of his time in that period. 76 He confirmed that so far as the application for the construction certificate for Stage 5A was concerned in the months of September, October, November and December 2002, he juggled Mr. Miller's work with other work as best he could. 77 He further conceded that it would have been possible for him to have isolated and attended to the "5A works" (the work required to satisfy Mr. Davis' requirements in the facsimile of 10 October 2002) first in time. However, it is apparent from his evidence in chief that no instruction to do so was given to him or his company to do so. He later sought in cross-examination to maintain that such an instruction had been given. He was immediately challenged on this evidence, it being pointed out that there was not a word in his affidavit or statement about that matter. 78 In terms of his overall time and commitments, he agreed that most time was devoted to Stage 6. Mr. Mowle sought to qualify his evidence by stating that Mr. Miller had made it clear that he "wanted 5A out before 6". He admitted, however, that he had not said anything in his affidavit about such an instruction having been given. Nor, in his statement, Exhibit 1, made as recently as 5 September 2006, did he refer to such an instruction "but it was my understanding that was the sequence he wanted them in". He rejected the suggestion when put to him that he had made up the last quoted statement. I was unimpressed with Mr. Mowle in relation to this aspect of his evidence, he offering no explanation as to why such a matter had not been previously raised by him. 79 Mr. Mowle conceded that spending a good deal of available time on Stage 6 in late 2002 meant that his efforts were being directed to both Stages 5A and 6 in parallel, not one in priority to the other. He endeavoured to explain that the work associated with Stages 5A and 6 overlapped - the lots joined each other, the services were connected to each other, etc. However, the reality was that in October 2002, following Council's facsimile, one of the principal tasks remaining with respect to Stage 5A was to obtain a construction certificate with respect to the sewer and drainage work. That certificate was received by Hopkins Consultants on 19 December 2002. Instead of pursuing Stage 5A ahead of Stage 6, he directed his efforts and those of his company to catchment hydrological issues relevant to the Stage 6 subdivision. The plans for the Stage 6 construction certificate, as earlier noted, were lodged with Council on 20 December 2002. Mr. Trebeck of counsel put to Mr. Mowle:- "Q. I suggest to you that the reason why you carried out the work on the 5A and the 6 plans in parallel fashion is because it was convenient for you to do that work in that way in terms of your own perceived office efficiency, that's right isn't it? A. Yes, that's right." 80 Mr. Mowle agreed that in respect of Stage 6 a construction certificate had issued on 16 January 2003. The plans in support of the application were also lodged on 20 December 2002, which, he conceded was "a quick turn-around". The 5A works and the work on Stage 6, he confirmed, proceeded concurrently in late 2002 because it was "convenient" to do so, especially, from an office efficiency point of view.

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(8) The events in the period mid-March 2003 to 8 May 2003 81 Mr. Mowle attended in early 2003 to the preparation of bills of quantities and tender documents. He said he received instructions from Mr. Miller to do so in mid-January 2003, that is, approximately 27 days after Hopkins Consultants had received the construction certificate. He agreed that he prepared the bill of quantities for Stage 6 in late January 2003 - Stage 6 works representing a much larger portion of work than the "5A works" - some 10 times greater. The time that would have been taken to produce the bill of quantities in this period would plainly have been mainly devoted to the more extensive Stage 6 works. The bill of quantities for the Stage 5A was not at all extensive or complex and the evidence indicated that it would have required about two hours to prepare. 82 The bills of quantities and the tender documents for both stages were sent to Mr. Miller on 10 February 2003. 83 Mr. Mowle was asked in cross-examination whether the instructions to prepare the bills of quantities were given at a meeting in mid-January 2003, as Mr. Miller and Mr. Mowle stated, or later, after the receipt of the construction certificate dated 16 January 2003 for Stage 6. Mr. Mowle conceded that the meeting could have taken place at a later date. 84 Mr. Mowle was unable to offer an explanation, on the basis of instructions having been received by him on 15 January, why the bill of quantities for Stage 5A was not prepared until 5 February 2003. It was in late January 2003 that he prepared the bill of quantities for Stage 6 which, as earlier observed, was a considerably larger undertaking. Mr. Mowle agreed that the value of Stage 6 works was many times that of Stage 5A works. 85 The bill of quantities for Stage 5A was clearly delayed whilst the bill for Stage 6 was prepared, even though the latter was a much larger exercise (it was estimated to have taken a day to prepare the bill of quantities for Stage 6). Mr. Mowle conceded that, having received the construction certificate for Stage 5A on 15 January 2003, it would have been possible for him to have prepared the bill of quantities for that stage at any time after 15 January 2003 and, accordingly, there could have been a saving of time between about 15 January 2003 and 10 February 2003, the latter being the date the bills of quantities were sent to Mr. Miller. 86 The tender documents were in evidence (an exhibit to Mr. Mowle's affidavit, MSM-1, pp.38 and following). They related only to Stage 6 works. There were no tender documents produced for Stage 5A works. 87 By early 2003, the contractual time specified in special condition 2.1 was becoming tight. A party in the defendant's position, bound to act with "due despatch", would have had to consider providing instructions to those working for the defendant on Stage 5A to prioritise the works associated with that stage. These included Mr. Hopkins, Mr. Edwards, the surveyor and Mr. Lindsay, the sub-contractor. 88 Whilst Mr. Miller stated that he always requested Mr. Mowle to undertake Tebran's work as quickly as possible, the evidence indicates that he did not inform or instruct Mr. Mowle, Mr. Edwards or Mr. Lindsay of the time constraints arising under special condition 2.1. There was no reference in Mr. Miller's two affidavits to him having issued instructions to prioritise Stage 5A works over Stage 6. He made no reference to any requirement being made for Stage 5A works to be performed and completed before Stage 6 works or any other works were undertaken. Mr. Miller, however, contended in cross-examination that he in fact issued instructions to prioritise Stage 5A. Mr. R.D. Wilson of counsel, who appeared for the defendant, provided and relied upon transcript references: tt.155.30, 161.58 and 162.35. I consider Mr. Miller's evidence on the issue of instructions, in this respect, unsatisfactory. He, like Mr. Mowle, failed to provide any explanation as to why he had not referred in his affidavit to having given such instructions. On this important aspect of the matter, I am unable to accept Mr. Miller's oral evidence on this point as reliable. 89 Whatever be Mr. Mowle's reason for adopting the detention basin proposal, it cannot be said that the defendant pursued it with the required diligence or with due despatch. 90 The defendant had received a quotation for the Stage 5A works from Haire Civil Constructions Pty. Limited. Mr. Mowle conceded that that company had more heavy machinery and staff than was available to Mr. Lindsay, who was awarded the contract. Haire, he conceded, had the greater capacity to undertake the work for the Stage 5A detention basins. Haire's tender was a competitive one and, further, that contractor was immediately available to undertake work on the construction of the detention basins. It, however, was not in a position to immediately proceed thereafter with the Stage 6 works. It would appear from the evidence that this was probably the reason G.H. Lindsay was chosen over Haire. 91 The original Development Application approval contained Clauses 61 to 64. Clause 63 provided:- "Stormwaters flow from the development site are to be controlled by structural measures such as stormwater detention systems to match the pre-development stormwater flow." 92 I have earlier referred (paragraph [54]) to the fact that Mr. Mowle conceded that, when attending to the detention basin proposal in respect of Stage 5A following upon Mr. Davies' facsimile of October 2002, that in the period October to December 2002, he was mindful of the requirement under Clause 63. 93 I consider that the following evidence in cross-examination by Mr. Trebeck reveals that the detention basin proposal was substantially driven by an opportunistic factor associated with the need to attend to the requirement under Clause 63 and which favoured the defendant, but which was not necessary for meeting Council's requirements for Stage 5A:- "Q. And when the suggestion from the Council in their facsimile of 10 October 2003 came through in paragraph 6, that you might have to consider putting fill over the sewer pipe, it occurred to you that a little dam a metre high would be constructed as a result of those words, if you carried out the alternative suggestion proposed by Council? A. That is what I said earlier today in response to your question.

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Q. And that was a solution not just for the 5A but in respect of the whole subdivision? A. Yes, that's right." 94 It is undoubtedly true that the self-interest of a developer and contractual obligations will often pull in the one direction. Such was noted by Young, CJ. in Eq. in Walker v. Chanrich Properties Pty. Limited [2003] NSWSC 1064 at [29]. However, that will not necessarily always be so. In the present case, the plaintiffs relied upon the fact that the detention basin proposal was one which operated as an opportunistic approach which enabled the defendant to satisfy the condition imposed by Council referred to in paragraph [56] of this judgment but resulted in some delay so far as Stage 5A was concerned. As noted in the previous paragraph, Mr. Mowle effectively acknowledged that he appreciated that that opportunity was apparent to him when he set about drafting the proposal. 95 Insofar as additional time was spent on developing that proposal over one peculiarly designed to meet the limited requirement for the Stage 5A works, as earlier discussed, I consider that the defendant placed more weight on its own interests than on its contractual obligation to the plaintiffs to act with due diligence. 96 The defendant failed to maintain records concerning the dates of commencement and completion of the Stage 5A works in early 2003. The contractor had completed the sewer and drainage works for Mr. Edwards and signed the linen plan on 28 April 2003, he having carried out his survey on 15 April 2003. On the former date, he provided the linen plan to Hopkins Consultants for preparation of sewer and draining WAX plans for submission to Council. 97 Mr. Miller, in cross-examination agreed that by the time Mr. Edwards had completed the linen plan, the drainage works had been completed. However, the application for a Subdivision Certificate dated 10 May 2003 was not lodged until 14 May 2003 (Mr. Miller said it was lodged on 10 May 2003 (a Saturday) but the receipt was dated 14 May 2003). Mr. Miller could offer no explanation for the delay in the period between the date of the linen plan, 28 April 2003, and 14 May 2003. He agreed that throughout May 2003 he was actively involved in dealing with Stage 5A matters. 98 Later, on 5 June 2003, the Council by facsimile raised a number of outstanding requisitions in relation to the defendant's linen release application. Although Mr. Miller said that he did not receive it, the outstanding matters referred to in the fax were straightforward and were such as could and should have been anticipated before 5 June 2003. They included:-

[49]

• A site classification report referring to Stage 5A. 99 Mr. Miller was asked by Mr. Trebeck in cross-examination:- "Q. If you had given your attention to satisfying Council requirements when you lodged the application for subdivision on 14 May 2003, you would have checked at least to see whether the Council needed those documents to be provided to them, would you not? A. Yes. Q. You didn't do that? A. No." 100 Mr. Miller went on to say that the information had not been lodged earlier as he had assumed the Council officer "could pull the certificates up and the certificates were all there". His assumption, of course, was incorrect as documentation earlier held by Council did not suffice for Stage 5A. Mr. Miller said he had endeavoured to check the position concerning outstanding matters on 19 June 2003 that is five weeks after the application of 16 May was lodged. He rejected the proposition that he had in that five weeks failed to act with due despatch. The evidence, however, fails to establish that he did so act and indicates the contrary. 101 The WAX plan, in fact, was not released to Council until after 19 June 2003. Mr. Miller said he had assumed (but without checking) that Hopkins Consultations had put the WAX plan into Council. This further assumption, it was submitted on behalf of the plaintiffs, was unjustified. They maintained that had these matters been proceeded with due despatch, they would have been checked along with the other matters Council raised in its facsimile of 5 June 2003. 102 The defendant, directly, through Mr. Miller, provided instructions and directions to Hopkins Consultants with respect to the work undertaken by Mr. Mowle and he reviewed progress of applications to Council and on-site developments. Mr. Miller also regularly dealt with Hastings Council with respect to subdivision matters, including Stage 5A. 103 In these various respects, Mr. Miller was, accordingly, very much an active director of the defendant company. He authorised proposals submitted by Hopkins Consultants, spoke to Mr. Mowle about their implementation and with Mr. Davis of Hastings Council. He issued instructions to Hopkins Consultants to prepare the bills of quantities and tender documents. It was he who selected contractors. The evidence indicates that prior to September 2002, he had acted as supervisor with respect to work performed by the defendant's employees and contractors in relation to aspects of subdivisional work. Mr. Miller's role plainly embraced the co-ordination of activities associated with Stage 5A including, in particular, the preparation of applications to Council with a view to obtaining the issue of necessary certificates and approvals. 104 It is clear that in late 2002/early 2003, given the competing demands on Hopkins Consultants and the defendant itself that priority would need to be given to Stage 5A over Stage 6 but was not. This was especially so given the size of Stage 6. However, on the evidence, I do not accept that Hopkins Consultants were directed or required to give Stage 5A works priority. I do not accept the oral evidence of Mr. Miller and Mr. Mowle on this aspect for reasons stated earlier. It was readily foreseeable by the defendant, had it considered the matter at all, that Stage 5A matters would be delayed if Hopkins Consultants proceeded to work in parallel on both Stages 5A and 6.

[56]

(v) As at October 2002, the Christmas shut-down period and its impact on Stage 5A was a factor the defendant could not ignore. It could and should have anticipated the need to obtain the Stage 5A construction certificate before the holiday period and engage contractors for a start early in the New Year. This was not done. 107 The plaintiffs criticise the approach taken to Council's facsimile of October 2002. Mr. Mowle had originally proposed the concrete encasement of the sewer main as a feasible proposal. The Council merely requested a certification by a structural engineer. There was no requirement specified by Council for a detention basin approach. Additionally, Council's alternative suggestion to the proposal for concrete encasement, namely, the placement of rock fill, as earlier discussed, was apparently not even considered. 108 Whatever substance may be given to the criticisms, I believe that the defendant was entitled to seek and rely upon expert engineering advice in relation to the sewer and drainage works. Accordingly, whilst what appear to be quite straightforward requisitions or suggested "amendments" by Council did not, in terms, require a new proposal, the defendant was entitled to be guided by the advice it received. However, by not ensuring that appropriate steps were taken to avoid unde delay by reason of the proposal the defendant failed to act as its contractual obligations required. 109 The adoption of the alternative solution did not justify the defendant in failing to ensure that the Stage 5A works were given priority and to so instruct Hopkins Consultants. The points made in (iv) and (v) in paragraph [106], I believe, are valid. 110 Mr. Green, an engineer of considerable experience and whose evidence I accept as essentially sound, expressed the view that the failure of the defendant to lodge amended Stage 5A plans in a timely manner to address the requisition resulted in delay in the issue of the construction certificate by approximately four weeks. There was no direct challenge to this estimate. The defendant simply relied upon Mr. Mowle's evidence as justifying the time taken. 111 It is difficult to quantify with any precision what might be termed "avoidable delay" in this period. The reason is that Mr. Green did not seek to estimate delay upon the amount of time taken to design and develop the detention basin system itself. His criticism essentially seemed to rest upon the proposition that the detention basin approach was not, in fact, necessary to meet Council's requirements and that meeting Council's "amendments" as set out in its facsimile of 10 October 2002 could have been achieved by other more straightforward measures. 112 However, accepting as I do, that the defendant was entitled to rely upon expert advice to adopt the detention basin approach, the defendant, in my opinion failed to issue appropriate instructions or directions as discussed above and, in particular, in terms of points (iv) and (v) of paragraph [106]. The difficulty then becomes one of quantifying the extent of the resultant delay. In this respect, one matter relevant to delay is the extent to which time was required to collect data for the detention basin proposal. Mr. Mowle addressed this matter in his affidavit (paragraph 11). However, it became apparent in the course of cross-examination that a good deal of the data he therein stated was required had, in fact, already been collected at earlier stages of the subdivision and was available to Hopkins Consultants. The remaining data to be collected was that which would be obtained by a technician on site inspection. The need to obtain relevant data, accordingly, does not in itself justify the time taken to lodge the amended plans in December 2000. Whilst I cannot accept Mr. Green's assessment of delay of approximately four weeks, I consider that the evidence does indicate avoidable delay in this period of the order of two weeks.

[59]

(ii) The delay in giving instructions to Hopkins Consultants to prepare bills of quantities (calculated at 27 days on the basis of delay between 19 December 2002 and 15 January 2003) . The instruction (given, as discussed earlier, in a January meeting) embraced the preparation of bills of quantities for Stages 5A and 6 and for a road upgrade. The evidence was that preparation of the bill of quantities for Stage 5A alone would take less than two hours. There is substance to the submission that, if the defendant had isolated Stage 5A, the pricing of the work and obtaining quotations could have been expedited. The bill of quantities for Stage 5A (which was limited and uncomplicated in content) on that basis could have been completed and sent before 5 February 2003. The last of the four quotations (from Ditchfield Contracting Pty. Limited) was received on 4 March 2003. 114 The events in the period of approximately 12 weeks between 19 December 2002 and early to mid March 2003 needs to be assessed in light of all relevant evidence. I consider that, had Hopkins Consultants been appropriately instructed in the period October to December 2002 to give an appropriate level of priority to the Stage 5A works, an application for the construction certificate would, on the probabilities, have been made before the application was made in December 2002 and, as a result, a certificate would have issued at least seven to 10 days before it was in fact issued (19 December 2002). 115 Had a construction certificate issued early in the second week of December 2002, that would have provided the defendant with the opportunity to prepare a bill of quantities for the Stage 5A works prior to the Christmas shut-down and to have called for quotations for at least the Stage 5A works. Given the pressures at that time of year, it may not have been possible to have received all quotations before the shut-down. On that basis, the defendant would have been in a position on or soon after resumption in mid-January 2003 to have selected a contractor. I consider that the engagement of a contractor by mid-February 2003 to have been achievable without any undue haste. 116 Mr. Miller stated in his affidavit of 11 May 2005 (paragraph 15) that until he took ill on 1 January 2003, he had intended to carry out the Stage 5A works himself through Tebran's employees and sub-contractors. He was working on at least an intermittent or a part-time basis from mid-January. If, at that point, he altered his original plans and instructed Hopkins Consultants to produce a bill of quantities for the Stage 5A works, tenders or quotations could have been called for in the second half of January 2003. Approaching the estimate of a reasonable start date on this basis, I remain of the opinion expressed above that, with due despatch, the Stage 5A works could have been commenced in mid-February 2003. At the end of the day, one of the primary factors in making this estimate is the relatively straight-forward and limited nature of those works, as the evidence plainly established.

[64]

(b) If, however, the Stage 5A works were commenced in mid-February 2003 by Haire Constructions and completed in four weeks (mid-March 2003), then on the same basis and approaching the assessment conservatively, an approval could have been obtained from Council by about mid-April 2003. 124 The evidence as to the actual completion date of the Stage 5A works is not precise. Mr. Edwards stated that he carried out his subdivision survey on 15 April 2003. At that time or within a day or two, he also took levels of the drainage and sewerage works:- "So by 15 April 2003, Mr Edwards, a few days either way, the sewerage and drainage works were in place? A. I'd say mostly. I will qualify by saying quite a bit of it would have been in place but the last bit from the one manhole to the receiving manhole was across a drain which had to be filled before the actual line was complete. Now, the other works could have been complete and that last bit put in at a later date once the earthworks had been completed for that detention basin. Q. So the pipe was in but the trenching had not been filled over the pipe, is that what you are saying? A. I'm saying I can't be certain when the actual connection between the last two manholes took place. It would be after the completion of the detention basin. Q. But the connection would have been completed, Mr Edwards, when you took the levels, wouldn't it? A. Not necessarily. As I said, the manholes were in place. You cannot move the manholes. Q. So is this the situation; that even if the pipe had not been joined up the manholes were in place and it was a matter of a very small additional amount of work? A. To connect. Q. Before the pipes were connected? A. Yes. Q. So leaving aside that very small additional amount of work, the sewage and drainage works were completed a day or two either side of 15 April 2003, is that right? A. It would have been in mid April, yes. Q. Let's just assume mid April is the 15th? A. Yes, about the middle of the month. Q. I think it was you who used the expression a day or two either side? A. Yes, yes. Q. Does that fairly represent your belief? A. Yes." 125 I have taken into account the evidence that there was some wet weather in the March/April period. However, just how heavy the rainfall was and over what period it fell were not addressed in the evidence. The evidentiary onus of establishing that the Stage 5A works were substantially disrupted or delayed through rain was on the defendant. I do not consider that the defendant discharged the onus of establishing that the work was substantially disrupted by wet weather conditions in that period. 126 The completion of the Stage 5A component of the works can, to an extent, be estimated by working backwards from the data survey and other data required for completion of the WAX plan. 127 Information from the surveyor, Mr. Edwards, was required to enable Hopkins Consultants to complete the WAX plan. Mr. Mowle stated in evidence that his best recollection was that he met Mr. Edwards at the door of his office one day at the end of April or early May 2003. That is consistent with the date on the linen plan of 28 April 2003. Mr. Mowle agreed that it was consistent with known events that Mr. Edwards left the linen plan and survey at the office of Hopkins Consultants within a day or two of 28 April 2003. 128 Mr. Mowle stated that in addition to such data, he would have required the sewer junction locations from the contractor, Mr. Lindsay, to complete the WAX plan. He thought that it was not until some time in June 2003 that he received that data from Mr. Lindsay. On the basis of the contention made by the defendant that Stage 5A works were completed by about 6 May 2003, Mr. Mowle agreed there was no reason why the information as to the junction locations could not have been made available to him by 6 May 2003. 129 Mr. Green's evidence was that it would have only been a matter of hours work to produce the WAX plan, "may be three or four hours at most". 130 Mr. Lindsay said that "most probably" the sewer was constructed by mid-April. He stated that the Stage 5A works (involving the cut and fill, strip, stockpile, re-spread grass and stabilise), probably took five days. Work on No. 2 detention basin went on after the sewer was constructed and the inter-allotment drainage was completed. By reference to the sub-contractor's time sheets (the excavator sub-contractor was Mr. Schmutter), trees were cleared from both detention basin areas. Mr. Lindsay agreed that the work on the sewer itself was effectively finished by mid-April. 131 Mr. Lindsay conceded that Mr. Schmutter's bills were consistent with work being undertaken on Stage 6 as early as 30 April 2003. Mr. Lindsay, in his affidavit, had said that Stage 5A works were completed on 6 May 2003. The probabilities, based on Mr. Schmutter's records, is that Stage 5A works were completed by about the end of April 2003, Mr. Lindsay only recently having put his mind to relevant events and not having had reference to any business records of his own which would confirm the precise dates on which work was performed. By 30 April 2003, records indicate that Mr. Schmutter undertook road excavation works that were not related to Stage 5A and would suggest that work was undertaken on Stage 6 before Stage 5A works were completed. 132 I consider that the evidence established and I so find:-

[81]

• The report from Mr. Whealey, Council's subdivision inspector, could have been arranged on completion of the Stage 5A works. The inspection and report on inspection could have been requested upon completion of the works but was not. 137 The evidence accordingly indicates that only a short amount of time was required to gather together the information on the matters raised in Council's facsimile of 5 June 2003 and essentially re-stated in its facsimile of 19 June 2003. The requirement for that information should have been anticipated by the defendant and lodged in the early part of May. The outstanding requirements were addressed by the defendant by Friday 27 June 2003. 138 The endorsed linen plan was released on Monday 30 June 2003 together with subdivision certificate and s.88B instrument. 139 On analysis of the evidence, I accept Mr. Green's evidence wherein he stated (paragraph [34] of his affidavit sworn 8 September 2005):- "On the information available to me, there was no reason why the information sought by Council in its faxes of 5 June and 19 June could not have been supplied to Council once the works had been completed. In 2003, in respect of a straightforward subdivision application, it was normal for Council to take about four weeks to process the application. Here, the application related to only four lots and was straightforward as all the road works and water supply works had been completed and accepted in a previous stage. Given the short time it took for the application to be granted once all of Council's requirements were met, I would have expected that the plan would have been released no more than four weeks after the application and necessary documentation was lodged. The fax from Council to Mr. Miller dated 5 June 2003 indicates that Council was ready to process the application three weeks after lodgment." 140 Mr. Miller's only explanation for not having lodged the information required by the Council at the time of lodging the Stage 5A application for the subdivision certificate or soon after was that he believed that the information was already available to Council in relation to the Stage 5 subdivision. There was no basis in the evidence to establish that any assumption made by Mr. Miller in this respect was well-founded or reasonable. The evidence rather establishes a consistent failure by Mr. Miller to issue instructions and to verify Council's requirements as to the matters raised by Council in June. 141 The subsequent history as established by the evidence was that the defendant obtained the mortgagee's signature following release of the plan. The mortgagee executed the plan on 19 July 2003 and, accordingly to Mr. Miller's evidence, it was lodged with the Department of Lands on 11 August (two calendar months and two days after the nine month period in special condition 2.1) and registered on 29 August 2003. E. ISSUES RAISED BY THE DEFENDANT 142 The defendant's primary submission was that any delay was occasioned by the activities of Hopkins Consultants as independent engineers and that such delay cannot be visited upon the defendant and that the defendant proceeded with all due despatch. 143 The defendant submitted that:-

[93]

(b) Legal principles 155 It was common ground in these proceedings that the legal onus lies on the plaintiffs as purchasers to prove that the defendant, as vendor, had breached the special condition. In that respect see Plumore (supra) and Masters v. Belpate Pty. Limited [2001] NSWSC 169 per Hodgson, CJ. in Eq. at [58]. 156 In circumstances where relevant facts are regarded as peculiarly within the knowledge of the vendor, it is accepted that there may be an evidentiary onus on the vendor to lead evidence as to what happened as otherwise, inferences may be drawn against the vendor, on matters such as unexplained delays: Apollo Shower Screen Pty. Limited v. Building & Construction Industry Long Service Payments Corporation (1995) 1 NSWLR 561 at 565-565; Hawes v. Cuzeno Pty. Limited [1999] NSWSC 1164 at [41] and Masters v. Belpate (supra) at [59]. 157 In relation to the express obligations of a developer/vendor, there has been a divergence of judicial opinion as to whether delays that are attributable to independent contractors in carrying out relevant tasks would or would not involve a breach by the vendor of contractual obligations. The divergence of opinion in this respect was noted and discussed by Santow, JA. in Churnin (supra) at [46] to [52]. 158 It is unnecessary, for the purposes of the present proceedings, to determine the application of special condition 2.1 upon the basis of whether any delays attributable to Hopkins Consultants, ipso facto, involved a breach by the defendant of its contractual obligations. Even if the approach to express contractual obligations of the kind the subject of the proceedings in Masters v. Belpate (supra) were adopted, it is clear from the judgment of Hodgson, CJ. in Eq. in that case, at [63], that a vendor may still have obligations even if specialist expertise has been employed. 159 A number of propositions may be derived from the observations made by Hodgson, CJ. in Eq. in that case concerning a provision that made completion conditional on the registration of a strata plan within 30 months from the date of the agreement and a right of rescission in the event that registration was not so effected. Those propositions may be formulated as follows:-

[100]

• The word "due" qualifies "despatch" in special condition 2.1. Santow, JA. observed that the word "due" in context means, in the words of the Macquarie Dictionary, "rightful" , "proper" , "fitting" as in the expression, "due care" or "in due time" . 162 The Shorter Oxford English Dictionary defines "dispatch"(also despatch) as including:- "4. Prompt settlement or accomplishment, promptitude; speed, efficiency, rapidity of progress" and as a transitive verb: "get (a task or piece of business) promptly done; accomplish, finish off, conclude." 163 The construction of the special condition in the light of the above principles and propositions requires that the plaintiffs establish fault in the defendant as vendor occasioning delay with consequent failure by the defendant to obtain the consent of Hastings Council and a failure to lodge the plan for registration within the stipulated period of nine months. 164 Accordingly, for the plaintiffs to succeed, such failure must be attributable to the defendant's failure to proceed with "all due despatch", the word "all" giving added emphasis to the expression "due despatch". 165 A provision such as special condition 2.1 may require a developer/vendor to take a number of affirmative steps. These may include such a vendor or someone acting on the vendor's behalf appropriately instructing agents and contractors, which instructions may include advice as to competing project priorities, ensuring the co-ordination of contractors, agents and others with a view to ensuring the orderly despatch of work and an obligation to oversee, monitor and review planning, construction and other operations. 166 In the present case, the defendant had a hands-on role and actively managed and controlled the subdivision development as developer through Mr. Miller. He, on its behalf, engaged agents and contractors and instructed them and conferred with them. He consulted and discussed project matters with officers of Hastings Council. He had relevant knowledge, power and control and the approach determined by him could influence the time taken in obtaining construction certificates from Council and the timing of other aspects of subdivisional development. 167 In determining whether the responsibility for the delay can be said to rest with independent contractors or experts can only be determined by considering the defendant's responsibilities in light of its capacity to control and influence outcomes. It is clear that a developer/vendor will have contractual obligations that overlap those of contractors and agents. In such circumstances, the developer/vendor will often be unable to take refuge in the fact that an issue of delay is associated with a contractor's performance or expertise. The vendor will often retain the responsibility for ordering or arranging the performance of work in accordance with a programme that is constructed and implemented in a time line that ensures the due despatch of contractual obligations. 168 Cases such as Wardy v. Hardy [2002] NSWCA 215 demonstrate that a person who is subject to a contractual obligation of the kind specified in special condition 2.1, may, as earlier discussed, be expected to anticipate matters that require or will require attention at an appropriate point in time and to act appropriately and in a timely manner in securing the consent of a local government authority (see discussion by Mason, P. at [58]). 169 On the findings made and expressed above, it was the defendant's obligation to instruct its contractors and agents so as to ensure that Stage 5A matters were progressed with due despatch and that it anticipate Council requirements that were raised in June 2003 as referred to earlier in this judgment (paragraphs [135] to [137]). 170 In Masters (supra), Hodgson, CJ. in Eq. cited the dicta of Young, J. (as he then was) in Sanctuary Investments Pty. Limited v. St. Gregory's Armenian School Incorporated (1998) 9 BPR 16, 823 in which his Honour said that one must:- "… look at whether the person seeking to rescind the contract materially contributed to the non-performance of the condition on which it now bases its rescission. In my opinion, this means that if the time would plainly have expired, even if the breach had not occurred, the breach will not preclude the vendor relying on the condition. However, in my opinion, if one could say that, if the breach had not occurred, there was a substantial chance that the condition would have been fulfilled, that would be enough to deprive the vendor of the right to rescind. If the vendor's breach has deprived the purchaser of such a substantial chance of this kind, in my opinion, that is enough to enable one to say that the breach has materially contributed to the non-fulfilment of the condition, so that the vendor is precluded from rescinding." 171 On the findings recorded earlier in this judgment, the defendant, by reason of avoidable delay, materially contributed to the non-performance of the special condition on which it relied to base its purported rescission. On the specific findings, it is clear that if the relevant delay by the defendant had not occurred, then it was highly likely that the condition would have been fulfilled. 172 Based on findings made and referred to earlier, delay by the defendant may be assessed on one of two bases as follows:-

[108]

APPENDIX TO JUDGMENT Date Event 13.12.00 Hastings Council issues to Jillana Developments Pty. Limited a Development Approval re 122 Lot subdivision. NB: Clauses 25 ff. 2000? Defendant purchases land at Timbertown Crescent, Wauchope with DA 2000/0340. 25.5.01 Defendant applies to modify consent DA 2000/0340 by increasing number of lots from 122 to 138. 15.8.01 Letter - Hopkins Consultants to Council, enclosing Application for construction certificate - subdivision for sewer reticulation re 35 lots. 5.9.01 Council consents to modifications subject to conditions. 4.10.01 Council issues subdivision construction certificate re 32 residential lots (Lots 200 - 231) for sewer reticulation. 31.10.01 Letter - Hopkins Consultants (Hopkins) to Council, enclosing Application for construction certificate - subdivision in respect of Stage 4 road works. 13.11.01 Subdivision construction certificate for 32 lots (200 - 231) for road works, water and drainage (sewer previously approved). 19.11.01 Letter - Hopkins Consultants (Hopkins) to Council, enclosing Application for construction certificate for road works and services for Stage 5 (Lots 233 - 261). 13.12.01 Council issues Subdivision construction certificate for 29 lot subdivision (Stage 5). Not stated 2002 Surveyor, Edwards, prepares initial preliminary drawing for Stage 5A. 30.1.02 Report - Chandler Geotechnical Pty. Limited - Timbertown Homes re site classifications Timbertown Estate Stage 5. 14.6.02 Miller signs Country Energy acceptance of offer dated 30 May 2002. July 2002 Plaintiffs discuss with each other buying land at Wauchope for next spec. house venture. 1.7.02 Hopkins makes Application for construction certificate - subdivision in respect of intersection upgrade. 17.7.02 Second plaintiff calls into Wauchope Real Estate, enquires about vacant land, informed of Timbertown Estate, given plan with green dots. 17.7.02 Goes to Estate with Carol and Kevin Begley and identifies Lots 262 to 265. 17.7.02 Telephone call - Rose Pelley to Philip Pelley at work, "Found a flat block worth looking at".

[109]

After work 17.7.02 Philip and Rose Pelley inspect block. Philip Pelley steps out boundaries from survey pegs, selects Lot 264 (third from the reserve). Following inspection Meeting - Philip and Rose Pelley and Garry Bloomfield (Wauchope Real Estate), stating they wish to buy Lot 264. Told price of $88,000 and five percent deposit. 18.7.02 Sales advice - Wauchope Real Estate (Bloomfield) re Lot 264, Cobblers Place, Wauchope. Special conditions: five percent deposit; contract price $88,000. 18.7.02 Letter from Wauchope Real Estate (Bloomfield) to Priest McCarron (Priest) re Lot 264 enclosing sales advice. 23.7.02 Letter from Thorntons (McKenzie) to Priest McCarron (Priest) enclosing contract. 24.7.02 Letter from Priest McCarron (Priest) to the plaintiffs requesting them to make an appointment to sign the contract for sale. Few days later Meeting with first plaintiff and Alan Priest. First plaintiff notices plan incorrect because it did not show Lot 264. 30.7.02 Letter from Priest McCarron (Priest) to Thorntons (McKenzie), "note the plan attached to the contract does not include Lot 264 and we ask you to please let us have a copy of the correct plan". 31.7.02 Application for intersection upgrade approved. August 2002 Surveyor, Edwards, prepares draft sale plan for Stage 5A. August 2002 Surveyor, Edwards, prepares plan headed "'Timbertown Estate' Stage 5A", dated August 2002. 28.8.02 Letter from Priest McCarron (Priest) to Thorntons (McKenzie) following up response to letter of 30 July 2002 29.8.02 Letter from Thorntons (McKenzie) to Priest McCarron (Priest), "we enclose copy site plan for annexure to the contract. This plan also indicates the position of the sewer line and no separate plan has yet been prepared". Plan shows Lot 264 as being third from the reserve. 30.8.02 Letter from Priest McCarron (Priest) to the plaintiffs, "… now received draft plan for Lot 264 and you will note that the sewer line runs along the back of the lot outside the boundary". 2.9.02 Facsimile from the defendant (Miller) to Hopkins Consultants regarding Lot 266. 6.9.02 Contract for sale of land, defendant to plaintiffs for sale and purchase of Lot 264 in unregistered plan. NB: (1) printed condition 29; (2) special condition 2.1, 8.1; (3) plan showing Lot 264 on p.22 of "MES 1".

[110]

6.9.02 Letter from Thorntons (McKenzie) to Priest McCarron (Priest), "… enclose original contract executed by the vendor to complete the exchange of contracts … we will keep you advised of the progress of the registration of the plan of subdivision". 16.9.02 Letter from Hopkins Consultants (Hopkins) to Council enclosing application for construction certificate - subdivision dated 11 September 2002 for sewer reticulation and roof water drainage. [Plan refers to Stage 6. covering letter subject heading reference to Stage 5, as received by Council, has been amended in handwriting to Stage 6, and again to Stage 5A. Similar amendment to Application.] Miller says Surveyor, Edwards, prepares plan entitled "'Timbertown Estate' Stage 5A - Final 18.09.2002", after Miller says to him "will you prepare a new sales plan and number the lots according to the Pelley and Everingham sales?". 18.9.02 Surveyor Edwards says lot numbers altered after speaking to Miller "in order to line up the lot numbers with the sales by Timbertown Homes'. Facsimile from defendant (Jenny) to Thorntons (Helen) re "Stage 5A - Final, please see site plan following from Alan Edwards - he has changed lots again to suit contract exchange for Pelley. Please destroy other plans, as I will, I will notify real estate also. Jenny". Plan attached is "Stage 5A Final 18.09.2002", dated September 2002 showing Lot 265 as third from the reserve. Facsimile from defendant (Jenny), "Gary, Ron, Des, Rhonda", same terms as facsimile to "Helen", above. 27.9.02 Facsimile from Council (Davis) to Hopkins Consultants (Mowle), "I am processing the linen for Timbertown Stage 5 and I seem to be missing some info". CBR report, Site Classification report, WAX plans. 10.10.02 Facsimile from Hastings Council (Andy Davis) to Hopkins Consultants (Mowle) re Stage, requiring amendments to plan submitted before further processing of Construction certificate [same terms as later facsimile of 17 December 2002]. 14.10.02 Subdivision Certificate No. 2000/0340.05 in respect of Stage 5. Letter from Hastings Council to Hopkins Consultants re Stage 5, enclosing linen plan and s.88B instrument. Oct - Dec 2002 Hopkins Consultants working on Stages 5A and 6 in parallel.

[111]

27.11.02 Letter from Priest McCarron (Priest) to Thorntons (McKenzie) seeking advice in relation to registration of the plan of subdivision. December 2002 Hopkins redesign sewer and roof water and submit new plan to Council. Plans include two detention basins. 12.12.00 Letter from Hopkins Consultants (Mowle) to Hastings Council re Stage 6, "refer to your faxed comments dated 11 December 2002 in relation to amendments to the drawings for the above subdivision. Please find enclosed three copies of our revised drawings". [All plans refer to Stage 6, but in fact 5A.] [No evidence of facsimile of 11 December 2002.] (typo- graphical error) 18.12.02 Council issues Subdivision Construction certificate No. 11.2000.0340.05 in respect of sewer and stormwater works connected with Stage 6. Four drawings approved by Certificate refer to Stage 6 and drawings #1 and #2 refer to Lot 262 - 265 numbered right to left with Lot 264 third from reserved. 19.12.02 Letter from Hopkins to Miller re Stage 6, enclosing Subdivision Construction certificate dated 18 December 2002, No. 11.2000.0340.05 in respect of sewer and stormwater works connected with Stage 6 and two copies of stamped approved engineering plans. 20.12.02 Defendant closes its office, Christmas. Application for Construction certificate - subdivision Stage 7 sent to Council by letter from Hopkins Consultants (Mowle). References to Stage 7 changed to Stage 6 on Council documents. Fee receipt dated 2 January 2003. 2.1.03 Council receipt for fees paid on Application of Construction certificate Stage 6. January 2003 Miller admitted to hospital with Bells Palsy, Miller says, "off work for a period of six weeks". 16.1.03 Council issues Subdivision Construction certificate in respect of 53 lot subdivision - Stage 6. January 2003 Miller says he telephones Hopkins about putting detention basins and drainage works out to tender. Miller says "mid-January" in second affidavit. Mowle says 15: "In January 2003, Syd Hopkins and I met with Dale Miller in our office. Mr. Miller indicated he was sick and was unable to undertake the construction work for the detention basins and drainage works. He asked me to prepare a tender pack so he could put the works out to tender. Ordinarily, Mr. Miller would carry out the constructions of the detention basins and the drainage works himself". 16: "I prepared a bill of quantities and the tender documentation and forwarded it to Dale Miller on 10 February 2003".

[113]

10.5.03 (Saturday) Miller says submits to Council linen plan and Application for Subdivision Certificate, signed and dated 10 May 2003. (Council fee receipt is dated 14 May 2003). (Mowle says submitted on 14 May 2003). Defendant (Miller) signs application for Certificate of Compliance under Water Management Act. 14.5.03 Date of receipt of $444 issued by Council for fee on application for subdivision. Hopkins says Application for Subdivision Certificate submitted to Council this day. Miller says Saturday 10 May. May 2003 (on return to Aust.) Conversation between first plaintiff and Bloomfield, "Registration of the plan has been held up but I'll give you a copy of the latest plan. See how the prices have gone up?". (Plan shows Lot 264 as second lot from reserve). First plaintiff says he did not look at the plan in detail and did not notice block had been re-numbered. More interested in value of the other blocks. Denies receiving plan "G" from Bloomfield, 6 May 2006. On or before 21 May 2003 First plaintiff takes new plan to architect, John Walsh. Mr. Walsh points out to him that the block has been re-numbered and immediately goes to his solicitors. 21.5.03 Letter from Priest McCarron (Priest) to Thorntons (McKenzie), "… client has received a further plan which would seem to indicate that the location of Lot 264 and also its general dimension may have changed, however, our client notes that the survey pegs relating to the lot purchased remain in the same position as the date of the contract. As our client is anxious to firm up design plans for a residence, we would be pleased if you would confirm that Lot 264 referred to in the contract is still located as shown on the contract plan annexed". 22.5.03 Alan Priest's secretary takes call from Helen of Thorntons, makes file note. Letter from Thorntons (McKenzie) to Priest McCarron (Priest), "By way of clarification, we are instructed that your client at all times was to purchase Lot 264 in the plan enclosed. The plan attached to the original contract shows Lot 264 but should in fact have read 263 as is evidenced from the areas in the enclosed plan. Accordingly, we suggest that the contract be amended to provide that your client what is to be known on the registration of the enclosed plan as Lot 264 (incorrectly shown on the previous plan as Lot 263, ie., it is the second lot from the reserve).

[114]

May 2003 Conversation between first plaintiff and the second plaintiff. First plaintiff says, "Something funny's going on, the agent showed me another plan which swaps our land with another block. I've seen the solicitors about it". Shows her plan "Stage 5A - final 19.09.02". 26.5.03 Conversation between Priest and Bloomfield. Bloomfield states that Lot 264 has not in fact been re-sold. Dale Miller wanted to retain it and build a house on it himself. Dictates letter of same date to his clients. 26.5.03 Letter from Priest McCarron (Pries) to Thorntons (McKenzie), purchasers "are adamant that the plan which is attached to the exchanged contract depicting Lot 264 reflects the area, dimensions and position of the land which they inspected prior to entering into the contract …". 3.6.03 Letter from Priest McCarron (Priest) to Thorntons (McKenzie), "the agent has advised us that the plan should be registered in a month. Please confirm that this is the case and that the changes in the plan have been rectified so that our client will receive the lot which is the subject of the contract". 5.6.03 Facsimile from Hastings Council (Andy Davis) to Miller re Cobblers Place linen release, "I am currently processing your linen release application for Cobblers Place. The following information is still required prior to release: WAX plan; site classification report; Telstra and Country Energy letters; Inspection report from Wayne Whealey". Miller denies receipt. 6.6.03 Nine months after exchange of contracts. Letter from Priest McCarron (Priest) to Thorntons (McKenzie), "We note that we have not heard from you in relation to our letter of 3 June 2003 and our client is concerned that the vendor may be deliberately seeking to avoid its obligations under the contract. In the event that a satisfactory response is not received by Thursday next week, we anticipate being instructed to place a caveat on the title to protect our clients' interests". 17.6.03 Telephone call from Priest McCarron (Priest) to Bloomfield, "Pelley can go jump in the lake …". Priest makes file note. Before 19.6.03 Miller telephones Andy Davis, Development Engineer, Hastings Council.

[115]

Miller apparently goes to Council offices, Andy Davis not available. Fees paid. Facsimile from Andy Davis to Miller - do not have WAX plan, site classification report, Telstra and Country Energy letters, waiting to hear from Wayne Whealey in regard to the infiltration problems with the sewer from the previous stage. 19.6.03 Emails from Hopkins Consultants (Norwood) to Hastings Council enclosing sewer and drainage WAX plan for Stage 6; plan refers to Lots 262 to 265, numbered right to left from the reserve. Conversation between Miller and McKenzie. McKenzie instructed to rescind the contract with the plaintiffs. Letter from Thorntons (McKenzie) to Priest McCarron (Priest), "our client instructs us that despite its best efforts to have proposed plan of subdivision approved by Hastings Council that the plan has still not yet been finally released from Council and that accordingly registration cannot be effected within the period prescribed by special condition 2.1 of the contract. We are accordingly instructed to formally rescind the contract as at the date hereof. We have been instructed by the agent to refund the deposit paid in accordance with Clause 19 of the contract". Letter from Priest McCarron (Priest) to Thorntons (McKenzie), "… our clients do not accept that your client is acting in a bona fide manner in attempting to escape from the contract in the manner which has now been devised". Email from Hopkins Consultants (Norwood) to Hastings Council attaching sewer and drainage WAX plan Stage 6 (in fact, Stage 5A). 20.6.03 Certificate of Acceptance from Country Energy to Hastings Council re Stage 6 advising satisfactory arrangements had been made for provision of underground electricity supply to the four lot subdivision comprising part of the above subdivision. Received by Council on 24 June 2003. Facsimile from Country Energy to the defendant attaching a copy of a facsimile to Hastings Council re Lots 262 to 265. Email from Hastings Council to Hopkins Consultants (Norwood): WAX for Timbertown 6 received. Report from Chandler Geotechnical Pty. Limited - Timbertown Homes, re site classifications Lots 262 to 265. 24.6.03 Hastings Council endorses Subdivision Certificate on DP. 27.6.03 Facsimile from defendant (Miller) to Hastings Council enclosing Geotechnical report and Telecommunications Certificate. 30.6.03 Letter from Hastings Council to Timbertown Homes, "in reply to your letter dated 27 June 2003, please find returned herewith endorsed linen plan, subdivision certificate and s.88B instrument together with one signed copy of the linen plan". Council issues Subdivision Certificate No. 11.2000.0340.04 in relation to four lot residential subdivision (Stage 5A). 14.7.03 National Australia Bank endorses consent on plan. 29.7.03 Letter from Thorntons (McKenzie) to Priest McCarron (Priest), "in relation to matters raised in your letter of 23 June 2003, we are instructed that: 1. The sewer plan was submitted to Council 16 September 2002 and released from Council on 18 December 2002; 2. Work on the project ceased over the Christmas holidays from 18 December 2002 until mid-January 2003; 3. Contracts for the development of both Stages 5 and 6 of our client's subdivision were sent out by Hopkins & Associates on 5 February 2003; 4. The quotation from G.H. Lindsay Earthmoving of 21 February 2003 was accepted and work commenced on March 2003; 5. The linen plan was submitted to Council on 19 May 2003 and released from Council at 3.30 pm on 7 July 2003; 6. Works Certificate was completed by Council on 26 June 2003; 7. The plan has now been approved by the mortgagee and is in order for registration; 8. …We are instructed that there is no doubt in the minds of both our clients and his salesman that your clients were well aware of the exact lot being purchased and the fact that a change in numbering took place does not alter the fact that the lot being purchased was at all times the second block of land from the reserve shown on the draft plan". 11.8.03 Plan lodged for registration. 29.8.03 Plan of subdivision registered.

At a glance

Court

Decision date

Before

Source

Judgment (116 paragraphs)

Cases Cited (6)

Cited By (6)