The contract was made on the 1992 edition of the Law Society and Real Estate Institute Copyright form, with a number of special conditions and annexures. The Particulars of Sale on the first page include a statement that the meaning of "completion date" is "the date which is 6 weeks after the date of this contract (cl.15)". Printed cl.15 is in the standard form and provides:

15.1 The parties must complete by the completion date (being a fixed but inessential date).

15.2 If the parties do not complete by the completion date, a party can serve a notice to complete if that party is otherwise entitled to do so."

"20.11 Normally, if a party must do something within a time, the time is not essential."

"1. For the purposes of provision 15.2 of this Contract the parties agree that a period of not less than fourteen (14) days shall be sufficient notice."

Special Condition 2 provides for interest from the contractual completion date to actual date of completion.

"15. The parties agree that the vendor may prior to completion remove from the property in her discretion the improvements or any part of the improvements including the fixtures and fittings. The purchaser acknowledges that the purchaser is purchasing the property for redevelopment and consequently attaches no value to the improvements, fixtures or fittings and shall not make any objection, requisition or claim with respect to this special condition or the removal by the vendor of the improvements, fixtures or fittings or part thereof or failure by her to remove the same."

Although Special Condition 15 states that the purchaser is purchasing the property for redevelopment and consequently attributes no value to improvements, there is no special condition under which completion is made subject to obtaining any development consent. According to a certificate under s.149(2) of the Environmental Planning and Assessment Act 1979 annexed to the contract the land is zoned Residential 2(c)(1) which is described in the zoning table (forming part of the certificate) as "Medium Density Zone 2(c)(1)", with the objective "to provide a multi-unit residential zone to encourage a broad mix of dwelling types and certain other developments compatible with the environmental capabilities of each site and development in the locality". Some development did not require development consent, but multi-unit residential development, for which the plaintiff purchased the property, did require consent.

Printed cl.7 was amended by Special Condition 11, and as amended is in these terms:

The purchaser can make a claim (whether for compensation or not) before completion only by serving it with a statement of the amount claimed, and if the purchaser makes one or more claims before completion -

7.1 the vendor can rescind if in the case of claims which are not claims for delay -

7.1.2 the vendor serves notice of intention to rescind; and

7.1.3 the purchaser does not serve notice waiving the claims within 14 days after that service; and

7.2.1 the lesser of the total amount claimed and 10% of the price must be paid out of the price to and held by the depositholder until the claims are finalised or lapse;

7.2.2 the amount held is to be invested in accordance with clause 3.1;

7.2.3 if the vendor disputes the validity or the amount of the claims, the dispute must be finalised by an arbitrator agreed upon by the parties or, failing agreement within 1 month of completion, by an arbitrator appointed by the president of the Law Society of NSW at the request of either party;

7.2.4 the purchaser is not entitled in respect of the claims to an amount greater than the total amount claimed;

7.2.5 any net interest on the amount held must be paid to the parties in the same proportion as the amount held is paid; and

7.2.6 if the parties do not agree upon an arbitrator and neither party requests appointment of an arbitrator within 3 months after completion, the claims lapse."

The contract of sale was made in exercise of an option to purchase granted by the defendant to Firmbuild Pty Limited in a Deed of Option dated 16 September 1996 in consideration of an option fee of $15,000 which was to go (and went) towards the deposit on exercise. The option expiry date was 16 April 1997 with provisions for extension.

Firmbuild Pty Ltd could assign the option or arrange for its exercise by a nominee. The Deed of Option was assigned to the plaintiff on 26 February 1997. There is some close commercial association among Firmbuild Pty Ltd, the plaintiff and the principals of those companies.

Clause 7 "Demolition Approval" of the Deed of Option contains an acknowledgment that Firmbuild Pty Ltd proposed to develop the property by demolishing the existing house and erecting a multi-unit development. After referring to the defendant's unsuccessful application to Randwick Council to demolish the existing improvements, cl.7 went on to provide for Firmbuild Pty Ltd to seek consent to demolition, and Firmbuild Pty Ltd was to do all acts and things necessary as soon as possible, while the defendant was to render any reasonable assistance.

In fact consent to demolition was obtained by the defendant on 31 October 1996, subject to conditions which regulated the manner in which demolition was to be carried out.

Clause 8 "Development Consent" contains a covenant by Firmbuild Pty Ltd to proceed immediately with preparation and submission of a development application for a multi-unit development and to pursue the application with due diligence. If an appeal to the Land and Environment Court had been commenced by 16 April 1997 the option period was extended until 1 month after determination of the court proceedings, and Firmbuild Pty Ltd was to use its best endeavour to finalise those proceedings without undue delay.

Under cl.9 "Access to the Property" Firmbuild Pty Ltd, its employees and agents had ample entitlements to access for survey work, external inspections and internal inspections at reasonable times by pre-arrangement.

The proceedings were commenced by Summons and the hearing was expedited. In the Further Amended Statement of Claim the plaintiff alleges the agreement, fulfilment of conditions which it fell to the plaintiff to perform, and neglect and refusal by the defendant to complete. The relief claimed at the hearing was principally a declaration establishing that the agreement is binding and enforceable, damages and incidental relief. In the Defence the defendant denies performance by the plaintiff of conditions except as to tender of a transfer, and denies that the plaintiff has been ready and willing to carry out the agreement. The defendant alleges that she gave notice to complete dated 29 August 1997 requiring completion on or before 3 pm on 15 September 1997 and that in that respect time was made essential. She also alleges that she was ready, willing and able to complete, and that the plaintiff was unable and failed and refused to complete, in breach of its fundamental contractual obligation. She also alleges that the plaintiff is disentitled to relief by reason of a systematic and deliberate course of conduct in seeking to delay the progression of its contractual arrangement. In a Cross-claim the defendant alleges that she has rescinded and terminated the agreement by notices after expiry of the Notice to Complete and seeks a declaration establishing that the agreement was terminated, the deposit was forfeited, and damages.

The plaintiff alleges (FASC 8) that some circumstances which led to the representative of the plaintiff's proposed mortgagee leaving the place of settlement shortly before 3 pm on 15 September, and relating to the plaintiff's not having completed a pre-completion inspection at 3pm make it unconscionable for forfeiture of the plaintiff's interest under the contract to take place. The plaintiff alleges (Reply 6) that the defendant lulled the plaintiff and the plaintiff's proposed mortgagee into believing that so long as settlement was effected shortly after 3 pm the tender would be accepted and that in the circumstances the defendant is estopped from claiming entitlement to terminate the contract. It is also alleged (Reply 7) that the defendant was at 3pm in breach of contract in that the defendant interfered with the exercise by the plaintiff of its right to a final inspection, and that the defendant did not give vacant possession, the particulars being failure to remove items of personalty from the property including bags of cement, and a box of pink bats and a box of rubbish.

Alternatively to its principal claims the plaintiff claims an order for the return of the deposit pursuant to s.55(2A) of the Conveyancing Act 1919 which provides: "(2A) In every case where the court refuses to grant specific performance of a contract, or in any proceeding for the return of a deposit, the court may, if it thinks fit, order the repayment of any deposit with or without interest thereon."

In Australian law it is established that the grounds for equitable relief against enforcement of essential conditions as to time in a contract for sale of land are not limited to the established equitable doctrine under which, after the time limited under the general law has not been complied with, time can be made essential by reasonable notice or in accordance with contractual arrangements. Equity can still relieve against unconscionable reliance on rights, where a ground on which such reliance is unconscionable is established. In my understanding and notwithstanding the diversity of views expressed in the judgments, this result appears from the decisions in Legione v. Hateley [1983] HCA 11; (1983) 152 CLR 406 and Stern v. McArthur [1988] HCA 51; (1988) 165 CLR 489. In Australia, the opportunities for equitable intervention are not exhausted by the doctrine which has evolved about making time of the essence.

In the Judicial Committee in Union Eagle Ltd v. Golden Achievement Ltd [1997] UKPC 5; [1997] AC 514 their Lordships left for future consideration the question whether they would take the same view; see p523. Such consideration would be required only in a case where reliance on contractual provisions as to time was unconscionable. If I may respectfully say so, in Legione v. Hateley and Stern v. McArthur there were such grounds, and it could only be in a case where there clearly were such grounds that any departure from the classic principles, associated by their Lordships with Steedman v. Drinkle [1916] 1 AC 275, would fall for consideration. In the Union Eagle case itself, there was nothing; simple reliance on the contract and the established law as to time could not be regarded as of itself unconscionable. The parties adopted a date and a time of day as the essential time for performance, and did so by an express written agreement. In my opinion the Union Eagle case was not a test of their Lordships' view on the Australian law, and is an illustration, of a fairly simple kind, of the workings of the law where time is of the essence and is not complied with.

In my opinion, the question whether a contractual provision is essential, so that breach of it is repudiatory, and the question whether its strict performance is required or substantial performance is sufficient are different questions. A condition may be essential yet substantial performance may be sufficient. Jordan CJ spoke to this effect in Tramways Advertising Pty Ltd v. Luna Park NSW Ltd [1938] 38 SR 632 at 642, and Glass JA in Lohar Corp. Pty Ltd v. Dibu Pty Ltd (1976) 1 Butterworth Property Reports 1977 at 9186 referring to this passage did not, on my reading, differ from it. The readiness, willingness and ability of both parties to perform their obligations by and at 3 pm should be tested according to the substance, with the kind of latitude illustrated by the holding in Lohar itself. In the judgment in Lohar Hutley and Glass JJA appraised the time required with the circumstances which led to its being required. Outstanding needs to accomplish small tasks which might take a few minutes and can be attended to straight away, or which would not matter if omitted, do not detract from the availability of performance of the obligation in substance.

Glass JA spoke to a different effect in Ciavarella v. Balmer [1983] 2 NSWLR 439 at 450, but the endorsement of his views in the judgment in the High Court at [1983] HCA 26; (1983) 153 CLR 438 at 446 did not extend to these observations.

The plaintiff's counsel contended that the notice to complete did not validly stipulate 3 pm as the last moment for completion of transaction. A ground for this contention was to the effect that the contractual obligation is one which may be performed by conduct which substantially complies with the obligation, and it was said that the notice to complete seems to proceed on the assumption that substantial compliance was not enough. In my opinion, there is no reason why a notice should give an indication that substantial compliance would be sufficient. It was not the function of the notice to give a lesson in law. It was then contended that there was nothing about the contract which permits the nomination of an hour by which settlement must take place, as distinct from a day on or by which settlement must take place. It was contended that the law has been settled in a way which establishes that a notice to complete may do no more than nominate a day on or before which settlement must occur. In support of this counsel referred to Green v. Sevin [1879] 13 ChD 589, but in my view that decision does not bear out the contention.

When parties agree in terms which fix a time as being of the essence they commonly fix an hour as well as a date; the contract in Union Eagle Ltd v. Golden Achievement Ltd [1997] UKPC 5; [1997] AC 514 is an example, among many examples. It is a commonplace that a notice to complete fixes an hour as well as a date for completion. Practical considerations strongly impel a party who makes time of the essence by a notice to fix a time and also a place as the last opportunity for completion, and to make the time and place convenient, falling within the hours when people engaged in business can reasonably be expected to be available and the range of places where they can reasonably be expected to attend, and to arrange for others to attend, with convenient access to banks and other business facilities. A notice which could be complied with in the night-time up to midnight, or did not specify a reasonably accessible place where the party giving the notice was to be found, would lack effectiveness.

Where, as in the present case, the contract contains machinery provisions which empower a party to make time of the essence, the construction of the contractual provisions shows whether or not a particular time of day as well as a date can be specified. Printed cl.15 empowers the party to serve a notice to complete and Special Condition 1 indicates that "A period of not less than 14 days shall be sufficient notice." There is contractual authorisation for notice of any length of time so long as it is not less than fourteen days, and there is no contractual provision which means or implies that the notice must specify a whole number of days. Nothing in the meaning of the contract obliges a party giving a notice to accept midnight as the time of expiry, and so long as the 14 day period is exceeded any nominated time of day will meet the requirements of Special Condition 1. If there were any ambiguity or doubt, consideration of the purpose of the Special Condition would confirm that this is so.

The plaintiff's counsel also submitted that the effect of making the appointment to settle for 2 pm was to make 2 pm an agreed time for completion, the date 15 September being essential, and that in some way this produced the result that the notice to complete had no residual effect in relation to the hour of 3 pm. There is however nothing in the evidence relating to making an agreed appointment about an arrangement to alter the essentiality of time, and no evidence of an arrangement which would have any impact on the contractual effect of the notice to complete and of failure to settle by 3 pm. Exhibit 1 contains an acknowledgment on behalf of the plaintiff that 3 pm continued to be an essential time. Common prudence is quite enough to explain why, if time was to expire at 3 pm, parties would agree to meet at 2 pm to settle.

A contest about fine details of the parties' readiness, willingness and ability to perform on the last day or at the last minute of the time for performance is just what Courts of Equity sought to avoid by requiring an additional period of notice after failure to perform at the contracted time. Equity requires the extension of a reasonable period for completion, and fixing a last moment for completion is not the object: the contemplation is that the period is sufficient and that completion will occur within it, not at the end of it. The plaintiff brings forward for adjudication the fine details of the events of the last hours although it had already been given an extra 18 days within which to do what it contracted to do by 28 August. The problem which Courts of Equity sought to banish of an undue burden of consequence turning on what happened by a precise last moment for performance has returned, in a worse case than before because there has been delay after the contracted completion date. As the parties' rights turn on it, the Court cannot disdain to examine it, but the object of the intervention of Equity has been defeated.

The development application with the defendant's consent was lodged on 25 February 1997. Before it was lodged there had been many communications between the defendant and Mr Kitas on behalf of Firmbuild Pty Ltd about progress towards lodging a development application and the time taken, and the defendant was asked for an extension of the option for additional payment, which she refused to do. By 9 April 1997 Randwick Council had refused the development application, an appeal had been lodged and solicitors representing the plaintiff pointed out to the defendant's then solicitors that an extension of the option period operated.

There was an obligation to proceed with due diligence, the defendant had complained at the time taken and the question whether there had been a breach of the due diligence obligation was open to consideration. On 10 July the defendant's solicitors asserted that there had been breaches of the time provisions relating to lodgment of the development application and conduct of the appeal and asserted that there had been a repudiation entitling the defendant to terminate the option agreement. The defendant's solicitors called for exercise within 7 days and threatened termination. In reply the plaintiff's solicitors sought to modify the arrangement about the completion date, seeking an extension to 10 weeks, but there was no agreement and on 17 July the option was exercised. The plaintiff had not then obtained development consent. The plaintiff still had not obtained development consent by 15 September 1997, and its principal Mr Christofidellis then hoped to obtain development consent from the Randwick City Council in the near future. He in fact obtained development consent several days later.

In the communications about questions of time and proposals for extensions the defendant was not accommodating. The events show that it was known to the plaintiff that the defendant regarded the times of performance of obligations as important and scrutinised her contractual obligations to see whether she could terminate them. There was no relaxed approach to time-based obligations. These circumstances do not enhance the essentiality of the time for completion fixed in accordance with contractual machinery; essentiality is not a matter of degree. The circumstances are relevant for discretionary questions, including the statutory power over the deposit.

After exercise of the option on 17 July 1997 there were further communications about proposed extensions of time for completion. On 12 August 1997 the plaintiff's solicitor sought an extension for four weeks; this was rejected. On 26 August the defendant's solicitors stated that they were instructed to issue a notice to complete if the contract was not completed in accordance with its terms. On 29 August the defendant by her solicitors offered to extend time for a payment of $250,000; this was not agreed to. On 29 August the defendant's solicitors gave a notice to complete requiring completion on or before 3 pm on 15 September 1997 for which time was made of the essence, and appointing 3.00 pm at the Law Society Settlement Rooms for completion. This notice allowed a period a few days longer than the minimum period of 14 days specified in Special Condition 1. The notice is unlike that in Paclyn Pty Ltd v. GP Harris Real Estate (1988) NSW Conv R 55-418, in that by its terms it makes the time of day as well as the day itself of the essence. In doing this it is supported by the contractual power under which it was given.

On 11 and 12 September there were communications between solicitors in which appointments were made for settlement at the Law Society at 2pm on Monday 15 September, and an inspection on the site at 1.30 pm. Exhibit 1, the letter of 12 September from the purchaser's solicitors to the intending mortgagee's solicitors, shows that it was then understood that the settlement appointment for 2 pm left to stand the effect of the notice to complete fixing 3 pm as the expiry of the essential time for performance. There was no express arrangement to abandon 3 pm as the essential time for completion. There was no express reference to varying the essential time for completion in the arrangements for an appointment at 2 pm. In the circumstances, no such arrangement should be implied, and a far more ready interpretation of the behaviour of those making the appointment is that one hour was allowed for contingencies.

The plaintiff did not have any arrangements for finance by 28 August and obtained approval for finance on or shortly before 12 September. Stamp Duty was paid on 10 September. The mortgage documents were signed and delivered to the intending mortgagee's solicitors on the morning of 15 September.

Mr Bailey did not deal sincerely with the court in giving his evidence. He maintained positions about vacant possession not having been given at 2 o'clock and about entitlement to vacant possession before final inspection which he could not reasonably have believed were correct or to the point. He must always have known that these positions have no basis. He finally accepted that there were probably dishonest statements in his 2.50 pm letter. He made elaborate corrections and restatements of his evidence about the times of preparing various and copious notes relating to the events. Mr Bailey did not deal frankly with the purchaser's solicitor in his communications about discovery of documents. In my finding he is not a reliable witness.

Mr Christofidellis' evidence was characterised by many corrections and restatements and he did not give me the impression of being careful or reliable.

Mrs Bruce was not in all respects reliable. When giving evidence she altogether mistook the time at which she had been told by Mr Blackmore the contents of the 2.50 letter. I cannot accept her evidence in every detail, but overall she gave me a much stronger impression of sincerity as a witness than Mr Christofidellis did. Both showed some sign of awareness of their interest in the outcome of the litigation and of a sense of involvement and lack of objectivity, rather more strongly in his case than in hers.

The vendor, Mrs Bruce, attended at the house from early in the day on 15 September to move possessions out. Some goods had been moved out earlier. On 15 September she had the assistance of several men who were friends of hers or of her former husband, and she also engaged removalists and had up to five removalists' men on the site. Some furniture and effects were removed to a repository and others were taken to a house in a nearby suburb. She was very mindful of the expiry of the notice to complete at 3 pm and of the appointment to settle at 2 pm, and made her arrangements with the object of being able to give vacant possession by 2 pm. As well as removing her furniture and other possessions, the men who were assisting her removed a number of items of fixed cedar furniture such as skirting boards and window frames, doors and stained or painted glass windows. The timber was cedar and she wished to use it elsewhere, being entitled to remove these items under Special Condition 15.

Mr Christofidellis, the principal of the plaintiff, was in attendance in the street near the site for several hours. He also had several other men in attendance throughout the period, with comings and goings of individuals. Some of these accompanied him on his inspection and took photographs. They gave evidence of their observations, presenting a maze of information about small details of when particular events happened and the state of affairs at the time of the inspection. Mr Christofidellis' explanation for the presence of Mr Frangakas, Mr Dedes and Mr Kitas was illogical and did not explain in a satisfactory way why he had so many persons there, or why he had anyone there. No reason which was in any way likely appeared from the evidence for the attendance of these people for some hours, or explained what motivation they had for taking part in inspections or making any particular observations of the state of progress.

At about 1.30 pm, which was the appointed time for the inspection, Mr Christofidellis telephoned Mr Bailey's office and was told the terms of Special Condition 15 by Mrs Judge, a paralegal employed by Mr Bailey with responsibilities which included handling conveyancing matters. Mr Christofidellis professed in his evidence not to have known of Special Condition 15 until Mrs Judge read it to him on this occasion. The improbability of his not knowing of the vendor's right to remove improvements is very great, but his position would not be improved if he in fact were unaware of the terms of the contract.

Mr Christofidellis, in company with several others, attended and conducted his inspection soon after 1.30 pm and it was completed by 2 pm. In this way the purchaser was accorded its right to a pre-completion inspection, at or soon after 1.30 pm and at the time when Mr Christofidellis wished it to take place. The right to a pre-completion inspection was made available to him and was taken, and no less so because there were still some rubbish and other articles to be removed from the premises then, and there was still some work in progress.

Mr Christofidellis suggested, in a passage which entered his evidence at a very late stage, that Mrs Bruce made an arrangement with him to let him know when his inspection could be resumed. Mrs Bruce denied this firmly. In my finding there was no such arrangement and there was no occasion to resume the inspection, which was completed within 10 or 20 minutes after it began. I find that Mrs Bruce gave no indication to Mr Christofidellis that she would tell him when she had finished removing goods from the house and did not tell him or indicate to him in any way, nor did circumstances indicate to him, that he would be given a further opportunity to make an inspection. In my finding he did not ask her for a further opportunity to do this and there was no significant conversation between them at the time of the inspection or thereabouts. He had no right or basis for an expectation that he would be given a further inspection after the inspection which was completed before 2 pm; and there was no basis on which it was reasonable for him to suppose that he had or would be given a further inspection.

He in fact came onto the premises at or soon after 3 pm and made some further observations.

The moveable objects still on the premises at 3 pm which Mr Christofidellis found sufficiently significant to mention in his evidence in chief were:-

in a storeroom under the house; two bags of cement (which had gone hard), some rubbish, a box of pink bats;

He also mentioned an old piece of dilapidated furniture which was at the rear of the house. There are also unclear references to pot plants and other rubbish. He said that it would have taken one man about five minutes to remove the rubbish, that it would have occupied half the back of the utility truck, and that it was not really of great concern to him.

In Mrs Bruce's evidence there was no furniture left inside the house by 1.30 pm. There were some things on the land which were to be put into storage and she mentioned a rug, a box of last-minute items and a cupboard on the back verandah that was to be put on the rubbish pile, some small items on the side verandah and under the house and some pot plants and a couple of boxes on the front lawn. The small items on the side verandah included the two table tops, some components of a trampoline, some pieces of wood. In my finding some items which had been fixtures were unfixed and removed after 1.30 pm. There is no reason why they should not have been, and the exact times cannot be established in a clear way. Little if any of the process happened after 2 pm. Certainly the whole process was finished well before 3 pm. Until 3 pm the defendant was entitled to act under Special Condition 15 and to remove fixtures. The test of her right to terminate is her readiness, willingness and ability to give vacant possession at 3 pm. If the plaintiff had been ready to settle at 2 pm the defendant could then have performed, in substance, her obligation to give vacant possession, and if any removal of fixture had not then been completed, she could simply have desisted from its removal.

Mr Christofidellis and Mr Bailey acted on some assumption to the effect that the purchaser was entitled to have the property in a vacant state ready for delivery of possession before the pre-completion inspection. There is no basis for this and no reason why work of removal of goods and of fixtures should not proceed during and after pre-completion inspection.

The vendor's solicitor Mr Blackmore attended for settlement at the Law Society's Settlement Rooms in Phillip Street, Sydney, at about 2 pm. Mr Blackmore's partner had had the conduct of the matter until the previous Friday 12 September, but she went overseas during the weekend and left Mr Blackmore with the file and instructions dealing with the settlement. Mr Blackmore had the documents necessary for the vendor to complete. While he was travelling by train from his office at Edgecliff to Martin Place station Mr Blackmore received a telephone message that Mr Bailey had telephoned for him. When he reached Phillip Street where his mobile telephone would work he rang Mr Bailey. Mr Bailey told him to the effect that he would not be attending at 2 pm. Mr Blackmore proceeded to the settlement rooms.

Mr Antonas, a clerk employed by Messrs Nugent Wallman and Carter, solicitors for the intending mortgagee, also attended at the Settlement Rooms and arrived at about 2 pm. He was ready to take part in completing the transaction and had a bank cheque to make the mortgage advance; this was the only source of funds which the purchaser proposed to use at completion. Mr Bailey did not inform Messrs Nugent Wallman and Carter in advance that Mr Bailey would not be attending the settlement. Mr Blackmore and Mr Antonas identified each other and remained at the Settlement Rooms while the events unfolded. There were many telephone calls among the persons interested in the events. Mr Bailey had his paralegal Mrs Judge, who knew the matter and was capable of conducting the settlement, available in his office, ready to attend when he directed her. Among the many things that he attended to, Mr Bailey composed a letter (which I call the 2.50 pm letter because it mentions 2.50 pm as the time of its preparation), which states or purports to state the purchaser's position.

After waiting till about 2.45 pm Mr Antonas, who was in telephone contact with his employer Mr Carter, left the Law Society Settlement Rooms to attend to other business. Before he left he explained to Mr Blackmore that he was leaving to attend to other business and that he would return. He gave Mr Blackmore the number of his mobile telephone; he did this because his employer Mr Carter had told him to do so, and he did not do it at the request of Mr Blackmore. Mr Blackmore made no arrangement to communicate with Mr Antonas or to see that he came back at any suitable time, or that he came back at all, and made no arrangement and gave no undertaking to anybody that he would communicate with Mr Antonas. Mr Blackmore had no control over Mr Antonas, and he made no attempt to exercise any. Mr Antonas went to the Land Titles Office, which is in the next city block, and before he left he told Mr Blackmore that he would not be long and that he would be close by.

Mr Bailey had made no arrangements for Mr Antonas to remain indefinitely; his arrangement was for the mortgagee's solicitor to be in attendance at 2 pm, and there was no arrangement for the mortgagee's solicitor to remain until 3 pm or to be in attendance at 3 pm. Telling Mr Antonas to attend at the Law Society Settlement Rooms and telling him to leave were decisions taken by Mr Carter and by nobody else, and neither Mr Bailey nor Mr Blackmore had any control over them. In one of the many telephone conversations which occurred between 2 pm and 3 pm Mr Carter told Mrs Judge "We can't wait forever." This was no more than to state the obvious; it was obviously likely that a settlement clerk attending a 2 o'clock appointment would have somewhere else to go to by 3 pm.

Mrs Judge set out at about 2.50 pm and made the short journey from Mr Bailey's office in ADC House at the corner of Elizabeth and King Streets to the Law Society's settlement rooms. Before she set out Mr Bailey gave her the 2.50 pm letter and told her to deliver it to Mr Blackmore. He told her "Don't settle until I call you."

When Mrs Judge arrived at the Law Society Settlement Rooms at about 2.55 pm, she announced herself and Mr Blackmore responded. She asked him where the mortgagee's representative was and Mr Blackmore said that the mortgagee had gone for a short time. He said "Are you ready to settle?" and in response Mrs Judge gave him the 2.50 pm letter. Mr Blackmore told Mrs Judge that Mr Antonas had given him a telephone number, that he had left for a short while and that Mr Blackmore had the number to call him. Both Mr Blackmore and Mrs Judge made telephone calls; Mr Blackmore to Mrs Bruce and Mrs Judge to Mr Bailey. Then, at a time within a few minutes after 3 pm, Mr Blackmore said to the effect that "since it is after 3pm, my instructions are to terminate the contract". There was some further discussion in which he repeated the substance of this statement and said he would reply to the letter in due course and referred to the fact that he had been in attendance since 2 o'clock. He brought the discussion to a substantial end with a statement which is a good epitome of the whole conflict - "You can't settle. Your incoming mortgagee isn't even here. I am instructed to terminate under the notice. Any further problems will be a matter for litigation."

Before 3 o'clock Mrs Judge did not directly answer the inquiry whether she was ready to settle. Having regard to her instructions from Mr Bailey, she could not say that she was. By 3 pm and by the time Mr Blackmore left, Mr Bailey had not told Mrs Judge to settle and indeed there is no evidence that he had told her to settle by the time she, in turn, left the Law Society settlement rooms.

As Mr Blackmore had been in attendance for almost an hour for an appointment for 2 o'clock, the time he could reasonably be expected to wait after 3 o'clock was very short: next to no time at all. The event closed when Mr Blackmore left at 3.11 pm and by that time the purchaser had not confronted him with readiness and ability to pay the balance of purchase money and was unable to.

When writing his letter Mr Bailey knew of Special Condition 15, the right to remove fixtures and the disentitlement to compensation in respect of their removal. He must have known of printed clause 11 in the common form which requires a purchaser to comply with public authority notices issued before contract, leaving the purchaser with recourse only to its right to make a claim under printed condition 7 if conduct of the vendor precipitates a notice after exchange of contract; and use of the claim machinery would precipitate the vendor's entitlement to rescind. Mr Bailey first raised the question of damage to the fence in the letter of 2.50 pm, although he had had one or more telephone conversations with Mr Blackman since he learnt of it. If damage to the fence gave rise to any entitlement (an issue which was not addressed at the hearing) it would be an entitlement to make a claim under condition 7. Damage to the fence is not mentioned anywhere in the particulars in the pleadings. Mr Bailey knew that the contractual procedure for a claim about damage to the fence had not been followed. If it had been followed the vendor would have had a contractual opportunity to rescind as printed clause 7.1.1 was deleted by Special Condition 11.

Mr Bailey's letter falsely attributed a statement to Mr Weresczynsk, a Randwick Council officer, that the building would appear to be unsafe and that council would issue a notice. Mr Bailey accepted that he had "put a bit of spin on ..." the subject and later acknowledged its falsity. This statement was clearly false, known to Mr Bailey so to be and made with the intention of deceiving the defendant's solicitor and of disrupting his course of action.

The letter asserted that vacant possession had not been given, and this was a pointless observation as it was not to be given before completion.

The letter made several claims which are groundless, and made false assertions about the position and attitude of the Randwick City Council. Although on a careful reading the later statements in the letter professed readiness to settle, it would be difficult to appreciate that this was so when presented with the letter in circumstances of urgency. The letter called for response, and its indication of readiness to settle under protest is conditional on a response; it is not unqualified. There was no right to insist on a response. Insisting on a response does not stop time from passing. The delivery of the letter was markedly disruptive in its effect and, I am quite satisfied, in its intended effect; it was an attempt to bluff the vendor out of requiring settlement except with some inappropriate concession which did not represent any contractual entitlement. The terms and use of the letter serve to show that the plaintiff, while prepared to profess readiness to settle, was seeking to avoid settlement except on the basis of obtaining some advantage. The statement in the letter about readiness to settle did not tally with Mrs Judge's instructions which in fact did not authorise her to settle without further authorisation from Mr Bailey.

The letter of 2.50 pm makes many complaints, including even fictitious complaints, but does not suggest that the provisions of the notice to complete had been waived or varied, and does not make any complaint about the defendant's not holding the opportunity for inspection open, or not extending an opportunity for a further or renewed inspection. Mr Bailey spent the hour from 2 o'clock to 3 o'clock trying to devise reasons to avoid settlement or ways to bluff the vendor out of insisting on it. His letter was the product of these attempts.

Within a few minutes, probably less than five minutes after 3 pm Mr Blackmore told Mrs Judge that the vendor would not settle; he left at or about 11 minutes past 3. At that time the mortgagee's representative Mr Antonas had not returned, and Mrs Judge did not have any money to pay over. Mrs Judge left after Mr Blackmore left, and when Mr Antonas, the intending mortgagee's solicitor's settlement clerk returned at about 3.20 pm no other person involved in the event was present.

There is no event which can be considered as raising the question of availability in substance of performance by the purchaser at 3 pm. In an exercise of the substance, an allowance of a few minutes ought to be made if some small accident required it, but no allowance of time ought to be made if there was simply no availability of performance at all. At 3 pm Mr Antonas was not there and there was no arrangement for him to be there at 3 pm or at any particular time. After waiting the best part of an hour he had left to attend to other business and was to return when that other business permitted. Without him there was no money. Mrs Judge was not authorised to settle, and she could not offer to settle at 3pm or at any time before Mr Blackmore left. Then before Mr Antonas returned she had left.

What Mr Blackmore told Mrs Judge and what Mrs Bruce told Mr Christofidellis soon after 3 o'clock made it quite clearly understood by the purchaser that the contract was terminated. No particular form of words or manner of communication is necessary to accept a repudiation constituted by failure to perform a condition which is of the essence of the contract.

At some time, probably in the half hour after Mr Blackmore left the Law Society Settlement Rooms, there were some further telephone exchanges between Mr Bailey and Mr Blackmore, but Mr Blackmore after referring to Mrs Bruce for instructions did not change his position. He did not join in any arrangement for settlement that afternoon at Edgecliff or at the Law Society Settlement Rooms.

Mr Bailey knew that Mr Blackmore was attending to other business in Selborne Chambers after he left the Law Society Settlement Rooms. This should have made it seem pointless to Mr Bailey to arrange for attendance at the Edgecliff office at 4 o'clock without an appointment, or on the basis that Mr Bailey himself had made the appointment unilaterally. He did so at the suggestion of Mr Carter of Nugent Wallman and Carter, solicitors for the intending mortgagee.

The groundless assertions and claims in the letter of 2.50 pm were not withdrawn, and the professed readiness to settle later on 15 September always remained subject to them.

The conduct of the purchaser's solicitor later on 15 September, and in the following days shows quite clearly that it was understood that the vendor had terminated the contract. A written confirmation followed on 23 September, but by that time the plaintiff had commenced the proceedings on 16 September and claimed declaratory relief which clearly shows an understanding of the position as asserted by the vendor.

Suggestions put forward in the pleadings to the effect that Mr Blackmore was in some way associated with the absence of Mr Antonas, and put forward in argument to the effect that the defendant had in some way thrown the plaintiff off its course by conduct in relation to the inspections are not supported by the facts.

There was no event at or about 3 pm which can be appraised for a decision whether it was substantial performance of the plaintiff's obligation to pay the purchase price and settle the purchase at 3 pm. At 3 pm the mortgagee's representative was not present, there was no money at hand to be paid over to the vendor's solicitor; the purchaser's solicitor's settlement clerk was present and had handed the vendor's solicitor a letter which was very difficult to understand, and especially difficult to understand or respond to in a limited time.

To see whether the plaintiff was ready, willing and able to make a substantial compliance with a contractual obligation to pay the balance of the purchase price and to settle I would have to see some facts and circumstances in which the purchaser was ready, willing and able to settle, and also establish when that was and what were the circumstances which led to delay. A delay caused by traffic or by someone being stuck in a lift, even for 10 or 15 minutes, might not be inconsistent with substantial performance. A shorter delay caused by simply having no effective arrangements to settle would show that performance of the substance of the obligation was not available. But here there is nothing. The elements never came together at all.

If something is to be done by 3 pm on a business day reasonable people accept some elasticity for most purposes. In ordinary parlance ten minutes past three is about 3 o'clock. The elasticity relates to the nature of the business in hand and to how long it is reasonable to expect others to wait. If the others had an appointment for 2 o'clock and have been kept for an hour already, they cannot be expected to wait after 3 o'clock when there has been no accidental delay. But here there is no time to assess, as the purchaser never brought the elements of readiness, willingness and ability to settle together.

The plaintiff pursued an obscuring and delaying strategy until 3 pm passed, then moved to professing readiness to settle, but had not created circumstances in which it could settle. The whole event of assembling for a settlement at 2 pm with an essential time of 3 pm came to a distinct end when Mr Blackmore left at about 3.11 pm and Mrs Judge left soon after. The plaintiff's solicitor's attempts unilaterally to appoint another settlement time at another place, at Edgecliff, and a yet further settlement time at the Law Society Settlement Rooms took place after there had been failure in substance to comply with the essential obligation.

The plaintiff's conduct on 15 September and since has seemed to involve some unclear suggestion to the effect that making arrangements for the inspection to take place at 1.30 pm involved the vendor incurring an obligation to have vacant possession available at 1.30 pm, and to have all articles removed by that time. I find that there was no arrangement to that effect, and no arrangement which in any way implied that that would be so, or altered the time at which the vendor was obliged to be ready, willing and able to give vacant possession.

The plaintiff's counsel made submissions, which I did not find altogether clear, to the effect that the plaintiff's non-compliance was in some way produced by the defendant's conduct in not having the premises vacant and in the condition which they would be on settlement by 1.30 pm, the time appointed for the final inspection. However there is no reason why final inspection and vacancy should coincide; the contract did not require it and there were no practical arrangements to that effect either. The plaintiff simply did not have a contractual right to see the premises in their final state at the inspection. Its right was no more than a right to inspect and see what there was to see. If what there was to see included the plaintiff exercising contractual rights under Special Condition 15, so be it. What there was to see constituted no impediment to settlement within the essential time, or for that matter by 2 pm bearing in mind that what was required of the defendant was ability substantially to comply with the contractual requirement to give up vacant possession.

The plaintiff's difficulties and the plaintiff's not being in a position to settle at 3 pm arise out of a chain of matters for which the plaintiff and not the defendant is responsible. These include the failure to make any arrangement to have the intending mortgagee represented when the purchaser's representatives appeared. Of at least equal importance is a series of contrivances and manoeuvres, the crown of which was the letter of 2.50 pm, which were undertaken with the objective of disrupting the settlement and disturbing the vendor's readiness to complete. There were no real limits to what the purchaser and its solicitor were prepared to do and did to disrupt proceedings; this included making obviously groundless complaints and telling false stories about the attitude of the Randwick City Council. The letter of 2.50 pm raised a lot of dust and confusion, but Mr Blackmore was able to see through it. There is much more than the simple failure to tender money by 3 pm in support of a finding that the purchaser's intentions were repudiatory; it is clear that the purchaser was prepared to settle only as a last resort, on inappropriate terms and if deception and confusion did not put off the need to do so. When the time came, the money was not there and the last resort was not available.

I find that the vendor was able to provide vacant possession at 3pm. Even at 2 pm, the vendor was in a position to make a substantial compliance with the obligation, in that if the purchaser had been in a posture of readiness to settle, the vendor, having regard to what moveable property was still on the premises and the number of men she had available - apparently four or five - could have cleaned up and removed the property in a few minutes. The fact that at 2 pm she had not removed all the fixtures she would like to remove does not qualify this; she could have settled by simply departing, leaving any fixtures which had not been removed by then. Certainly by 3 pm the substance of vacant possession was available. The few small pieces of rubbish, which Mr Christofidellis conceded caused him no concern, could have been removed by one man in a few minutes, but as the property was, according to the express terms of the contract, being sold for demolition, the fact that the rubbish was on the property made it no less true that vacant possession was available. The rubbish items fall within the de minimis rule referred to by Lord Greene MR in Cumberland Consolidated Holdings Ltd v. Ireland [1946] 1 KB 264 at 271.

An indication of what Lord Greene had in mind by referring to the rule de minimis is found in his Lordship's observations at 271: "When we speak of a physical impediment we do not mean that any physical impediment will do. It must be an impediment which substantially prevents or interferes with the enjoyment of the right of possession of a substantial part of the property." The few pieces of rubbish which remained on the property at 3 pm are clearly de minimis in this sense. Indeed Mr Christofidellis' own evidence shows that they had no importance. The working of these principles is illustrated by the decision of Needham J in Point Glebe Pty Ltd v. Lidofind Pty Ltd (1988) NSW Conv. R 55-412. The contemplated demolition of the property makes the irrelevance of a few pieces of rubbish very clear in the present case.

Mrs Bruce believed that the value of the premises had risen and that it would be to her advantage if the sale went off. I see no advantage to her from the plaintiff's expenditure on its project. She is not in a position to use the plans which the plaintiff had prepared; these would be subject to copyright, and there is the sheer impracticality of carrying out someone else's development project without co-operation.

In my opinion I should not make a discretionary decision relieving the purchaser against the contractual forfeiture of the deposit. The conduct of the purchaser and its solicitor are strongly adverse to relief: they brought the outcome on the plaintiff themselves. Forfeiture of a deposit of a reasonable amount is not a penalty, and the deposit of 10% was at the reasonable and customary rate from which parties to real estate contracts in New South Wales rarely depart. The purchaser has never been in possession and has never made any improvements, and the purchaser's expenditures for the purpose of his own prospective development are in no way analogous to improvements; it is not reasonably open to the purchaser to take up the development project. In no sense did any failures or misconduct of the vendor contribute to the purchaser's difficulties. Forfeiture of the deposit is simply the working out of the parties' contractual arrangements, first the deed of option and later the contract under it, with which the vendor was encumbered for a year. Forfeiture of the deposit was a contractual outcome the possibility of which the purchaser incurred open-eyed and as a matter of business in an arrangement in which each party incurred risks. Considerable inconveniences fell to the vendor, from her being encumbered with the option and the contract for 12 months and, not insignificantly, from her relying on the contract to remove her goods and to cause a great deal of damage to be done to the premises, disabling her from living in it. In my opinion I should not as a matter of discretion disturb the contracted outcomes of these events.

The plaintiff has failed to establish the allegations on which the Further Amended Statement of Claim is based, principally in paras 5, 6, 7, 8.

The defendant has made out the defence raised principally in paras 6, 7, 8 and 9 of the Defence. The defendant has established that there have been rescission and termination as alleged in the cross-claim.

The plaintiff has not made out the matters pleaded in the Reply.

In the circumstances which appear from these reasons I do not think fit to order repayment of the deposit under s.55(2A) and exercise the discretion there conferred against the grant of relief.

(2) Declaration as claimed in para 5(a) of the Defence and Cross-claim;

(4) Judgment for the Cross-defendant Cross-claimant for damages as claimed in para 5(d); and order that an inquiry be conducted to ascertain and certify the amount of the Cross-claimant's damages and that judgment be entered for the amount so certified.

(5) Order that the Cross-defendant pay the Cross-claimant's costs of the Cross-claim.

Legione v. Hateley [1983] HCA 11; (1983) 152 CLR 406

Stern v. McArthur [1988] HCA 51; (1988) 165 CLR 489

Union Eagle Ltd v. Golden Achievement Ltd [1997] UKPC 5; [1997] AC 514

Steedman v. Drinkle [1916] 1 AC 275

Tramways Advertising Pty Ltd v. Luna Park NSW Ltd [1938] 38 SR 632 at 642

Lohar Corp. Pty Ltd v. Dibu Pty Ltd [1976] 1 Butterworth Property Reports 1977 at 1986

Green v. Sevin [1879] 13 ChD 589

Union Eagle Ltd v. Golden Achievement Ltd [1997] UKPC 5; [1997] AC 514

Paclyn Pty Ltd v. GP Harris Real Estate (1988) NSW Conv R 55-418

Cumberland Consolidated Holdings Ltd v. Ireland [1946] 1 KB 264 at 271

Point Glebe Pty Ltd v. Lidofind Pty Ltd (1988) NSW Conv. R 55-412