Waterhouse v Rothner [2026] NSWSC 937 | Case summary

Waterhouse v Rothner [2026] NSWSC 937 | Case summary | Zoe

Court

Supreme Court of NSW

Decision date

2026-08-06

Before

Pike J

Catchwords

CONTRACTS — construction — contract for sale of residential property — Spanish style Rose Bay mansion – Villa Biscaya — purchaser granted pre-completion access and exclusive occupation — purchaser permitted to carry out works on property — trees removed from adjoining property — purchaser authorised removal — whether removal breached special condition prohibiting damage, nuisance or inconvenience to adjoining property — clause confined to damage caused by works carried out on subject property CONTRACTS — termination — notice of default — vendor purported to terminate purchaser’s contractual occupation rights — whether notified non-compliance rectified within contractual period — deed polls offered in response to allegations concerning removal of trees — whether rectification required to address only notified non-compliance — whether purchaser rectified notified non-compliance CONTRACTS — performance — vendor required to sign applications, plan and consents reasonably required by purchaser — failure to sign construction certificate application — breach of express term and implied duty to cooperate — no loss caused EQUITY — relief against forfeiture — contractual right of occupation pending completion of sale — vendor’s asserted entitlement to terminate occupation rights — whether relief against forfeiture available EVIDENCE — witness credibility — conflicting accounts concerning responsibility for removal of trees — contemporaneous communications, including WhatsApp messages and video evidence — failure to call material witness — inference that purchaser authorised removal of trees DAMAGES — mesne profits — where purchaser remained in occupation after purported termination — vendor claimed market rent or loss of opportunity to lease property — whether vendor would have leased property to third party — vendor unable to prove lost rental income or opportunity — alternative assessment of mesne profits — whether quantum of land tax payable by vendor if property leased should be deducted from mesne profits DAMAGES — causation — purchaser claimed increased holding costs arising from vendor’s failure to sign construction certificate application — whether purchaser would have commenced main-house works immediately

Source

Original judgment source is linked above.

Catchwords

CONTRACTS — construction — contract for sale of residential property — Spanish style Rose Bay mansion – Villa Biscaya — purchaser granted pre-completion access and exclusive occupation — purchaser permitted to carry out works on property — trees removed from adjoining property — purchaser authorised removal — whether removal breached special condition prohibiting damage, nuisance or inconvenience to adjoining property — clause confined to damage caused by works carried out on subject property CONTRACTS — termination — notice of default — vendor purported to terminate purchaser’s contractual occupation rights — whether notified non-compliance rectified within contractual period — deed polls offered in response to allegations concerning removal of trees — whether rectification required to address only notified non-compliance — whether purchaser rectified notified non-compliance CONTRACTS — performance — vendor required to sign applications, plan and consents reasonably required by purchaser — failure to sign construction certificate application — breach of express term and implied duty to cooperate — no loss caused EQUITY — relief against forfeiture — contractual right of occupation pending completion of sale — vendor’s asserted entitlement to terminate occupation rights — whether relief against forfeiture available EVIDENCE — witness credibility — conflicting accounts concerning responsibility for removal of trees — contemporaneous communications, including WhatsApp messages and video evidence — failure to call material witness — inference that purchaser authorised removal of trees DAMAGES — mesne profits — where purchaser remained in occupation after purported termination — vendor claimed market rent or loss of opportunity to lease property — whether vendor would have leased property to third party — vendor unable to prove lost rental income or opportunity — alternative assessment of mesne profits — whether quantum of land tax payable by vendor if property leased should be deducted from mesne profits DAMAGES — causation — purchaser claimed increased holding costs arising from vendor’s failure to sign construction certificate application — whether purchaser would have commenced main-house works immediately

Judgment

Source: NSW Caselaw (www.caselaw.nsw.gov.au). Converted to plain text by ZoeLaw. Not the official version.

Medium Neutral Citation: Waterhouse v Rothner [2026] NSWSC 937

Hearing dates: 12, 13, 14, 17, 18 and 19 November 2025, 30 April 2026

Date of orders: 6 August 2026

Decision date: 06 August 2026

Jurisdiction: Equity - Real Property List

Before: Pike J

Decision: (1) The parties are to confer to seek to agree on orders in accordance with these reasons and provide any agreed orders to my Associate by no later than 20 August 2026.
(2) In the event that agreement cannot be reached, the parties are to each provide to my Associate, by no later than 20 August 2026, the orders for which they contend, together with submissions in support of those orders of no more than five pages.
(3) Any submissions in reply, of no more than three pages, are to be provided to my Associate by no later than 27 August 2026, upon which I will determine the remaining issues on the papers.

Catchwords: CONTRACTS — construction — contract for sale of residential property — Spanish style Rose Bay mansion – Villa Biscaya — purchaser granted pre-completion access and exclusive occupation — purchaser permitted to carry out works on property — trees removed from adjoining property — purchaser authorised removal — whether removal breached special condition prohibiting damage, nuisance or inconvenience to adjoining property — clause confined to damage caused by works carried out on subject property
CONTRACTS — termination — notice of default — vendor purported to terminate purchaser’s contractual occupation rights — whether notified non-compliance rectified within contractual period — deed polls offered in response to allegations concerning removal of trees — whether rectification required to address only notified non-compliance — whether purchaser rectified notified non-compliance
CONTRACTS — performance — vendor required to sign applications, plan and consents reasonably required by purchaser — failure to sign construction certificate application — breach of express term and implied duty to cooperate — no loss caused
EQUITY — relief against forfeiture — contractual right of occupation pending completion of sale — vendor’s asserted entitlement to terminate occupation rights — whether relief against forfeiture available EVIDENCE — witness credibility — conflicting accounts concerning responsibility for removal of trees — contemporaneous communications, including WhatsApp messages and video evidence — failure to call material witness — inference that purchaser authorised removal of trees DAMAGES — mesne profits — where purchaser remained in occupation after purported termination — vendor claimed market rent or loss of opportunity to lease property — whether vendor would have leased property to third party — vendor unable to prove lost rental income or opportunity — alternative assessment of mesne profits — whether quantum of land tax payable by vendor if property leased should be deducted from mesne profits DAMAGES — causation — purchaser claimed increased holding costs arising from vendor’s failure to sign construction certificate application — whether purchaser would have commenced main-house works immediately

Parties

Applicant/Plaintiff:

Waterhouse

Respondent/Defendant:

Rothner

Legislation Cited (5)

Cited:** Evidence Act 1995(NSW)

Uniform Civil Procedure Rules 2005(NSW)

Home Building Act 1989

Residential Tenancy Act 2010

Tax Management Act 1956

Cases Cited (54)

[2025] NSWSC 563

[2017] NSWSC 1230

[2018] NSWCA 114

Cases Cited: 1128CG Pty Ltd v MH Affordable Homes on Kelly Pty Ltd [2025] NSWSC 563
Akici v L R Butlin Ltd [2006] 1 WLR 201
Auburn Shopping Village Pty Ltd v Nelmeer Hoteliers Pty Ltd (2017) 324 FLR 378; [2017] NSWSC 1230
Auburn Shopping Village Pty Ltd v Nelmeer Hoteliers Pty Ltd (2018) 19 BPR 38,569; [2018] NSWCA 114
Ayers Rock SkyShip Pty Ltd v Voyages Indigenous Tourism Australia Pty Ltd (2019) 19 BPR 39,541; [2019] NSWSC 828
Batson v de Carvalho (1948) 48 SR (NSW) 417
Bird v DP (2024) 419 ALR 552; [2024] HCA 41
Briginshaw v Briginshaw (1938) 60 CLR 336; [1938] HCA 34
Bunnings Group Limited v CHEP Australia Limited (2011) 82 NSWLR 420; [2011] NSWCA 342
Butt v M’Donald (1896) 7 QLJ 68
Dexus Capital Investment Services Pty Ltd v Australia Pacific Airports Corp Ltd [2026] NSWSC 600
ET-China.com International Holdings Limited v Cheung (2021) 150 ACSR 461; [2021] NSWCA 24
Goodman Fielder Consumer Foods Pty Ltd v Graincorp Foods Australia Pty Ltd [2020] NSWSC 706
Huang v Waterhouse [2025] NSWLEC 71
ING Bank (Aust) Ltd v O’Shea (2010) 14 BPR 27,317; [2010] NSWCA 71
Inverugie Investments Ltd v Hackett [1995] 1 WLR 713
JPA Finance Pty Ltd v Gordon Nominees Pty Ltd (2019) 58 VR 393; [2019] VSCA 159
Kay v Playup Australia Pty Ltd (2020) 19 BPR 40,037; [2020] NSWCA 33
L Schuler AG v Wickman Machine Tools Sales Ltd [1974] AC 235
Mineralogy Pty Ltd v Sino Iron Pty Ltd [2017] FCAFC 55
Mineralogy Pty Ltd v Sino Iron Pty Ltd (No 6) (2015) 329 ALR 1; [2015] FCA 825
Progressive Mailing House Pty Ltd v Tabali Pty Ltd (1985) 157 CLR 17 at 39; [1985] HCA 14
Scandinavian Trading Tanker Co A.B. v Flota Petrolera Ecuatoriana (The Scaptrade) [1983] 2 AC 694
Schellenberg v Tunnel Holdings Pty Ltd (2000) 200 CLR 121; [2000] HCA 18
Secured Income Real Estate (Australia) Ltd v St Martins Investments Pty Ltd (1979) 144 CLR 596; [1979] HCA 51
Sydney Local Health District v Macquarie International Health Clinic Pty Ltd (2020) 105 NSWLR 325; [2020] NSWCA 274
The J&P Marlow (No 2) Pty Ltd v Hayes & McCabe (2023) 112 NSWLR 29; [2023] NSWCA 117
The National Insurance Company of New Zealand Limited v Espagne (1961) 105 CLR 569; [1961] HCA 15
Vauxhall Motors Ltd v Manchester Ship Canal Co Ltd [2020] AC 1161; [2019] UKSC 46
Wickland (Holdings) Ltd v Telchadder [2014] 1 WLR 4004; [2014] UKSC 57

Mr Rothner availed himself of the right of access and subsequently the right of occupation, commencing work in the garden in about late 2023 and moving into the Property on 5 January 2024. Works were carried out including under the supervision of the second defendant, Lisa Rothner (Mrs Rothner), Mr Rothner’s former wife. That work included work to the garden of the Property.
It is not in dispute that prior to 10 June 2024 a number of trees/plants were removed from 8 Tivoli Avenue, Rose Bay (No 8), being the land immediately to the north of the Property. Those trees/plants were in the line of sight from the Property to the Sydney Harbour Bridge.
Extracted below is a still image from a video shot by Mrs Rothner and sent to Mr Rothner, likely in early 2024, and prior to the removal of trees in early April 2024.
On 17 May 2024, having been told about the removal of trees on No 8, Mr Waterhouse gave a notice of default to Mr Rothner contending that he had breached the special condition granting him the right of occupation by causing damage to an adjoining property, and giving Mr Rothner notice that should he fail to rectify the breach within 14 days, his right of occupation would be terminated.
On 5 June 2024, Mr Waterhouse purported to terminate Mr Rothner’s occupation rights and commenced these proceedings by statement of claim.
Mr Waterhouse relevantly contends, and Mr Rothner disputes, that he validly terminated Mr Rothner’s occupation and seeks damages measured by what he contends he would have leased the Property for during the period from 5 June 2024 until completion. Mr Rothner contends that he had nothing to do with the removal of trees from No. 8.
Mr Rothner has cross-claimed against Mr Waterhouse contending that Mr Waterhouse has breached the special conditions of the Contract by not consenting to Development Applications. Mr Rothner contends that by reason of these breaches he has been delayed in the construction work he was proposing to carry out – he will now not be able to carry out the work until after he has completed on the purchase. As a consequence, he says he will incur increased construction costs and increased holding costs prior to selling the Property which he says was always his intention.
There are, and were, other defendants.
The fifth defendant, Al Shahwan (Mr Shahwan), is alleged to have caused the trees on No. 8 to be cut down. He was represented by a solicitor until the first day of the hearing when the solicitor provided to the Court a communication from Mr Shahwan withdrawing his instructions. I gave the solicitor leave to withdraw and the hearing proceeded in the absence of Mr Shahwan.
Mrs Rothner, the second defendant took an active role in defending the proceedings, including by the appearance of counsel, until the second day of the hearing. On the morning of the second day of the hearing, junior counsel for Mr Waterhouse advised the Court that he was no longer seeking any injunctive relief against Mrs Rothner to the effect that Mr Waterhouse was involved in the removal of the trees and associated relief including damages. Counsel for Mrs Rothner sought, and was granted, leave to file a submitting appearance save as to costs. Mrs Rothner thereafter took no role in the proceedings, although she remained in the public gallery of the Court for a large part of the initial hearing in November 2025.
The third and fourth defendants, Mincong and Minshan Huang (the Huangs) are the owners of No. 8. They brought a cross-summons against Mr Rothner in relation to the removal of trees from No. 8. Shortly prior to the hearing, those proceedings settled and a notice of discontinuance was filed in relation to the claims brought by the Huangs. A copy of the settlement deed entered into between the Huangs, Mr Rothner and Mr Shahwan was tendered in evidence late in the initial hearing.
The only active parties at the hearing were Mr Waterhouse and Mr Rothner. Mr Waterhouse was represented by Mr F M Douglas KC and Mr D A Allen. Mr Rothner was represented by Mr S A Lawrance SC and Mr C J Chiam. The proceedings were initially heard over the period 12 to 19 November 2025.
On the first morning of the hearing, I conducted a view of the Property in the presence of counsel and the legal representatives for the parties, including Mrs Rothner’s representatives. The view included the entirety of the house on the Property and also the front (harbourside) garden and pool area. This enabled me to observe the views presently available from the Property as well as the boundary between the Property and No 8 where the trees were removed.
As set out in a little more detail later in these reasons, both Mr Waterhouse and Mr Rothner made applications to reopen in February 2026. On 30 April 2026, I determined that leave to reopen should be granted but only to permit evidence to be admitted of the objective facts which had occurred since the initial hearing. Each of Mr Waterhouse and Mr Rothner then provided written submissions as to what flowed from these new facts in terms of the issues I had to decide.
As between Mr Waterhouse and Mr Rothner, seven issues arose for determination by the Court. Those issues, and a brief statement of what I have found in relation to each, are as follows:
First, whether Mr Rothner is responsible for the removal of the trees on No. 8? Yes, he authorised Mrs Rothner to carry out the works.
Secondly, and if so, whether Mr Rothner failed to comply with cl 49.1(c)(vii) of the Contract? No, the clause properly construed does not extend to work on a neighbouring property.
Thirdly, if so, whether Mr Rothner rectified that non-compliance? Does not arise, but if it did, Yes.
Fourthly, if Mr Waterhouse is contractually entitled to terminate Mr Rothner’s right of occupancy, whether relief against forfeiture should be granted to prevent him from exercising that right? Does not arise, but if it did, No.
Fifthly, and depending on the resolution of the previous issues, what (if any) compensation is Mr Waterhouse entitled to either as damages for breach of contract, or as indemnity under the Deed Poll? Does not arise, but if it did, he is entitled to $256,430 plus interest.
Sixthly, whether Mr Waterhouse breached the terms of the Contract by failing to sign an application for a construction certificate to carry out works on the Property? Yes.
Seventhly, if Mr Waterhouse breached the Contract by not signing those documents, the measure of Mr Rothner’s loss which was caused by that breach? No loss was caused by the breach because Mr Rothner would not have immediately carried out the work to the main house. If**, contrary to my finding,** loss was caused, I quantify it at $1,313,256.00.
The remaining claims against Mrs Rothner and Mr Shahwan are made out and the declaratory relief sought by Mr Waterhouse against them should be made.
The parties should otherwise confer to seek to agree orders, including as to costs. I will determine any remaining issues on the papers.

On Mr Waterhouse’s side, there were two witnesses – Gary Gibbons (Mr Gibbons) and Mr Waterhouse himself. Each was extensively cross-examined and a credit attack levelled at their evidence in closing submissions.
Dealing first with the evidence of Mr Gibbons, Mr Rothner contended in closing submissions that he was not a reliable witness, who, in his answers in cross-examination was significantly confused about the chronology of events. There is some substance to these contentions. On a number of matters his evidence was just plainly wrong or inconsistent with the contemporaneous documentation. A prime example of the former is the evidence he gave in relation to when he first visited the Property. An example of the latter is his evidence that he was pretty sure that Mr Waterhouse’s daughter, Olivia Waterhouse (Olivia) only typed up one of his statements. The objective evidence is to the contrary. He is also mistaken that one of the statements and associated statutory declarations was made before Mr Whitfield.
These matters do not cause me to reject Mr Gibbons uncorroborated evidence entirely but rather cause me to approach Mr Gibbons’ evidence with caution and to analyse it in the context of the other evidence and inherent likelihoods. I consider each relevant aspect of Mr Gibbons’ evidence as part of my chronological fact finding below. Relevantly, I accept as mostly accurate the contents of Mr Gibbons’ two statements including what he says in his Second Statement about his interaction with Mr Rothner on 2 April 2024.
Whilst Mr Gibbons freely admitted in cross-examination that he was “genuinely grateful” to Mr and Mrs Waterhouse and wanted to help them in this litigation, I do not regard this as providing a reason to further question Mr Gibbons’ evidence. It was not suggested that Mr Gibbons’ was giving deliberately false evidence, just to help Mr Waterhouse. Having observed him in the witness box, I would not have accepted such a contention if made. Mr Gibbons’ affinity for Mr Waterhouse was explained by what Mr Waterhouse had done for Mr Gibbons. The affinity simply reinforces the necessity of a cautious approach to Mr Gibbons’ evidence.
Without wishing to be unkind to Mr Gibbons, he did not appear to me to be overly sophisticated or articulate. He struck me, however, as a person seeking to do his best to assist the Court in giving his evidence. It is the inconsistency of some parts of his evidence with objective material that warrants a cautious approach to it.
In relation to Mr Waterhouse, I also approach his evidence with considerable caution. It was obvious to me throughout the hearing that Mr Waterhouse had a significant hand in the preparation of his case. That role continued to some extent when he entered the witness box. On a number of occasions in cross-examination, particularly early in the cross-examination, Mr Waterhouse did not answer the question asked but rather volunteered information that he no doubt thought would assist his case. I have carefully considered Mr Waterhouse’s oral and affidavit evidence against the objective material and inherent probabilities. In a number of respects, I do not accept his evidence, particularly as to aspects of the preparation of Mr Gibbons’ Second Statement.
For Mr Rothner, the principal witness was Mr Rothner himself. He was extensively cross-examined for about a day.
Mr Waterhouse contended that I should not accept key aspects of Mr Rothner’s evidence, particularly and importantly his denial of any knowledge, or approval of, the removal of trees from No 8. Having closely observed Mr Rothner in the witness box during his cross-examination, I have some difficulty in accepting key aspects of his evidence, particularly his denials on the key issues. They are difficult to reconcile against the objective material and inherent likelihoods.
A considerable number of text and WhatsApp messages were tendered in evidence between Mr and Mrs Rothner. I set out a number of these messages in the chronological sequence below. For some unexplained reason, there are very few messages in April 2024 when some of the tree removal undoubtedly occurred. The messages produced provide a relatively reliable base against which to assess Mr Rothner’s oral evidence: see ET-China.com International Holdings Limited v Cheung (2021) 150 ACSR 461; [2021] NSWCA 24 at [25]-[30] per Bell P (Bathurst CJ and Leeming JA agreeing). The messages show regular communications between Mr and Mrs Rothner in relation to the work being carried out to the garden to open up the view from the Property, with Mr Rothner being engaged in the communications and indeed requesting pictures be sent. The messages include videos and in particular a video showing the view to the Sydney Harbour Bridge being opened up with more work to be done. This material paints a picture somewhat at odds with Mr Rothner’s denials of any knowledge of the tree removal on No 8, and the importance of views from the Property north toward the Harbour Bridge. Again, I approach Mr Rothner’s evidence with considerable caution. As set out below, I do not accept it on some lay aspects.
There was some brief expert evidence at the hearing.
First, concurrent evidence was given by Julia Conlon (Ms Conlon) (for Mr Waterhouse) and Jerome Srot (Mr Srot) (for Mr Rothner) as to what rent the Property would achieve if Mr Rothner’s right of occupation was validly terminated by Mr Waterhouse and the Property rented out prior to completion. There was a significant difference of opinion between the two as to what the Property would likely rent for. Whilst I accept that each was no doubt expressing their honest opinion, there were difficulties with each of their opinions. Mr Srot identified what he regarded as comparable properties, but it emerged reasonably clearly in cross-examination that they were not comparable but rather inferior to the Property. The likely rental in my view would be higher than Mr Srot’s estimate. Ms Conlon did not, however, identify any particular comparable properties so as to enable her opinion to be tested. The fact that she may have listed the Property for rent at $7,000 per week is far from determinative in the absence of some evidence that there would be any takers at this price. In the circumstances there is little alternative other than to adopt a mid-point between the two.
Second, David Madden (Mr Madden), a quantity surveyor called by Mr Rothner, was briefly cross-examined by junior counsel for Mr Waterhouse on day 4 of the hearing. I did not understand any credit attack to be levelled at his evidence.
Finally, Gavin Rubinstein (Mr Rubinstein), a real estate agent called by Mr Rothner was briefly cross-examined in relation to the opinion he expressed as to how long it would take to sell the Property if put on the market. Again, no credit issues arose.
Experts were also retained by Mr Waterhouse and Mr Rothner in relation to the trees that were cut down on No. 8. They ultimately reached agreement and as such neither was required for cross-examination.
It was contended by Mr Waterhouse that Mr Rothner should have called Mrs Rothner to give evidence in his case and that I should draw a Jones v Dunkel inference against Mr Rothner for failing to do so.
The issue is complicated by the fact that Mrs Rothner is a party to the proceedings as the second defendant. She made an affidavit. On the second morning of the hearing, however, she was granted leave to file a submitting appearance save as to costs. Her counsel then withdrew from the hearing. This was consequent upon Mr Waterhouse dropping the claims against Mrs Rothner for injunctive relief and damages, leaving only declaratory relief.
Mrs Rothner remained in the back of the court for most of the rest of the initial hearing, including during the cross-examination of Mr Rothner.
In closing submissions, counsel for Mr Rothner contended that a Jones v Dunkel inference should not be drawn for two reasons.
First, an ex-wife could not be said to be in the camp of her ex-husband. Secondly, while there were allegations being made against Mrs Rothner, one would not expect Mr Rothner to call her.
It was accepted that there were two matters on which it may be expected that Mrs Rothner would give evidence:

On the morning of the fourth day of the hearing, junior counsel for Mr Waterhouse made an application for leave to rely on an affidavit of Olivia (Mr Waterhouse’s daughter) which had been served unsworn on the evening before (Sunday 16 November 2025) and which I was informed would be adopted by Olivia in the witness box if I permitted the evidence to be given.
An application was made earlier in the hearing – on day 2 – for Olivia to be called to give evidence orally and without notice. I refused that application and indicated that if Mr Waterhouse wished to seek leave to rely on evidence from Olivia, an affidavit should be prepared and served before any such application was made. The unsworn affidavit from Olivia was subsequently served on the basis she would adopt it when called.
Mr Rothner opposed the application by Mr Waterhouse to rely on Olivia’s affidavit. Reliance was placed on an affidavit made by Jonathan Milner (Mr Milner), Mr Rothner’s solicitor who set out the steps that he would have taken had he been given earlier notice of the intention to rely on the affidavit of Olivia.
After hearing argument, I refused the application to rely on Olivia’s affidavit. I indicated that I would give reasons in my final judgment for this decision.
In simple terms, I took the view that it would not be in the interests of justice to permit Mr Waterhouse to rely on Olivia’s affidavit. This is because there was no reason why the affidavit could not have been served much earlier than it was, which would have allowed Mr Rothner to take the steps set out by Mr Milner in his affidavit.
The fact that the involvement of Olivia was referred to in the cross-examination of Mr Gibbons does not deal with the fact that Mr Waterhouse was always aware that the statutory declarations made by Mr Gibbons – and more particularly the second statutory declaration made 23 May 2024 – would be called into question and could have served evidence from Olivia as part of Mr Waterhouse’s evidence in chief.
There was no challenge to the evidence given by Mr Milner as to the steps that he says would have been taken had Olivia’s affidavit been served earlier. There was also no suggestion that the hearing could conclude within its allocated time if the steps were now taken. An adjournment would thus have been necessary. Even if that adjournment would only have been for a short period, new dates would need to have been found for the conclusion of the hearing. In the circumstances, including the history of the matter, I formed the view that it would not be in the interests of justice for this to occur.

In connection with the applications to reopen, Mr Waterhouse caused to be issued subpoenas to Mr Rothner’s conveyancing solicitor (Boskovitz), Revenue NSW, National Australia Bank Limited, BIDA Design Consultants Pty Ltd as well as a notice to produce to Mr Rothner. Mr Rothner sought to set each of these aside.
Due to various availability reasons of the parties, which do not need to be traversed in these reasons, it was not possible for the motions to reopen and to set aside the subpoenas and notice to produce, to be heard until 30 April 2026.
Mr Waterhouse made a number of affidavits in support of his position. Mr Rothner relied on two affidavits made by Mr Milner. I also had the benefit of written submissions from both sides. Mr Milner was briefly cross-examined. No credit issues arose from this.
It was not in dispute that the purchase completed on 17 December 2025. The PEXA settlement statement stated that the funds to enable Mr Rothner to settle were provided by the National Australia Bank (NAB). During the hearing, Mr Rothner gave evidence that he was borrowing funds from Pallas Capital. There was no mention of the NAB. Evidence led on the applications to reopen was to the effect that the NAB loan was cheaper for Mr Rothner than the proposed facility from Pallas Capital.
Mr Waterhouse’s position on the application was that he should be given leave to reopen to tender only the PEXA settlement statement, and that Mr Rothner’s application to reopen should be dismissed. Further, that if the Court was minded to grant Mr Rothner leave to reopen, it should be on condition that Mr Rothner be made available for further cross-examination and that Mr Waterhouse be given access to the documents produced or to be produced pursuant to the subpoenas and notice to produce. Mr Rothner would then be cross-examined not only as to the circumstances surrounding the change to the NAB, but also as to his intentions to carry out renovation works at the Property and then to resell it. There would also be further cross-examination as to his credit and it was contended that the subpoena to Revenue NSW was relevant to Mr Rothner’s credit, namely whether he paid the correct amount of stamp duty or underpaid it.
Mr Rothner’s principal position, outlined in written submissions served prior to the hearing and clarified at the start of the hearing, was that he should be given leave to reopen to tender the documents evidencing the terms on which Mr Rothner borrowed money from the NAB and then to make submissions as to damages that should be awarded to Mr Rothner on his cross claim in light of that evidence. A fallback position was that leave to reopen should be given on particular topics in which case there was a possibility that Mr Rothner would make a further affidavit and would make himself available for cross-examination on that affidavit.
I ultimately determined that leave to reopen should only be granted in a limited manner to tender:

Mr Rothner sought to immediately exercise his visitation rights under the Contract. It was not in dispute that Mr Rothner authorised Mrs Rothner to carry out the works on the Property. The extent of that authority is in issue.
A dispute arose early in relation to this which involved correspondence between the parties’ respective solicitors. The correspondence states that it was Mr Rothner’s intention to immediately commence external renovation works covering the garage, the structure beneath and all external grounds. No work on the main home would take place prior to possession on 4 January 2024.
As at 9 August 2023, Mr Rothner (or more accurately consultants working for him) were seeking quotes to carry out geotechnical investigations in relation to the Property. By 13 August 2023, quotes were being sought for tree/shrub pruning and removal works. Scott Freeman (Mr Freeman) had been engaged by Mr Rothner as a horticultural expert. Sandra Ongaro (Ms Ongaro), a director and interior designer had also been engaged by Mr Rothner with overall responsibility for the proposed works.
On 14 August 2023, Ms Ongaro sent an Arborists Report to Mr Rothner proposing a staged approach to tree removal on the Property. Section J refers to “clearing the view”. It is clear from this early time that Mrs Rothner was to be involved in relation to the garden work. Ms Ongaro’s communications were addressed to Mr and Mrs Rothner. As set out above, it was not in dispute that Mr Rothner authorised Mrs Rothner to carry out this work.
On 17 August 2023, Michael Drake (Mr Drake) of Westpac telephoned Mr Waterhouse to inform him that he needed Westpac’s approval in order to carry out internal works on the house. Mr Drake did not say that Westpac would not approve the work but that approval was necessary.
On 21 August 2023, Mr Waterhouse’s solicitor wrote to Mr Rothner’s solicitor as part of the correspondence working out the access arrangements, stating, inter alia, that the works being carried out by Mr Rothner would need to be approved by Westpac in accordance with the terms of the existing mortgage.
Mr Waterhouse immediately forwarded the letter to Mr Drake.
Mr Waterhouse was, at this time, engaged in discussions with Westpac (Mr Drake) with a view to changing his loan facility agreement such that the interest he would be paying would be reduced by approximately 1% per annum. At the time of the Contract, he owed Westpac approximately $14 million and was paying interest of 6% per annum. Mr Waterhouse expected to be able to change his loan.
Mr Waterhouse’s dealings with Westpac at this time are relied on by Mr Rothner as bearing on Mr Waterhouse’s motives in his dealings with Mr Rothner, including in relation to Mr Waterhouse signing (or refusing to sign) documents consenting to the work which Mr Rothner was proposing to carry out.
The correspondence between the solicitors continued in relation to the conditions attaching to access including whose responsibility it was to obtain Westpac’s approval and whether Mr Rothner was required to have his own insurance for the work he was proposing to carry out. By email dated 22 August 2023, Mr Rothner’s solicitor contended that it was Mr Waterhouse that was required to obtain the approval.
In about early September 2023, Mr Waterhouse was informed by Westpac that his interest rate would not be reduced as he had expected but in fact it was to be increased to 6.5% per annum. Mr Waterhouse agreed that he was “extremely unhappy” about this. It was shortly after this time that Mr Waterhouse made the first suggestion to Mr Rothner to settle early (by text message sent on 13 September 2023). Mr Waterhouse rejected the suggestion that the only reason he suggested that Mr Rothner settle early was because of Westpac’s decision to increase his interest rate on the loan. He said it was also because he thought that Westpac had reneged on Mr Rothner doing work on the Property.
On 5 September 2023, Mr Rothner and Mr Waterhouse exchanged text messages in relation to the proposed works. Mr Rothner’s texts included:

I, Gary John Gibbons of sound mind live at unit X, X street Five Dock NSW 2046 and my mobile number is X. I do casual ground and gardening work for David and Janette Waterhouse, they also have another bloke that works for them whose name is Al Shahwan. On the 28/3/2024 Al called me up and asked me if I had cut trees down before. I said yes and he told me to meet him at 6A Tivoli Avenue Rose Bay on the 29/3/2024 8:30am as we will be doing some work for Lisa Rothner of the above address. I arrive at 6A Tivoli Avenue and went down the front, where Al had put a ladder into the next door’s property (8 Tivoli Avenue) which is on the right-hand side of Lisa’s place. Al and I both climb over the wall to take a look at the Palms that Lisa wanted removed for a better view of the harbour. At this time, I thought she had permission to do this and to be on the property. Because of this, Al and I were going to cut down the palms (one of which was well over 30 feet tall) but were not able to because the chainsaw was not good enough. So, I said to Al ‘you’re going to have to get a better chainsaw’ to which they went and hired one. This took place on the 29/3/2024. We then had a group conversation about what was the best way to remove the palms from the property next door. I asked Lisa and Al if they had gotten permission to remove these palms to which she responded that they would blame it on David Waterhouse. Al interjected by saying not to worry we will make a ‘bodgy’ company and this company can be said to be doing the work on behalf of David Waterhouse. I was in shock in what they said, I told them both that ‘I couldn’t do that, I don’t want to be involved and it is not right.’ They both said I would be fine, but I was worried about this so Al said he would see me on the 30/3/2024 which I never turned up. I didn’t want to go back but I had to as Lisa paid me $300 cash on 29/3/2024 and dropped me at Edgecliff station where I somehow had misplaced that money. I believe I had dropped it in her car as that was the only place I had been between receiving it and realising it was lost although she stated I did not. She then gave me another $300 so I was then obligated to come back and do that work which was supposed to be on 30/3/2024 but as previously stated I never turned up. Al rang me up on the 31/3/2024 stating that I was obligated to do this work for Lisa as ‘she has paid you’ and has ‘been very good to you’. I stated to Al that “I don’t want to do this, I can give her the $300 back as what she is asking of me is illegal.” I did decide after this conversation to go back to the Tivoli Address on 1/4/2024 but I still protested on doing the work knowing that it was wrong although I was the one that was left to cut down the palms. After cutting down several palms (roughly four) we moved all the rubbish down to the Lefthand side, bottom of the property and jumped back over the fence onto Lisa’s property. I then finished up a bit more work for Lisa on XX Tivoli Avenue. Nothing else was said until Al called me to help at XX Elizabeth Bay Road (Mr Waterhouse’s’ address) on 6/5/2024 which I turned up to. Al stated that he had more work for me, and I asked what it was. He stated that we were to do a break and enter at the property to the right of XX Tivoli Avenue being number 8 (same place as previous stated, where we had cut down the palms) because Lisa and Al believed there was money in the place, and it would be shared 3 ways. I was shocked and told Al via text that I don’t want to be involved with anything illegal and I found it already bad enough he had gotten me to cut down the Palms. I then got in contact with David and Janette via text and asked to have a sit-down meeting with them. I spoke with Janette Mr Waterhouse for three hours about the situation and was willing to come in to make a full statement on what had been said and done against the Waterhouse’s by Al Shahwan and Lisa Rothner.

An important issue in the proceedings is whether, as Mr Gibbons contends, Mrs Rothner bought Mr Rothner out on 2 April 2024 to show him the clearing of trees on No 8 and the impact on the view from the Property.
I accept Mr Gibbons’ evidence as to his interaction with Mr Rothner on 2 April 2024. I reject Mr Rothner’s denial.
The fact that Mr Gibbons admitted that he was grateful to both Mr Waterhouse and his ex-wife and wanted to assist Mr Waterhouse in these proceedings, does not, in and of itself, cause me to doubt what Mr Gibbons said in relation to Mr Rothner in his Second Statement and affidavit in these proceedings.
Mr Gibbons was unshaken in cross-examination about what occurred on the day in early April 2024 when the trees were cut down on No 8, including Mrs Rothner bringing Mr Rothner out to show him what had been done.
It is inherently likely, in my view, that Mrs Rothner would have done this.
The objective material, principally the text messages between Mr and Mrs Rothner, paints a strong picture of Mr Rothner taking a keen interest in what Mrs Rothner was doing at the Property, particularly in relation to improving the view from the Property and Mrs Rothner keeping him up to date as to what she was doing. Mr Rothner was sent a number of videos and pictures by Mrs Rothner and was often the person requesting that pictures be sent to him. One can well understand Mr Rothner’s keen interest in this subject given the location of the Property. The 12 January 2024 and 14 April 2024 exchanges were both in the context of the tree removal from No 8, directly implicating Mr Rothner in this work being carried out. As I have set out later in these reasons, there was no need for a message between Mr and Mrs Rothner on 2 April 2024 as they were both at the Property.
I am conscious that some aspects of Mr Gibbons’ evidence were unsatisfactory and unreliable in several respects. I have referred to several of these earlier in these reasons. There is also the fact that I am satisfied that Mr Waterhouse likely had a hand in some aspects of the Second Statement by providing the material he had obtained from Kennards to Mr Gibbons, and by sending an email to Mr Kosmin suggesting a change in the date.
Nonetheless, these matters do not cause me to reject Mr Gibbons’ evidence on this key point in circumstances where it is inherently likely to have occurred.
Opening up the view was an important matter to both Mr and Mrs Rothner. In circumstances where Mr Rothner was at the Property after the tree removal was completed, it makes sense that Mrs Rothner would have shown him the results. There was no need for the usual exchange of texts between the two.
I am also not satisfied that Mr Gibbons simply included the material in his Second Statement to implicate Mr Rothner at the request of Mr Waterhouse, both knowing it was not true.
I reject Mr Rothner’s denial of the account given by Mr Gibbons. In a number of respects his evidence was unsatisfactory.
Mr Rothner admitted that he had returned to Australia on 2 April 2024 and was at the Property on that day.
In my view he sought to deliberately downplay the importance of improving the view from the Property because he knew that any such improvement would be short-lived because of the impending development of the nearby 10a.
Whilst it is clear that Mr Rothner was aware at the time of purchasing the Property of the development application that had been submitted in respect of 10a, and had received advice from Mr Suttie as to the likely impact of this proposed development on the views from the Property, Mrs Rothner was also aware of these matters. Notwithstanding this knowledge, the objective material shows that considerable work was done in improving the view from the Property towards the Harbour Bridge in the area where the residence on 10a was to be constructed. Mr Rothner was being constantly updated by Mrs Rothner as to this work, including through the video in early January 2024 referred to above. There were at least three separate cutting events.
Mrs Rothner was not simply on a frolic of her own.
The text exchanges between Mr and Mrs Rothner on about 13 January 2024 also suggest that work was being done whilst no one else was around and with a consciousness that no evidence should be left behind to suggest that any clearing work had been carried out.
The WhatsApp message on 14 April 2024 from Mrs Rothner to Mr Rothner – “Another 3 🌴fown, *down” is a reference to trees being cut on No 8. Mr Rothner was being told this, yet he repeatedly denied being aware of any trees being removed from No 8 until he received a letter on 13 May 2024. Mr Rothner’s response which stated “we need to do the house – forget the F greenery!”, could only be interpreted as Mr Rothner suggesting that Mrs Rothner prioritise work on the house, and not as Mr Rothner being concerned that Mrs Rothner was causing trees to be removed from the neighbouring property.

On 31 May 2024, Mr Rothner executed a Deed Poll in favour of Mr Waterhouse. I extract the relevant terms later in these reasons. In the Deed Poll, Mr Rothner denied that he caused the removal of the trees from No 8, but nevertheless undertook to ensure that Mr Waterhouse was no worse off as a result of the removal of the trees. Mr Rothner relevantly indemnified Mr Waterhouse against any claims etc as a result of the removal of the trees, undertook not to invite Mr Gibbons onto the Property and instructed those working at the Property not to enter No 8.
On the same day, Mr Rothner executed another Deed Poll, this time in favour of Mr Huang. I set out the relevant terms later in these reasons. Mr Rothner relevantly promised to replant trees on No 8 that as closely as possible replicate the trees removed or, at Mr Huang’s election, compensate him for the removal of the trees (or both to the extent that Mr Huang remained worse off after the replacement of the trees).
Mr Rothner’s solicitors responded to the Notice of Default by email dated 31 May 2024, denying any breach of Special Condition 49.1. The email also contended that Mr Rothner had rectified any non-compliance with Special Condition 49 by executing and delivering the two Deed Polls.
On 5 June 2024, Mr Waterhouse purported to terminate Mr Rothner’s occupation rights under cl 49.2. He commenced these proceedings on the same day.
On 1 July 2024, Mr Rothner’s solicitors emailed to Mr Waterhouse’s solicitors, copies of DA drawings for the Wellness Centre together with Owners Consent and a CDC Application Form for Mr Waterhouse’s consent, execution and return, in accordance with his obligations under the contract for sale of land.
By separate email sent at or about the same time, Mr Rothner’s solicitors also emailed DA drawings for the main house (DA 518/2021/1) together with the Construction Certificate and a CDC Application Form for the interior works for Mr Waterhouse’s consent, execution and return in accordance with his obligations under the Contract.
By separate email sent at or about the same time, a third set of documents was sent for the Garage DA for Mr Waterhouse’s consent, execution and return, in accordance with his obligations under the Contract.
By email dated 16 September 2024, Mr Waterhouse’s solicitors responded to Mr Rothner’s solicitors to the effect that they were instructed Mr Waterhouse would consent to signing the Development Application for the Wellness Centre on certain conditions.
There was then a further email from Mr Rothner’s solicitors to Mr Waterhouse’s solicitors dated 27 September 2024, in relation to Mr Waterhouse’s consent to the various development applications. Mr Waterhouse was again asked to return the duly executed documents by Friday, 4 October 2024.
The correspondence on this topic continued with a letter from Mr Waterhouse’s solicitors to Mr Rothner’s solicitors dated 29 September 2024. The response stated:

On 1 October 2024, Ms Ongaro sent an email to consultants working on the Wellness Centre asking for all works on the Wellness Centre to be paused until further notice.
The solicitor correspondence in relation to Mr Waterhouse consenting to the relevant development applications continued through November and into December 2024.
On 16 December 2024, Mr Waterhouse, through his solicitor, sent to Mr Rothner’s solicitors a signed owners consent. It appears that the consent related to the proposed pool and Wellness Centre.
On 28 April 2025, Mr Rothner gave notice, under cl 47 of the Contract, extending the date for completion of the Contract to 21 December 2025. Mr Rothner had transferred the required $208,333.34 into Mr Waterhouse’s bank account for this purpose.
Shortly thereafter, on 14 May 2025, Mr Rothner forwarded, by his solicitors, his renewed insurance policy noting the interests of both Mr Waterhouse and Westpac. Thereafter there ensued correspondence in relation to the acceptability of this insurance policy. An updated insurance policy was provided on 17 May 2025.
On 29 July 2025, Mr Waterhouse’s solicitors wrote to Mr Rothner’s solicitors referring to the recent decision of the Land and Environment Court in relation to the validity of the 2004 development consent to the existing garage/studio, in which the Court held that the development application lapsed on 26 June 2012. The letter stated that should Mr Rothner wish to proceed with the lodgement of a new development application with new plans, as submitted to Mr Waterhouse for consent on 1 July 2024, the signed owners consent with a copy of the relevant plans was attached to the letter. The letter stated that the owner’s consent was not previously provided as, on counsel’s advice it was not appropriate whilst the Court proceedings were on foot.
On 2 October 2025, the Council approved the development application in relation to the demolition of the existing cabana and swimming pool and the construction of a new wellness pavilion, swimming pool and associated landscaping.
On 29 October 2025, Mr Rothner executed two further Deed Polls, one in favour of Mr Waterhouse and the other in favour of Mr and Mrs Huang. These two new Deed Polls concerned additional plants that had been identified as having been cut down on No 8 between the period 3 October 2023 and 10 June 2024. Again, the Deed Poll in favour of Mr Waterhouse purported to indemnify him against any claims, loss or expenses incurred by him as a result of the removal of the additional plants. The Deed Poll in favour of Mr Huang was also in favour of his wife, and similarly promised to either plant replacement trees on No 8 that as closely as possible replicated the additional plants, or compensate the Huangs for the removal of the additional plants, at their election.
Completion of the sale of the Property occurred on 17 December 2025. The PEXA Settlement Completion Record was admitted into evidence as a consequence of the application to reopen.
The source of funds provided on completion by Mr Rothner of $20,635,689.49 came from the NAB. Of the sale proceeds, Mr Waterhouse appears to have received $9,777,350.11. Westpac’s loan payout was $10,817,859.07.
Also tendered in evidence were the following documents:

At [32], the joint judgment also stated that the liability of A for the acts of B is not established, if B does no more than “represent” A (in the loose sense of merely acting for the benefit or advantage of A).
I am conscious that the allegation levelled by Mr Waterhouse against Mr Rothner in this regard is a serious one to which the well-known principles apply: s 140 of the Evidence Act 1995 (NSW); Briginshaw v Briginshaw (1938) 60 CLR 336; [1938] HCA 34 at 361-2 per Dixon J.
I am comfortably satisfied that Mr Rothner authorised Mrs Rothner to remove the trees in No 8. The two were part of a joint endeavour to develop the Property to their taste including by improving the view from the Property. An aspect of improving the view was removing the trees from No 8 which were obstructing such view.
It is not in dispute that Mr Rothner authorised Mrs Rothner to renovate the Property including by the removal of trees. The evidence – principally the text messages between Mr and Mrs Rothner – demonstrate that Mr Rothner was not content with taking a back seat as it were, and leaving it to Mrs Rothner to do what she wished, with no apparent interest in the outcome. To the contrary, he was intimately involved in what was being done and its impact on the view. He was actively seeking pictures and videos of the impact on the view, and was receiving regular updates. The messages include messages about what trees were being removed from No 8 (12 January 2024 and 14 April 2024).
The messages between the two also establish that aspects of the work were being carried out surreptitiously whilst people (including Mr Waterhouse and the Huangs) were away. Mr and Mrs Rothner were both concerned that no evidence was left behind.
The overwhelming conclusion is that Mr Rothner was taking a keen interest in what was being done. Mr Rothner’s case seems to be that this only extended to the work that Mrs Rothner was carrying out on the Property. The implicit contention, in light of the belated concession that Mrs Rothner authorised the tree cutting on 2 April 2024, must be that Mrs Rothner was on a frolic of her own. I do not accept this contention. The video sent by Mrs Rothner to Mr Rothner in January 2024 is quite contrary to Mrs Rothner going on a frolic. The messages suggesting a degree of secrecy in the work being carried out are also to the contrary.
The 14 April 2024 WhatsApp text “Another 3 🌴 fown, down” from Mrs Rothner to Mr Rothner is directly updating him on the removal of trees from No 8.
There were at least three separate cutting events, which were targeted. They occurred over several months. Mr Rothner was living at the Property for at least part of that time. The view was important to him. All of these matters further diminish the likelihood that Mrs Rothner was on a frolic of her own.
This material alone satisfies me that Mr Rothner authorised the works.
Added to this is Mr Gibbons’ evidence as to what occurred on 2 April 2024, which I accept and prefer over Mr Rothner’s evidence for the reasons given earlier in these reasons. That evidence of Mr Gibbons establishes Mr Rothner’s awareness of the tree removal on that day.
Added to this is the fact that I found Mr Rothner to be an unsatisfactory witness in several respects.
The overwhelming inference from the material that Mr Rothner authorised the carrying out of the works by Mrs Rothner can be more comfortably drawn in circumstances where Mrs Rothner was not called to give evidence.
The matters referred to by Mr Rothner to refute the suggestion that he authorised the tree removal, are not persuasive. Whether or not a new house was to be built at 10A obstructing part of the view is not overly relevant. The objective material shows how important improving the view was to both Mr and Mrs Rothner. It is not in dispute that the tree removal occurred at the direct request of Mrs Rothner. I do not accept that she was on a frolic of her own.
The fact that Mr Rothner issued the deed polls to both Mr Waterhouse and Mr Huang (denying any knowledge) is not inconsistent with Mr Rothner having authorised Mrs Rothner. Having been caught, it was his attempt to rectify the effects.

In my view, cl 49.1(c)(vii), properly construed, only applies where the damage, nuisance or inconvenience is connected to the carrying out of the works on the Property. It is not a free standing obligation unconnected to the works. This emerges from the words used by the parties, construed in context.
First, the structure of cl 49.1 is important. It grants Mr Rothner a right of occupation from 5 January 2024 until completion “on the following terms and conditions”. One of the terms and conditions is contained in subclause (c), which permits Mr Rothner to carry out any works.
The relevant subclause – 49.1(c)(vii) – forms part, obviously enough, of cl 49.1(c). It is not expressed to be a free standing term and condition of the right of occupation – in which case it would be expressed as its own subparagraph of cl 49.1, and not as part of subclause 49.1(c). This would be the more natural grammatical expression of the clause on the construction propounded by Mr Waterhouse.
Turning now to the words of subclause 49.1(c) – it grants permission to Mr Rothner to carry out works “provided”, and then follows (i) to (vii). The natural reading of these words are that (i) to (vii) are directed at the terms on which Mr Rothner can carry out works to the Property. Subclause (vii) must be construed in this context. It is only enlivened if Mr Rothner causes “damage, nuisance or inconvenience” to an adjoining property by the carrying out of works on the Property.
Such a construction serves a sensible commercial purpose. By cl 49.1, Mr Waterhouse authorised or permitted Mr Rothner to carry out works on the Property. By giving that authority or permission it may be alleged that Mr Waterhouse is liable for the consequences of those works.
Conversely, the references by Mr Waterhouse to a broad commercial purpose being flouted do not assist. The contention is circular. As set out above in J&P Marlow, the purpose of a clause normally emerges from the words the parties have used. Mr Waterhouse’s contention simply assumes a broad purpose and then impermissibly uses that alleged purpose to force a construction onto the words that their plain meaning, in context, does not permit.
I do not accept Mr Waterhouse’s contention that the construction of sub-clause 49.1(c)(vii) which I prefer would render the indemnity contained in sub-clause 49.1(c)(iv) superfluous or vice versa. The two paragraphs are directed at different matters. Sub-clause (iv) gives Mr Waterhouse the benefit of an indemnity from Mr Rothner in respect of any claims made against Mr Waterhouse with regards to the works being carried out. Sub-clause (vii) is a prohibition on causing “damage, nuisance or inconvenience” to any adjoining property or occupier.
Mr Waterhouse’s reliance on the expressio unius principle also does not assist. The presumption (and hence the maxim) only applies when it is consistent with the intention discoverable from the face of the instrument and is thus one that must be applied with caution. “It is often a valuable servant, but a dangerous master to follow”: see Interpretation, Herzfeld and Prince (3rd ed, Thomson Reuters) at [24.50] and the cases there cited.
I accept Mr Rothner’s submission that there is a sound textual reason for why subclause (vii) does not expressly refer to “work”. It is the only one of the subclauses which prohibits Mr Rothner from acting in a certain way – a negative promise. Such a promise did not need to specify that it only applied in respect of the works because the word “provided” at the end of the chapeau provides that. By contrast, subclauses (i) to (vi) impose positive obligations and it is more natural to express those positive obligations by reference to the carrying out of the works.
Further, I accept Mr Rothner’s contention that subclause (vii) requires some act attributable to the purchaser (Mr Rothner) for it to be breached. It is not a free standing indemnity. (This point goes nowhere given that I have found the relevant authorisation in Issue 1.)
For these reasons I reject the construction of subclause 49.1(c)(vii) propounded by Mr Waterhouse and accept that contended for by Mr Rothner.
On this construction there must be a link between the works authorised by Mr Waterhouse on the Property and the damage etc caused. On the facts of this case, there was no such link. The fact that the tree removal was carried out by the same people (principally Mrs Rothner and Mr Shahwan) who were carrying out works on the Property, and that Mr Rothner authorised the removal, does not provide the necessary link. The tree removal on No 8 was an act of vandalism unconnected with the carrying out of authorised works on the Property.
The answer to this issue is therefore No.

I do not accept Mr Rothner’s argument that the Court should find that Mr Rothner rectified the failure to comply with cl 49.1(c)(vii) because the breach ceased to occur following the issue of the notice of default on 17 May 2024.
I accept, in this regard, the factual predicate of the argument, namely that none of the trees cut down from No 8 were cut down after 17 May 2024. Although the expert arborists agreed that the final of the three cutting events – being the removal of three trees – occurred between 7 April and 10 June 2024. This is evidenced by the aerial photographs, and there were not daily aerial photographs. I accept that the last three trees were removed around 14 April 2024, being the date Mrs Rothner sent a WhatsApp message to Mr Rothner which stated “Another 3 🌴 fown *down”.
In no sense could it properly be said that merely ceasing the offending conduct is “rectifying” the breach. The authorities set out above make clear that in considering whether a breach is capable of rectification (which I treat as synonymous with remedy in this respect), and if so, how, the focus is on the effect of the breach and how that effect can be redressed into the future.
In the present case, the effect of the breach is not redressed by simply ceasing to engage in the conduct. The effect of the conduct continues into the future.
Reference to the outcome in Wickman and Telchadder in this regard does not assist. As Hammerschlag CJ in Eq recently stated in Dexus, what is required is an evaluative judgment (at [248]) and that “each case will turn on its own circumstances” (at [249]).
I turn now to consider whether the hypothesised breach of cl 49.1(c)(vii) is capable of being rectified and, if so, whether the provision of a Deed Poll to each of Mr Waterhouse and Mr Huang did rectify the breach.
I did not understand Mr Waterhouse to advance a contention that the breach in the present case was not capable of rectification. Rather, the contention was that the two Deed Polls did not rectify the breach.
In Akici v L R Butlin Ltd [2006] 1 WLR 201, Neuberger LJ (with whom Mummery LJ agreed) observed (at [65]) that “the great majority of breaches of covenant should be capable of remedy”.
The Notice of Default alleged a breach of cl 49.1(c)(vii) which provided that Mr Rothner “shall cause no damage, nuisance or inconvenience to any adjoining property or occupier of any adjoining property”. The conduct amounting to the breach was “by removing several palm trees from” No 8 without the approval of the Huangs.
As a matter of substance, the breach was causing damage by the removal of “several palm trees”. The effect of the breach is obvious – the palm trees have gone. The Huangs have lost the palm trees that were once on their property.
Looked at from the perspective of the Huangs that effect can only be redressed by replacing the removed trees and compensating the Huangs for any other loss suffered as a result of their removal.
It may be contended that the breach had an effect on Mr Waterhouse in the sense that he may be exposed to a claim by the Huangs by reason of the fact that Mr Rothner was occupying the Property and carrying out work on it with the permission of Mr Waterhouse. That effect could be redressed by Mr Rothner indemnifying Mr Waterhouse against any such claim.
Viewed through this prism, the two Deed Polls do, in my view, rectify the breach. Practically speaking, they redress the harm suffered by, or effect of, the breach.
I do not accept that, looked at from the perspective of the Huangs, in order to rectify the breach, Mr Rothner was required, within the 14 day period after the service of the Notice of Default, to have in fact replanted the removed trees. This is not at all practicable in circumstances where Mr Rothner had no right of access to the Huang’s property. The effect of, or harm caused by, the breach could be compensated for in money terms, rather than the replacement of the trees. This was a matter for the Huangs to elect under the terms of the Deed Poll.
There was no suggestion in the present case that Mr Rothner’s indemnity to Mr Waterhouse or his promise to compensate Mr Huang for the removal of the trees was worthless in the sense that he did not have the financial resources to fulfill the promises he made in the respective Deed Polls if called on to do so.
Mr Waterhouse also mounted a number of arguments particularly directed at the deficiency in offering a Deed Poll to Mr Waterhouse and Mr Huang.
The first was to point out that a Deed Poll is a unilateral promise to pay which is distinct from a bilateral contract. A deed poll, whilst binding on the grantor, does not need to be accepted by the grantee and as such cannot unilaterally discharge contractual obligations or extinguish secured rights held by another party.
So much may be accepted.
None of this means, in my view, that the offering of the respective Deed Polls does not rectify the breach in the sense of setting things right for the future. There is nothing more that Mr Rothner can do, or needs to do, to redress the effect of, or harm caused by, the breach. It is to be remembered that Mr Rothner cannot force any particular outcome on the Huangs. What is offered will, however, once accepted, set things right for the future.
The second and related contention was to point out that an existing contractual obligation can only be discharged by accord and satisfaction, and in the present case there was no agreed substituted performance. The contents of the Deed Poll could not be forced on the Huangs.
Again, these contentions do not address the relevant issue which is whether Mr Rothner has redressed the effect of, or the harm caused by, the breach. The focus is on making things right for the future. In my view the Deed Polls had this effect.
Finally, Mr Waterhouse contended, as I understood the submission, that his right to terminate had occurred by the time of delivery of the Deed Poll and no unilateral act thereafter by Mr Rothner could extinguish Mr Waterhouse’s accrued right.
The relevant chronology was said to be:

On appeal from Edelman J, the full court stated at [421] that “for the reasons set out by the primary judge at [978] to [988], relief against forfeiture may be taken to be available in principle”.
There are several first instance decisions where the Court has proceeded, like Edelman J, on the assumption that relief against forfeiture could apply to non-proprietary rights but then determined that relief should not be granted on the facts: see Auburn Shopping Village Pty Ltd v Nelmeer Hoteliers Pty Ltd (2017) 324 FLR 378; [2017] NSWSC 1230 at [211]ff per Ward CJ in Eq (upheld on appeal in Auburn Shopping Village Pty Ltd v Nelmeer Hoteliers Pty Ltd (2018) 19 BPR 38,569; [2018] NSWCA 114) and Ayers Rock SkyShip Pty Ltd v Voyages Indigenous Tourism Australia Pty Ltd (2019) 19 BPR 39,541; [2019] NSWSC 828 at [106]-[107] per Darke J. The Victorian Court of Appeal in JPA Finance (defined below) took a similar approach (at [82]).
The distinction between, on the one hand proprietary or possessory rights, and on the other contractual rights, stems from what was said by Lord Diplock in Scandinavian Trad**ing Tanker Co A.B. v Flota Petrolera Ecuatoriana *(*The Scaptrade) [1983] 2 AC 694 at 702.
Whatever may be said to be the position in Australia, the distinction remains the law in the United Kingdom: see Vauxhall Motors Ltd v Manchester Ship Canal Co Ltd [2020] AC 1161; [2019] UKSC 46 (Vauxhall). For a discussion of the differences between Australia and the United Kingdom see N Tiveros [2020] CLJ 17, “Salvaging security: The normative basis of Equity’s relief against forfeiture” by A Berriman (2021) 15 Journal of Equity 306, and “The Requirement of Property or Possessory Rights for Relief against Forfeiture” by F Di Lizia (2021) 95 ALJ 641. For a powerful criticism of the distinction see P Turner [2019] CLJ 276. As far back as 1985, Sir Anthony Mason, writing extra judicially, said that the distinction was “difficult to define and defend”: “Themes and Prospects” in Paul Finn (ed), Essays in Equity (Lawbook Co 1985) p 248.
In Vauxhall, Lord Briggs JSC (with whom Lord Carnwath, Lady Black and Lord Kitchin JJSC agreed) clarified what was meant by a possessory right in this context. At [42], Lord Briggs JSC approved the following statement of Lewison LJ in the Court of Appeal:

Somewhat similar to what Edelman J said in Mineralogy at [991]-[992], it is difficult to see how there could be any basis to grant relief against forfeiture.
Mr Rothner’s authorisation of Mrs Rothner causing the trespass onto No 8 and the removal of trees could properly be described as a wilful or deliberate act. There is also, in my view, nothing unconscionable in Mr Waterhouse seeking to exercise his contractual rights in the circumstances.
Whilst the rights of occupation are undoubtedly valuable rights to Mr Rothner, this is only one matter to be taken into account. It is not determinative. The matters referred to above are more relevant in my view.
The parties were at odds as to whether the clause in the present case falls within the first kind discussed in JPA Finance – whether it is directed at securing an object of the transaction. I do not need to reach a final view on this question because even if I was satisfied that it could be so characterised, I would not, in the exercise of my discretion, grant relief against forfeiture for the reasons set out above.
It does seem to me, however, that the clause does more than simply secure an object of the transaction. It is materially different to a clause securing an obligation to pay rent. Mr Waterhouse would no doubt be concerned about an occupant (Mr Rothner) causing damage at a time when Mr Rothner does not own the Property and may never own the Property if he does not complete on the Contract. He would be entitled in these circumstances to protect his position and terminate the right of occupation, thus removing his exposure going forward until he ceases to own the Property.
A further relevant matter is that, as set out above, in having to deal with relief against forfeiture I will already have found that the breach has not been remedied by Mr Rothner. I will thus have rejected that the Deed Polls in favour of Mr Waterhouse and Mr Huang rectified the breach. This is another reason why relief would not be granted.

Having regard to my conclusions above, it is not strictly necessary that I consider this issue. I address it against the possibility that I am wrong on the issues set out above and Mr Waterhouse was entitled to terminate Mr Rothner’s right of occupation.
Mr Waterhouse purported to terminate the right of occupation on 5 June 2024.
By his second further amended statement of claim, Mr Waterhouse alleges that by reason of Mr Rothner’s breach of the Contract, he is entitled to damages. The loss alleged is the rent he would have received for the Property, or the loss of opportunity to receive that rent.
The first issue that arises is one of causation – whether Mr Waterhouse would have rented the Property to a third party or whether, consistent with well understood principles, Mr Waterhouse has proved he lost the opportunity to rent it out. Mr Rothner contended that Mr Waterhouse would have moved back in.
Mr Waterhouse accepted in cross-examination that if he was receiving rent for the Property, he “would be up for land tax”. The land tax would have been in an amount of approximately $150,000 per annum.
Mr Waterhouse gave the following additional evidence on the topic:
Added to this is the fact that the expert called by Mr Waterhouse on the question of what the Property would have been rented for – Ms Conlon – stated that she would have listed the Property for rent at $7,000 per week. One difficulty with Ms Conlon’s opinion in this regard is that it was not supported by any real comparables. Although she made some general reference in her report to comparables, no detail was provided as to those comparables. It also appears that some of the “comparables” were in fact listings currently available online, suggesting they were not in fact properties that had been leased. No business records were included to suggest that the “comparables” were concluded transactions. Ms Conlon also did not take into account that Mr Rothner still had his rights to access the Property daily to carry out works.
The competing expert qualified by Mr Rothner – Mr Srot – expressed the view that the weekly rental was in the order of $2,750 to $3,000 per week if, as appears to be agreed, the Property was let on an unfurnished basis. The difficulty with Mr Srot’s opinion is that, although he offered what he said were comparable properties, they in fact appear to be inferior properties to the Property. There is also nothing to indicate that he took account of the fact that Mr Rothner continued to have rights to access the Property daily to carry out works.
On the state of the expert evidence, I am left with little alternative but to adopt a position between the two opinions of the experts. One major difficulty with the exercise is whether I need to assess the impact on market rent of Mr Rothner’s continued right to access the Property daily to carry out works to the garden and the garage (cl 48.1).
I assume that the right would have been exercised. There is perhaps a question of construction as to whether the right of occupation in cl 49.1, being a larger right than the right of access in cl 48.1, and coming into effect at a later point in time – 5 January 2024 as opposed to 31 July 2023 – overtakes, in a sense, the right of access such that it ceases to exist. If Mr Rothner is in occupation, he no longer needs or has a right of access.
This issue was not really ventilated before me.
I proceed on the basis that Mr Rothner would have sought to exercise his cl 48.1 right of access if he was removed from occupation.
It is likely that, in this situation, Mr Waterhouse would have sought to terminate the right of access under cl 48.1. Its terms, with respect to termination, are relevantly the same as the terms attached to the right of occupation.
The question of damages that I am presently considering arises if I have found that Mr Waterhouse had validly brought the right of occupation to an end. It is reasonable to assume that if Mr Rothner had still sought to avail himself of his rights under cl 48.1, Mr Waterhouse would have validly terminated that right of access as well. I am in no doubt, given the poor state of their relationship at the time, that Mr Waterhouse would have sought to exercise his right to terminate.
As a result, the exercise should be approached on the basis that Mr Rothner would not have retained his cl 48.1 right of access.
Doing the best I can, I estimate the weekly rental to be $5,000 per week being a figure between Mr Srot and Ms Conlon’s estimates.
On this basis there is no real prospect, taking Mr Waterhouse’s evidence at its most favourable to him, that he would have rented the Property. At $5,000 he said he would probably reject the offer and live in the Property himself. At best his evidence was equivocal at $7,000 per week. His affidavit evidence was $10,000 per week. There is no evidence to support this.
This is all against the background of his initial answer in cross-examination when it was put to him that he would have stayed there himself – “I think so, yes”.
I am not satisfied that Mr Waterhouse would have rented the Property out. Nor am I satisfied that Mr Waterhouse has lost a valuable opportunity to rent the Property out.
Perhaps conscious of this evidentiary difficulty, Mr Waterhouse’s claim in this regard was ultimately put, as I understand it, as a claim for mesne profits. I have addressed the traditional damages claim above in case I have misunderstood Mr Waterhouse’s position. If it is a damages claim on the basis he would have rented the Property out, it fails.
As the Court of Appeal explained in Sydney Local Health District v Macquarie International Health Clinic Pty Ltd (2020) 105 NSWLR 325; [2020] NSWCA 274 (Macquarie International), mesne profits is a monetary remedy for the use of the plaintiff’s land by the defendant during the period of trespass. Typically this measure of damages will be sought where the plaintiff with the right to exclusive possession has in fact suffered no loss or less loss than is represented by a “rent” or “hiring charge” for the land on which the trespass has occurred (at [79]). Further, such a remedy, where available, is in the strict alternative to a claim for damages for loss of profits or loss of opportunity to use the land. This is because the calculation of damages for claims of this latter character is predicated on the plaintiff being in and remaining in possession; the plaintiff could not generate a profit from possession of the property while simultaneously renting it out. The claims are mutually exclusive (see [80]).
As the Court of Appeal made clear at [81], one particular feature of the award of damages by way of mesne profits is that a plaintiff does not need to establish on the balance of probabilities that he, she or it would have rented or licenced the land trespassed upon to the defendant trespasser.
In Progressive Mailing House Pty Ltd v Tabali Pty Ltd (1985) 157 CLR 17 at 39; [1985] HCA 14, Brennan J stated:

Despite the capitalisation, the words “Development Application” are not defined in the Contract.
It is not in dispute that on 31 January 2024, Mr Rothner (by his solicitor at the time) sent an email to Mr Waterhouse’s solicitor which requested that “Applications and consent forms” be signed by Mr Waterhouse. Those forms were sent under the cover of three separate emails. In one of those emails, Mr Rothner asked Mr Waterhouse to sign an application for a construction certificate to carry out the work the subject of DA 518/2021 (the CC Application Form). The CC Application Form described the proposed works as “alterations and additions to existing dwelling including enclosure of balcony, two new verandahs and an attic room addition.”
On the same date, Mr Rothner also sent documents for signing in relation to the garage and wellness centre, but those aspects no longer form part of Mr Rothner’s cross-claim.
On 7 March 2024, Mr Rothner sent a further email to Mr Waterhouse’s solicitor advising him that the original certifier was no longer available and therefore requested that he sign a substitute form to apply for a construction certificate for the works in the house (DA 518/2021). The request that Mr Waterhouse sign an application for a construction certificate in respect of the works for DA 518/2021 was repeated on 1 July 2024, and again on 27 September 2024.
Mr Waterhouse has not signed the CC Application Form for the works on the main house.
Mr Rothner contends that Mr Waterhouse’s failure to do so was a breach of cl 50.1. That clause, properly construed, required him to sign the CC Application Form. Mr Rothner further contended that a term should also be implied into the Contract requiring Mr Waterhouse to do all things necessary to enable Mr Rothner to obtain the benefit of the Contract. The failure was a breach of this implied term.
Under the Contract, Mr Rothner was entitled to carry out works pursuant to cl 49.1(c). That right could only be exercised if Mr Waterhouse, as registered proprietor of the Property, signed the applications for a construction certificate.
Mr Rothner contends that his intention was to renovate the Property during the period that he was in occupation prior to settlement and then sell the Property once he has completed on the purchase. By reason of Mr Waterhouse’s breach, Mr Rothner contends that he has been delayed in carrying out the works to the Property. This has allegedly had two major consequences. First, increased holding costs that Mr Rothner will incur up to the sale of the Property – said to be a delay of 18 months. Second, Mr Rothner contends that he will incur increased construction costs. These two alleged consequences are dealt with in the seventh issue below. This issue is concerned solely with the issue of breach.
Mr Waterhouse raised a number of matters in defence of the claim:

The first issue to consider is the proper construction of cl 50.1 and, in particular, where the requirement of “reasonable” fits. The usual principles of construction apply. I have set them out above in relation to issue 2.
I have set out cl 50.1 above.
Before considering the text of cl 50.1, it is useful to remember the context in which the clause appears.
As set out above, the clause forms part of a suite of special conditions inserted into the Contract for purchase of the Property in connection with the works which Mr Rothner was proposing to carry out.
In the period from 31 July 2023, Mr Rothner was entitled to carry out works to the garage and the garden which were approved by a Development Consent or work not requiring Council approval, subject to the conditions set out in cl 48.1(c).
From 5 January 2024, Mr Rothner was entitled to carry out any works, by way of alterations or additions to the Property, as were either approved by a Development Consent or work not requiring Council approval, subject to the conditions in cl 49.1(c).
Turning now to the text of cl 50.1, a reasonable person in the position of the parties would regard the clause as firstly imposing an obligation on Mr Waterhouse to consent to the lodgement by Mr Rothner of a development application or application to vary a development application to Council. Second, Mr Waterhouse must sign all such applications, plans and consents as may be reasonably required by Mr Rothner.
The obvious grammatical meaning of the words used is that it is the requirement of Mr Rothner to obtain Mr Waterhouse’s signature on the relevant documents, which must also be reasonable. The clause does not direct attention to Mr Waterhouse’s position. It invites attention to whether Mr Rothner’s requirement for Mr Waterhouse to sign, is reasonable.
The critical issue is what is meant by the words “and will sign all such applications plans and consents”. The ordinary grammatical meaning of those words in context is to impose a separate obligation on Mr Waterhouse to sign all such applications, plans and consents as may be reasonably required by Mr Rothner in connection with a Development Application. The obligation is separate from simply consenting to the lodgement of a Development Application or application to vary a Development Application. This is made clear by the word “and”. It is also clear when construed against the agreed background of some development approvals already having been granted at the time of the Contract.
The CC Application Form would, in my view, clearly fall within that separate aspect of the clause. To contend, as I understood Mr Waterhouse to contend, that cl 50.1 only required consent to lodgement of a Development Application or an application to vary a Development Application, would rob those additional words of any work to do. Those additional words clearly have work to do in circumstances where, at the time of Contract, development approval had already been granted for some works and Mr Rothner was clearly permitted to do those approved works.
In any event, cl 50.1 is only part of the contractual picture. The Contract imposed an implied obligation on each party to do all that was reasonably necessary to secure performance of the Contract: see Secured Income Real Estate *(Australia) Ltd v St Martins Investments Pty Ltd (1979) 144 CLR 596; [1979] HCA 51 at 607 per Mason J. As Griffith CJ said in Butt v M’*Donald (1896) 7 QLJ 68 at 70-71:

The Contract permits, post 5 January 2024, Mr Rothner to carry out works to the Property as are approved by a Development Consent. If, in order to do this, Mr Rothner requires Mr Waterhouse’s consent as the owner of the Property, then, at the very least, the implied obligation would require Mr Waterhouse to give his consent. This requirement would perhaps be qualified by an element of reasonableness in the sense that he would not be required to consent if, it would be unreasonable to require him to do so. There was no suggestion, and nor could there be, that an owner of land such as Mr Waterhouse, would not, post the grant of development consent, be required to give any further consent to working being carried out on their land. Put another way, there was no suggestion that the parties should be taken to have contracted on the basis that Mr Waterhouse had no further role, post the grant of development consent, to Mr Rothner doing the works that Mr Waterhouse contractually agreed he could do. (These observations are also equally relevant, in my view, to the construction of cl. 50.1 addressed above.)
I now turn to consider whether Mr Waterhouse’s failure to sign the construction certificate form was a breach of contract – either cl 50.1 or the implied duty to cooperate.
As set out above, the requirement of reasonableness in cl 50.1 is whether it was reasonable for Mr Rothner to require the document to be signed. This is the focus of the inquiry. The inquiry under cl 50.1 is not whether it was reasonable for Mr Waterhouse to sign the documents provided to him. That is not the ordinary meaning of the words used by the parties in the clause.
Further, I accept Mr Rothner’s contention that the question of compliance with cl 50.1 is to be assessed at the time that the relevant request is made by Mr Rothner. It is not to be assessed by subsequent events.
Mr Waterhouse contends that it was reasonable for him not to sign the documents submitted because Mr Rothner had agreed with Mr Waterhouse and Westpac that he would not cause Mr Waterhouse to breach the terms of the first mortgage.
It is clear that the Contract contemplated Mr Rothner taking a second registered mortgage over the Property. The Contract included the terms of a proposed Second Mortgage. The Contract also included a proposed letter from Westpac to Mr Rothner in the following terms:
The provision of a letter in substantially these terms was a condition of Mr Waterhouse obtaining a release of the deposit monies paid by Mr Rothner under the Contract (see cl 43.2).
Clause 10 of the proposed Second Mortgage, which was in the same terms in the Second Mortgage as executed and registered on title, was in the following terms:

(a) correspondence between the solicitors for Mr Waterhouse and Mr Rothner ensued; (b) Mr Rothner wrote to Mr Drake at Westpac, seeking Westpac’s support for the work. He set out the details of what he proposed to do; (c) Mr Drake wrote to Mr Rothner on 27 February 2024 saying he was comfortable for those works to proceed. Mr Drake forwarded his response to Mr Waterhouse by separate email; (d) Mr Waterhouse did not react positively to this development and sent a series of emails to Mr Drake contending that the works were far greater than Mr Rothner proposed and that Westpac had no right to approve them; (e) Mr Drake told Mr Rothner that he had discussed the matter with Mr Waterhouse who had provided him with a copy of the plans and that the work seemed greater than that set out in Mr Rothner’s email such that a formal submission to credit would definitely be required. Mr Rothner responded to the effect as was set out in his original email – he would not be activating the Attic part of the DA; (f) Mr Drake then told Mr Waterhouse he would not be communicating with Mr Rothner without Mr Waterhouse’s express confirmation; (g) solicitor correspondence was then exchanged with Mr Waterhouse’s solicitor referring to the fact that Westpac was not consenting, but that Mr Waterhouse was in the process of refinancing with Bank of Singapore who may be less stringent than Westpac; (h) a further request was then made by letter dated 7 March 2024 because a new certifier had to be appointed. Mr Waterhouse’s solicitors immediately responded, not giving consent and continuing to refer to a proposed refinance with the Bank of Singapore who Mr Waterhouse believed would be far less stringent on giving ongoing approvals for the proposed building work; and (i) on 1 July 2024, a further request was made and again on 27 September 2024. Mr Waterhouse’s solicitors responded on 29 September 2024, relevantly to the effect that Mr Waterhouse could not consent as he would be in default under his mortgage with Westpac.

Mr Waterhouse’s refusal to sign the CC Application Form was, in my view, a breach of both cl 50.1 and the implied duty to cooperate.
It may be accepted that Mr Rothner could only reasonably require Mr Waterhouse to sign a document relevant to work which Westpac had approved. Mr Rothner appears to have been proceeding on that basis in writing to Mr Drake in early February (immediately after Mr Rothner had provided the CC Application Form to Mr Waterhouse) seeking Westpac’s support for the work being carried out. (He had also written to Westpac post Contract seeking Westpac’s approval to work.)
Westpac then provided its support. True it is that this was on the basis of what Mr Rothner had told them was the work he was planning to carry out to the house. I am satisfied, however, that this is what Mr Rothner was in fact planning to do at the time. I accept that he did not intend to activate the Attic part of the Main House DA.
Mr Waterhouse should have signed the CC Application Form at this time. Instead, he persuaded Westpac to withdraw its support on the basis that the work was for greater work than what Mr Rothner was intending. He then refused to provide consent to Mr Rothner and brought into the equation Mr Rothner consenting to Mr Waterhouse refinancing with Bank of Singapore on the basis that they would be less stringent than Westpac in terms of approving building works. This was all to achieve a better financial outcome for Mr Waterhouse in the form of a lower interest rate on his substantial debt. Another alternative, again to Mr Waterhouse’s financial advantage, was for Mr Rothner to settle early.
None of this conduct assists Mr Waterhouse. If, contrary to what I have held above, cl 50.1 does involve an inquiry into the reasonableness of Mr Waterhouse’s conduct in refusing consent, I am comfortably satisfied that his refusal was unreasonable when looked at from Mr Waterhouse’s perspective. He was motivated by seeking to exert pressure to bring about a better financial outcome for himself. He overstated Westpac’s position. None of this was reasonable.
I also do not accept Mr Waterhouse’s contentions concerning the lack of any insurance required under cl 49.7 as providing a basis for him to refuse to provide consent.
The correspondence set out earlier in these reasons does not reveal Mr Waterhouse relying on the lack of insurance as a reason for refusing consent at the time. In fact, in relation to the consent provided for the garage works, Mr Waterhouse’s solicitor in his covering letter dated 15 March 2024, purported to include as one of the conditions of consent that evidence of the builders insurance is to be provided prior to any work commencing.
Clause 49.7 provides:

In a subsequent paragraph of this affidavit, he referenced the Land and Environment Court proceedings commenced by the Huangs and said that if those proceedings meant that he was not able to carry out the works on the garage/studio, or delayed him in being able to carry out those works, then he would have carried out the works on the main house on their own.
It is to be remembered that until shortly prior to the commencement of the hearing in November 2025, Mr Rothner’s cross-claim involved not only the works to the main house, but also the garage works and the pool and wellness centre.
Shortly prior to the hearing, the claims in relation to the garage works and the pool and wellness centre were dropped.
Mr Rothner’s evidence (at least in his November 2024 affidavit) was prepared in the context of the expanded claim. That affidavit evidence did not directly address the claim ultimately run – confined only to whether Mr Rothner would have immediately commenced works to the main house if Mr Waterhouse signed the CC Application Form.
Mr Rothner’s affidavit evidence expressly states that it was his preference to renovate the main house and the garage/studio at the same time. That evidence is consistent with the objective contemporaneous documents. Mr Rothner told Mr Drake of Westpac on several occasions in early 2024 that this was his intention.
The difficulty with this aspect of Mr Rothner’s claim is that progressing the garage works got derailed with the Land and Environment Court proceedings commenced by the Huangs on 10 April 2024. This derailment obviously cannot be laid at the feet of Mr Waterhouse. Mr Rothner became aware of these proceedings shortly after they were commenced. He was obviously aware that this would significantly delay his ability to do the works to the garage.
There is then no reliable material placed before the Court by Mr Rothner to persuade me that, once the garage works became stalled by the Land and Environment Court proceedings, it was Mr Rothner’s plan to proceed with the works to the main house. I accept that while Mr Rothner gave quite general evidence in cross-examination that Ms Ongaro was speaking to builders and obtaining quotes, no objective material was put before the Court to give content and substance to the general statements made by Mr Rothner.
This is a matter on which Mr Rothner bears the onus and, the evidence to prove these matters is clearly within his power to produce. I have also found Mr Rothner to be an unsatisfactory witness in a number of respects. This cautions me against simply accepting his uncorroborated general evidence in the witness box.
There is no evidence that any builder had been retained, or even a short list of builders or any evidence of any quotes for the work to be carried out. Similarly, there is no evidence as to how Mr Rothner was going to pay for the works. Whilst he told Mr Drake that he was paying for it out of his own funds, there is no evidence that he had the funds available to carry out the works at the time.
Consistent with what he said in his 27 November 2024 affidavit, Mr Rothner was likely waiting for the position to become clear in relation to the Garage DA, before proceeding with any works.
I turn now to consider the second aspect of the causation inquiry, namely whether I am satisfied that Mr Rothner still intends to carry out the works to the main house and then sell the Property. In light of my conclusion on the first aspect of the causation inquiry, it is strictly not necessary to move to the second part, but I address it against the possibility that I am wrong on the first aspect.
The position in this regard has some factual complexity to it, including by reason of the documents tendered by Mr Rothner on the application to reopen.
The evidence adduced by Mr Rothner during the hearing in November 2025 was that on 8 September 2025 he accepted a letter of offer dated 28 August 2025 from Pallas Capital in respect of a First Mortgage Investment Facility with a limit of $24,700,000 which is repayable over a period of 18 months at an interest rate of 8.5% per annum (Pallas Capital Facility). He anticipated drawing down on that facility in the amount of $20,600,000 being the balance payable to Mr Waterhouse on the completion of the Contract.
Mr Rothner also admitted that he would have to pay stamp duty of around $2 million prior to completion. This was also apparently to be funded from the Pallas Capital Facility. Mr Rothner said in cross examination that he would use the remaining funds from the Pallas Capital Facility for the works to the main house.
Post completion of the Contract, both sides applied to reopen. Having heard argument on the application I determined to permit the following documents to be tendered:

The PEXA statement revealed that the funds to enable Mr Rothner to complete were provided by the NAB, not Pallas Capital. The additional documents tendered included the NAB offer letter to Mr Rothner for a 30 year loan for $21,450,000 dated 27 October 2025. The NAB Transaction Statement showed that the full amount of the loan was drawn down on 17 December 2025, being the date on which completion occurred.
Two further observations should be made.
First, Mr Rothner referred to the Pallas Capital Facility in an affidavit made 7 November 2025 and was cross-examined on 17 and 18 November 2025 in relation to it. He gave evidence that the conditions precedent in the Pallas Capital Facility had already been satisfied, at least implicitly suggesting the offer had been accepted. The NAB offer letter is dated 27 October 2025. No reference was made to the NAB offer letter prior to the application to reopen.
Second, during argument on the application to reopen, senior counsel for Mr Rothner accepted that what should be tendered was the loan agreement between Mr Rothner and the NAB which was a different and later document than the NAB offer letter. (Mr Rothner also opposed Mr Waterhouse’s contention that the NAB offer letter should be tendered as it went to Mr Rothner’s credit.) No such loan agreement was tendered, and no real explanation was provided as to why not. The NAB offer letter tendered is not signed by Mr Rothner so as to accept the offer.
On the material presently before me, I am not satisfied that Mr Rothner proposes to carry out the works to the house. This is for the simple reason that there is no evidence as to how he is going to pay for the works. The works are expected to cost at least several hundred thousand dollars. Mr Rothner has just drawn down on a loan of $21,450,000 to pay the entirety of the balance due on completion. There is no evidence of what financial resources, if any, he has available to pay for the works. The previously identified source – the remaining funds under the Pallas Capital Facility – are no longer available.
Again, this is a matter on which Mr Rothner bears the onus and has the capacity to adduce evidence to prove it.
The 30 year term of the NAB loan also casts some doubt on whether it remains Mr Rothner’s intention to sell the Property in the near future having renovated it, or whether he intends to hold it long term as a family home.
The 18 month term of the Pallas Capital Facility together with part of that facility being available to be used to pay for the works to the main house, was consistent with Mr Rothner having some intention to renovate and sell, but that facility was not taken up.
In my view, Mr Rothner will likely sell the Property when he considers it to his financial advantage to do so.
I turn now to quantification. I address it against the prospect that I am wrong on causation.
There are two aspects – holding costs and increased construction costs.
Mr Rothner called Mr Madden, a quantity surveyor to prove the time that it would take for the works to the main house to be completed and what the increased construction costs would be. His evidence was that the work would take nine months. The likely increase in construction costs was estimated to be $68,225, being the difference between $1,181,719 and $1,249,944.
Mr Madden was cross-examined. He was shown the CC Application Form sent on 31 January 2024. He accepted that this form was referring to a later version of the development application than he had been instructed in relation to. He also agreed he had not been provided with the application or the detail of the work described in it.
He was also shown the email from Ms Ongaro (on behalf of Mr Rothner) to Mr Drake on 7 February 2024 setting out the work that Mr Rothner proposed to do to the main house and the estimated cost of $250,000 to $350,000. He agreed he had not seen that document before. The position was the same in relation to the CC Application Form sent on 6 March 2024.
Finally, he agreed in cross-examination that he was not aware of whether Mr Rothner intended to carry out the works that he had costed in his report.
Having regard to the totality of Mr Madden’s evidence, I am not satisfied that the work that he has costed and estimated as to time, bears even a close resemblance to what Mr Rothner was or is planning on doing such that I can place any real reliance on Mr Madden’s evidence.
There are significant differences between the contemporaneous documents and Mr Madden’s estimates, both as to cost and time to complete. No real explanation was provided to explain the discrepancies. Mr Madden offered the explanation that there may have been work being done that was not being done under a DA. That was pure speculation on his part. I cannot reliably estimate any likely increase in construction costs on the evidence.
In terms of time to do the work to the main house, the task is complicated by the lack of clarity as to the work that will be done. The most reliable estimate is from Ms Ongaro’s email to Mr Drake, being 12 to 16 weeks, say 14 weeks.
Another aspect of the holding cost claim is the time to sell the Property. Mr Rothner called expert evidence from Mr Rubinstein a well-known real estate agent in the eastern suburbs. His opinion was that for a home of this nature he expects there would be a period of 9 to 12 months between him being engaged to market and sell the Property and completion. In cross-examination, Mr Rubinstein gave evidence that for a property in the eastern suburbs in the $20 to $40 million range, it may, on average, take six months to sell. The question was not asked, however, as a direct challenge to Mr Rubinstein’s opinion of 9 to 12 months for the Property in his report.
I adopt the period of 9 months.
When this period is added to the 12 to 16 week construction period – say 14 weeks – the delay period would be one year and two weeks, say one year.
In terms of the rate of interest being paid by Mr Rothner, I am satisfied that the NAB offer letter sets out the terms on which Mr Rothner has borrowed funds for the purchase and the subsequent documents tendered prove the increases in rates.
The evidence is, however, far from satisfactory. On the application to reopen it was accepted by senior counsel for Mr Rothner that the NAB offer letter would have been superseded by a loan agreement between the NAB and Mr Rothner and that it was the loan agreement that should be, and would be, tendered. The loan agreement was not tendered and no explanation was proffered or sought to be proffered as to why not.
Mr Waterhouse contended that the failure of Mr Rothner to meet the expectation that he would tender the loan agreement has resulted in a catastrophic denial of natural justice to Mr Waterhouse because he ought to have been entitled to test Mr Rothner’s case by reference to Mr Rothner’s contract with the NAB. I do not accept this contention. The issue is whether Mr Rothner has proved the terms on which he borrowed the funds. He has sought to do this by tendering only the offer and a transaction history showing the funds drawn down, together with two documents showing an increase in the rates.
The NAB offer letter is consistent with the transaction history, as to the amount of the loan. The offer letter is, obviously enough, an offer capable of acceptance. The transaction history and PEXA statement evidence NAB providing the funds – the inference being the NAB offer letter was accepted by Mr Rothner.
The NAB Home Loan Rate Announcements indicate the increases in the interest rate being paid.
It follows from this material that Mr Rothner made interest payments at 5.99% in December 2025 and January 2026 at a rate of 6.24% in February and March 2026, and at a rate of 6.49% from April 2026 onwards.
For the 12 month period I have determined above, the holding cost would be $1,313,256.08.

Waterhouse v Rothner

At a glance

Court

Decision date

Before

Catchwords

Source

Catchwords

Judgment

Parties

Legislation Cited (5)

Cases Cited (54)

JUDGMENT

1 Overview of the witnesses and their credibility

2 Application to call evidence from Olivia Waterhouse

3 Application to reopen

4 The facts

The purchase of the Property and the terms

Early works by Mr and Mrs Rothner – the beginning of the disputes

Mr Rothner commences occupation – the disputes continue

Requests for Mr Waterhouse to sign forms

The 2 April 2024 cutting of trees on No 8

The first Gibbons Statutory Declaration and statement

The 17 May Notice of Default

The Second Gibbons Statutory Declaration and statement

Resolution of whether Mr Rothner spoke to Mr Gibbons on 2 April 2024

Subsequent Events

5 Issues for determination

Issue 1 – Is Mr Rothner responsible for the removal of the trees on No 8?

Issue 2 – Did Mr Rothner breach clause 49.1(c)(vii)?

Issue 3 – Has Mr Rothner rectified any non-compliance?

Issue 4 – Is Mr Rothner entitled to relief against forfeiture?

Issue 5 – Quantification of Mr Waterhouse’s loss

Issue 6 – Whether Mr Waterhouse breached the contract of sale by failing to sign the application for a construction certificate to carry out approved works under DA 518/2021?

Issue 7 – Quantum of loss caused by Mr Waterhouse’s breach

6 The claims against Mrs Rothner and Al Shahwan

7 Conclusion and orders

Amendments

07 August 2026